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 2, 1995,
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) Registrants
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 registrants 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 $60 million as of June 15,
1995. There were 9,938,987 shares of the corporations $.01 par
value common stock outstanding at June 15, 1995 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
<PAGE>
TABLE OF CONTENTS
PART I
Item 1. Business.............................................
Item 2. Properties...........................................
Item 3. Legal Proceedings....................................
Item 4. Submission of Matters to a Vote of Security Holders..
PART II
Item 5. Market for the Registrants Common Equity and
Related Shareholder Matters..........................
Item 6. Selected Financial Data..............................
Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations..................
Item 8. Consolidated Financial Statements and
Supplementary Data..................................
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................
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 Related Transactions......
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K ................................
<PAGE>
ITEM 1. BUSINESS
INTRODUCTION
Todd Shipyards Corporation (the Company) was organized in 1916
and has operated a shipyard in Seattle, Washington (the Shipyard)
since incorporation. The Company has operated the Shipyard
through its 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. The
Shipyard is located on Harbor Island on approximately 46 acres of
property.
Until early in this decade, a substantial portion of the
Shipyards revenues and profits were attributable to long term
government contracts. The significant decline in the annual
shipbuilding budgets of the U.S. Navy (the Navy) has greatly
reduced the Companys bidding opportunities for such contracts and
has created excess ship construction and repair capacity. This
excess shipyard capacity, both nationally and locally, has
resulted in intense price competition. The Company has responded
to this competition by carefully reviewing its overhead,
streamlining its operations and introducing advanced shipyard
production techniques. Since completion of the last long term
government contract in fiscal year 1992, the Company has focused
on Puget Sound based repair, overhaul and construction
opportunities for commercial and governmental customers.
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. It plans to pursue repair, maintenance, overhaul and new
construction work for the ferry fleets operated by the states of
Washington and Alaska. Additionally, the growing number of
military vessels home ported in Puget Sound waters with the
activation of the Everett, Washington Navy home port facility is
expected to provide business opportunities to Puget Sound
shipyards.
SHIPYARD OVERVIEW
The Companys 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
impacted by the downsizing of the active Navy fleet. Also
affecting private shipyards is the regional impact of either the
establishment or closure of Navy home ports, the location of
marine accidents, the availability and scheduling of maintenance
and 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. Repair and overhaul jobs are usually contracted
on a fixed-price basis with additional work contracted on a
negotiated-price basis.
U.S. Government ship repair and overhaul work is usually awarded
through a formal bidding process. 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 customers
judgment of the contractors performance with respect to certain
pre-established criteria. The government regulates the methods
by which overhead costs are allocated to government contracts.
The Companys 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, overhaul and new
construction work require some form and amount of performance and
payment bonding, particularly state agencies.
The activity of the Companys operations in recent years has
included short-term repair, overhaul and phased maintenance work
on Navy vessels, as well as commercial repair, overhaul and
conversion work on container vessels, tankers, fishing industry
related vessels, cruise ships, barges, tug supply vessels and
ferries.
The approximate amount of revenues for each segment of the
Companys shipbuilding operations for each of the last three
fiscal years are summarized as follows (in millions):
1995 1994 1993
U.S. Government Vessels $ 41.2 $ 16.2 $ 29.9
Commercial Vessels 27.9 52.4 24.4
Total $ 69.1 $ 68.6 $ 54.3
Construction
The Company has not had any material ship construction revenues
for the last three fiscal years. However, in January 1995, the
Company was awarded a significant Washington State Ferry System
(Ferry System) contract for the construction of one Jumbo Mark II
Class Ferry (Jumbo Ferry), with an option for the construction of
two additional Jumbo Ferries. The Jumbo Ferries are designed to
transport 218 automobiles and 2,500 passengers on the waterways
of Puget Sound and will be the largest ferries in the Ferry
System fleet. The first Jumbo Ferry will be built under a fixed
price contract for $68 million. The contract value including the
option for the two additional Jumbo Ferries is $182 million. On
June 8, 1995 the Ferry System notified the Company of its intent
to exercise the option for two additional Jumbo Ferries.
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 shipyard industry is intense. The
Company competes for commercial and government work with a number
of other northwest shipyards, some of which have more
advantageous cost structures. The Companys competitors include
non-union shipyards and shipyards with excess capacity. The
declining size of the U.S. Governments 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 has led to acute price
competition.
Commercial ship construction and, to a lesser extent, repair work
performed in certain foreign markets is 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 12 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, averaging
approximately 700 during fiscal year 1995 and totaling
approximately 650 on April 3, 1995. During fiscal year 1995 an
average of approximately 600 of the Companys shipyard employees
were covered by a union contract at the Shipyard which expires on
July 31, 1996. At April 3, 1995 approximately 550 Company
employees were covered under this agreement. The Company
believes that its relations with its employees are good.
Backlog
At April 2, 1995 the Companys backlog consists of approximately
$76 million ($190 million including Jumbo Ferry options) of
construction, repair and overhaul work, $44 million of which is
expected to be completed in the upcoming fiscal year. This
compares with backlogs of $35 million and $40 million at April 3,
1994 and March 28, 1993 respectively. Substantially all of the
Companys firm backlog is for the construction of one Jumbo Ferry.
ACQUISITIONS
The Company has from time to time pursued opportunities to
diversify its business, in areas such as metal fabrication,
marine transportation, other marine industries and businesses
unrelated to the Shipyard. As described below, the Company
through a subsidiary signed contracts to purchase three radio
stations in May 1995. The Company continues to evaluate suitable
investment opportunities that would appropriately utilize the
Companys resources.
Subsequent to the fiscal year ending April 2, 1995, the Company
organized Elettra Broadcasting Corporation (Elettra) through its
wholly owned subsidiary, TSI Management, Inc. for the purpose of
investing in the broadcasting industry. In May 1995, Elettra
signed contracts to purchase three FM radio stations in Monterey,
California for total consideration of $3.5 million. The effect of
the transaction on Company revenue and earnings is not expected
to be material in the near term. The Company currently has no
plans to make significant additional equity contributions to
Elettra, though Elettra may investigate additional acquisition
opportunities.
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 46
acres at the locations set forth below:
Acreage
Location Owned Leased Date of Lease Expiration
Seattle, WA 27 19 2001, 2003, 2012
The Company has three drydocks, two steel and one wood, all of
which are located at the 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 12/17/95
YFD-54 1943 Wood 5,700 9/30/99
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 United States Coast Guard
(Coast Guard) contracts. The Companys 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 Navy and all Coast Guard vessels. The
Company also maintains certification of its cranes.
The Company believes that its owned and leased properties at the
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 12 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 1995.
PART II
ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The Companys 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
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
July 3, 1994 4.50 4.13
October 2, 1994 4.88 4.13
January 1, 1995 5.75 4.38
April 2, 1995 5.88 5.00
On June 15, 1995 the high and low prices of the Companys common
stock on the NYSE were $6.00 and $5.88, respectively.
At June 15, 1995 there were approximately 2,290 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 2, April 3, March 28, March 29, March 31,
1995 1994 1993 1992 1991
Revenue $69,096 $68,552 $54,278 $147,500 $187,230
Income (loss)
from operations 1,102 (6,724) (14,018) 22,206 29,437
Income (loss)
before cumulative
effect of change
in accounting
principles(1) 3,402 (2,714) (11,802) 29,021 6,782
Cumulative effect
of change in
accounting
principles(3) 438
Net income(loss)(1) 3,840 (2,714) (11,802) 29,021 6,782
Per share of common stock
Income (loss)
before cumulative
effect of change
in accounting
principles 0.32 (0.24) (0.99) 2.43 0.66
Income (loss)
before cumulative
effect of change
in accounting
principles
proforma(2) 0.57
Cumulative effect
of change in
accounting
principles(3) 0.04
Net income (loss)(1) 0.36 (0.24) (0.99) 2.43 0.66
Net income(loss)
proforma(2) 0.57
Financial position:
Working capital 50,704 52,337 57,311 67,195 38,632
Fixed assets 24,552 24,001 24,636 27,192 28,656
Total assets 110,924 111,447 129,287 138,988 117,588
Stockholders
equity 62,433 63,740 70,700 83,240 54,219
per common share 6.28 5.83 5.99 6.96 4.54
pro forma per
share(2) 4.53
(1) For the fiscal year ended March 31, 1991, includes a
reduction of net income of approximately $23.5 million
resulting from the Company adopting Statement 106
Employers Accounting for Post Retirement Benefits Other
Than Pensions and electing to recognize the total
accumulated obligation in fiscal year 1991.
(2) Calculated assuming the shares issued in the Companys
January 1991 bankruptcy reorganization were outstanding
since the beginning of fiscal year 1991.
(3) Effective April 4, 1994 the Company changed its method of
accounting for general and administrative costs from
recognizing these expenses as contract costs to recognizing
them as incurred which reflects the change, over time, in
the Companys business from predominately longer term
Department of Defense contracts to predominately shorter
term commercial and government contracts. This change has
been applied to general and administrative costs of prior
years and results in a cumulative effect credit of $438
thousand ($0.04 per share).
ITEM 7. MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Notes to Consolidated Financial Statements are an integral
part of Managements Discussion and Analysis of Financial
Condition and Results of Operations and should be read in
conjunction herewith.
The Company continues to respond to the increasingly competitive
shipbuilding and repair industry. The Companys Shipyard is
focusing on profitably serving its government and commercial
customers. To accomplish this goal Shipyard management has
worked to selectively increase business volume and reduce
operating costs. The Shipyards award of the Jumbo Ferry
construction program increased business backlog to $76 million.
The Shipyards ongoing production and administrative process
review projects have shown favorable results. These projects are
designed to enhance production efficiency and reduce overhead
costs.
During the Companys fourth quarter, the Ferry System awarded the
Shipyard a contract to build one Jumbo Ferry. The contract is
for one vessel, valued at $68 million, with a contract option for
two additional vessels. The Jumbo Ferry contract is valued at
$182 million with the exercise of the contract option. The
Companys Jumbo Ferry engineering efforts began in January 1995;
construction is expected to begin in the fall of 1995. Company
management expects government and commercial revenue to decrease
substantially in the first and second quarters of fiscal year
1996 as compared to fourth quarter 1995 results. Revenue for the
third and fourth quarters of fiscal year 1996 is expected to
benefit from Jumbo Ferry construction efforts, scheduled Navy
activity and continuing commercial work.
The Companys future profitability depends largely on the ability
of the Shipyard to maintain an adequate volume of ship repair,
overhaul and conversion business. The variables affecting the
Companys business volume include subsidies provided to competing
northwest shipyards, excess west coast shipyard capacity,
governmental legislation and regulatory issues, activity levels
at the Everett Navy Homeport and foreign competition. There is no
assurance that the Company will be successful in winning adequate
additional work to assure continued profitability.
Year to year comparisons:
1995 Compared with 1994
Revenues
Revenues for the fiscal year ended April 2, 1995 increased $.5
million (1%) compared to the prior fiscal year. The increase in
sales was primarily attributable to a high level of activity on a
Navy contract. The increase in Navy revenues was largely offset
by prior year activity on two major commercial contracts: a
contract to convert two container ships to an open-cargo
configuration (the Conversion Contract) and a contract to
overhaul a Ferry System Evergreen Class ferry (the Overhaul
Contract).
Operating Expenses
Operating expenses decreased $7.3 million (10%) compared to the
prior fiscal year. The decrease in operating expenses was
primarily due to the high costs incurred performing the
Conversion Contract in the prior year. Direct costs improved to
65% of revenue in 1995 compared to 88% of revenue in 1994. Prior
year performance reflected difficulties experienced on the
Conversion Contract and the Overhaul Contract.
Administrative expenses were $23.7 million in 1995 down $1.7
million (7%) compared to $25.4 million in 1994. The Company
attributes this reduction in cost to its streamlining efforts
($2.6 million) partially offset by increased bid and proposal
costs of $.9 million. In 1995, the Company utilized $1.0 million
in contract loss reserves compared to $10.2 million in 1994.
Provision for Environmental Reserves
In fiscal year 1995, the Company added $2.0 million in provisions
for environmental liabilities for sites and circumstances where
it was possible to make reasonable estimates of the Companys
potential liability. In fiscal year 1994 the Company established
environmental reserves of $6.5 million.
Closed Facilities Adjustments
Galveston - Upon the December 1993 disposition of the Galveston
facility, the Company reversed the $3.1 million deferred credit
for estimated Galveston facility closure costs.
Los Angeles - During the third quarter of fiscal year 1994, the
Company reduced the Los Angeles facility closure provision by
$2.5 million to reflect adequate funding of the Los Angeles
Pension Fund.
Gain on sale of facility
During the second quarter of fiscal year 1995, the State of
California released its interest in the Companys Alameda,
California property, allowing the Company to sell its property to
the U.S. Government for $.6 million. The Company recognized a
net gain on the sale of $.5 million in the second quarter of
fiscal year 1995. The Company sold its Galveston shipyard
facilities in December 1993 to Galveston Wharves for $6 million,
consisting of $.6 million cash with the balance financed with
special revenue bonds issued to the Company. The Company is
recognizing the gain on the sale as the bond payments are
received. The Company received initial proceeds from the
Galveston facility and equipment sale in 1994 and recognized a
net gain of $.6 million. Included in 1995 other income was a
gain of $.2 million reflecting a current period bond principal
payment.
Investment and Other Income
Investment and other income decreased $.2 million compared to
fiscal year 1994 results. Current year activity benefited from
Galveston bond interest income and principal payments of $.7
million, unclaimed bankruptcy distributions of $.4 million and
increased interest income of $.6 million. Prior year activity
included a $1.8 million gain from the settlement of a dispute
with a former insurer.
Income Taxes
For fiscal year 1995 the Company recognized no income tax expense
as the expense was offset by a reduction in the deferred tax
valuation reserve. The prior year income tax benefit of $.3
million represents a refund of fiscal year 1993 estimated tax
payments.
Cumulative Effect of Change in Accounting Principles
Effective April 4, 1994 the Company changed its method of
accounting for general and administrative costs from recognizing
these expenses as contract costs to recognizing them as incurred
which reflects the change, over time, in the Companys business
from predominately longer term Department of Defense contracts to
predominately shorter term commercial and government contracts.
This change has been applied to general and administrative costs
of prior years and resulted in a cumulative effect credit of $.4
million, which was included in income of the first quarter of
fiscal year 1995. The effect of the change was to decrease
fiscal year 1995 income before the cumulative effect of the
accounting change by $1.3 million ($.12 per share) There was no
income tax effect as a result of the change.
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 increase in
revenues was primarily due to two commercial projects, partially
offset by a decrease in government revenue due in part to a lower
level of activity on a multiple year Navy contract.
Operating Expenses
Operating expenses increased $7.0 million (10%) compared to the
prior fiscal year despite a 26% increase in sales. The increase
in operating expenses was primarily due to the increased level of
activity at the Shipyard. Direct costs increased to 88% of
revenue in fiscal year 1994 compared to 58% of revenue in fiscal
year 1993 as 1994 performance reflected difficulties on the
Conversion Contract and the Overhaul Contract. Administrative
costs were $25.4 million in 1994 compared to $25.7 million in
1993. Administrative costs in fiscal year 1994 reflected the
early benefits of the Companys streamlining programs.
Administrative costs in 1993 benefited from the reversal of a
$1.3 million executive compensation provision. Increases in the
Shipyards total 1994 operating expenses were largely offset by a
$21.2 million decrease in net operating expenses due to contract
loss reserve activity. Fiscal year 1993 activity resulted in the
establishment of loss reserves in 1993 of $12.5 million offset by
the reversal of a $1.5 million contract loss reserve. Fiscal
year 1994 included net loss reserves utilization of $10.2
million.
Provision for Environmental Reserves
During the third quarter of fiscal year 1994 the Company recorded
provisions totaling $6.5 million for sites where it was possible
to make reasonable estimates of the Companys environmental
liability.
Closed Facilities Adjustments
Galveston - Upon the December 1993 disposition of the Galveston
facility, the Company reversed the $3.1 million deferred credit
for estimated Galveston facility closure costs.
Los Angeles - During the third quarter of fiscal year 1994, the
Company reduced the Los Angeles facility closure provision by
$2.5 million to reflect adequate funding of the Los Angeles
Pension Fund.
Gain on sale of facility
Fiscal year 1994 activity increased over the prior year as 1994
includes a $.6 million net gain on the sale of its Galveston
shipyard to Galveston Wharves compared to no facility sales
activity in 1993.
Investment and Other Income
Investment and other income increased $1.7 million compared to
the prior fiscal year. The increase was due primarily to a $1.8
million gain from the settlement of a dispute with a former
insurer offset by decreased investment income due to a decrease
in market interest rates.
Income Taxes
For fiscal year 1994 the income tax benefit of $.3 million
represents a refund of fiscal year 1993 estimated tax payments.
For fiscal year 1993 the income tax expense of $.1 million
reflects the limitation of the recognition of tax credits
attributable to net operating losses and other miscellaneous
adjustments.
Liquidity, Capital Resources and Working Capital:
During fiscal year 1995, working capital decreased modestly by
$1.7 million to $50.7 million at April 2, 1995 which includes
restricted and unrestricted cash, cash equivalents and marketable
securities of $54.2 million. The decrease in working capital is
attributable to fixed asset additions and common stock
repurchases.
Expenditures for property, plant and equipment in fiscal year
1995 were $3.3 million compared to $2.7 million for the prior
fiscal year and were attributable to Shipyard equipment
purchases. These expenditures are in addition to ongoing repair
and maintenance expenditures in the Shipyard of $3.7 million,
$3.8 million, and $2.7 million in fiscal years 1995, 1994 and
1993, respectively. The Company anticipates increased property,
plant and equipment expenditures and repair and maintenance
expenditures in fiscal year 1996 to prepare for construction of
the Jumbo Ferries. The future business plans of the Shipyard are
not expected to require substantial additional capital
expenditures beyond those related to the Jumbo Ferry contract.
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. On
December 28, 1994 Todd Pacific entered into an agreement with a
surety pursuant to which the surety will provide a contract bond
for the Jumbo Ferry contract. The contract bond is secured by
Todd Pacifics machinery, equipment, inventory and trade accounts
receivable on certain bonded jobs. Since December 1994 this
surety has also bonded commercial repair jobs totaling
approximately $5.7 million.
Todd Pacific established an annually renewable, $3 million
revolving credit facility secured by a first lien on certain
trade receivables. Outstanding borrowings under the credit
facility may not exceed certain percentages of Todd Pacifics
trade receivables.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
See following page.
<PAGE>
REPORT OF ERNST & YOUNG LLP 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 2, 1995 and April 3, 1994 and the related consolidated
statements of operations, stockholders equity and cash flows for
each of the three years in the period ended April 2, 1995. Our
audits also included the financial statement schedule listed on
the index at item 14(a). The financial statements and schedule
are the responsibility of the Companys management. Our
responsibility is to express an opinion on the financial
statements and schedule 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 schedule 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 2, 1995 and April 3, 1994 and the consolidated results
of its operations and its cash flows for each of the three years
in the period ended April 2, 1995 in conformity with generally
accepted accounting principles. Also, in our opinion, the
related financial statements schedule, when considered in
relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set
forth therein.
As more fully described in Note 12 to the financial statements,
the Company faces significant potential liabilities in connection
with the alleged presence of hazardous waste materials at certain
sites. In addition the Company has been named as a defendant in
civil actions by parties alleging damages from past exposure to
toxic substances at Company facilities. The Company may have
insurance coverage and has provided reserves for these contingent
liabilities, however the ultimate amount of liability cannot be
determined at this time.
As more fully described in Note 1 to the financial statements,
the Company changed its method of applying general and
administrative costs on contracts.
ERNST & YOUNG LLP
Seattle, Washington
May 19, 1995
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED BALANCE SHEETS
APRIL 2, 1995 and APRIL 3, 1994
(in thousands of dollars)
1995 1994
ASSETS:
Cash and cash equivalents $ 11,966 $ 3,787
Restricted cash 313 5,719
Securities available for sale 41,901 48,480
Accounts receivable, less allowance for
losses of $548 and $653, respectively
U.S. Government 435 3,395
Other 6,331 4,748
Costs and estimated profits in excess of
billings on incomplete contracts 6,392 3,063
Inventories 1,063 932
Other 61 985
Total current assets 68,462 71,109
Property, plant and equipment, at cost 61,129 61,854
Less accumulated depreciation 36,577 37,853
24,552 24,001
Deferred pension asset 15,564 13,937
Other 2,346 2,400
Total assets $110,924 $111,447
LIABILITIES AND STOCKHOLDERS EQUITY:
Accounts payable and accruals $ 7,076 $ 7,266
Payrolls and vacations 3,596 3,552
Stock purchases payable 2,525 -
Accrual for loss on contracts - 2,267
Other 323 334
Taxes other than income taxes 1,136 1,370
Income taxes 3,102 3,952
Total current liabilities 17,758 18,741
Environmental reserves 8,423 6,500
Accrued post retirement health benefits 22,310 22,466
Stockholders equity:
Common stock ($.01 par value) 120 120
Additional paid-in capital 38,181 38,181
Retained earnings 33,576 29,788
71,877 68,089
Less treasury stock 9,444 4,349
Total stockholders equity 62,433 63,740
Total liabilities and stockholders
stockholders equity $110,924 $111,447
The accompanying notes are an integral part of this statement.
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended April 2, 1995, April 3, 1994, March 28, 1993
(In thousands of dollars)
1995 1994 1993
REVENUES $ 69,096 $ 68,552 $ 54,278
OPERATING EXPENSES:
Direct labor and benefits 29,045 36,293 18,982
Materials and other 16,189 23,787 12,605
Administrative expenses 23,740 25,428 25,726
Contract loss reserves (980) (10,232) 10,983
Subtotal 67,994 75,276 68,296
OPERATING INCOME (LOSS) 1,102 (6,724) (14,018)
Provision for environmental
reserves (2,000) (6,500) -
Closed facilities adjustment
Galveston - 3,131 -
Los Angeles - 2,522 -
Gain on sale of facility 505 613 -
Investment and other income 3,795 3,981 2,266
INCOME (LOSS) BEFORE INCOME
TAXES AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 3,402 (2,977) (11,752)
INCOME TAX PROVISION (BENEFIT) - (263) 50
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE 3,402 (2,714) (11,802)
CUMULATIVE EFFECT TO APRIL 3,
1994 OF ACCOUNTING CHANGE,
NET OF TAX 438 - -
NET INCOME (LOSS) $ 3,840 $ (2,714) $(11,802)
NET INCOME (LOSS) PER COMMON SHARE:
Income (loss), before cumulative
effective of change in accounting
principle $ 0.32 $ (.24) $ (.99)
Cumulative effect of change
in accounting principle 0.04 - -
Net income (loss) $ 0.36 $ (.24) $ (.99)
PROFORMA AMOUNTS, ASSUMING THE NEW
ACCOUNTING METHOD IS APPLIED
RETROACTIVELY:
Net income (loss) $ 3,402 $ (4,034) $ (7,136)
Net income (loss) per share .32 (.35) (.60)
WEIGHTED AVERAGE NUMBER OF SHARES
(THOUSANDS) 10,740 11,540 11,943
The accompanying notes are an integral part of this statement.
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended April 2, 1995, April 3, 1994, March 28, 1993
(in thousands of dollars)
1995 1994 1993
OPERATING ACTIVITIES:
Net income (loss) $ 3,840 $ (2,714) $(11,802)
ADJUSTMENTS TO RECONCILE NET INCOME
(LOSS) TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES:
Affect of change in accounting
principle (438) - -
Depreciation and amortization 3,078 3,173 3,291
Increase in environmental
reserve 1,923 6,500 -
Increase (decrease) in accrued
loss on contracts (980) (10,232) 12,499
Los Angeles facility closure
adjustment (35) (2,636) -
Galveston facility closure
adjustment (50) (3,246) -
CHANGES IN OPERATING ASSETS AND
LIABILITIES
Decrease (increase) in costs
and estimated profits in
excess of billings on
incomplete contracts (4,178) 2,479 (715)
Decrease (increase) in
deferred pension asset (1,627) (1,925) 1,150
Increase in accounts
receivable 1,377 9,460 16,372
Decrease (increase) in other
current assets 924 739 (526)
Decrease in income taxes (850) (27) (1,817)
Increase (decrease) payrolls
and vacations 44 (1,105) (3,183)
Increase (decrease) in
accounts payable (190) 438 (932)
Other (841) (1,379) (3,332)
Net cash - operating activities 1,997 (475) 11,005
INVESTING ACTIVITIES:
Purchases of securities
available for sale $(10,297) $(46,278) $(77,484)
Maturities of securities
available for sale 15,358 16,487 44,494
Sales of securities
available for sale 1,466 9,756 3,909
Purchases of property, plant
and equipment (3,287) (2,655) (901)
Other 106 648 (756)
Net cash - investing activities 3,346 (22,042) (30,738)
FINANCING ACTIVITIES:
Decrease (increase) in
restricted cash 5,406 5,242 (8,877)
Purchases of treasury stock (2,570) (3,611) (738)
Net cash - financing activities 2,836 1,631 (9,615)
NET CHANGE IN CASH AND CASH
EQUIVALENTS 8,179 (20,886) (29,348)
BEGINNING CASH AND CASH EQUIVALENTS 3,787 24,673 54,021
ENDING CASH AND CASH EQUIVALENTS $ 11,966 $ 3,787 $ 24,673
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 3 $ 26 $ 105
Income taxes 900 27 1,867
Noncash financing activities:
Common stock purchases payable 2,525 - -
The accompanying notes are an integral part of this statement
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
Years Ended April 2, 1995, April 3, 1994, March 28, 1993
(in thousands of dollars/shares)
Additional
Common Paid-in Retained Treasury Total
Stock Capital Earnings Stock Equity
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
Purchase of common
shares for treasury (5,095) (5,095)
Unrealized losses on
marketable securities
available-for-sale (52) (52)
1995 Net income 3,840 3,840
Balance at
April 2, 1995 $ 120 $ 38,181 $33,576 $(9,444) $62,433
SHARES ISSUED AND OUTSTANDING:
Common Total
Stock Treasury Shares
Issued Stock Outstanding
Balance at
March 29, 1992 11,956 - 11,956
Purchase of common
shares for treasury (148) (148)
Balance at
March 28, 1993 11,956 (148) 11,808
Purchase of common
shares for treasury (871) (871)
Balance at
April 3, 1994 11,956 (1,019) 10,937
Purchase of common
shares for treasury (998) (998)
Balance at
April 2, 1995 11,956 (2,017) 9,939
The accompanying notes are an integral part of this statement.
<PAGE>
TODD SHIPYARDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended April 2, 1995, April 3, 1994, March 28, 1993
1. PRINCIPAL ACCOUNTING POLICIES
(A) Basis of Presentation - The consolidated financial
statements include the accounts of Todd Shipyards Corporation
(the Company) and its wholly-owned subsidiaries Todd Pacific
Shipyards Corporation (Todd Pacific) and TSI Management, Inc.
All intercompany transactions have been eliminated. The Companys
policy is to end its fiscal year on the Sunday nearest March 31.
Certain reclassifications with the consolidated financial
statements have been made to conform to the current year
presentation.
(B) 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 periods where permitted.
(C) 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 and six months duration, 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 collection. Losses on contracts are reported when
first estimated. Revisions to contract estimates are recorded as
the estimating factors are refined. The effect of these
revisions is included in income in the period the revisions are
made.
(D) Changes in Accounting Principles - Effective April 4, 1994
the Company changed its method of accounting for general and
administrative costs from recognizing these expenses as contract
costs to recognizing them as incurred which reflects the change,
over time, in the Companys business from predominately longer
term Department of Defense contracts to predominately shorter
term commercial and government contracts. This change has been
applied to general and administrative costs of prior years and
results in a cumulative effect credit of $.4 million, which is
included in income of the first quarter of fiscal year 1995. The
effect of the change was to decrease income before the cumulative
effect of the accounting change by $1,314 ($.12 per share) for
the fiscal year ended April 2, 1995. There was no income tax
effect as a result of the change.
(E) Income Taxes - Effective March 29, 1993 the Company adopted
Statement of Financial Accounting Standards (Statement) No. 109
Accounting for Income Taxes. As permitted by Statement 109, the
Company elected not to restate the financial statements of prior
years. There was no cumulative effect on income of adopting
Statement 109.
(F) Inventories - Inventories, consisting of materials and
supplies, are valued at lower of cost (principally average) or
replacement market.
(G) Cash and Cash Equivalents - The Company considers all highly
liquid debt instruments purchased with an original maturity of
three months or less to be cash equivalents. Cash equivalents
consist 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.
(H) 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 and are valued based upon
market quotes.
In 1994, the Company adopted Statement of Financial Accounting
Standards (Statement) 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. All of the Companys
short-term and long-term investments are classified as available-
for-sale as of the balance sheet date and are reported at fair
value, with unrealized gains and losses recorded as a component
of stockholders equity.
2. RESTRICTED CASH AND SURETY LINE
On December 28, 1994 Todd Pacific entered into an agreement with
a surety pursuant to which the surety will provide a contract
bond for a contract to build three ferries for the Washington
State Ferry System. The contract bond is secured by Todd
Pacifics machinery, equipment, inventory and trade accounts
receivable on certain bonded jobs. Since December 1994 this
surety has also bonded commercial repair jobs totaling
approximately $5.7 million.
Prior to December 1994, Todd Pacific utilized a cash
collateralized surety arrangement or posted cash in lieu of a
performance bond. The amount being used for surety arrangements
totaled approximately $.1 million and $.8 million on April 2,
1995 and April 3, 1994 and is classified as other current assets
on the Companys balance sheet. The deposits together with other
retainage amounts posted in cash are classified as restricted
cash on the Companys balance sheet.
3. SECURITIES AVAILABLE FOR SALE
The Company implemented Statement No. 115 Accounting for Certain
Investments in Debt and Equity Securities on March 29, 1993. The
following is a summary of available-for-sale securities:
Amort- Gross Gross Estimated
ized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
April 2, 1995
U.S. Treasury securities
and agency obligations $21,417 $ - $ 357 $21,060
U.S. corporate securities 4,021 2 66 3,957
Mortgage-backed
securities 15,724 - 538 15,186
Total debt securities 41,162 2 961 40,203
Equity securities 1,426 272 - 1,698
$42,588 $ 274 $ 961 $41,901
Amort- Gross Gross Estimated
ized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
April 3, 1994
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
The Company had no gross realized gains on sales of available-for-
sale securities for the fiscal year ending April 2, 1995. Gross
realized gains on sales of available-for-sale securities were $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 years 1995 or 1994.
The amortized cost and estimated fair value of the Companys
available-for-sale debt and mortgage-backed securities are shown
below:
Estimated
Amortized Fair
(In thousands) Cost Value
April 2, 1995
Due in one year or less $11,989 $11,852
Due after one year through three years 13,449 13,165
25,438 25,017
Mortgage-backed securities 15,724 15,186
Equity securities 1,426 1,698
$42,588 $41,901
Estimated
Amortized Fair
(In thousands) Cost Value
April 3, 1994
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. CONTRACTS
Unbilled Receivables - Certain unbilled items on completed
contracts included in accounts receivable were approximately $2.7
million at April 2, 1995 and $.9 million at April 3, 1994.
Retainages - Costs and estimated profits in excess of billings on
incomplete contracts include $0 million in retainages at April 2,
1995 and $1.0 million at April 3, 1994 (after deducting progress
billings of $154 million and $157 million at April 2, 1995 and
April 3, 1994, 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 $41.2 million (60%), $16.2 million (24%)
and $29.9 million (55%) in fiscal years 1995, 1994 and 1993,
respectively. Revenues from the Washington State Ferry System
were $8.3 million (12%), $18.5 million (26%) and $1.9 million
(3%) in fiscal year 1995, 1994 and 1993, respectively.
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment and accumulated depreciation at
April 2, 1995 and April 3, 1994 consisted of the following:
1995 1994
Land $ 1,151 $ 1,208
Buildings 8,555 7,980
Piers, shipways and drydocks 25,992 25,260
Machinery and equipment 25,431 27,406
Total plant and equipment, at cost 61,129 61,854
Less accumulated depreciation 36,577 37,853
Plant, property and equipment, net $24,552 $24,001
6. EMPLOYEE BENEFIT PLANS
Union Pension Plans - Operating Shipyard- The Company
participates in several multi-employer plans, which provide
defined benefits to the Companys collective bargaining employees
at its Shipyard. The expense for these plans totaled $1.8
million, $2.2 million and $1.2 million, for fiscal years 1995,
1994 and 1993, 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 employees compensation before
retirement. The Companys funding policy is to fund such
retirement costs as required to meet allowable deductibility
limits under current Internal Revenue Service regulations. New
membership in the Retirement System was frozen on July 1, 1993.
The components of net periodic pension cost (benefit) for the
Retirement System defined benefit plan in fiscal years 1995, 1994
and 1993 are as follows (in thousands):
1995 1994 1993
Service cost-benefit earned during
the time period $ 248 $ 333 $ 502
Interest cost on projected benefit
obligation 2,179 2,325 2,439
Actual return on plan asset (2,367) (1,981) (3,436)
Net amortization and deferral (3,093) (4,098) (2,986)
Subtotal (3,033) (3,421) (3,481)
Liability for early retirement
incentive - - 3,243
Net periodic pension benefit before
OBRA 90 (3,033) (3,421) (238)
Transfer of assets for payment of
retiree medical benefits
(401(h) Plan) 1,406 1,496 1,388
Net periodic pension cost (benefit) $ (1,627) $(1,925) $ 1,150
For fiscal years 1993 through 1995 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.
The following table sets forth the Retirement System plans funded
status and amounts recognized in the Companys consolidated
balance sheets at April 2, 1995 and April 3, 1994 for the
Retirement System defined benefit plan (in thousands):
1995 1994
Actuarial present value of benefit obligation:
Accumulated benefit obligations,
fully vested $27,566 $27,357
Projected benefit obligation 28,651 28,756
Plans assets at fair value 49,932 52,443
Plans assets in excess of projected
benefit obligation 21,281 23,687
Unrecognized net loss 8,771 7,152
Unrecognized net transition asset being
recognized over 15 years (14,488) (16,902)
Deferred pension asset $15,564 $13,937
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 $1.4 million in excess
pension assets from its Retirement System into a fund to pay
fiscal year 1995 retiree medical benefit expenses. OBRA 90, was
modified by the Retirement Protection Act of 1994 to extend
annual excess asset transfers through the fiscal year ending
March 2001.
Savings Investment Plan
The Company sponsors a Savings Investment Plan (the Savings
Plan), under Internal Revenue Code Section 401, covering
substantially all non-union employees. Under the Savings Plan,
the Company at its sole discretion can contribute an amount equal
to up to 6% of each participants annual salary depending on the
participants Savings Plan contributions, and the Companys profits
and performance. The Company has made no contributions to the
Savings Plan during the last three years.
Post Retirement Group Health Insurance Program - The Company
sponsors a defined benefit retirement 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 retirement
health care plan contains cost-sharing features such as
deductibles and coinsurance. These benefits are funded monthly
through the payment of group health insurance premiums.
The actuarially calculated components of net periodic post
retirement health care benefit cost for the defined benefit plan
in fiscal years 1995, 1994 and 1993 are as follows (in
thousands):
1995 1994 1993
Service costs $ - $ - $ -
Interest cost on projected
benefit obligation 1,343 1,533 1,907
Return on plan assets - - -
Net amortization of gain (182) (200) -
Net period postretirement benefit
cost $ 1,161 $ 1,333 $ 1,907
Current year plan contributions $ 1,467 $ 1,551 $ 1,593
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 years 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. The
health care cost trend rate assumption has a significant effect
on the amounts reported. For fiscal year 1995 the Company changed
the weighted average discount rate and rate of increase in the
per capita cost of covered benefits to 7% and 8% respectively to
reflect changes in economic conditions and the expectation that
long term medical cost trends will not stay at current levels.
In accordance with 106, Employers Accounting for Post retirement
Benefits Other Than Pensions, retirement health care plan gains
or losses exceeding 10% of the benefit obligation are amortized
over the beneficiaries average remaining life expectancy (11
years). 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 2, 1995 by
$2.1 million and the interest cost component of net periodic post
retirement benefit cost for 1995 by $.1 million.
The following table sets forth the amounts recognized in the
Companys consolidated balance sheet at April 2, 1995 and April 3,
1994 for the post retirement health benefit obligation (in
thousands):
1995 1994
Accumulated post retirement health benefit
obligation $19,877 $19,910
Plan assets - -
Accumulated post retirement health benefit
obligation in excess of plan assets 19,877 19,910
Unrecognized net gain 3,887 4,160
Accrued post retirement health benefits 23,764 24,070
Less estimated current portion of obligations
classified as accrued expenses 1,454 1,604
Long-term portion of accrued post retirement
health benefits $22,310 $22,466
7. INCOME TAXES
The provision for income taxes consists of the following (in
thousands):
1995 1994 1993
Current: federal $ - $ (263) $ 1,990
state and local - - -
Deferred: federal - - (1,940)
state and local - - -
Total income tax provision $ - $ (263) $ 50
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 tax 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 Liability Deferred
Method Method Method
1995 1994 1993
Tax provision (benefit) at
federal statutory tax rate $ 1,344 $(1,042) $(3,996)
Increase (decrease) in valuation
allowance (908) 1,261 -
Tax rate differential - (232) -
Limitation on recognition of net
operating loss carryforward - - 3,996
Other - net (436) (250) 50
$ - $ (263) $ 50
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 Companys
deferred income tax assets and liabilities at April 2, 1995 and
April 3, 1994 were as follows (in thousands):
1995 1994
Deferred income tax assets:
Business credit carryforwards $8,092 $9,429
Alternative minimum tax credit carryforwards 2,874 2,874
Accrued employee benefits 1,597 2,351
Environmental reserve 2,815 2,138
Contract deferrals 958 1,442
Deferred gain on sale of facility 627 847
Securities available-for-sale 241 -
Reserve for doubtful accounts 192 228
Other 802 607
Total deferred income tax assets 18,198 19,916
Valuation reserve for deferred tax assets (7,026) (7,934)
Net deferred tax assets 11,172 11,982
Deferred income tax liabilities:
Accelerated depreciation 5,488 6,344
Deferred pension income 5,447 4,878
Completed contracts - 703
Other 237 57
Total deferred income tax liabilities 11,172 11,982
Net deferred taxes $ - $ -
Major components of the deferred income tax benefit for fiscal
years ending March 28, 1993 are as follows (in thousands):
1993
Accelerated depreciation $(1,064)
Completed contract method of accounting (8,244)
Decrease (increase) in nondeductible
reserves (2,996)
Decrease in shipyard closures reserves 436
Limitation of the recognition of net
operating loss 9,501
Other - net 427
$(1,940)
The Company utilized $1.3 million in general business credits
during fiscal year 1995. The Company had, for federal income tax
purposes, tax credit carryforwards of $8.1 million and $9.4
million at April 2, 1995 and April 3, 1994 respectively. If not
utilized, these carryforwards will expire in fiscal years 1996
through 2001. The Company had tax credit carryforwards for
financial statement purposes at March 28, 1993 of approximately
$9.1 million.
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 Companys U.S. income tax for fiscal year 1991 is presently
under examination by the Internal Revenue Service. Management
believes that previously established tax provisions will be
adequate to provide for adjustments, if any, that may result from
this examination.
8. LEASES
Operating lease payments charged to expense were $.5 million, $.7
million, and $.8 million for fiscal years 1995, 1994 and 1993,
respectively. Certain leases contain renewal options and
escalation clauses. Minimum lease commitments at April 2, 1995
are summarized below (in thousands):
Operating
Leases
1996 $ 217
1997 155
1998 155
1999 155
2000 150
Thereafter 1,313
Total minimum lease commitments $ 2,145
9. INCENTIVE STOCK OPTION PLAN
On September 23, 1993 Company shareholders approved an incentive
stock compensation plan under which key employees may be granted
stock purchase options, restricted stock and stock appreciation
rights. The purpose of the plan is to encourage the acquisition
of the Companys common stock by key employees who perform
significant services for the benefit of the Company and to serve
as a means of attracting and retaining outstanding employees.
There are five hundred thousand shares of common stock of the
Company reserved for award under this plan. Stock option awards
require, among other things, that the key employee remain an
employee of the Company during the period of the stock option,
subject to certain provisions, and that the stock option price
will not be less than 100% of the fair market value of the common
stock on the date of the grant.
A summary of the Company stock options issued and outstanding is
as follows:
Exercise
Shares Price
Outstanding at March 28, 1993
and April 3, 1994 - -
Granted 210,000 $4.25-$4.50
Outstanding at April 2, 1995 210,000 $4.25-$4.50
Available for award at April 2, 1995 290,000
Options totaling 134,500 shares were exercisable at April 2, 1995
at prices ranging from $4.25 to $4.50 per share. As of April 2,
1995 there have been no awards of restricted stock or stock
appreciation rights.
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. FINANCING ARRANGEMENTS
In March 1995 Todd Pacific finalized an annually renewable, $3
million revolving credit facility secured by a first lien on
certain trade receivables. Outstanding borrowings under the
credit facility may not exceed certain percentages of Todd
Pacifics trade receivables. There were no balances outstanding
at April 2, 1995.
12. 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 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 warrant
establishment of reserve 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 Shipyard is located. 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 Company entered into a Consent Decree for the Soil
and Groundwater Operable Unit (first of two units) in September
1994 under which the Company has agreed to remediate the
designated TPH contamination on its property. Said remediation
is scheduled to begin late 1995. The parties are currently
negotiating the extent and methodology of that remediation. The
Sediments Operable Unit (second of two units) continues to
undergo testing by the EPA and a third party consultant retained
by the PRPs. The current schedule indicates the release of the
Record of Decision in late December 1995. Any remediation
required is not expected to begin prior to mid 1997. The
established reserve discussed below does not include any estimate
for the Sediments Operable Unit.
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. In July 1994, the Company, a nonsettling PRP, was
sued in Superior Court in Los Angeles, California by the settling
PRPs for contribution. The Companys general liability insurer is
defending the suit but has not agreed to indemnify the Company
for any judgment entered against it.
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 United States Navy (Navy) on
the nuclear ship NS SAVANNAH during the 1960s and 1970s. 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 during fiscal year 1996.
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.
The Company 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 1980s. 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.
The Company was named as a PRP by the California Department of
Toxic Substances Control regarding the Environmental Protection
Corp. hazardous waste site located outside Bakersfield,
California in March 1995. The site operated from 1971 through
1985, accepting a variety of industrial wastes. Company
management is unaware of the nature and quantity of any materials
allegedly delivered to the site. Investigation continues with no
estimation of potential liability possible at this time.
The Company was served notice in April 1995 of its status as a
PRP on the Tulalip Landfill Superfund Site located above
Marysville, Washington on the Tulalip Indian Reservation. This
landfill accepted materials from approximately 350 Seattle-area
businesses in the 1970s. The Company has no records of directly
delivering any material to the site however it did business with
a number of the transporters also named as PRPs. The Company is
unaware of the nature and quantity of any materials allegedly
delivered to the site. The Companys investigation continues with
no estimation of potential liability possible at this time.
Todd Pacific has been notified by the California Environmental
Protection Agency that it may be considered a potentially
responsible party for the cleanup of the Omega Chemical
Corporation site (Omega Site) in Whittier, California. It is
alleged that the Los Angeles Division of Todd Pacific caused
certain production wastes and by-products to be transported to
this hazardous waste treatment and storage facility between 1976
and 1991. The California Department of Toxic Substances Control
is pursuing the clean up of the Omega Site pursuant to state and
federal regulations. The Company is investigating these
allegations. No estimation of potential liability is currently
available.
The Company has been named as a defendant in civil actions by
parties alleging damages from past exposure to toxic substances
at Company facilities. The Company and its insurers are
vigorously defending these actions. There are no certainties
regarding the outcome of such actions, nor is there agreement by
the insurers to indemnify the Company in the event a judgment is
entered against it.
During the fiscal year ended April 2, 1995 the Company continued
to analyze the most recent data available from the EPA and other
sources regarding the Harbor Island Superfund Site and several
other sites and has estimated costs for their respective
remediations. Additionally the Company has estimated potential
losses related to the personal injury civil actions. The Company
has provided aggregate reserves of $8.5 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. No assurance can be given that the $8.5 million reserve
is adequate to cover all potential remediation costs and related
expenses or awards the Company could incur.
13. ACQUISITIONS
Subsequent to the fiscal year ending April 2, 1995, the Company
organized Elettra Broadcasting Corporation (Elettra) through its
wholly owned subsidiary, TSI Management, Inc. for the purpose of
investing in the broadcasting industry. In May 1995, Elettra
signed contracts to purchase three FM radio stations in Monterey,
California for total consideration of $3.5 million. The effect of
the transaction on Company revenue and earnings is not expected
to be material in the near term.
14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Financial results by quarter for the fiscal years ended April 2,
1995 and April 3, 1994 are as follows (in thousands):
Cumulative
Operating effect of Net
income Income accounting income
Revenues (loss) (loss) change (loss)
1st Qtr 1995 $ 14,469 $ (1,963) $(1,013) $ 438 $ (575)
2nd Qtr 1995 10 372 ( 499) 1,117 - 1,117
3rd Qtr 1995 15,551 337 1,250 - 1,250
4th Qtr 1995 28,704 3,227 2,048 - 2,048
$ 69,096 $ 1,102 $ 3,402 $ 438 $ 3,840
1st Qtr 1994 $ 14,280 $ (2,649) $ (171) $ - $ (171)
2nd Qtr 1994 13 688 (5,071) (3,847) - (3,847)
3rd Qtr 1994 20,870 2,001 1,804 - 1,804
4th Qtr 1994 19,714 (1,005) (500) - (500)
$ 68,552 $ (6,724) $(2,714) $ - $(2,714)
Earnings per share of common stock:
Cumulative
effect of Net
Income accounting income
(loss) change (loss)
1st Qtr 1995 $ (0.09) $ 0.04 $ (0.05)
2nd Qtr 1995 0.10 - $ 0.10
3rd Qtr 1995 0.12 - $ 0.12
4th Qtr 1995 0.19 - $ 0.19
1st Qtr 1994 $ (0.01) $ - $ (0.01)
2nd Qtr 1994 (0.33) $ - $ (0.33)
3rd Qtr 1994 0.15 $ - $ 0.15
4th Qtr 1994 (0.05) $ - $ (0.05)
The cumulative effect of changes in accounting principles amount
is net of income tax effect. Fiscal year 1994 first quarter net
income includes a $1.8 million insurance adjustment. Fiscal year
1994 third quarter and fiscal year 1995 fourth quarter net income
includes Navy contract activity accomplished during each
respective period.
Todd Shipyards Corporation
Schedule II - Valuation and Qualifying Reserves
For years ending April 2, 1995, April 3, 1994 and March 28, 1993
(in thousands)
Reserves deducted from assets to which they apply - Allowance for
doubtful accounts:
Balance Reductions Deduction Balance
beginning credited from at close
of period to income reserves of period
(1) (2)
Year ended April 2, 1995 $ 653 $ 100 $ 5 $ 548
Year ended April 3, 1994 1,807 604 550 653
Year ended March 28, 1993 2,035 0 228 1,807
Notes:
(1) The Company recognized no additions to the allowance for
doubtful accounts during years ended April 2, 1995, April 3, 1994
and March 28, 1993. Reductions to the allowance were credited to
other income and primarily reflect changes in the Companys
business volume.
(2) Deductions from reserves represent uncollectible accounts
written off less recoveries.
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
1995 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 filed the following reports on Form 8-K during the
fourth quarter ended April 2, 1995.
On February 1, 1995, the Company filed an 8-K Current Report
announcing that Todd Pacific signed a contract with the
Washington State Ferries, a division of the Washington State
Department of Transportation, for the construction of one Jumbo
Mark II Class Ferry.
On March 28, 1995, the Company filed an 8-K Current Report
announcing the departure of the Companys Chief Financial Officer.
<PAGE>
TODD SHIPYARDS CORPORATION
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT AUDITORS
Items 14(a) 1 & 2
Report of Ernst & Young LLP Independent Auditors
Consolidated Balance Sheets at April 2, 1995and April 3, 1994
Consolidated Statements of Operations
For the years ended April 2, 1995,
April 3, 1994 and March 28, 1993
Consolidated Statements of Cash Flows
For the years ended April 2, 1995,
April 3, 1994 and March 28, 1993
Consolidated Statements of Stockholders Equity
For the years ended April 2, 1995,
April 3, 1994 and March 28, 1993
Notes to Consolidated Financial Statements
For the years ended April 2, 1995,
April 3, 1994 and March 28, 1993
Supplementary Information:
Quarterly Financial Data (unaudited)
Consolidated Financial Statement Schedule:
II-Valuation and Qualifying Reserves
<PAGE>
TODD SHIPYARDS CORPORATION INDEX TO EXHIBITS
Item 14(a)3
Exhibit
Number
3-1 Certificate of Incorporation of the Company *
dated November 29, 1990, filed in the Companys
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 Companys
Form 10-K Report for 1993 as Exhibit 3-2.
10-1 Lease Agreement of floating drydock YFD-70 dated #
May 15, 1981 between the Company and amendments
thereto.
10-2 Lease Agreement of floating drydock YFD-54 dated #
April 1, 1987 between the Company and NAVSEA and
amendments thereto.
10-3 Collective Bargaining Agreement between Todd *
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 filed in the
Companys Form 10-K Annual Report for 1994 as
Exhibit 10-4.
10-4 Project Agreement between Todd 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 August
1994.
10-5 Unsigned executed copy of Harbor Area Lease #
Agreement No. HA-2202 dated March 21, 1985 between
the Company and the State of Washington Dept. of
Natural Resources.
10-6 Harbor Area Lease Agreement No. 2590 dated #
December 13, 1982 between the Company and the State
of Washington Dept. of Natural Resources.
10-7 Harbor Area Lease Agreement No. 22-090038 dated #
September 1, 1986 between the Company and the State
of Washington Dept. of Natural Resources.
10-8 Harbor Area Lease Agreement No. 22-090039 dated #
September 1, 1986 between the Company and the State
of Washington Dept. of Natural Resources.
10-9 Savings Investment Plan of the Company effective #
April 1, 1989.
10-10 Todd Shipyards Corporation Retirement System Plan #
and Amendments thereto.
10-11 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 filed in the Companys Form 10-K
Annual Report for 1994 as Exhibit 10-12.
10-12 Contract with the State of Washington for repair *
of the MV Tillikum by Todd Pacific dated May 10,
1993 filed in the Companys Form 10-K
Annual Report for 1994 as Exhibit 10-13.
10-13 Purchase and Sale Agreement and Deed of Trust *
relating to the sale of the Companys Galveston
facility to the Galveston Wharves dated December
16, 1993 filed in the Companys Form 10-K
Annual Report for 1994 as Exhibit 10-14.
10-14 Employment contract between Todd Pacific and Roland #
H. Webb dated December 27, 1994.
10-15 Contract between Todd Pacific and the Washington #
State Ferries, a division of the Washington State
Department of Transportation for the construction of
one Jumbo Mark II Class Ferry dated January 30, 1995.
10-16 Contract No. N000024-91-C-8503 between Todd Pacific #
and the Department of the Navy for the maintenance
and repair of supply ships.
10-17 Documents pertaining to the bonding arrangements of #
Todd Pacific relating to the Ferry Contract (Exhibit
10-16): Underwriting and Continuing Indemnity Agreement,
Security Agreement, Pledge Agreement, Intercompany
Credit Agreement, Preferred Mortgage of vessel
EMERALD SEA, UCC-1 Financing Statement, and UCC-2
Fixture Statement.
10-18 Documents pertaining to revolving line of credit #
agreement between Todd Pacific and U.S. Bank of
Washington, National Association: Security Agreement,
Commercial Guaranties, Corporate Resolution to Borrow,
Corporate Resolutions to Guaranty/Grant Collateral,
Business Loan Agreement, Disbursement Request and
Authorization Agreement, Accounts Receivable Collateral
Parameters Agreement, Promissory Note, and UCC-1
Financing Agreement.
10-19 Todd Shipyards Corporation Incentive Stock #
Compensation Plan effective October 1, 1993, approved
by the shareholders of the Company at the 1994 Annual
Meeting of Shareholders.
10-20 Grants of Incentive Stock Option dated June 24, 1994 #
and September 29, 1994 to certain officers of the
Company and Todd Pacific pursuant to the Incentive
Stock Compensation Plan (Exhibit 10-19).
10-21 Separation Agreement between the Company and David #
K. Gwinn dated March 3, 1995.
18-1 Letter dated 8/17/94 from Ernst & Young, LLP *
regarding changes in accounting principles.
22-1 Subsidiaries of the Company. #
27 Financial Data Schedule #
28-1 Unsigned unexecuted copy of Indemnity Agreement #
between the Company and ACSTAR Insurance Company.
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 Companys Form 10-K
Annual Report for 1991 as Exhibit 28-4(a).
Note: All Exhibits are in SEC File Number 1-5109.
* Incorporated herein by reference.
# Filed herewith.
<PAGE>
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/ Stephen G. Welch
Stephen G. Welch
Vice President, Chief Financial
Officer and Treasurer
June 16, 1995
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 19, 1995 June 19, 1995
/s/ Patrick W.E. Hodgson /s/ Joseph D. Lehrer
Patrick W.E. Hodgson, Joseph D. Lehrer, Director
Chairman, Chief Executive June 16, 1995
Officer, and Director
June 16, 1995
/s/ Philip N. Robinson /s/ John D. Weil
Philip N. Robinson, Director John D. Weil, Director
June 16, 1995 June 19, 1995
/s/ Stephen G. Welch
Stephen G. Welch
Vice President, Chief Financial
Officer and Treasurer
Principal Financial Officer and
Principal Accounting Officer
June 16, 1995
Department of the Navy
Naval Sea Systems Command
Washington, DC 20362
CONTRACT N00024-81-L-0004
FOR
LEASE OF GOVERNMENT-OWNED DRY DOCK YFD-70
BETWEEN
UNITED STATES OF AMERICA
AND
TODD PACIFIC SHIPYARDS CORPORATION
THIS CONTRACT, made as of 15 May 1981, between the UNITED
STATES OF AMERICA(hereinafter called the Government)
represented by the contracting officer executing this
contract, and TODD PACIFIC SHIPYARDS CORPORATION
(hereinafter called the lessee), a corporation organized and
existing under the laws of the State of New York and having
its principal place of business at New York, New York
WITNESSETH:
WHEREAS, the secretary of the Navy (hereinafter called the
Secretary) has determined that the 14,000 Ton Floating dry
Dock designated YFD-70 is not excess to the needs of the
Department of the Navy(hereinafter called the Department),
within the meaning of Section 472 of the Tile 40 of the
United States Code, but is not for the time being required
for public use, and
WHEREAS, the Secretary has determined that it will be
advantageous and in the public interest to lease the Dry
Dock to the Lessee at its shipyard in Seattle, Washington,
upon the terms and conditions hereinafter set forth, and
WHEREAS, this lease is made under the authority of Section
2667 of Title 10 of the United States Code (70 A. Stad.
150).
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter contained, the
parties hereto do mutually agree as follows:
SPECIAL PROVISIONS
CLAUSE 1. PURPOSE AND PRECEDENCE
(a) The purpose of this Lease is to establish the
terms upon which the Lessee will use the Dry Dock leased
hereunder.
(b) This Lease consists of:
(I) The Special Provisions, and
(ii) The General Provisions, FLOATING DRY DOCK
LEASE NAVSEA (10 USC 2667).
Said General Provisions are hereby
incorporated in and made a part of this Lease.
(c) To the extent of any inconsistency
between the Special Provisions and the General Provisions,
the terms of the Special Provisions shall control.
CLAUSE 2. TERM OF LEASE
(a) The term of this Lease shall be five
(5) years, commencing 15 May 1981 unless sooner terminated
as herein provided. Nine (9) months prior to the expiration
of the current term, the Lessee shall give written notice to
the Government of its desire to extend this Lease for one
(1) additional five (5) year term. Said notice shall
include a list of the Lessees then current Navy Shipbuilding
Program. In the event the Government agrees that this lease
should be extended, then the Government shall, six months
prior to the expiration of the current term, notify the
Lessee of that determination, and the parties will extend
the lease based upon such terms and conditions as may be
mutually agreed upon.
(b) In the event the parties are unable
to agree as to the terms and conditions fur such extended
period, the Contracting Officer shall determine the terms
for the succeeding term and shall notify the Lessee of such
determination. In the event the Lessee shall dispute the
reasonableness of these terms as determined, it shall comply
with the terms so determined subject to its right to invoke
Article 27 of the General Provisions, The reasonableness of
the terms so determined shall be deemed to be a question of
fact within the meaning of said Article 27.
CLAUSE 3. RENT
(a) The Lump sum annual rental referred
to in article 5(b)(i) of the general Provision is Two
hundred Twenty Five thousand Dollars ($225,000).
(b) the minimum charge refereed to in
article %(b) (ii) of the General Provision are:
Table of Computation Sums
Size of Ships Haul Day
Lay Day
Vessels having a registered gross tonnage $.42 per
$.32 per
2,000 tons or over registered
registered
gross ton
gross ton
Table of Computation Sums (Continued)
Size of Ships Haul Day
Lay Day
Vessels having a registered gross tonnage $3.50 per
$2.70 per
under 2,000 tons per ft.
per ft.
gross ton
gross ton
Minimum amount per drydocking,- $1,000
For the purpose of clarifying the third paragraph of this
article 5(b) (ii), the phrase work ordered by the
Government shall be deemed to include, without limiting the
generality thereof work ordered by any department, agency,
or instrumentality of the Government.
CLAUSE 4. MAINTENANCE
(A) Minimum Maintenance
The minimum amount which the lessee is obligated
to expend annually for normal maintenance on the YFD-70
pursuant to Article 6(b) of the General Provisions is One
Hundred Fifty Thousand Dollars ($150,000).
(b) Specific Maintenance and repair
The lessee, at its own expense, shall perform the
following maintenance to the satisfaction of the Government:
(I) Remove all failed internal coating and coat
the interior with preservative. such preservative shall be
compatible with material now being used. Application
shall be by spray method. In the event the material used,
or the method of application of the preservative
results in problems concerning protection of the
environment, then the lessee shall use other acceptable
material and/or method of application, as appropriate.
(ii) Install during the first drydocking the
following electrochemical cathodic protection system:
A. A permanent impressed current
(impedance) system using NAVSEA Drawing 53711-633-556488
and manufacturers components drawing B. A Galvanic Anode
(sacrificial ) Zinc System to the sixteen (16) main ballast tanks as
follows:
(1) Center Section, eight (8) tanks.
fourteen (14) Zinc Anodes, Type-ZNC-47, Shall be installed evenly
distributed on each tank bottom, and four (4)
Zinc Anodes, Type-ZHC-47, shall be located on
opposite bulkheads at the 4-foot waterline
in each tank.
(2) End Section, eight (8) tanks.
Six (6) Zinc Anodes, type-ZHC-47, shall be evenly distributed on
each tank bottom and two (2) Zinc Anodes, Type- ZHC-47, shall be located on
opposite bulkheads at the 4-foot waterline in each tank.
CLAUSE 5. INSURANCE AND RISK OF LOSS
(a) The amount of insurance referred to in
the General Provisions. Article 7 (a) (I), is Marine
Insurance ,Hull and Machinery (Lessee to be responsible for
any deductible), and is $7,612 000 during any tow and $3,806
000 while the dry Dock is located at a shoreside facility.
(b) The amount of insurance referred to in
the General Provisions, Article 7 (c) is:
(i) Bodily injury liability in the amount of $300,000 per occurrence
(ii) Property Damage Liability in the amount of $100,000 per occurrence
(iii) Workmens Compensation and Longshoreman and Harbor Workers
Coverage Plus Employers liability in the minimum amount
of $100,000, or such greater amount as may be
required by law.
CLAUSE 6. PERFORMANCE BOND
The amount of the performance bond required under
Article 12 of the General provisions is One Hundred thousand
Dollars ($100,000), which bond shall be substantially in
accordance with U.S. Government Standard Form 25 Performance
Bond and be for the full lease period.
CLAUSE 7. RETURN OF DRY DOCK
The place to which the Dry Dock shall be returned
in accordance with Article 18 of the General provisions
shall be the Inactive Ship Maintenance Facility, Bremerton,
Washington.
CLAUSE 8. INTEREST
notwithstanding any other provision of this
contract, unless paid within 30 days, -all amounts that
become payable by the contractor to the Government under
this contract(not of any applicable tax credit under the
Internal revenue Code) shall bear interest from the date
due until paid and shall be subject to adjustments as
provided by part 6 of Appendix E of the Defense Acquisition
Regulation as in effect on the date of this contract. The
interest rate per annum shall be the interest rate in effect
which has been established by the Secretary of the Treasury
pursuant to Public Law 92-41; 85 STAT 97 as of the date the
amount becomes due as herein provided. Amounts shall be due
upon the earliest of one of the following:
(I) the date fixed pursuant to this contract.
(ii) the date of the first written demand for
payment, consistent with this contract,
including demand consequent upon default termination.
(iii) the date of transmittal by the Government to
the Contractor of a proposed supplemental agreement to confirm
completed negotiations fixing the amount, or
(iv) if this contract provides for revision of
prices, the date of written notice to the
Contractor stating the amount of refund
payable in connection with a pricing proposal
or in connection with a negotiated pricing
agreement not confirmed by contract supplement.
CLAUSE 9. PROTECTION OF THE ENVIRONMENT
In the use of the Dry Dock, the Lessee
shall, at its own expense, comply with all Federal, State,
and local laws and regulations in being or that may be
hereafter enacted or issued and relating to protection of
the environment.
CLAUSE 10 SAFETY CERTIFICATION
(a) In the event the Lessee plans to
utilize the Dry Dock for docking U.S. Navy ships, the Lessee
shall, at its own expense, certify the Dry Dock in
accordance with MIL-STD-1625, Drydocking Facilities Safety
Certification Criteria for Docking U.S. Navy Ships, before
docking such ships. There is no expressed or implied
warranty of any kind whatsoever, regarding the condition of
the Dry Dock with regards to the certification pursuant to
MIL-STD-1625.
(b0 In no event shall the Government be
under any obligation to provide funds for, or be required to
approve, any corrections to obtain this certification.
Failure to obtain the certification shall in no event form
the basis for any claim by the Lessee against the
Government.
CLAUSE 11. REPRESENTATIVE OF THE DEPARTMENT
The other authorized representative of the
Department referred to in Article 33 of the General
provisions is the Supervisor of Shipbuilding, Conversion and
Repair, USN, Seattle, Washington
CLAUSE 12. MODIFICATION OF GENERAL PROVISIONS
ARTICLE 3. OPERATION AND USE
DELETE Article 3 in its entirety, and in lieu
thereof INSERT the following:
FLOATING DRY DOCK LEASE
NAVSEA (10 USC 2667)
(APRIL 1981)
GENERAL PROVISIONS
Table of Contents
Page
Article 1 PURPOSE
Article 2 LEASED PROPERTY
Article 3 OPERATION AND USE
Article 4 DELIVERY
Article 5 RENT
Article 6 MAINTENANCE
Article 7 INSURANCE AND RISK OF LOSS
Article 8 INDEMNIFICATION
Article 9 DISCLAIMER OF WARRANTY AND
CONDITIONS
DRY DOCK
Article 10 TERMINATION BY GOVERNMENT
Article 11 TERMINATION BY LESSEE
Article 12 PERFORMANCE BOND
Article 13 MOVEMENT OF DOCK
Article 14 ALTERATIONS
Article 15 INVENTORY
Article 16 GOVERNMENT ACCESS
Article 17 NON-REHABILITATION
Article 18 RETURN OF DRYDOCK
Article 19 PAYMENTS AND DISBURSEMENTS
Article 20 STATE AND LOCAL TAXES
Article 21 PRORATION IN EVENT OF TERMINATION
Article 22 FAILURE TO INSIST ON COMPLIANCE
Article 23 RIGHT TO SUBLEASE OR ASSIGN
Article 24 COVENANT AGAINST CONTINGENT FEES
Article 25 OFFICIALS NOT TO BENEFIT
Article 26 GRATUITIES
Article 27 DISPUTES
Article 28 EQUAL OPPORTUNITY
Article 29 EXAMINATION OF RECORDS
Article 30 LABOR PROVISIONS
Article 31 AUDIT BY DEPARTMENT OF DEFENSE
Article 32 CERTIFICATION OF REQUEST FOR ADJUSTMENT
OR RELIEF EXCEEDING $100,000
Article 33 DEFINITIONS
Article 34 NOTICES
ARTICLE 1. PURPOSE--These General Provisions form a part of
the lease bearing the number designated above.
ARTICLE 2. LEASED PROPERTY--The Government does hereby
lease and rent the Dry Dock to the Lessee and the Lessee
does hereby hire and rent same from the Government.
ARTICLE 3. OPERATION AND USE--the Lessee shall have the
right to use the at the Shipyards, unless otherwise
authorized by the Contracting Officer, in the performance of
shipbuilding, ship repair work for the government as the
department may from time to time require. The Lessee
shall operate the Dry Dock in a manner following the
practices and standards of care normally employed in the
operation of similar dry docks and in accordance with the
operating manual for said Dry Dock issued by the Department
of the Navy, and as directed by the Department. The Lessees
plans for the operating basin and the mooring of the Dry
Dock shall be subject to the approval of the Department, and
the Dry Dock shall be moored at the Shipyard in accordance
with the said plans as approved.
ARTICLE 4. DELIVERY -- The Lessee shall accept
delivery and take custody of the Dry Dock at its present
site after the date specified in the Special Provisions of
the commencement of the term and, at its own
expense, shall promptly remove the Dry Dock to the operating
basin provided therefor, moor it therein, and furnish all
facilities and accomplish all work required to place the Dry
Dock in operation. Prior to such delivery the Lessee shall
(I) participate in the joint inventory
and inspection and preparation of the report thereof as
required by Article 9(b) and 15 hereof, and (ii) furnish
the Department the plans for the operating basin and the
mooring of the Dry Dock specified in Article 3 hereof (which
plans shall be approved by the Department before the Dry
Dock is permanently moored), the insurance policies or other
evidence of the insurance required by Article 7 hereof, and
the performance bond required by Article 12 hereof. In the
event the Dry Dock is not delivered to the Lessee by reason
of the Lessees failure to perform any of the foregoing or
other obligations under this lease, or by reason of any
other act, fault or failure of the Lessee, the Lessee shall
remain liable for the full performance of all the
obligations of this lease including the payment of rent
effective as of the date specified in the Special Provisions
for the commencement of the term.
The Government shall not be liable to the Lessee for damages
or loss of profit by reason of any delay or failure to
deliver the Dry Dock occasioned by an act or fault of the
Government , provided, however, that in such event the date
upon which the rental obligation shall commence shall be
adjusted to reflect such period of delay or failure to
deliver the Dry Dock.
ARTICLE 5. RENT --
(a) For the right to use the Dry Dock, The
Lessee shall pay to the Government, on or before the
fifteenth (15th) day of each annual period in respect of the
preceding annual period of the term of this lease, an amount
equal to the difference between:
(I) The amount computed in accordance with paragraph
(b) of this Article (such amount being
hereinafter referred to as the Amount To Be Paid) and
(ii) The sum of all amounts allowed as credits against
the Amount To Be Paid during said preceding
annual period in accordance with the provisions
of Article 6(d) and Article 7(f) of this lease.
(b) The Amount To Be Paid shall be the greater
of (I) or (ii) below:
(I) The lump sum specified in the Special Provisions;
or
(ii) 50% of the minimum charges set forth in the
Special Provisions for the actual number of days
a vessel occupies the Dry Dock or 50% of the
actual charges made by the Lessee for such
period, whichever amount is greater.
For the purpose of computing rental due under
this paragraph a Haul Day shall be deemed to be
the first twenty-four continuous hours or less of
a drydocking period. A Lay Day shall constitute
each succeeding period of twenty-four continuous
hours or less following a Haul Day whether or not
work is performed for the Vessel. A Haul Day
shall commence when the stem of the vessel enters
the mouth of the Dry Dock. Any fractional part
of a day shall, for the purpose of computations
herein, be deemed to be a full day. A Saturday,
Sunday or a Legal Holiday shall not be deemed a
Haul Day or a Lay Day unless work is performed in
the Lessees shipyard for the Vessel on such
days.
In computing such rental the Lessee shall be
required to include any amount for the right to
use the Dry Dock in the performance of (I) work
ordered by the Government on a cost plus a fixed
fee or a time and material basis, or (ii) any
other work ordered by the Government if the
compensation to be paid to the Lessee shall have
been determined on the basis that no amount is to
be paid for the use of the Dry Dock in the
performance of such work.
ARTICLE 6. MAINTENANCE -- From the time of delivery
until the return of the Dry Dock, the Lessee, at the Lessees
own expense, shall:
(a) keep the slip and drydock basin properly
dredged and maintain the mooring in such a manner as to
permit the safe and efficient operation of the Dry Dock.
(b) Protect, preserve and maintain the Dry Dock
in good working order and condition as prescribed in Navy
Design Manual NAVDOCKS DM-29 (June 1963 edition), Volume III
entitled Drydocking Facilities--Operation, Maintenance and
Inspection, and as directed by the Department, so as to
assure the full availability and usefulness of the Dry Dock
at all times. The Lessee shall be obligated to expand
annually a minimum amount for such normal maintenance which
minimum amount is specified in the Special Provisions.
However, if the performance of such maintenance requires the
expenditures of funds in excess of such specified minimums
amounts, then the Lessee shall continue to perform, at the
Lessees own expense, such normal maintenance as may be
required to protect, preserve, repair, and maintain the Dry
Dock. Normal maintenance shall include, but is not limited
to the following:
(1) Cleaning, testing, painting,
preservation, and repair of the exterior and interior of
accessible hull structures
(2) Block and cradle renewals and replacement
of the block runner parts and structures supports.
(3) Minor repairs and replacements or
renewal, where necessary, of parts and of the pumping and
flooding systems
(4) Minor repairs and maintenance of the
electrical power-generating and distribution systems.
(5) Minor repairs and calibrations of the
water level and draft-indicating systems.
(6) Minor repairs and replacements or
renewal of parts of service equipment, such as compressed
air, water, steam, CO- , fire protection and Sewage system.
(7) Repair and maintenance of cranes,
capstans, flying bridges, ladders, ventilation systems,
fittings and similar items.
(8) Repair and replacement of interiors and
exterior Cathodic protection Systems.
(9) Operate for approximately a thirty (30)
minute period every thirty (30) days all equipment not in
regular use; except that Lessee shall have the right to
place any equipment not required for its operation of the
Dry Dock in an approved state of partially or totally
immobilized preservation or storage at locations not aboard
the Dry Dock. It is understood that the Lessee will, at its
own expense, return and restore such preserved equipment to
operating condition upon the termination or expiration of
this lease.
(10) At the time of each annual inspection
the dry Dock shall be opened sufficiently to expose as much
as possible of the exterior underwater hull in order to
determine its condition. When the inspection by careening
disclosure deterioration of the underwater hull, or the
paint coating thereon, the Drydock shall be drydocked and
necessary repairs including painting of the underwater hull
and other underwater parts shall be made as required. The
dry Dock shall be drydocked at least once during the term of
this lease as a requirement of normal maintenance under this
article. The hull shall be repaired as may be necessary and
completely painted or treated during this drydocking.
NOTE: The drydocking obligation contained herein shall be
in addition to the Lessees normal maintenance obligation set
forth in this paragraph (b).
The performance of such maintenance shall be subject to the
approval of or as may be directed by the Department. If in
any annual period the Lessee shall expend less than the
specified amount for such maintenance of the Dry Dock, the
unexpended balance shall be carried over for each succeeding
year of the term or be [aod in cash as additional rent, at
the election of the Department. Notwithstanding the
provisions of subparagraph (10), the drydocking shall be
accomplished no later than the end of the third year of the
term. The Lessee is hereby expressly made responsible for
any loss or damage of the Dry Dock resulting from failure to
comply with the provisions of this Article to the extent
that such loss or damage is found by the Department to
constitute a risk not of the type customarily covered by
insurance. Joint annual inspections and such other
inspections as may be determined necessary by the Department
shall be made of the material condition of the Dry Dock,
including the machinery and equipment thereof, by the
Department and Lessee, after performance of such maintenance
work as is considered necessary. compliance with such
instructions, however, shall not in itself be construed as a
complete discharge of lessees obligation to protect,
preserve, repair and maintain the Dry Dock.
(c) As soon as practicable after the commencement
of the term of this lease, the lessee shall submit to the
representative of the Department in writing, a proposed
normal maintenance program indicating the manner and time
for the accomplishment of the normal maintenance work set
forth in paragraph (b) of this Article, including an
appropriate maintenance record system, in sufficient detail
to show its adequacy as a normal maintenance program. the
Lessee shall perform such maintenance work as may be
directed by the Contracting Officer in writing in accordance
with the provisions of the above paragraph (b0.
(d) To the extent that any directed repair or
restoration work is determined to be beyond the scope of the
lessees normal maintenance obligations, under paragraph (b)
above, the allowable cost incurred in effecting such repairs
or restoration shall either (I) be credited against the
Amount To Be Paid with respect to the annual period in which
the Lessee shall have commenced such repairs or restoration
and any balance not so credited shall be credited against
the Amount to Be Paid for the succeeding annual periods or
(ii) be reimbursed by the Department to the Lessee as the
Department shall specify by notice to the Lessee, provided
however, that the Government shall not be obligated to so
credit lessee or otherwise reimburse Lessee unless the prior
written approval of the Department shall have been obtained
for such work. the determination as to whether specific
repair or restoration work is beyond the scope of the
Lessees normal maintenance obligation shall be made by the
Lessor. Any disagreement by the Lessee with such
determination shall be deemed a question of fact within the
meaning of Article 27, entitled Disputes.
(e) If it appears that the sum of the Amount to
Be Paid with respect to the succeeding annual periods, will
not be sufficient to permit the cost of repair restoration
to be credited in full against such sum, the Lessee shall
not be required to effect such repairs or
restoration unless and until the Department shall have
agreed that the
cost thereof shall be reimbursed to the Lessee. For the
purpose of determining the credit against the Amount To Be
Paid, the amount to be
allowed shall be the estimated cost of such repair or
restoration as
specified in the written authorization or direction of the
Department to
perform such work, provided, that upon completion of such
repair or
restoration such amount shall be adjusted on the basis of
the allowable actual costs thereof as determined under the
provisions of Article 19 of
this lease. If the authorized or directed repair or
restoration is not
completed within one (1) year following the end of the
period in which such work shall have commenced then the
Lessee shall be entitled to such
credit only to the extent of the allowable cost of the work
actually
performed by the end of such year; provided, that in such
event the
Lessee shall not be obligated to complete such repairs or
restoration unless the Department shall authorize or direct
such completion and shall specify in writing that the cost
of such completion shall be (I)
credited against the Amount To Be Paid for the next
succeeding annual
period, or (ii) reimbursed to the Lessee. The Lessee shall
not be required to give notice to the Department if the
Lessee shall estimate the cost of such repair or restoration
at Five Hundred Dollars ($500.00)
or less and shall elect to perform such repair or
restoration at its own expense. In the event the Lessee
shall, at its own expense, replace any complete and readily
serviceable item of the Dry Dock, such replaced item shall
become the property of the Lessee.
ARTICLE 7. INSURANCE AND RISK OF LOSS --
(a) From the date of delivery of the Dry Dock to
Lessee until return of the Dry Dock to custody of the
Government, the Lessee, at its own expense and without
reimbursement under this lease, shall procure and maintain
the following insurance:
(i) Marine floating dry dock
insurance in the
amounts specified in the special
provisions
to cover the drydock while
located at the
Shipyards and during any tow,
including tow
required to redeliver the Dry
Dock in
accordance with Article 18 of
this lease and
(ii) Workmens compensation (including
longshoremen and harbor workers
coverage),
employers liability, bodily
injury
liability, and third party
property damage
insurance in such amounts as
shall be
sufficient to cover the risks
arising out of
Lessees possession and use of
the Dry Dock,
or insuch amounts as the
government shall
specify pursuant to paragraph
(c) hereof.
Each such policy shall contain
an endorsement
reading substantially as follow
The insurer waives any right of
subrogation against the United
States of
America which might arise by
reason of any
payment under this policy.
(b) All insurance shall be for the protection of
the Government and the Lessee against their respective risks
and liabilities in connection with the Dry Dock, shall name
the Lessee and the United States of America (Department of
the Navy) as the insured, and shall contain a loss payable
clause reading substantially as follows:
Loss, if any, under this policy
shall be
adjusted with (Lessee) and the
proceeds, at
the direction of the Government,
shall be
payable to (Lessee). Proceeds
not paid to
(Lessee) shall be payable to the
United
States of America.
(c) Except as otherwise specifically provided
herein, all insurance required to be carried by the Lessee
shall be in such form, for such amounts and for such periods
of time as the Department may specify, and with such
insurers as the Department, represented by the
Insurance Section, Naval Material Command Washington, D.C.,
may approve.
Each policy of insurance shall provide for thirty(30) days
prior notice
to such Insurance Section in the event of cancellation of
the policy by the insurer. A certificate or certified copy
of each policy of insurance procured hereunder shall be
deposited with the said Insurance
Section promptly following the date of delivery of the Dry
Dock, and similar evidence of renewal of such insurance
shall be deposited with said Insurance Section not less than
thirty (30) days prior to the expiration of the term of any
such insurance.
(d) Nothing in this Article shall be construed
as a waiver of Lessees obligations under Article 8 of this
lease.
(e) All risk of loss of or damage to the Dry
Dock during the term of this lease, whether or not caused by
the failure of the Lessee to exercise due diligence in
complying with the provisions hereof, shall be borne by the
Lessee, and the Lessee shall, upon demand and at the
election of the Department, either compensate the Government
in full for any loss or damage, or rebuild, replace or
repair any part of the Dry Dock so lost or damaged;
provided, however, that the Lessee shall be liable for loss
of or damage to the Dry Dock resulting (I) from the risks
expressly required to be insured hereunder only to the
extent of
insurance so required to be procured and maintained,
whichever shall be
greater, (ii) from risks which are in fact covered by
insurance or for
which the Lessee is otherwise reimbursed, but only to the
extent of such insurance or reimbursement; and provided,
further, that the Lessee shall not be liable for loss of or
damage to the Dry Dock arising from causes
beyond the control of the Lessee occasioned by a risk not in
fact covered and not customarily covered by insurance in the
locality in which the Dry Dock is situated. Nothing
contained herein, however, shall relieve the Lessee of
liability with respect to any loss of or damage to the Dry
Dock, not fully compensated for by insurance, which results
from the willful misconduct, lack of good faith or failure
to exercise due diligence on the part of any of the Lessees
officers, directors or representatives having supervision or
direction of the Dry Dock.
(f) In the event the Dry Dock or part thereof
shall require repair or restoration resulting from loss or
damage the risk of which is required to be covered by
insurance hereunder, the Lessee shall promptly give notice
thereof to the department and submit a report on the extent
of damage together with an estimate of the cost to repair
such damage and the time needed to complete such repairs.
The Lessee shall effect such repair or restoration as the
Department may direct or approve. The
Department shall direct the payment to the Lessee of so much
of the proceeds of the available insurance covering such
loss or damage as may be necessary to reimburse the Lessee
for the allowable costs of effecting such authorized repair
or restoration. If the proceeds of such insurance are not
sufficient to cover the allowable costs of such repair or
restoration, and if the loss or damage has resulted from any
cause the risk of which is not required by this lease to be
borne by the Lessee without regard to the sufficiency of
insurance proceeds, the excess of such allowable costs over
such insurance proceeds shall be allowed as a credit against
the Amount To Be Paid for the annual period in which the
Lessee shall have commenced such repair or restoration and
any balance not so credited shall be credited against the
Amount To Be Paid for the succeeding annual periods of the
then current term of the lease. If the Lessee shall not
have been required or authorized to effect such repair or
restoration, the Lessee shall promptly refund to the
Government the amount of any insurance proceeds heretofore
paid the Lessee on account of such loss or damage.
(g) (I) The Lessee shall provide, maintain,
change or
discontinue such insurance as the
Government may
from time to time require; provided,
that the
Lessees liability for loss or damage
to the
drydock is modified accordingly;
(ii) If any insurance requirement is
changed pursuant
to (i) above, an equitable
adjustment in rent
shall be made so as to reflect any
resulting
savings or increased costs to the
Lessee; and
(iii) The Lessee shall notify the
Department whenever
the use of the Dry Dock in the
performance of
Government contracts changes so as
to become
seventy-five percent (75%) or more
of the total
productive capacity thereof, and
conversely
whenever such use changes so as to
become less
then seventy-five percent (75%) of
such
capacity.
ARTICLE 8. INDEMNIFICATION--The Lessee expressly agrees to
indemnify and hold harmless the United States Government,
its officers, employees, agencies, and instrumentalities
against all suits, actions, claims, cost, or demands
(including, without limitation (i)suits actions, claims,
cost, or demands resulting from death, personal injury, and
property damage; and (ii) suits actions claims cost demands
fees and penalties arising out of violations of any Federal,
State or local environmental protection law, regulation or
ordinance) to which the Government, its officers, employees,
agencies, and instrumentalities may be subject as a result
of the use or possession of the leased property by the
lessee or any sub-Lessee.
ARTICLE 9. DISCLAIMER OF WARRANTY AND CONDITION OF DRY --
(a) The dry dock is leased to the Lessee on an as
is, where is basis without warranty of any kind ,express or
implied, on the part of the Government The Lessee
acknowledges that no representations concerning the
condition or state of repair of the dry dock or any part
thereof have been made by the Government prior to, or at the
time of, the execution of this lease which are not set forth
herein and that this lease contains all the agreements of
the parties. The Lessee further acknowledges that the
Government has made no agreement or promise to alter,
improve, adapt or repair the Dry dock, any part thereof, or
any equipment relating thereto, prior to, or at the time of
this execution of this lease.
(b) Immediately prior to the delivery of the Dry
Dock to the Lessee an inspection of the Physical condition
of the Dry Dock shall be made by representatives of the
Department and the Lessee. A joint report of their
findings shall be made which shall be conclusive evidence
as to the physical conditions of said Dry Dock as of the
time of delivery. A similar survey and joint report shall
be made by the parties upon the termination or expiration
of this lease. The findings of this report shall be
conclusive evidence as to the physical condition of the Dry
Dock as of termination or expiration of this lease.
ARTICLE 10. TERMINATION BY THE GOVERNMENT --
this lease may be terminated by the Government at any time
prior to the expiration of the term hereof:
(a) during any national emergency declared
by the President or Congress;
(b) Upon written notice to the Lessee
whenever the Secretary shall determine that the interest of
national defense so requires.
(c) Upon ten (10) days written notice to the
Lessee if the Lessee shall have defaulted in the performance
of any of its obligation hereunder and shall have failed to
cure or initiate action to cure such default within thirty(
30) days after receipt of notice from the Department
specifying such default or within such longer time as may
have been specified in said notice: provided, however, that
in lieu of terminating this lease, the Government may elect
to perform, or cause to be performed said defaulted
obligations for the account of and at the expense of the
Lessee;
(d) Upon thirty (30) days written notice to
the Lessee after determination by the Contracting Officer
that the Dry dock is not being used to an extent
commensurate with ship repair work available in the area;
(e) In the event institution of the Lessee
or others of proceedings in a Federal or State court of
adjudication of the Lessee as bankrupt, for corporate
reorganization of the Lessee, for an arrangement within the
meaning of the bankruptcy Act and any amendments thereto,
for other similar debtor or creditor relief available under
State or local law, or upon the appointment of a receiver or
trustee for the property of the Lessee;
(f) Upon Ninety (90) days written notice to
the Lessee following a determination by the Secretary that
the Dry Dock is surplus to the further needs and
responsibilities of the Department.
If the Department shall terminate this
lease under paragraph (c), (d) or (e) of this Article, it
shall have the immediate right to reenter and resume
possession of the Dry Dock and remove all persons and
property therefrom and such entry shall not be deemed an
acceptance or surrender of this lease. In such event the
Department may, at its election, relate the Dry Dock for any
period of, less than, equal to, or greater than the
remainder of the term of this lease or any extension
thereof, for any rental and upon any terms and conditions
deemed by the Government to be reasonable and satisfactory,
and the Lessee shall be liable to and shall pay to the
Government the amount of the difference between the rental
and charge provided for under this lease and not paid by the
Lessee and the net rental and charges received by the
Government from such relating of the Dry Dock, which amount
shall be due and payable at the time specified for the
payment of rent in Article 5 (a) hereof. It is expressly
agreed and understood that, whether or not the government
shall have relate the Dry Dock as aforesaid, the Lessee
shall be obligated to and shall reimburse the Government for
any cost incurred by the Government in (i) resuming
possession of the Dry Dock, and (ii) performing or having
performed the maintenance and any other obligation for which
the Lessee is responsible under this lease but has failed to
perform.
ARTICLE 11. TERMINATION BY THE LESSEE--
This lease may be terminated by the Lessee at any time prior
to the expiration of the term hereof upon thirty (30) days
written notice to the Department in the event of damage to
or destruction of all or a substantial part of the Dry Dock
so as to render the Dry Dock incapable of use for the
purpose for which it is leased hereunder; provided, that (i)
such damage or destruction is occasioned by a risk not in
fact covered and not customarily covered by insurance in
the locality in which the Dry Dock is located or by a risk
which is covered by insurance and the Department either has
not authorized or directed the repair, rebuilding or
replacement of the Dry Dock or Doesnt not make provisions
for payment for such repair rebuilding or replacement by the
application of insurance proceeds or otherwise, and (ii)
such damage or destruction is not occasioned by fault or
negligence of the Lessee or by any failure or refusal on its
part fully to comply with its obligations hereunder.
ARTICLE 12. PERFORMANCE BOND--Prior to the Delivery of the
Dry Dock to the Lessee, the /Lessee shall furnish a
performance bond hereunder in a penal sum specified in the
special provisions. Said bond shall be satisfactory in all
respects to the Department.
ARTICLE 13. MOVEMENT OF DOCK--Any movement of the Dry Dock
shall be at the sole expense of the lessee and shall be
conducted in accordance with rules and regulations
prescribed in advance of the movement by the Department;
provided, however, that prior to any movement of the Dry
Dock approval of the Department shall be obtained as to the
preparation for towing including open sea towing the Dry
Dock and preparation of the operating berth of said Dock.
ARTICLE 14. ALTERATIONS-- The Lessee shall not, so long as
this lease shall be in effect, make any substantial
alterations, additions or betterments to the Dry Dock
without the prior approval, or consent of the Department.
All such approved alterations, additions or betterments
shall become the property of the Government when annexed to
any property
included in the Dry Dock, except those items of personal
property belonging to the Lessee which can be removed
readily without injury to the Dry Dock. Such items shall be
removed by the Lessee any time prior to the expiration of
the lease or such additional periods as the Department shall
authorize. All property not no removed shall be deemed
abandoned by the Lessee and may be used or disposed of by
the Government
without liability or any obligation to account to the Lessee
therefor.
Nothing contained herein shall be construed to authorize any
alterations, additions, or betterments to the Dry Dock which
will render the Dry Dock unsuitable for the purpose for
which the Dry Dock was designed or is being retained by the
Government unless, in addition to securing the prior
approval or consent of the Department thereto, the Lessee
shall agree to restore the Dry Dock to the condition thereof
as of the time of delivery, at its own expense, within
ninety (90) days after
being required so do by the Department (I) during any period
of natural emergency, or (ii) after determination by the
Secretary that such restoration is in the interest of
national defense. The Lessee shall not do or suffer
anything to be done upon or in connection with the Dry Dock
which may subject it or any part of it to any liens or
rights in rem and shall promptly discharge or cause to be
discharged any lien or right in rem of any kind other that
one in favor of the Government which at any time shall arise
or exist with respect to the Dry Dock or to any alterations,
additions or betterments thereto.
ARTICLE 15. INVENTORY -- Immediately prior to the
delivery of the Dry Dock to the Lessee, in addition to the
joint inspection of physical
condition required by Article 9(b) of this lease, the
parties hereto shall take a full and complete inventory
including current condition of all portable tools, shop
machinery, spare parts and instruments and all consumable
supplies and materials of the Government then on board the
Dry Dock. Upon the expiration or termination of this lease,
the Parties shall take a similar inventory. The Lessee, at
its expense, as directed by the Department, shall promptly
deliver on board the Dry Dock such portable tools or
instruments or such consumable supplies or materials
as shall be required to meet any deficiency either as to
quantity or quality disclosed by the latter inventory as
shall be required to meet any deficiencies either as to
quantity or quality disclosed by the latter inventory. In
the event the latter inventory discloses an excess quantify
of portable tools or instruments or consumable materials or
supplies, the lessee may remove such excess quantity; in the
absence of prompt removal thereof, title to such excess
quantity shall thereupon vest in the Government.
ARTICLE 16. GOVERNMENT ACCESS--The Government or its
designated representative shall have access at all
reasonable times to the Dry Dock for the of inspecting or
inventorying the same and for other purposes under this
lease.
ARTICLE 17 NON-REHABILITATION--The Government shall
not, as between the parties hereto, be under any duty or
obligation to restore or rehabilitate, or to pay the cost of
the restoration or rehabilitation of, any part of the land
or any other property of the lessee affected by the
installation, possession, operation, or removal of the dry
dock under this lease or otherwise.
ARTICLE 18. RETURN OF DRY DOCK--
(a) Upon expiration or termination of this lease,
the Lessee at its own expense, shall prepare the Dry dock
for tow in accordance with Design Manual DM29 (1963 EDITION)
and return the Dry dock to the custody of the Government,
at the location specified in the special provisions, in as
good a condition as when delivered to the Lessee or as
improved thereafter, normal wear and tear excepted;
provided, however, that the Department may direct the return
of them Dry Dock to be made a place other therein specified
prior to the direction of the Department and that if such
direction causes a decrease in the cost either of
preparation for tow or of tow itself the Lessee shall pay to
the Department an amount equal to the difference between the
cost which would have been incurred because of said
directions.
(b) Following expiration or termination of this
lease, the Lessee shall at the election and direction of the
department, and subject to specifications and procedures set
forth for the applicable Dry Dock, place the Dry Dock in a
safe stowage condition and return it to the custody of the
Department in accordance with the provisions of paragraph
(a) above Safe stowage shall be at the expense of the
Lessee and shall include as a minimum the following:
(1) Internally blanking all overboard
discharges below the waterline.
(2) wiring all sea valves shut.
(3) Cleaning and drying tanks, voids, and
components.
(4) Draining and drying all piping systems.
(5) Cleaning and drying all heads and sanitary
facilities.
(6) Securing all topside closures
(7) Removing all trash, debris, and fire
hazards.
(c) In effecting the return of the dock, the
Lessee shall carry out the following actions: (1) establish
liaison with the Government and provide a plan for safe
stowage of the Dry Dock, (2) conduct a joint inspection with
the government to verify accomplishment of preparation for
safe stowage prior to accepting custody, and (3) the Lessee
shall return the Dry Docks blueprints, Booklet of General
Plans, machinery history records and logs, last joint
material inspection report, and any other dry docking
reports to the Government. To provide for the
accomplishment of any of the above actions required by this
article, this lease will remain in full force and effect for
a period of not more than sixty (60) days after expiration
or termination of this lease, except that the Lessee is not
permitted to use the Dry Dock during this period, nor is the
Lessee required to pay rent therefor. In addition, the
government is not obligated under this lease to reimburse
the lessee for any cost incurred by the Lessee during this
period
(d) The Department reserves the right, with
regard to the obligations set forth in the above paragraphs,
either (1) to accept performance by the Lessee of all or any
part of the work specified therein, or (2) to require the
Lessee in lieu thereof, to pay to the Department the cash
equivalent of the cost of performing such work;
provided, however, that if the Lessees lease shall be
extended for an additional term or otherwise continued, then
the obligations in this paragraph shall be deferred until
such time as the then current lease shall expire or
terminate.
]
(e) In the event the parties are unable to agree
as to the amount representing the cost of performing any
such work, the Lessee shall pay to the Government in cash
such amount as the Contracting Officer shall determine:
provided, that if the Lessee shall dispute the
reasonableness of such amount, the said determination of the
Contracting Officer shall be deemed to be a question of fact
within the meaning of Article 27, entitled Disputes.
ARTICLE 19. PAYMENTS AND DISBURSEMENTS --
(a) Payments required to be made by the Lessee
pursuant to
Article 5 of this lease shall be made to the Commanding
Officer, Navy Regional Finance Center, Washington, D.C.
20376.
(b) At the end of each annual period, the Lessee
may submit
to the Contracting Officer certified bills in respect of all
items for which the Lessee shall be entitled to
reimbursement under this lease.
Promptly after receipt of each such submission of bills, the
Government
shall, within the limits of the appropriations available
therefor, pay
to the Lessee such amount as said office shall have
determined to be allowable costs reimbursable to the Lessee
under this lease on account
of such items and not previously paid or credited. Such
allowable costs
shall be determined in accordance with Part 5 of Section XV
of the Defense Acquisition Regulation in effect on the date
of this lease, and shall exclude any profit to the Lessee
therefor. The decisions of said Contracting Officer when
reduced to writing and received by the Lessee, shall be
binding on the parties hereto, subject to written appeal by
the Lessee in accordance with Article 27, Disputes.
(c) When any payment is to be made hereunder,
the Contracting Officer, as a condition precedent to
approving such payment, may, in his discretion, require that
affidavits satisfactory to him be furnished by the Lessee
that no liens or rights in rem of any kind lie under or have
attached against the Dry Dock, or any material or equipment
furnished therefor, or any part thereof, either for or on
account of any work done upon or about the Dry Dock, or any
material or equipment furnished therefor, or in connection
therewith, or any other cause or thing, or any claims or
demands of any kind except the claims of the Department.
The Lessee shall promptly discharge or cause to be
discharged any valid lien or right in rem of any kind other
than one in favor of the Government which at any time shall
arise or exist with respect to the Dry Dock or material or
equipment furnished therefor, or any part thereof. If any
such lien or right in rem shall not promptly be discharged,
the Government may discharge or cause to be discharged said
lien or right in rem at the expense of the Lessee.
ARTICLE 20. STATE AND LOCAL TAXES -- In the event
that, as a result of any future Act of Congress subjecting
Government-owned property to ad valorem taxation, taxes,
assessments, or similar charges are thereupon imposed by
State or local authorities upon the property leased
hereunder( other then upon the Lessees possessory or use
interest therein) the Lessee shall pay the sum when sue and
payable and this lease shall be renegiotiated so as to
accomplish an equitable reduction in the rent provided for
therein, which reduction shall not bear greater then the
amount of such taxes, assessments, or similar charges;
provided, that in the event that the parties hereto are
unable to agree within ninety (90) days from the date of the
imposition of such taxes, assessments, or similar charges,
on a rental which, in the opinion of the Department,
constitutes a reasonable return to the Government on the
leased property, then, in such event, the Department shall
have the right to determine the amount of the rental, which
determination shall be binding on the Lessee, subject to
appeal in accordance with The Article of this lease entitled
Disputes.
ARTICLE 21. PRORATION IN EVENT OF TERMINATION--In the
event of termination of this lease pursuant to Article 10
(a) or (b0, or Article 11, effective at any time other than
at the end of the fixed period of term, the amount to be
paid to the Government shall be prorated to such date and
termination.
ARTICLE 22. FAILURE TO INSIST ON COMPLIANCE-- The failure
of the Government to insist, in any one or more instances,
upon performance of any of the terms, covenants or
conditions of this lease shall not be construed as a waiver
or relinquishment of the Governments right to the future
performance of any terms, convenants or conditions; and the
Lessees obligations in respect of such future performance
shall continue in full force and effect.
ARTICLE. 23 RIGHT TO SUBLEASE OR ASSIGN--Neither this lease
nor any interest herein shall be transferred, assigned or
subleased by the Lessee except with written consent of the
Department nor shall the Dry
Dock be sublet or otherwise made available by the Lessee to
any third
party or parties, including any other Federal Government
agency, without
such written consent.
ARTICLE 24 COVENANT AGAINST CONTINGENT FEES -- The
Lessee warrants that no person or selling agency has been
employed or retained to solicit or secure this contract upon
an agreement or understanding for a
commission, percentage, brokerage, or contingent fee,
excepting bona fide employees or bona fide established
commercial or selling agencies maintained by the Lessee for
the purpose of securing business. For breach or violation
of this warranty the Government shall have the right to
annul this contract without liability or in its discretion
to deduct from the contract price or consideration, or
otherwise cover, the full amount of such commission,
percentage, brokerage, or contingent fee.
ARTICLE 25. OFFICIALS NOT TO BENEFIT -- No member of
or delegate to Congress, or resident commissioner, shall be
admitted to any share or part of this lease or to any
benefit that may arise therefrom but this provision shall
not be construed to extend to this lease made with a
corporation for its general benefit.
ARTICLE 26. GRATUITIES --
(a) The Government may, be written notice to the
Lessee, terminate the rights of the Lessee under this lease
if it is found after
notice and hearing, by the Secretary or his duty authorized
representative, that gratuities (in the form of
entertainment, gifts, or otherwise) were offered or given by
the Lessee, or any agent or representative of the Lessee, to
any officer or employee of the Government with a view toward
securing this lease or securing favorable
treatment with respect to the awarding or amending of the
same, or the making of any determinations with respect
thereto; provided, that the existence of the facts upon
which the Secretary or his duty authorized representative
makes such findings shall be in issue and may be reviewed in
any competent court.
(b) In the event this lease is terminated as
provided in paragraph (a) hereof, the Government shall be
entitled (I) to pursue the
same remedies against the Lessee as it could pursue in the
event of a breach of the lease by the Lessee, and (ii) as a
penalty, in addition to any other damages to which it may be
entitled by law, to exemplary damages in an amount (as
determined by the Secretary or his duly authorized
representative) which shall be not less than three or more
than ten times the costs incurred by the Lessee in providing
any such gratuities to any such officer or employee.
(c) The rights and remedies of the Government
provided in this clause shall not be exclusive and are in
addition to any other rights and remedies provided by law or
under this lease.
ARTICLE 27. DISPUTES --
(a) Except as otherwise provided in this
contract, any dispute concerning a question of fact arising
under this contract which is not disposed of by agreement
shall be decided by the Contracting Officer who shall reduce
his decision to writing and main or otherwise furnish a copy
thereof to the Lessee. The decision of the Contracting
Officer shall be final and conclusive unless, within thirty
(30) days from date of receipt of such copy, the Lessee
mails or otherwise furnishes to the Contracting Officer a
written appeal addressed to the Secretary. The decision of
the Secretary or his duly authorized representative for the
determination of such appeals shall be final and conclusive
unless determined by a court of competent jurisdiction to
have been fraudulent, or capricious, or arbitrary, or so
grossly erroneous as necessarily to imply bad faith, or not
supported by substantial evidence. In connection with any
appeal proceeding under this clause, the Lessee shall be
afforded an opportunity to be heard and the offer evidence
in support of his appeal. Pending final decision of a
dispute hereunder, the Lessee shall proceed diligently with
the performance of the contract and in accordance with the
Contracting Officers decision.
(b) This Disputes clause does not preclude
consideration of law questions in connection with decisions
provided for in paragraph (a) above; provided, that nothing
in that contract shall be construed as
making final the decision of any administrative official,
representative, or board on a question of law.
ARTICLE 28. EQUAL OPPORTUNITY -- during the
performance of this
contract, the Contractor agrees as follows:
(1) The Contractor will not discriminate against
any employee
or applicant for employment because of race, color,
religion, sex, or
national origin. The Contractor will take affirmative
action to ensure that applicants are employed, and that
employees are treated during employment without regard to
their race, color, religion, sex, or national origin. Such
action shall include but not be limited to the following:
Employment, upgrading, demotion, or transfer, recruitment or
recruitment advertising; layoff or termination, rates of pay
or other forms of compensation; and selection for training,
including apprenticeship. The Contractor agrees to post in
conspicuous places, available to employees and applicants
for employment, notices to be provided by the Contracting
Officer setting forth the provisions of this Equal
Opportunity clause.
(2) The Contractor will, in all solicitations or
advertisements for employees placed by or on behalf of the
Contractor, state that all qualified applicants will receive
consideration for employment without regard to race, color,
religion, sex or national origin.
(3) The Contractor will send to each labor union
or representative of workers with which he has a collective
bargaining agreement or other contract or understanding a
notice to be provided by the agency Contracting Officer,
advising the labor union or workers representative of the
contractors commitments under this Equal Opportunity clause
and shall post copies of the notices in conspicuous places
available to employees and applicants for employments
(4) The contractor will comply with all
provisions of Execution Order No. 11246 of September
24,1965, as amended by Execution order No 11375 of October
13, 1967, and of the rules, regulations, and revenant orders
of the Secretary of Labor
(5) The Contractor will furnish all information
and reports required by Executive Order No. 11246 of
September 24, 1965. as amended by Executive Order No. 11375
of October 13, 1967, and by the rules, regulation, and
orders of the Secretary of Labor or pursuant thereto, and
will permit access to his books, records, and accounts by
the contracting agency and the Secretary of Labor for
purposes of investigation to ascertain compliance with such
rules regulations and orders.
(6) In the event of the contractors noncompliance
with the Equal Opportunity clause of this contract or with
any of the said rules, regulations, or orders, the contract
may be canceled, terminated or suspended in whole or in
part, and the Contractor may be declared ineligible for
further Government contracts in accordance with procedures
authorized in Executive order No. 11246 for September
24,1965, as amended by Executive Order No. 11375 of October
13, 1967, and such other sanctions may be imposed and
remedies invoked as provided in Executive Order NO. 11246 of
September 24, 1965, as amended by Executive Order No. 11375
of October 13, 1967, or by rule, regulation, or order of the
Secretary of Labor, or as otherwise provided by law.
(7) The Contractor will include the provisions of
paragraphs (1) through (7) in every subcontract or purchase
order unless exempted by rules, regulations, or orders of
the Secretary of Labor issued pursuant to section 204 of
Executive Order No. 11246 or September 24,1965, as amended
by Executive Order No. 11375 of October 13, 1967, so that
such provisions will be binding upon each subcontractor or
vendor.
The Contractor will take such action with respect to any
subcontract or purchase order as the contracting agency may
direct as a means of enforcing such provisions including
sanctions for noncompliance: Provided, however, that in the
event the Contractor becomes involved in, or is threatened
with, litigation with a subcontractor or vendor as a result
of such direction by the contracting agency, the Contractor
may request the United States to enter into such litigation
to protect the interests of the United States.
ARTICLE 29. EXAMINATION OF RECORDS --
(a) The Lessee agrees that the Comptroller
General of the United States or any of his duly authorized
representatives shall, until the expiration of three years
after expiration of this contract or such
lesser time as is agreed to by the parties, have access to
and the right to examine any directly pertinent books,
documents, papers, and records of the Lessee involving
transactions related to this contract.
(b) The Lessee further agrees to include in all
his subcontracts hereunder a provision to the effect that
the subcontractor agrees that the Comptroller General of the
United States or any of his duly authorized representatives
shall, until the expiration of three years after expiration
of the subcontract or such lesser time as may be approved by
the Government as appropriate, have access to and the right
to examine any directly pertinent books, documents, papers
and records of such subcontractor involving transactions
related to the subcontract. The term subcontract as used in
this clause excludes (I) purchase orders not exceeding
$2,500, or (ii) subcontracts or purchase orders for public
utility services at rates established for uniform
applicability to the general public.
(c) The periods of access and examination
described in (a) and (b) above for records which related to
(I) appeals under the Disputes clause of this contract, (ii)
litigation or the settlement of claims arising out of the
performance of this contract, or (iii) costs and expenses of
this contract as to which exception has been taken by the
Comptroller General or any of his duly authorized
representatives, shall continue until such appeals,
litigation, claims or exceptions have been disposed of.
ARTICLE 30. LABOR PROVISIONS --
(a) Convict Labor -- In connection with the
performance of work under this lease, the Lessee agrees not
to employ any person undergoing sentence of imprisonment at
hard labor.
(b) Contract Work Hours Standards Ace - Overtime
Compensation -- This contract, to the extent that it is of a
character specified in the Contract Work Hours Standards Act
(40 U.S.C. 327-330), is subject to the following provisions
and to all other applicable provisions and exceptions of
such Act and the regulations of the Secretary of Labor
thereunder.
(I) Overtime requirements. No contractor or
subcontractor contracting for any part of the contract work
which may require or involve the employment of laborers or
mechanics shall require or permit any laborer or mechanic in
any workweek in he is employed on such work to work in
excess of eight hours in any calendar day or in excess of
forty hours in such workweek or work subject to the
provisions of the Contract Work Hours Standards Act unless
such laborer or mechanic receives compensation at a rate not
less that one and one-half times his basic rate of pay for
all such hours worked in excess of eight hours in any
calendar day or in excess of forty hours in such workweek,
whichever is the greater number of overtime hours.
(ii) Violation; liability for unpaid wages;
liquidated damages. In the event of any violation of the
provisions of paragraph (I), the Contractor and any
subcontractor responsible therefor shall be liable to any
affected employee for his unpaid wages. In addition, such
Contractor and subcontractor shall be liable to the United
States for liquidated damages. Such liquidated damages
shall be computed with respect to each individual laborer or
mechanic employed in violation of the provisions of
paragraph (I) in the sum of $10 for each calendar day on
which such work in excess of eight hours or in excess of his
standard workweek of forty hours without payment of the
overtime wages required by paragraph (I).
(iii) Withholding for unpaid wages and
liquidated damages. The Contracting Officer may withhold
from the Government Prime Contractor, from any moneys
payable on account of work performed by the Contractor or
subcontractor, such sums as may administratively be
determined to be necessary to sashays any liabilities of
such Contractor or subcontractor for unpaid wages and
liquidated damages as provided in the provisions of
paragraph (ii).
(iv) Subcontracts. The Lessee shall insert
paragraphs (I) through (iv) of this clause in all
subcontracts, and shall require their inclusion in all
subcontracts of any tier.
(v) Records. The Lessee shall maintain
payroll records containing the information specified in 29
CFR 516.2 (a). Such records shall be preserved for three
years from the completion of the contract.
(c) Overtime and Shift Premiums --
(I) Insofar as practicable the Lessee shall
perform any work required under this lease which is at the
expense of the Government without the use of overtime or
multi-shift labor for which premium payments are required,
except to the extent that such payments either (A) are
approved in writing on behalf of the Government by the
Contracting Officer or (B) are paid for work -
(1) necessary to cope with emergencies
such as
those resulting from accidents,
natural
disasters, or breakdowns of
equipment;
(2) by indirect labor employees such as
those
performing duties in connection
with
administration, protection,
transportation,
maintenance, operation of
utilities, or
accounts;
(3) in the performance of tests,
laboratory
procedures, loading or unloading of
transportation media, and
operations in flight
or afloat, which are continuous in
nature and
cannot reasonably be interrupted or
otherwise
completed; or
(4) which will result in lower overall
cost to the
Government.
(ii) The cost of overtime premiums or shift
premiums otherwise allowable under (I) above shall be
allowed only to the extent the amount thereof is reasonable
and properly allocable to the work under this lease.
ARTICLE 31. AUDIT BY DEPARTMENT OF DEFENSE --
(a) General. The Contracting Officer or his
representatives shall have the audit and inspection rights
described in the applicable
paragraphs (b), (c) and (d) below.
(b) Examination of Costs. The Contractor shall
maintain, and the Contracting Officer and his
representatives shall have the right to examine books,
records, documents, and other evidence and accounting
procedures and practices, sufficient to reflect properly (1)
all direct and indirect costs of whatever nature claimed to
have been incurred and anticipated to be incurred for the
performance of this contract and (2) the use of, and charges
for the use of, the facilities. Such right of examination
shall include inspection at all reasonable times of the
Contractors plants, or such parts thereof, as may be engaged
in the performance of this contract.
(c) Cost or Pricing Data. If the Contractor
submitted cost or pricing data in connection with the
pricing of this contract or any price competition,
established catalog or market prices of commercial items
sold in substantial quantities to the general public, or
prices set by law or regulation, the Contracting Officer or
his representatives who are employees of the United States
Government shall have the right to examine all books,
records, documents and other data of the Contractor related
to the negotiation, pricing or performance of such contract,
change or modification, for the purpose of evaluating the
accuracy, completeness and currency of the cost or pricing
data submitted. Additionally, in the case or pricing any
change or modification exceeding $100,000 to formally
advertise contracts, the Comptroller General of the United
States or his representatives who are employees of the
United States Government shall have such rights. The right
of examination shall extend to all documents necessary to
permit adequate evaluation of the cost or pricing data
submitted, along with the computations and projections used
therein.
(d) Reports. If the Contractor is required to
furnish Cost Information Reports (CIR) or Contract Fund
Status Report (CFSR), the Contracting Officer or his
representatives shall have the right to examine books,
records, documents, and supporting materials, for the
purpose of evaluating (I) the effectiveness of the
Contractors policies and procedures to produce data
compatible with the objectives of these reports, and (ii)
the data reported.
(e) Availability. The materials described in
(b), (c)and (d) above shall be made available at the office
of the Contractor, at all reasonable times, for inspection,
audit, or reproduction, until the expiration of three years
from the date of final payment under this contract or such
lesser time specified in Appendix M of the Armed Services
Procurement Regulation, and for such longer period, if any,
as is required by applicable statute, or by other clauses of
this contract, or by (1) and (2) below:
(1) If this contract is completely or
partially terminate, the records relating to the work
terminated shall be made available for a period of three
years from the date of any resulting final settlement.
(2) The Records which relate to appeals
under the Disputes clause of this contract, or litigation or
the settlement of claims arising out of the performance of
this contract, shall be made available until such appeals,
litigation, or claims have been disposed of.
(f) The Contractor shall insert a clause
containing all the provisions of this clause, including this
paragraph (f), in all subcontracts exceeding $10,000
hereunder, except altered as necessary for proper
identification of the contracting parties and the
Contracting Officer under the Government prime contract.
ARTICLE 32. CERTIFICATION OF REQUESTS FOR ADJUSTMENT
OR RELIEF EXCEEDING $100,000 --
(a) Any contract claim, request for equitable
adjustment to contract terms, request for relief under
Public Law 85-804 or other similar request exceeding
$100,000 shall bear, at the time of submission the following
certificate given by a senior company official in charge at
the plant or location involved:
I certify that the claim is made in good
faith, that the
supporting data are accurate and complete to
the best of
my knowledge and belief; at that the amount
requested
accurately reflects the contract adjustment
for which the
Contractor believes the Government is liable.
______________________________
(Officials Name)
______________________________
(Title)
(b) The certification in paragraph (a) requires
full disclosure of all relevant facts, including cost and
pricing data.
(c) The certification requirement in paragraph
(a) does not apply to:
(I) requests for routine contract payments--
for example,
those for payment for accepted supplies
and
services, routine vouchers under cost
reimbursement-
type contracts, and progress payment
invoices;
(ii) final adjustments under incentive
provisions of \
contracts;
(d) In those situations where no claim
certification for the
purposes of Section 813 has been submitted prior to the
inception of a
contract dispute, a single certification, using the language
prescribed by the Contract Disputes Act but signed by a
senior company official in
charge at the plant or location involved, will be deemed to
comply with both statutes.
ARTICLE 33. DEFINITIONS -- As used throughout this
lease the following terms shall have the meanings set forth
below:
(a) The term Department means the Secretary of
the Navy, the Commander, Naval Sea Systems Command of the
Department of the Navy, the Contracting Officer, and such
other duly authorized representative or representatives
specified in the Special Provisions, which the Secretary or
the Commander, Naval Sea Systems command may designate from
time to time.
(b) The term Secretary means the Secretary, under
Under Secretary or and Assistant Secretary of the Department
of the Navy; and the term his duly authorized representative
means any person or persons on board (other than the
Contracting Officer) authorized to act for the Secretary.
(c) The term Contracting Officer means the person
executing this lease on behalf of the Government and any
other officer or civilian employee who is properly
designated Contracting Officer; and the term includes,
except as otherwise provided in this contract, the
authorized representative of the Contracting Officer acting
within the limits of his authority.
(d) The term Contractor means Lessee.
ARTICLE 34. NOTICES -- No notice, order, direction,
determination, requirement, consent or approval under this
lease shall be of any effect unless in writing.
Contract
No.______________________
IN WITNESS WHEREOF, the parties hereto have duly executed
this Contract as of the date first above written.
THE UNITED STATES OF
AMERICA
By: /s/ Henry Jacob
Contracting Officer
Naval Sea Systems
Command
TODD PACIFIC SHIPYARDS
CORPORATION
By: /s/ Clifford E. Jones
Title: Vice President-
Resources
13-May-1981
<PAGE>
AMENDMENT OF SOLICIATATION/MODIFICATION OF CONTRACT
AMENDMENT/MODIFICATION NO. EFFECTIVE DATE
P000008 See Block 16C
ISSUED BY CODe N000024 ADMINISTERED BY
CODE N62799
THE NAVAL SEA SYSTEMS COMMAND Supervisory of
Shipbuilding
DEPARTMENT OF THE NAVY Conversion and
Repair
WASHINGTON, D.C. 20362-5101 Seattle, WA 98115-
5003
BUYER/SYMBOL: J.M. Mullinax/SEA 02813
PHONE: AREA CODE 703 602-1264
NAME AND ADDRESS OF CONTRACTOR
Todd Pacific Shipyards Corporation
Seattle Division
PO Box 3806
Seattle, WA 98124
MODIFICATION OF CONTRACT/ORDER NO.
N00024-81-L-0004
DATE
1983 JUNE 03
11 THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
The above numbered solicitation is amended as set forth in
Item 14. The hour and date detailed for receipt of Offers
is amended is not amended.
Offers must acknowledge receipt of this amendment prior to
the hour and date specified in the solicitation or as
amended, by one of the following methods: (a) by completing
items 8 and 15 and returning ____ copies of the amendment
(b) by acknowledging receipt of this amendment of said copy
of the offer submitted or (c) by separate letter or telegram
which includes a reference to the solicitation and amendment
numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT
THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE
HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR
OFFER. If by virtue of this amendment you desire to change
an offer already submitted, such change may be made by
telegram or letter, provided each telegram or letter makes
reference to the solicitation and this amendment and is
received prior to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
XX Not Applicable
13 THIS ITEM APPLIES ONLY TO MODIFICATIONS OF
CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS
DESCRIBED IN ITEM 14.
X THIS CHANGE ORDER IS ISSUED PURSUANT TO: (specify
authority).
The changes set forth in Item 14 are made to the contract
order no.
in Item 10A
THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT
THE
ADMINISTRATIVE CHANGES (such as changes in paying offers,
appropriation data, etc) SET FORTH IN ITEM 14, PURSUANT
TO THE
AUTHORITY OF FAR 43.103(b)
X THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF:
By Mutual Agreement of the Parties.
OTHER
IMPORTANT Contractor __ is not _X_ is required to sign this
document and return 2 copies to the issuing office.
DESCRIPTION OF AMENDMENT/MODIFICATION
WHEREAS, Lease Contract N00024-81-L-0004 expires 14 June
1990, and
WHEREAS, the parties desire to extend the term of the lease
for a period of five (5) years;
NAME AND TITLE OF SIGNER NAME AND TITLE OF
CONTRACTING OFFICER
STUART S. ADAMSON JAMES M. MULLINAX
VICE PRESIDENT Contracting Officer
/S/ STUART S. ADAMSON 6/6/90 /S/ JAMES M. MULLINAX
6/6/90
NOW, THEREFORE, the parties do hereby agree as follows:
1. Delete Clause 2. Term of Lease in its entirety and
substitute therefore:
Clause 2. Term of Lease
The term of this lease extension shall be five (5) years
commencing 15 June 1990 unless sooner terminated as herein
provided.
2. Delete subparagraph (a) of Clause 4 entitled Maintenance
and substitute therefore:
(a) Minimum Normal Maintenance
The minimum amount which the Lessee is obligated to expend
annually for normal maintenance on the YFD-70 pursuant to
Article 6(b) of the General Provisions is One Hundred Fifty
Thousand Dollars ($150,000.00).
3. Delete Clause 10 entitled Safety Inspection in its
entirety and substitute therefore:
Clause 10. Safety Certification
(a) The Lessee will protect, maintain, repair and restore
the dry dock to maintain, without alteration, improvement or
modification of the dry dock, certification of the dry dock
in accordance with the latest published version or revision
in accordance with the latest published version or revision
of MIL-STD-1625(SH) for the duration of the Lease. The
Lessee will maintain the capability to dock ships of FFG-7
and LPD-4 classes at the least site. There is no expressed
or implied warranty of any kind whatsoever, regarding the
condition of the dry dock with regard to certification may
be grounds for Navy termination of the lease in accordance
with (Section I) Article 10. Termination by the Government.
(b) In no event shall the Government be under any
obligation to provide funds for, or be required to approve,
any corrections, modification, or improvement to obtain
certification or recertification. Failure to obtain
certification or recertification shall in no event form the
basis for any claim by the Lessee against the Government.
(c) the Navy shall be under no obligation to guarantee U.S.
Navy shipbuilding, ship repair or conversion work at the dry
dock.
4. Except as provided herein, all other terms and
conditions of N00024-81-L-0004 remain unchanged and in full
force and effect.
AWARD/CONTRACT
1. This contract is a rated order under DPAS (15 CFR 350) page 1
of 55
2. Contract (Proc. Inst. Ident.) No.
3. Effective Date 01 Oct 94
4. Requisition purchase request/project no.
5. Issued by
Naval Sea Systems Command
Buyer/Symbol: Carla J. Brown/SEA 0281L
2531 Jefferson Davis Hwy
Arlington, VA 22242-5160
Phone: Area Code 703/602-1265
6. Administered by (If other than Item. CODE Criticality
Designator;
Subship Puget Sound
2802 Wetmore Ave, Suite 500
Everett, WA 98201-3518
7. Name and Address of Contractor
CEC No.
Todd Pacific Shipyards Corporation
1801 16th Avenue S.W.
Seattle, WA 98134
8. Delivery
N/A
9. Discount for prompt payment
N/A
10. Submit invoices
(4 copies unless otherwise specified)_To Address Shown In
11. Ship to/Mark for N/A
12. Payment will be made by: N/A
13. Authority for using other than full and open competition
N/A
14. Accounting and Appropriation data N/A
15a. Item No.
15b. Supplies/Services See Section B
15c. QTY
15d Unit
15e. Unit price
15f. Amount
15g. Total amount of contract SEE SECTION B
16. Table of Contents
Xd Sec. Description Page(s)
x A SOLICITATION/CONTRACT FORM 1
X B SUPPLIES OR SERVICES AND PRICES/COSTS 2
X C DESCRIPTION/SPECS/WORK STATEMENT 3
X D PACKAGING AND MARKING 5
X E INSPECTION AND ACCEPTANCE 5
X F DELIVERIES OR PERFORMANCE 5
X G CONTRACT ADMINISTRATION DATA 7
X H SPECIAL CONTRACT REQUIREMENTS 8
X I CONTRACT CLAUSES 18
X J LIST OF ATTACHMENTS 44
X K REPRESENTATIONS, CERTIFICATIONS AND
OTHER STATEMENTS OF OFFERORS 45
X L INSTS., CONDS., AND NOTICES TO OFFERORS
X M EVALUATION FACTORS FOR AWARD
17. ( ) CONTRACTORS NEGOTIATED AGREEMENT
(Contractor is required to sign this document and return ___
copies to issuing office.) Contractor agrees to furnish and
deliver all items or perform all the services set forth or
otherwise identified above and on any continuation sheets for the
consideration stated herein. The rights and obligations of the
parties to this contract shall be subject to and governed by the
following documents: (a) this award/contract (b) the
solicitation, if any, and (c) such provisions, representations,
certifications and specifications as are attached or incorporated
by reference herein. (attachments are listed herein.)
18. AWARD (Contractor is not required to sign this document.)
Your offer of Solicitation Number
including the additions or changes made by you which additions or
changes are set forth in full above, is hereby accepted as to the
items listed above and on any continuation sheets. This award
consummates the contract which consists of the following
documents: (a) the Governments solicitation and you offer, and
(b) this award/contract. No further contractual document is
necessary.
19A. NAME AND TITLE OF SIGNER: (Type or print)
Roland H. Webb
19B. NAME OF CONTRACTOR: Roland H. Webb
19C. Oct. 04/94
20A. NAME OF CONTRACTING OFFICER
J B HALL
CONTRACTING OFFICER
20B: UNITED STATES OF AMERICA
BY JAB. HALL
20C. 02 NOV 94
NSN 7540-01-53-8069
PREVIOUS EDITION UNUSABLE
25-106
*U.S. GOVERNMENT PRINTING OFFICE 1983 0-380-498(91)
STANDARD FORM 26 (REV. 4-85)
Prescribed by GSA
FAR (48 CFR) 53.214(a)
<PAGE>
SCHEDULE
SECTION B--SUPPLIES OR SERVICES
Item 0001 - First Five Year Lease Period
a. The lump sum annual rental referred to in Lease Clause 2,
Rent, subparagraph (b)(i) is $10,000. See Note A.
Item 0002 First Additional Five Year Lease Period (See Section F)
a. The lump sum annual rental referred to in Lease Clause 2,
Rent, subparagraph (b)(i) is $10,000. See Note A.
Item 0003 Second Additional Five Year Lease Period (See
Section F)
a. The lump sum annual rental referred to in Lease Clause 2,
Rent, subparagraph (b)(i) is $10,000. See Note A.
Item 0004 Third Additional Five Year Lease Period (see Section F)
a. The lump sum annual rental referred to in Lease Clause2,
Rent, subparagraph (b)(i) is $10,000. See Note A.
Note A: Offeror shall fill in the proposed annual rent for the
Items 0001, 0002, 0003, and 0004.
SCHEDULE
SECTION C--DESCRIPTION/SPECIFICATIONS/WORK STATEMENT
Item 0001, and, if extended, items 0002, 0003 and 0004 - Floating
Dry Dock YFD-54 (one piece timber dock) - The Government does
hereby lease and rent floating Dry Dock YFD-54 to the Lessee and
the Lessee does hereby hire and rent the same from the
Government.
1. GENERAL DESCRIPTION (Note: All figures are approximate)
Designed Lifting Capacity 5,000 tons
Length Overall 412 feet
Draft, Over Pontoon Deck 23 feet, 4 inches
Width, Overall Molded 90 feet
Draft, Maximum When Submerged 37 feet
Year Built 1943
2. REQUIREMENTS
Immediately prior to delivery of the Dry Dock, Lessee will do the
following:
(a) submit to the PCO the plans for the operating basin and
mooring of the Dry Dock in accordance with Special Lease
Requirement H-1, Operation and Use (these plans must be approved
by the PCO before the Dry Dock is permanently moored);
(b) participate in an inspection of the physical condition of the
Dry Dock and take a full and complete inventory in accordance
with Special Lease Requirement H-2, Inspection and Inventory;
(c) furnish the PCO the insurance policies or other evidence of
insurance required by Lease Clause 3, Insurance and Risk of Loss;
(d) submit to the PCO the Performance Bond required by Lease
Clause 4, Performance Bond;
(e) furnish the PCO the towing plan as required in Lease Clause
11, Movement of Dock.
3. CAUTION
THE DRY DOCK AND RELATED EQUIPMENT MATERIAL AND OTHER SUPPLIES
ARE LEASED TO THE LESSEE ON AN AS is, WHERE IS BASIS WITHOUT
WARRANTY OR REPRESENTATION OF ANY KIND, EXPRESS OR IMPLIED, ON
THE PART OF THE GOVERNMENT. SEE LEASE CLAUSE 8, DISCLAIMER OF
WARRANTY AND CONDITION OF DRY DOCK.
SCHEDULE
SECTION D--PACKAGING AND MARKING
Not Applicable to this Lease Agreement.
SECTION E--INSPECTION AND ACCEPTANCE
1. Inspection - See Lease Clause 8, Disclaimer of Warranty and
Condition of Dry Dock.
2. Acceptance - The location at which the Lessee will accept the
Dry Dock is either at its present location, Todd Pacific Shipyard
Corporation, Seattle, WA, or the Inactive Ship Maintenance
Facility, Bremerton, WA, and shall be in accordance with Section
F, Deliveries or Performance.
SECTION F--DELIVERIES OR PERFORMANCE
1. Delivery - The location at which the Lessee will accept
delivery and take custody of the Dry Dock is either at its
current location, Todd Pacific Shipyard Corporation, Seattle, WA,
or the Inactive Ship Maintenance Facility, Bremerton, WA.
2. The place of performance of this lease shall be as set
forth below:
NAME Todd Pacific, Shipyards Corporation
STREET ADDRESS 1801 16th Avenue S.W.
CITY/STATE/ZIP CODE Seattle, WA 98134
3. This lease is for a period of five (5) years, commencing 01
Oct. ER 1994, unless this lease is terminated in accordance with
Lease Clause 9, Termination by the Government, or Lease Clause
10, Termination by the Lessee. The Lessee has the right to
extend this lease for three (3) additional terms of five (5)
years each by giving written notice to the PCB at least-nine (9)
months prior to expiration of the Lease term. The Lessees right
to extend is conditional upon full compliance with all terms and
conditions, including achievement and maintenance of the maximum
certified rated capacity in accordance with Special Lease
Requirement H-6, Safety Certification, and upon concurrence by
the PCB.
4. After the delivery date specified in paragraph 3 above, the
Lessee will, at its own expense, promptly remove the Dry Dock to
the operating basin provided therefor, moor it therein, and
furnish all facilities and accomplish all work required to place
the Dry Dock in operation. Prior to delivery the Lessee will
comply with the provisions set forth in Section C, paragraph 2,
Requirements. In the event the Dry Dock is not delivered to the
Lessee by reason of the Lessees failure to perform any of the
Section C requirements or other obligations under this lease, or
by reason of any other act, fault or failure of the Lessee, the
Lessee will remain liable for the full performance of all the
obligations of this lease including the payment of rent effective
as of the date specified in paragraph 3 above for the
commencement of the term . The Government will not be liable to
the Lessee for damages or loss of profit by reason of any delay
or failure to deliver the Dry Dock occasioned by an act or fault
of the Government, however, in that event the date upon which the
rental obligation commences will be adjusted to reflect the
period of delay or failure to deliver the Dry Dock.
5. Return of the Dry Dock upon expiration or termination will be
in accordance with Special Lease Requirement H-8, Return of Dry
Dock.
SECTION G--CONTRACT ADMINISTRATION DATA
1. The Contract Administration Office is the office specified in
Block 24 of Standard Form 33.
2. The Leasing Office Representative is as specified in Block 7
of Standard Form 33.
3. Enter below the address (street and number, city, county,
state and zip code) of prospective Lessees facility which will
administer the proposed contract if such address is different
from the address shown on the cover page (Standard Form 33).
Name of Offer or Lessee
SCHEDULE
SECTION H--SPECIAL LEASE REQUIREMENTS
The following are the Special Lease Requirements of this Lease
Agreement:
TITLE PAGE
H-1 OPERATION AND USE 9
H-2 INSPECTION AND INVENTORY 9
H-3 NORMAL MAINTENANCE 10
H-4 DRY-DOCKING REQUIREMENTS 12
H-5 CAPITAL MAINTENANCE 13
H-6 SAFETY CERTIFICATION 14
H-7 PROTECTION OF THE ENVIRONMENT 14
H-8 RETURN OF DRY DOCK 14
SCHEDULE
H-1 OPERATION AND USE
(a) The Lessee has the right to use the Dry Dock at the shipyard
in Seattle, WA , unless otherwise authorized by the PCB, in the
performance of shipbuilding, ship repair and ship conversion
work. The Lessee shall at all times give priority to work for
the government as the Procuring Contracting Officer (PCO) or
Administrative Contracting Officer (ACO) may require. The Lessee
shall operate the dock in a manner consistent with the practices
of the Marine Industry.
(b) In addition, the Lessee shall operate the dock using the
guidelines for the procedures as detailed in the Docks Operating
Manuals. The Lessees plans for the operating basin and the
mooring of the Dry Dock are subject to the approval of the PCO,
and the Dry Dock must be moored at the Shipyard in accordance
with the plans as approved. In addition, the depth of the harbor
must be dredged to a depth to ensure there is a minimum clearance
of twelve (12) inches between the bottom of the dock and the
harbor bottom and eighteen (18) inches between the top of blocks
and ship at Mean Low Water (MLW).
H-2 INSPECTION AND INVENTORY
(a) Immediately prior to delivery of the Dry Dock to the Lessee,
the Lessee and the ACO will conduct a joint inspection of the
physical condition of the Dry Dock. A joint report of the
findings will be made and will be conclusive evidence of the
physical condition of the Dry Dock at the time of delivery to the
Lessee.
(b) Also immediately prior to delivery of the Dry Dock to the
Lessee, the Lessee and the ACO will conduct a full and complete
inventory of all Government-owned property, including the current
condition of all portable tools, shop machinery, spare parts and
instruments, and all consumable supplies and materials on board
the Dry Dock. A joint report of the dry dock inventory and
condition will be made and will be conclusive evidence of the
inventory of property on board the Dry Dock at time of delivery
to the Lessee.
(c) Joint inspections and reports will also be made by both
parties upon the termination or expiration of this lease. The
findings of these reports will be conclusive evidence of the
physical condition of the Dry Dock on the date of termination or
expiration of this lease. In the event that the inventory
discloses a deficiency in either quantity or quality of items
aboard the Dry Dock, the Lessee, at its expense and, as directed
by the PCO or the ACO, shall promptly deliver on board the Dry
Dock such portable tools or instruments or such consumable
supplies or materials required to correct any such deficiency.
In the event that the inventory discloses an excess quantity of
portable tools or instruments or consumable materials or
supplies, the Lessee may remove the excess quantity; if the
Lessee does not promptly remove any such items, title to such
excess quantity shall thereupon vest in the Government.
H-3 NORMAL MAINTENANCE
(a) From the time of delivery of the Dry Dock until the return of
the Dry Dock, the Lessee, at the Lessees own expense, shall
perform all normal maintenance, and in so doing is obligated to
expend annually a minimum of $50,000 for normal maintenance and
repair of the YFD-54. However, if the performance of maintenance
requires the expenditure of funds in excess of the specified
minimum amount, then the Lessee shall continue to perform, at the
Lessees own expense, any normal maintenance that may be required
to protect, preserve, repair and maintain the Dry Dock.
(b) Normal maintenance includes, but is not limited to, the
following:
(1) Keep the slip and Dry Dock basin properly dredged and
maintain the moorings in a manner which will permit the safe and
efficient operation of the Dry Dock.
(2) Protect, preserve, repair and maintain the Dry Dock in good
working order and condition in a manner consistent with practices
of the marine industry and as prescribed in MIL-STD1625(SH) and
all revisions in order to assure the full availability and
utility of the Dry Dock at all times.
(3) Clean, test, paint, preserve and repair of the exterior and
interior of accessible hull structures. Doubler plates are not
an acceptable repair. Plating and structural members which are
holed or wasted in excess of 25% of original design thickness
must be cropped out and renewed.
(4) Blocking renewals, replacement of bilge runners and fenders,
structural supports and cradle renewals. Replace deteriorated
keel and bilge blocks and outriggers.
(5) Repairs, replacement or renewal, where necessary, Of parts of
the pumping and flooding systems.
(6) Repair and maintain the electric power-generating and
distribution systems.
(7) Repairs and calibrations of water level and draft indicating
systems.
(8) Repairs and replacements or renewals of parts of service
equipment such as compressed air, water, steam, carbon dioxide,
fire protection and sewage systems.
(9) Repair and maintain cranes, capstans, flying
bridges,ladders,ventilation systems, fittings and similar items.
(10) Repair and maintain interior and exterior Catholic
Protection System.
(11) Repair and replacement of Galvanic Anode (Sacrificial) zinc
system.
(12) Operate for approximately a thirty (30) minute period every
thirty (30) days all equipment not in regular use; except that
Lessee may place any equipment not required for operation of the
Dry Dock in an approved state of partially or totally immobilized
preservation or storage at locations not aboard the Dry Dock. It
is understood that the Lessee will, at its own expense, return
and restore any preserved equipment to operating condition not
later than the termination or expiration of this lease.
(13) The Lessee is required to perform an annual inspection of
the Dry Dock. At the time of each annual inspection, the Dry
Dock must be careened or inspected by underwater camera
sufficiently to expose as much as possible of the exterior
underwater hull in order to determine its condition. When this
inspection discloses deterioration of the underwater hull, or the
paint coatings thereon, the Dry Dock must be dry-docked and any
necessary repairs including painting of the underwater hull and
other underwater parts performed.
(c) The performance of maintenance is subject to the approval of,
or may be directed in writing by, the PCO or ACO.
(d) If in any annual period the Lessee expends less than the
minimum specified amount for normal maintenance, the unexpended
balance will be carried over to the next year of the lease or be
paid in cash as additional rent, at the election of the PCO.
(e) The Lessee is responsible for any loss or damage of the Dry
Dock resulting from failure to comply with the provisions of this
clause to the extent that the loss or damage is found by the PCO
to constitute a risk not of the type customarily covered by
insurance.
(f) Joint annual inspections and any other inspections that may
be determined necessary by the PCO or ACO will be made of the
material condition of the Dry Dock, including its machinery and
equipment after performance of any maintenance work. Compliance
with instructions, however, may not in itself be construed as a
complete discharge of Lessees obligations to protect, restore,
repair and maintain the Dry Dock.
(g) During the first six months of this lease, the Lessee shall
submit to the ACO for review and comment and forwarding to the
PCO for approval, a proposed normal maintenance program
indicating the manner and time for the accomplishment of the
normal maintenance work set forth in the above paragraphs,
including an appropriate maintenance records system, in
sufficient detail to show its adequacy as a normal maintenance
program. The normal maintenance program must also include a
planned timetable for the dry-docking the Dry Dock requirement in
Special Lease Requirement H-4, Dry-Docking Requirements.
H-4 DRY-DOCKING REQUIREMENTS
In addition to the minimum normal maintenance requirements
required in Special Lease Requirement H-3, Normal Maintenance,
the Lessee, at its expense, shall also dry-dock the Dry Dock at
least once during the basic term of five (5) years of the lease.
The Dry Dock shall also be docked at Lessees expense every ten
(10) years thereafter, i.e., by the end of the second five year
option. During the performance of this dry-docking of the Dry
Dock requirement, the Lessee, at its own cost and expense, shall
conduct a complete certified marine survey of the Dry Dock. The
normal maintenance requirements which are identified in the
Marine Survey report must be accomplished during the dry-docking
of the Dry Dock. During this dry-docking, as a minimum, the
underwater hull parts, both interior and exterior areas, must be
cleaned, repaired, completely painted or treated as may be
necessary.
H-5 CAPITAL MAINTENANCE
(a) Capital Maintenance is repair or restoration work that is
beyond the scope of normal maintenance and is approved by the
PCO. Capital Maintenance projects may either be requested by the
Lessee or directed by the PCO.
(b) Any Capital Maintenance project must be submitted in writing
to the ACO. Each request must include, as a minimum, the
estimated costs to perform the work, broken down by material,
subcontract costs, labor and burden costs, and the time required
to perform the project. The ACO will review the request and
forward the recommendation to the PCO. Work will not start until
written approval is received from the PCO. Each project will be
approved on a not to exceed cost basis. In circumstances where
time is a factor, the Lessee may seek oral approval from the PCO
after consulting with the ACO.
(c) To the extent that any directed repair or restoration work is
determined to be Capital Maintenance, the audited, allocable and
allowable costs incurred in performing such repair or restoration
will be credited against the annual rent amounts, as approved by
the PCO. However, the Government will not be obligated to credit
the annual rent amounts unless prior written approval from the
PCO has been obtained. Any disagreement by the Lessee with such
determination is deemed a dispute within the meaning of Lease
Clause 23, Disputes.
(d) For the purpose of determining the credit against the rental
amounts to be paid, the amount to be allowed will be the approved
not to exceed cost to perform such work adjusted on the basis of
the audited, allocable and allowable actual costs as determined
under the provisions of Lease Clause 27, Audit by Department of
Defense. If the audited cost is less than the not to exceed cost
authorized for repair or restoration, any authorized credit
against the rent or reimbursement will be adjusted accordingly.
If the audited cost is greater than the not to exceed cost
authorized for repair or restoration, excess costs are deemed to
be costs of performing normal maintenance. As such, these costs
are at the Lessees expense.
(e) In no event is the Government under any obligation to credit
the rental amounts for, or be required to approve, any
alterations, additions or betterments to obtain certification or
rectification in accordance with Special Lease Requirement H-6,
Safety Certification. Any work performed to obtain certification
or rectification will be performed at Lessees expense.
(f) The Lessee is not required to give notice to the PCO if the
Lessee estimates that the cost of any repair or restoration is
Five Hundred Dollars ($500.00) or less and the Lessee elects to
perform such repair or restoration at its own expense.
H-6 SAFETY CERTIFICATION
(a) B the end of the third year of this lease (or before dry
docking a U.S. Naval vessel, if earlier), Lessee shall obtain
certification of the Dry Dock in accordance with MIL-STD-1625(SH)
and all published revisions. Toward this end, this Lessee shall
submit a complete Facility Certification Report in accordance
with MIL-STD-1625(SH). The Lessee will achieve the maximum
certified rated capacity obtainable without performing
alterations, additions or betterments to the Dry Dock, as
described in Lease Clause 12, Alterations. Participation in the
maintenance program described in paragraph 4.10 of MIL-STD
1625(SH) is mandatory after the Dry Dock receives certification.
There is no express or implied warranty of any kind regarding the
condition of the Dry Dock with regard to certification pursuant
to MIL-STD-1625(SH) or to any later published version or
revision. Lessees failure to achieve or maintain certification
may be grounds for the Navys termination of the lease in
accordance with Lease Clause 9, Termination by the Government.
(b) In no event shall the Government be under any obligation to
provide funds for, or be required to approve, any alterations,
additions, or betterments to obtain certification or
recertification. Failure to obtain certification or
recertification shall in no event form the basis for any claim by
the Lessee against the Government.
(c) The Navy does not guarantee U.S. Navy shipbuilding, ship
repair or ship conversion work at the Dry Dock.
H-7 PROTECTION OF THE ENVIRONMENT
The Lessee shall comply with all Federal, state, and local
environmental laws and regulations in existence or that may be
hereinafter enacted that are applicable to the transportation,
operation, and maintenance of the drydock.
H-8 RETURN OF DRY DOCK
(a) Except as may be directed under (f)(2) below, the place to
which the Dry Dock is to be returned is the Inactive Ship
Maintenance Facility, Bremerton, WA.
(b) Except as otherwise provided, before expiration, termination,
or cancellation of the Lease, Lessee shall, at its own expense,
restore the Dry Dock to as good a condition as when delivered to
the Lessee and as improved thereafter by the Government or the
Lessee, reasonable wear and tear excepted. An exception to the
above is any loss of or damage to the Dry Dock for which the
Lessee is relieved of liability under this Lease. In the event
the Government terminates this lease upon less than thirty(30)
days notice, the Lessee shall, at the election of the PCO, either
(i) have thirty (30) days from receipt of notice of termination
to accomplish restoration, or (ii) pay to the Government as
additional rent the cash equivalent of the cost of performing
such work.
(c) Upon expiration of the Lease Term, or any extension thereof,
or upon termination pursuant to Lease Clause 9, Termination by
the Government, or upon termination or cancellation of the Lease
Term by the Government under any other Lease Clause or provision
of this lease, this lease will remain in full force and effect
for a Standby Period of ninety (90) days from such expiration,
cancellation, or termination of the Lease Term. However, in the
event this lease is terminated by the Lessee pursuant to Lease
Clause 10, Termination by the Lessee, then the Standby Period
indicated above is one (1) year from the date of such
termination. During the Standby Period all Lease Clauses,
Special Lease Requirements and other provisions in the Schedule
of this lease remain in full force and effect except that the
Lessee is not permitted to use the Dry Dock nor is the Lessee
required to pay additional rent. The PCO may terminate the
Standby Period at any time either (i) upon thirty (30) days
written notice to the Lessee, or (ii) if this lease is terminated
pursuant to Lease Clause 9, Termination by the Government,
subparagraph (a) or (b), upon notice to the Lessee of termination
of the Standby Period.
(d) In effecting the return of the Dry Dock, the Lessee shall, at
its own expense, carry out the following actions during the
Standby Period: (i) establish liaison with the ACO and PCO and
provide a plan for safe stowage of the Dry Dock, (ii) conduct a
joint inspection with the ACO to verify accomplishment of
preparation for safe stowage prior to the Governments accepting
custody, and (iii) return the available Dry Dock blueprints,
Booklet inspection report, and any other Dry Dock or dry-docking
reports to the Government. During the Standby Period, the Lessee
shall, at its own expense, continue to provide a secure mooring
arrangement and the necessary security to protect the Dry Dock.
(e) The PCO reserves the right, with regard to the obligations
set forth in the above paragraphs (c) and (d) either:
(1) to accept performance by the Lessee of all of the work
specified in paragraphs (c) and (d) above;
(2) to direct the Lessee to perform any part of the work
specified in paragraphs (c) and (d) above and to require the
Lessee to pay to the Government as additional rent the cash
equivalent of the cost of performing any such work that the
Lessee did not perform prior to direction and that the PCO did
not direct the Lessee to perform; or
(3) to require the Lessee in lieu thereof, to pay to the
Government as additional rent the cash equivalent of the cost of
performing all of such work.
If the parties are unable to agree on the amount representing the
cost of performing such work, the Lessee shall pay to the
Government in cash the amount the PCO determines; if the Lessee
disputes the reasonableness of the amount, the dispute is deemed
to be a dispute within the meaning of Lease Clause 23, Disputes.
(f) Upon expiration, cancellation, or termination of the Lease
Term, and prior to the expiration of the Standby Period, the
Lessee shall, at its own expense, subject to the specifications
and procedures set forth for the applicable Dry Dock:
(1) Perform all work required to place the Dry Dock in a safe
stowage condition. Such work shall include, as a minimum, the
following:
(i) externally blank all overboard discharges above the
waterline;
(ii) wire all sea valves shut;
(iii) clean tanks, voids, and compartments;
(iv) drain all piping systems;
(v) clean and dry all heads and sanitary facilities;
(vi) secure all topside closures;
(vii) remove all trash, debris, and fire hazards;
(viii) fabricate and install a breakwater at the towing end of
the Dry Dock; and
(2) Prepare the Dry Dock for tow in accordance with requirements
established by an independent qualified marine surveyor and
approved by the Navy. To the extent that the Navy and the marine
surveyor disagree, and the Navy imposes additional requirements
for the prep-foretow, the cost of implementing these additional
requirements will be reimbursed to the Lessee in accordance with
Special Lease Requirement H-5, Capital Maintenance. The Lessee
shall return the Dry Dock to the custody of the Government as
specified above, except that the Government may direct the return
of the Dry Dock to another location with the following
provisions.
(i) If such direction causes an increase in the cost either of
preparation for tow or of the tow itself, the allowable costs
incurred in excess of those which would have been incurred to
effect return at the place herein specified prior to the
direction of the PCO will be credited in accordance with Special
Lease Requirement H-5, Capital Maintenance; and
(ii) If such direction causes a decrease in the cost either of
preparation for tow or of the tow itself, the Lessee shall pay to
the Government as additional rent an amount equal to the
difference between the allowable costs which would have been
incurred to effect return at the place specified absent the
direction of the PCO and the allowable costs incurred to effect
return as directed.
(g) If the lease is extended for an additional Lease Term or
otherwise continued or a follow-on lease is awarded, then the
obligations in this Lease Clause will be deferred until such time
as the then current Lease Term expires, or is terminated, or
canceled.
PART II--LEASE CLAUSES
SECTION I--LEASE CLAUSES
This Lease Agreement incorporates the following Lease Clauses in
full text as follows:
LEASE
CLAUSE NO. TITLE AND DATE PAGE
1. PURPOSE 20
2. RENT 20
3. INSURANCE AND RISK OF LOSS 20
4. PERFORMANCE BOND 23
5. INTEREST 23
6. RIGHT TO SUBLEASE OR ASSIGN 23
7. INDEMNIFICATION 23
8. DISCLAIMER OF WARRANTY AND CONDITION OF 24
DRY DOCK
9. TERMINATION BY THE GOVERNMENT 24
10. TERMINATION BY THE LESSEE 25
11. MOVEMENT OF DOCK 26
12. ALTERATIONS 26
13. GOVERNMENT ACCESS 27
14. NON-REHABILITATION 27
15. PAYMENTS AND DISBURSEMENTS 27
16. STATE AND LOCAL TAXES 28
17. PRORATION IN EVENT OF TERMINATION 28
18. FAILURE TO INSIST ON COMPLIANCE 29
19. NOTICES 29
20. COVENANT AGAINST CONTINGENT FEES 29
21. OFFICIALS NOT TO BENEFIT 29
22. GRATUITIES 29
23. DISPUTES 30
24. EQUAL OPPORTUNITY 32
25. EXAMINATION OF RECORDS 34
26. LABOR PROVISIONS 34
27. AUDIT BY DEPARTMENT OF DEFENSE 37
28. CERTIFICATION OF REQUESTS FOR ADJUSTMENT 38
ON RELIEF
29. ORDER OF PRECEDENCE 39
30. DRUG-FREE WORKPLACE 39
31. CLEAN AIR AND WATER 41
<PAGE>
1. PURPOSE
These additional Lease Clauses form a part of the lease bearing
the number designated above.
2. RENT
For the right to use the Dry Dock, the Lessee shall pay to the
Government the rent due for the previous annual period less the
sum of all amounts allowed as credits against the Amount To Be
Paid during the preceding annual period. The amount due the
Government is to be paid within fifteen (15) days after the end
of the annual period.
3. INSURANCE AND RISK OF LOSS
(a) From the date of delivery of the Dry Dock to Lessee until
return of the Dry Dock to custody of the Government, the Lessee,
at its own expense and without reimbursement under this lease,
shall procure and maintain the following insurance and pay any
applicable deductibles.
(1) Marine floating dry dock insurance for a minimum amount of
$1,484,000 during any tow, including tow required to redeliver
the Dry Dock in accordance with Special Lease Requirement H-8,
Return of Dry Dock, and a minimum of $742,000 hull damage
insurance while the Dry Dock is located at a shoreside facility.
At Lessees expense and within thirty (30) days after Lease award,
Lessee will forward to the PCO the recommendation of a Certified
Marine Surveyor for the amount of hull damage insurance. If the
figure is higher than $742,000, this clause will then be modified
to include that amount for hull damage liability.
(2) Workmens compensation (including longshoremen and harbor
workers coverage) and employers liability in the minimum amount
of $100,000 per occurrence; bodily injury liability in the
minimum amount of $500,000 per occurrence; and third party
property damage liability in the minimum amount of $500,000 per
occurrence. Each such policy shall contain an endorsement
reading substantially as follows:
The insurer waives any right of subrogation against the United
States of America which might arise by reason of any payment
under this policy.
(b) All insurance shall protect the Government and the Lessee
against their respective risks and liabilities in connection with
the Dry Dock, shall name the Lessee and the United States of
America (Department of the Navy) as insureds, and for hull
insurance shall contain a loss payable clause reading
substantially as follows:
Loss, if any, under this policy shall be adjusted with (Lessee)
and the proceeds, at the direction of the Government, shall be
payable to (Lessee). Proceeds not paid to (Lessee) shall be
payable to the United States of America.
(c) Except as otherwise specifically provided herein, all
insurance required to be carried by the Lessee must be in such
form, for such amounts, and for such periods of time as the Naval
Sea Systems Command may specify, and with such insurers as the
Naval Sea Systems Command, represented by the Insurance Examiner
of the Navy, may approve. Each policy of insurance shall provide
for thirty (30) days advance notice to the Insurance Examiner
before cancellation of the policy by the insurer. A certificate
or certified copy of each policy of insurance procured hereunder
must be deposited with the said Insurance Examiner at the
following address: Office of the Assistant Secretary of the Navy,
(Research, Development and Acquisition) APIA PP, Washington, DC
20350-1000, with a copy to the PCO, promptly following the date
of delivery of the Dry Dock, and like evidence of renewal of
insurance must be deposited with the Insurance Examiner not less
than thirty (30) days before expiration of the term of insurance.
(d) Nothing in this Lease Clause may be construed as a waiver of
Lessees obligations under Lease Clause 7, Indemnification.
(e) All risk of loss of or damage to the Dry Dock during the term
of this lease, whether or not caused by the failure of the Lessee
to exercise due diligence in complying with the provisions
hereof, shall be borne by the Lessee, and the Lessee shall, upon
demand and at the election of the Naval Sea Systems Command,
either compensate the Government in full for any loss or damage,
or rebuild, replace or repair any part of the Dry Dock lost or
damaged; provided, however, that the Lessee is liable for loss or
destruction of, or damage to, the Dry Dock (i) that results from
a risk expressly required to be insured under this lease, but
only to the extent of the insurance required to be purchased and
maintained or to the extent of insurance actually purchased and
maintained, whichever is greater; (ii) that results from a risk
that is in fact covered by insurance or for which the Lessee is
otherwise reimbursed, but only to the extent of such insurance or
reimbursement; and provided, further, that the Lessee is not
liable for loss of or damage to the Dry Dock arising from causes
beyond the control of the Lessee occasioned by a risk not in fact
covered and customarily covered by insurance in the locality in
which the Dry Dock is situated. Nothing contained herein,
however, shall relieve the Lessee of liability with respect to
any loss of or damage to the Dry Dock, not fully compensated for
by insurance, which results from the willful misconduct, lack of
good faith, or failure to exercise due diligence on the part of
any of the Lessees officers, directors or representatives having
supervision or direction of the Dry Dock.
(f) In the event the Dry Dock or any part of it requires repair
or restoration resulting from loss or damage the risk of which is
required hereunder to be covered by insurance, the Lessee shall
promptly give notice to the Naval Sea Systems Command and submit
a report on the extent of damage together with an estimate of the
cost to repair the damage and the time needed to complete the
repairs. The Lessee shall effect any repairs or restorations the
Naval Sea Systems Command may direct or approve. The Naval Sea
Systems Command shall direct the payment to the Lessee of as much
of the proceeds of the available insurance covering the loss or
damage necessary to reimburse the Lessee for the allowable costs
of effecting an authorized repair or restoration. If the
insurance proceeds are not sufficient to cover the allowable
costs of a repair or a restoration, and if the loss or damage has
resulted from any cause the risk of which is not required by this
lease to be borne by the Lessee without regard to the sufficiency
of insurance proceeds, the excess of the allowable costs over the
insurance proceeds shall be applied as a credit against the
Amount To Be Paid for the annual period in which the Lessee
commenced the repair or restoration and any balance not so
credited will be credited against the Amount To Be Paid for the
succeeding annual periods of the then current term of the lease.
If the Lessee was not required or authorized to effect a repair
or a restoration, the Lessee shall promptly refund to the
Government the amount of any insurance proceeds paid the Lessee
on account of the loss or damage.
(g) (1) The Lessee shall provide, maintain, change or discontinue
such insurance as the Government may from time to time require;
however, except as provided at paragraph (e)(ii) above, the
Lessees liability for loss or damage to the Dry Dock is modified
accordingly.
(2) If any insurance requirement is changed pursuant to (1)
above, an equitable adjustment in rent will be made to reflect
any resulting saving or increased costs to the Lessee.
4. PERFORMANCE BOND
Prior to the delivery of the Dry Dock to the Lessee, the Lessee
shall furnish a performance bond in the penal sum amount of Fifty
Thousand ($50,000). This performance bond shall be substantially
in accordance with U.S. Government Standard Form 25 Performance
Bond, be satisfactory in all respects to the Government, and be
for the full lease period.
5. INTEREST
Notwithstanding any other provisions of this lease, all amounts
that become payable by the Lessee to the Government under this
lease (net of any applicable tax credit under the Internal
Revenue Code(26 U.S.C. 1481)), unless paid within 30 days, shall
bear interest from the date due until paid. The interest rate
shall be the interest rate established by the Secretary of the
Treasury pursuant to Public Law 95-563, as of the date the amount
becomes due as herein provided. Amounts are due upon the
earliest of: (i) the date fixed under this lease; (ii) the date
of the first written demand for payment consistent with this
lease, including any demand consequent upon default termination;
(iii) the date of transmittal by the Government to the Lessee of
a proposed supplemental agreement to confirm completed
negotiations fixing the amount; or (iv) if the lease provides for
revision of prices, the date of written notice to the Lessee
stating the amount of refund payable in connection with a pricing
proposal or in connection with a negotiated pricing agreement not
confirmed by supplemental agreement.
6. RIGHT TO SUBLEASE OR ASSIGN
Neither this lease nor any interest in it may be transferred,
assigned or subleased by the Lessee except with the written
consent of the PCO. The Dry Dock may not be sublet or otherwise
be made available by the Lessee to any third party, including any
other Federal Government agency, without such written consent.
7. INDEMNIFICATION
The Lessee expressly agrees to indemnify and hold harmless the
United States Government, its officers, employees, agencies, and
instrumentalities against all suits, actions, claims, costs, or
demands (including, without limitation (i) suits, actions,
claims, costs, or demands resulting from death, personal injury,
and property damage; and (ii) suits, actions, claims, costs,
demands, fees and penalties arising out of violations of any
Federal, State or local environmental protection law, regulation
or ordinance) to which the Government, its officers, employees,
agencies and instrumentalities may be subject as a result of the
use or possession of the leased property by the Lessee or any Sub-
Lessee.
8. DISCLAIMER OF WARRANTY AND CONDITION OF DRY DOCK
The Dry Dock is leased to the Lessee on an as is, where is basis
without warranty of any kind, express or implied, on the part of
the Government. The Lessee acknowledges that no representations
concerning the condition or state of repair to the Dry Dock or
any part of it has been made by the Government prior to, or at
the time of, the execution of this lease which are not set forth
herein and that this lease contains all the agreements of the
parties. The Lessee further acknowledges that the Government has
made no agreement or promise to alter, improve, adapt, or repair
the Dry Dock, any part of it, or any related equipment, prior to,
or at the time of the execution of this lease. The Lessee
further acknowledges that it is responsible for preparing the Dry
Dock for tow and for towing the Dry Dock to the Lessees Navy-
approved mooring site.
9. TERMINATION BY THE GOVERNMENT
This lease may be terminated by the Government at any time prior
to the expiration of the term:
(a) During any national emergency declared by the President or
Congress;
(b) Upon written notice to the Lessee whenever the Secretary of
the Navy determines that the interests of national defense
require it;
(c) Upon ten (10) days written notice to the Lessee if the Lessee
defaults in the performance of any of its obligations hereunder
and fails to cure or initiate action to cure such default within
thirty (30) days after receipt of notice from the PCO specifying
such default or within such longer time as may have been
specified in said notice; however, in lieu of terminating this
lease, the Government may elect to perform, or cause to be
performed, the defaulted obligations for the account of and at
the expense of the Lessee;
(d) Upon thirty (30) days written notice to the Lessee after
determination by the PCO that the Dry Dock is not being used to
an extent commensurate with ship repair work available in the
area;
(e) In the event of proceedings in any Federal or State court for
adjudication of the Lessee as bankrupt by the Lessee or others,
for corporate reorganization of the Lessee, for an arrangement
within the meaning of the Bankruptcy Act and any amendments
thereto, for other similar debtor or creditor relief available
under State or local law, or upon the appointment of a Receiver
or Trustee for the property of the Lessee;
(f) Upon ninety (90) days written notice to the Lessee following
a determination by the Secretary that the Dry Dock is surplus to
the further needs and responsibilities of the Government;
(g) Upon thirty (30) days written notice to the Lessee after
determination by the Contracting Officer that the Lessee has
failed to meet the requirements of Special Lease Requirement H-6,
Safety Certification.
(h) If the Government terminates this lease under paragraph (c),
(d), (e) or (g) of this clause, it may immediately re-enter and
resume possession of the Dry Dock and remove all persons and
property therefrom, but such entry is not deemed an acceptance or
surrender of this lease. In the event of termination and reentry
the Government may, at its election, relet the Dry Dock for any
period, less than, equal to, or greater than the remainder of the
term of this lease or any extension thereof, for any rental and
upon any terms and conditions deemed by the Government to be
reasonable and satisfactory, and the Lessee is liable to and
shall pay the Government the amount of the difference between the
rental and charges received by the Government from such reletting
of the Dry Dock. This amount is due and payable at the time
specified for the payment of rent in Lease Clause 2, Rent. It is
expressly agreed and understood that, whether or not the
Government relets the Dry Dock, the Lessee is obligated to
reimburse the Government for any costs incurred by the Government
in (i) resuming possession of the Dry Dock, and (ii) performing
or having performed the maintenance and any other obligation for
which the Lessee is responsible under this lease but has failed
to perform. The Government is not be liable for any costs
incurred by the Lessee under the Lease Clause H-5, Capital
Maintenance, which exceed the total amount of rent due at the
time of said determination.
10. TERMINATION BY THE LESSEE
This lease may be terminated by the Lessee at any time prior to
the expiration of the term upon thirty (30) days written notice
to the PCO in the event of damage to or destruction of all or a
substantial part of the Dry Dock so as to render the Dry Dock
incapable of use for the purposes for which it is leased
hereunder; but only if (i) the damage or destruction is
occasioned by a risk not in fact covered and not customarily
covered by insurance in the locality in which the Dry Dock is
located or by a risk which is covered by insurance and the
Government either has not authorized or directed the repair,
rebuilding or replacement of the Dry Dock or does not make
provision for payment for such repair, rebuilding or replacement
by the application of insurance proceeds or otherwise, and (ii)
the damage or destruction is not occasioned by the fault or
negligence of the Lessee or by any failure or refusal on its part
fully to comply with its obligations hereunder.
11. MOVEMENT OF DOCK
Any movement of the Dry Dock is at the sole expense of the Lessee
and must be conducted in accordance with rules and regulations
prescribed in advance of the movement by the PCO; however, prior
to any movement of the Dry Dock, including sea towing, approval
of the PCO must be obtained of the preparation for towing the Dry
Dock and preparation of the operating berth of the Dry Dock.
12. ALTERATIONS
The Lessee may not, so long as this lease is in effect, make any
substantial alterations, additions or betterments to the Dry Dock
without the prior approval or consent of the PCO. All approved
alterations, additions or betterments shall become the property
of the Government when annexed to any property included in the
Dry Dock, except those items of personal property belonging to
the Lessee which can be readily removed without injury to the Dry
Dock. Such items must be removed by the Lessee prior to the
expiration of the lease or within such additional periods as the
Government may allow. All property not removed is deemed
abandoned by the Lessee and may be used or disposed of by the
Government without liability or any obligations to account for it
to the Lessee. Nothing contained herein authorizes any
alterations, additions, or betterments to the Dry Dock which will
render the Dry Dock unsuitable for the purpose for which the Dry
Dock was designed or is being retained by the Government unless,
in addition to securing the prior approval or consent of the
Government thereto, the Lessee agrees to restore the Dry Dock to
its condition at the time of delivery, at its own expense, within
ninety (90) days after being required so to do by the Government
(i) during any period of national emergency, or (ii) after
determination by the Secretary of the Navy that such restoration
is in the interest of national defense. The Lessee shall not do
or suffer anything to be done upon or in connection with the Dry
Dock anything which could subject it or any part of it to any
liens or rights in rem and shall promptly discharge or cause to
be discharged any lien or right in rem of any kind other than one
in favor of the Government which at any time may arise or exist
with respect to the Dry Dock or to any alterations, additions or
betterments to it.
13. GOVERNMENT ACCESS
The Government or its designated representative shall have access
at all reasonable times to the Dry Dock for the purpose of
inspecting or inventorying it and for other purposes under this
lease.
14. NON-REHABILITATION
The Government is not be under any duty or obligation to restore
or rehabilitate, or to pay the costs of the restoration or
rehabilitation of, any part of the land or any other property of
the Lessee affected by the installation, possession, operation,
or removal of the Dry Dock under this lease or otherwise.
15. PAYMENTS AND DISBURSEMENTS
(a) Payments required to be made by the Lessee pursuant to
Lease Clause 2, Rent, must be made to the Defense Finance
Accounting Service - Columbus Center, DFAS - CO/Capital Division,
P.O. Box 182263, Columbus, OH 43218-2263.
(b) At the end of each annual period, the Lessee may submit to
the PCO certified bills in respect of all items for which the
Lessee is entitled to reimbursement under this lease. Promptly
after receipt of each such submission of bills, the Government
shall, within the limits of the appropriations available
therefor, pay to the Lessee the amount determined to be allowable
costs reimbursable to the Lessee under this lease on account of
such items and not previously paid or credited. Such allowable
costs will be determined in accordance with Part 31 of the
Federal Acquisition Regulation in effect on the date of this
lease, and shall exclude any profit to the Lessee. The PCOs
decision on any request for payment by the Lessee, when reduced
in writing and received by the Lessee, is binding on the parties
hereto, subject to written appeal by the Lessee in accordance
with Lease Clause 23, Disputes.(c) When any payment is to be
made hereunder, the Contracting Officer, as a condition precedent
to approving such payment, may, in his discretion, require that
affidavits satisfactory to him be furnished by the Lessee that no
liens or rights in rem of any kind lie under or have attached
against the Dry Dock, or any material or equipment furnished for
it, or any part of it, either for or on account of any work done
upon or about the Dry Dock, or any material or equipment
furnished for it, or in connection with it, or any other cause or
thing, or any claims or demands of any kind except the claims of
the Government. The Lessee shall promptly discharge or cause to
be discharged any valid lien or right in rem not promptly be
discharged, the Government may discharge or cause to be
discharged said lien or right in rem at the expense of the
Lessee.
16. STATE AND LOCAL TAXES
In the event that, as a result of any future Act of Congress
subjecting Government-owned property to ad valorem taxation,
taxes, assessments, or similar charges are imposed by State or
local authorities upon the lease property (other than upon the
Lessees possessory or use interest therein), the Lessee shall pay
it when due and payable and this lease shall be re-negotiated to
accomplish an equitable reduction in the rent, which shall not be
greater than the amount of such taxes, assessments, or similar
charges; provided, that, in the event that the parties are unable
to agree, within ninety (90) days from the date of the imposition
of such taxes, assessments, or similar charges, on a rental
which, in the opinion of the Government, constitutes a reasonable
return to the Government on the lease property, then, in that
event, the Government may determine the amount of the rental,
which shall be binding on the Lessee, subject to appeal in
accordance with Lease Clause 23, Disputes.
17. PRORATION IN EVENT OF TERMINATION
In the event of termination of this lease pursuant to Lease
Clause 9, Termination by the Government, or Lease Clause 10,
Termination by the Lessee, the amount to be paid to the
Government will be prorated to the date of Termination.
18. FAILURE TO INSIST ON COMPLIANCE
The failure of the Government to insist, in any one or more
instances, upon performance of any of the terms, covenants or
conditions of this lease may not be construed as a waiver or
relinquishment of the Governments right to the future performance
of any such terms, covenants or conditions; and the Lessees
obligations in respect of such future performance shall continue
in full force and effect.
19. NOTICES
Except as provided in Special Lease Requirement H-5, Capital
Maintenance, paragraph (b), no notice, order, direction,
determination, requirement, consent or approval under this lease
is of any effect unless in writing.
20. COVENANT AGAINST CONTINGENT FEES
The Lessee warrants that no person or agency has been employed or
retained to solicit or secure this lease upon an agreement or
understanding for a contingent fee, excepting a bonafide employee
or agency maintained by the Lessee for the purpose of securing
business. For breach or violation of this warranty, the
Government may annul this lease without liability.
21. OFFICIALS NOT TO BENEFIT
No member of or delegate to Congress, or resident commissioner,
may be admitted to any share or part of this lease or to any
benefit that may arise therefrom, but this provision does not
apply to this lease if it is made with a corporation for its
general benefit.
22. GRATUITIES
(a) The right of the Lessee to proceed may be terminated by
written notice if, after notice and hearing, the agency head or a
designee determines that the Lessee, its agent, or another
representative--
(1) Offered or gave a gratuity (e.g., any entertainment or
gift) to an officer, official, or employee of the Government; and
(2) Intended, by the gratuity, to obtain a lease or favorable
treatment under a lease.
(b) The facts supporting the determination may be reviewed by
any court having lawful jurisdiction.
(c) If this lease is terminated under paragraph (a) above, the
Government is entitled--
(1) To pursue the same remedies as in a breach of the lease,
and
(d) The rights and remedies of the Government provided in this
clause are not exclusive and are in addition to any other rights
and remedies provided by law or under this lease.
23. DISPUTES
(a) This lease is subject to the Contract Disputes Act of 1978,
as amended (41 U.S.C. 601-613) (the Act).
(b) Except as provided in the Act, all disputes arising under
or relating to this lease shall be resolved under this clause.
(c) Claim as used in this clause, means a written demand or
written assertion by one of the parties seeking, as a matter of
right, the payment of money in a sum certain, the adjustment or
interpretation of lease terms, or other relief arising under or
relating to this lease. A claim arising under a lease, unlike a
claim relating to that lease, is a claim that can be resolved
under a lease clause that provides for the relief sought by the
claimant. However, a written demand or written assertion by the
Lessee seeking the payment of money exceeding $50,000 is not a
claim under the Act until certified as required by subparagraph
(d)(2) below. A voucher, invoice, or other routine request for
payment that is not in dispute when submitted is not a claim
under the Act. The submission may be converted to a claim under
the Act, by complying with the submission and certification
requirements of this clause, if it is disputed either as to
liability or amount or is not acted upon in a reasonable time.
(d) (1) A claim by the Lessee shall be made in writing and
submitted to the Contracting Officer for a written decision. A
claim by the Government against the Lessee shall be subject to a
written decision by the Contracting Officer.
(2)(i) Lessees shall provide the certification specified in
subparagraph (d)(2)(iii) of this clause when submitting any claim-
(A) Exceeding $50,000; or
(B) Regardless of the amount claimed, when using-
(1) Arbitration conducted pursuant to 5 U.S.C.
575-580; or
(2) Any other alternative means of dispute resolution (ADR)
technique that the agency elects to handle in accordance with the
Administrative Dispute Resolution Act (ADRA).
(ii) The certification requirement does not apply to issues in
controversy that have not been submitted as all or part of a
claim.
(iii) The certification shall state as follows: certify that
the claim is made in good faith; that the supporting data are
accurate and complete to the best of my knowledge and belief;
that the amount requested accurately reflects the adjustment for
which the Lessee believes the Government is liable; and that I am
duly authorized to certify the claim on behalf of the Lessee.11
(3) The certification may be executed by any person duly
authorized to bind the Lessee with respect to the claim.
(e) For Lessee claims of $50,000 or less, the Contracting
Officer must, if requested in writing by the Lessee, render a
decision within 60 days of the request. For Lessee-certified
claims over $50,000, the Contracting Officer must, within 60
days, decide the claim or notify the Lessee of the date by which
the decision will be made.
(f) The Contracting Officers decision shall be final unless the
Lessee appeals or files a suit as provided in the Act.
(g) At the time a claim by the Lessee is submitted to the
Contracting officer or a claim by the Government is presented to
the Lessee, the parties, by mutual consent, may agree to use ADR.
When using arbitration conducted pursuant to 5 U.S.C. 575-580, or
when using any other ADR technique that the agency elects to
handle in accordance with the ADRA, any claim, regardless of
amount, shall be accompanied by the certification described in
subparagraph (d)(2)(iii) of this clause, and executed in
accordance with subparagraph (d)(3) of this clause.
(h) The Government shall pay interest on the amount found due
and unpaid from (1) the date the Contracting Officer receives the
claim (certified, if required), or (2) the date that payment
otherwise would be due, if that date is later, until the date of
payment. With regard to claims having defective certifications,
as defined in FAR 33.201, interest shall be paid from the date
that the Contracting officer initially receives the claim.
Simple interest on claims shall be paid at the rate, fixed by the
Secretary of the Treasury as provided in the Act, which is
applicable to the period during which the Contracting Officer
receives the claim and then at the rate applicable for each 6-
month period as fixed by the Treasury Secretary during the
pendency of the claim.
(i) The Lessee shall proceed diligently to comply with this
lease, pending final resolution of any request for relief, claim,
appeal, or action arising under the lease, and comply with any
decision of the Contracting Officer.
24. EQUAL OPPORTUNITY
(a) If, during any 12-month period (including the 12 months
preceding the award of this lease), the Lessee has been or is
awarded nonexempt Federal contracts and/or subcontracts that have
an aggregate value in excess of $10,000, the Lessee shall comply
with subparagraphs (b)(1) through (11) below. Upon request, the
Lessee shall provide information necessary to determine the
applicability of this clause.
(b) During performing this lease, the Lessee agrees as follows:
(1) The Lessee shall not discriminate against any employee or
applicant for employment because of race, color, religion, sex,
or national origin.
(2) The Lessee shall take affirmative action to ensure that
applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex,
or national origin. This shall include, but not be limited to
(i) employment, (ii) upgrading, (iii) demotion, (iv) transfer,
(v) recruitment or recruitment advertising, (vi) layoff or
termination, (vii) rates of pay or other forms of compensation,
and (viii) selection for training, including apprenticeship.
(3) The Lessee shall post in conspicuous places available to
employees and applicants for employment the notices to be
provided by the Contracting Officer that explain this clause.
(4) The Lessee shall, in all solicitations or advertisements
for employees placed by or on behalf of the Lessee, state that
all qualified applicants will receive consideration for
employment without regard to race, color, religion, sex, or
national origin.
(5) The Lessee shall send, to each labor union or
representative of workers with which it has a collective
bargaining agreement or other contract or understanding, the
notice to be provided by the Contracting Officer advising the
labor union or workers representative of the Lessees commitments
under this clause,, and post copies of the notice in conspicuous
places available to employees and applicants for employment.
(6) The Lessee shall comply with Executive Order 11246, as
amended, and the rules, regulations, and orders of the Secretary
of Labor.
(7) The Lessee shall furnish to the contracting agency all
information required by Executive Order 11246, as amended, and by
the rules, regulations, and orders of the Secretary of Labor.
Standard Form 100 (EEO-1), or any successor form, is the
prescribed form to be filed within thirty (30) days following the
award, unless filed within 12 months preceding the date of award.
(8) The Lessee shall permit access to its books, records, and
accounts by the contracting agency or the Office of Federal
Contract Compliance Programs (OFCCP) for the purposes of
investigation to ascertain the Lessees compliance with the
applicable rules, regulations, and orders.
(9) If the OFCCP determines that the Lessee is not in
compliance with this clause or any rule, regulation, or order of
the Secretary of Labor, this lease may be canceled, terminated,
or suspended in whole or in part and the Lessee may be declared
ineligible for further Government contracts, under the procedures
authorized in Executive Order 11246, as amended. In addition,
sanctions may be imposed and remedies invoked against the Lessee
as provided in Executive Order 11246, as amended, the rules,
regulations, and orders of the Secretary of Labor, or as
otherwise provided by law.
(10) The Lessee shall include the terms and conditions of
subparagraph (b)(1) through (11) of this clause in every
subcontract or purchase order that is not exempted by the rules,
regulations, or orders of the Secretary of Labor issued under
Executive Order 11246, as amended, so that these terms and
conditions will be binding upon each subcontractor or vendor.
(11) The Lessee shall take such action with respect to any
subcontract or purchase order as the contracting agency may
direct as a means of enforcing these terms and conditions,
including sanctions for noncompliance; provided that if the
Lessee becomes involved in, or is threatened with, litigation
with a subcontractor or vendor as a result of any direction, the
Lessee may request the United States to enter into the litigation
to protect the interest of the United States.
(c) Notwithstanding any other clause in this lease, disputes
relative to this clause will be governed by the procedures in 41
CFR 60-1.1.
25. EXAMINATION OF RECORDS
(a) This clause applies if this lease exceeds $10,000 and was
entered into by negotiation.
(b) The Comptroller General of the Unites States or a duly
authorized representative from the General Accounting Office
shall, until 3 years after expiration of the lease, or for any
shorter period as is agreed to by the parties, have access to and
the right to examine any of the Lessees directly pertinent books,
documents, papers, or other records involving transactions
related to this lease.
(c) The Lessee agrees to include in first-tier subcontracts
under this lease a clause to the effect that the Comptroller
General or a duly authorized representative from the General
Accounting Office shall, until 3 years after expiration of the
subcontract, or for any shorter period agreed to by the parties
have access to and the right to examine any of the subcontractors
directly pertinent books, documents, papers, or other records
involving transactions related to the subcontract. Subcontract
as used in this clause, excludes (1) purchase orders not
exceeding $25,000 and (2) subcontracts or purchase orders for
public utility services at rates established to apply uniformly
to the public, plus any applicable reasonable connection charge.
(d) The periods of access and examination in paragraphs (b) and
(c) above for records relating to (1) appeals under the
Disputes
clause, (2) litigation or settlement of claims arising from the
performance of this lease, or (3) costs and expenses of this
lease to which the Comptroller General or a duly authorized
representative from the General Accounting Office has taken
exception shall continue until such appeals, litigation, claims,
or exceptions are disposed of.
26. LABOR PROVISIONS
(a) Convict Labor--In connection with the performance of work
under this lease, the Lessee agrees not to employ any person
undergoing sentence of imprisonment, except as provided by 10
U.S.C. 4082 (c)(2) and Executive Order 11755, Dec. 29, 1973.
(b) Contract Work Hours Standards Act - Overtime Compensation.
This contract, to the extent that it is of a character specified
in the Contract Work Hours Standards Act (40 U.S.C. 327-330), is
subject to the following provisions and to all other applicable
provisions and exceptions of such Act and the regulations of the
Secretary of Labor thereunder.
(1) Overtime Requirements--No Lessee or subcontractor
contracting for any part of the lease work which may require or
involve the employment of laborers or mechanics (see Federal
Acquisition Regulation (FAR) 22.300) shall require or permit any
such laborers or mechanics in any workweek in which the
individual is employed on such work to work in excess of 40 hours
in such workweek unless such laborer or mechanic receives
compensation at a rate not less that 1 1/2 times the basic rate
of pay for all hours worked in excess of 40 hours in such
workweek.
(2) Violation; liability for unpaid wages; liquidated damages--
In the event of any violation of the provisions set forth in
paragraph (a) of this clause, the Lessee and any subcontractor
responsible therefor shall be liable for the unpaid wages. In
addition, such Lessee and subcontractor shall be liable to the
United States (in case of work done under lease for the District
of Columbia or a territory, to such district or to such
territory), for liquidated damages. Such liquidated damages
shall be computed with respect to each individual laborer or
mechanic employed in violation of the provisions set forth in
paragraph (i) of this clause in the sum of $10 for each calendar
day on which such individual was required or permitted to work in
excess of the standard workweek of 40 hours without payment of
the overtime wages required by provisions set forth in paragraph
(i) of this clause
(3) Withholding for unpaid wages and liquidated damages--The
Contracting officer shall upon his or her own action or upon
written request of an authorized representative of the Department
of Labor withhold or cause to be withheld, from any moneys
payable on account of work performed by the Lessee or
subcontractor under any such contract or any Federal contract
with the same Lessee, or any other Federal-assisted lease subject
to the Contract Work Hours and Safety Standards Act which is held
by the same Lessee, such sums as may be determined to be
necessary to satisfy any liabilities of such Lessee or
subcontractor for unpaid wages and liquidated damages as provided
in the provisions set forth in paragraph (ii) of this clause.
(4) Payrolls and basic records
(i) The Lessee or subcontractor shall maintain payrolls and
basic payroll records during the course of the lease work and
shall preserve them for a period of 3 years from the completion
of the lease for all laborers and mechanics working on the lease.
Such records shall contain the name and address of each such
employee, social security number, correct classifications, hourly
rates of wages paid, daily and weekly number of hours worked,
deductions made, and actual wages paid. Nothing in this
paragraph shall require the duplication of records required to be
maintained for construction work by Department of Labor
regulations at 29 CFR 5.5(a)(3) implementing the Davis-Bacon Act.
(ii) The records to be maintained under paragraph (iv)(1) of
this clause shall be made available by the Lessee or
subcontractor for inspection, copying, or transcription by
authorized representatives of the Contracting officer or the
Department of the Labor. The Lessee or subcontractor shall
permit such representatives to interview employees during working
hours on the job.
(c) Overtime and Shift Premiums--
(1) Insofar as practicable the Lessee shall perform any work
required under this lease which is at the expense of the
Government without the use of overtime or multi-shift labor for
which premium payments are required, except to the extent that
such payments either (A) are approved in writing on behalf of the
Government by the Contracting Officer or (B) are paid for work--
(i) necessary to cope with emergencies such as those resulting
from accidents, natural disasters, or breakdowns of
equipment;
(ii) by indirect labor employees such as those performing
duties in connection with administration, protection,
transportation, maintenance, operation of utilities, or accounts;
(iii) in the performance of tests, laboratory procedures,
loading or unloading of transportation media, and operations in
flight or afloat, which are continuous in nature and cannot
reasonably be interrupted or otherwise completed; or
(iv) which will result in lower overall cost to the Government.
(2) The cost of overtime premiums or shift premiums otherwise
allowable under (i) above shall be allowed only to the extent the
amount thereof is reasonable and properly allocable to the work
under this lease.
27. AUDIT BY DEPARTMENT OF DEFENSE
(a) General. The Contracting officer or his representatives
shall have the audit and inspection rights described in the
applicable paragraphs (b), (c) and (d) below.
(b) Examination o-f Costs. The Lessee shall maintain, and the
Contracting officer and his representatives shall have the right
to examine, books, records, documents, and other evidence and
accounting procedures and practices, sufficient to reflect
properly (1) all direct and indirect costs of whatever nature
claimed to have been incurred and anticipated to be incurred for
the performance of this lease and (2) the use of, and charges for
the use of, the facilities. Such right of examination shall
include inspection at all reasonable times of the Lessees plants,
or such parts, thereof, as may be engaged in the performance of
this lease.
(c) rts. If the Lessee is required to furnish Cost Information
Reports (CIR) or Contract Fund Status Reports (CFSR), the
Contracting Officer or his representatives shall have the right
to examine books, records, documents, and supporting materials,
for the purpose of evaluating (i) the effectiveness of the
Lessees policies and procedures to produce data compatible with
the objectives of these reports, and (ii) the data reported.
(d) Availability. The materials described in (b), (c) and (d)
above shall be made available at the office of the Lessee, at all
reasonable times, for inspection, audit, or reproduction, until
the expiration of three years from the date of final payment
under this lease or such lesser time as agreed to by the parties,
and for such longer period, if any, as is required by applicable
statute, or by other clauses of this lease, or by (1) and (2)
below:
(1) If this lease is completely or partially terminated, the
records relating to the work terminated shall be made available
for a period of three years from the date of any resulting final
settlement.
(2) Records which relate to appeals under the Disputes clause
of this lease, or litigation of the settlement of claims arising
out of the performance of this lease, shall be made available
until such appeals, litigation, or claims have been
disposed of.
(e) The Lessee shall insert a clause containing all the
provisions of this clause, including this paragraph (e), in all
subcontracts exceeding $10,000 hereunder, except altered as
necessary for proper identification of the contracting parties
and the Contracting Officer under the Government prime contract.
28. CERTIFICATION OF CLAIMS AND REQUESTS FOR ADJUSTMENT OR
RELIEF
(a) Any contract claim, request for equitable adjustment to
lease terms, request for relief under Public Law 85-804 or other
similar request exceeding $100,000 shall bear, at the time of
submission, the following certificate given by an individual who
has knowledge of the basis of the claim or request, knowledge of
the accuracy and completeness of the supporting data, and
knowledge of the claim or request:
I certify that the claim is made in good faith, that the
supporting data are accurate and complete to the best of my
knowledge and belief; and that the amount requested accurately
reflects the lease adjustment for which the Lessee believes the
Government is liable; and that I am duly authorized to bind the
contractor with respect to the claim.
(Officials Name)
(Title)
(b) The certification in paragraph (a) of this clause requires
full disclosure of all relevant facts, including cost and pricing
data.
(c) The certification requirement in paragraph (a) of this
clause does not apply to:
(1) Requests for routine contract payments--for example, those
for pay merit for accepted supplies and services, routine
vouchers under cost reimbursement-type contracts, and progress
payment invoices; or
(2) Final adjustments under incentive provisions of contracts.
(d) In those situations where no claim certification for the
purposes of 10 U.S.C. 2410e has been submitted prior to the
inception of a contract dispute, a single certification, using
the language prescribed by the Contract Disputes Act (41 U.S.C.
601 et seq.) but signed by an individual who has knowledge of the
basis of the claim or request, knowledge of the accuracy and
completeness of the supporting data, and knowledge of the claim
or request, will satisfy the certification requirements of both
statutes.
(e) If this is a request for equitable adjustment under a
substantially completed lease or a completed lease, the
certification will be expanded to include the following:
This claim includes only costs for performing the alleged change,
and does not include any costs which have already been reimbursed
or which have been separately claimed. All indirect costs
claimed are properly allocable to the alleged change in
accordance with applicable acquisition regulations. I am aware
that the submission of a false claim to the Government can result
in the assessment of significant criminal and civil penalties and
fines.
29. ORDER OF PRECEDENCE
Any inconsistency in this solicitation or lease shall be resolved
by giving precedence in the following order: (a) The Schedule;
(b) representations and other instructions; (c) lease clauses;
and (d) other documents, exhibits, and attachments.
30. DRUG-FREE WORKPLACE
(a) Definitions. As used in this clause.
(1) Employee in a sensitive position, as used in this clause,
means an employee who has been granted access to classified
information; or employees in other positions that the Contractor
determines involve national security, health or safety, or
functions other than the foregoing requiring a high degree of
trust and confidence.
(2) Illegal drugs, as used in this clause, means controlled
substances included in Schedules I and II, as defined by section
802(6) of Title 21 of the United States Code, the possession of
which is unlawful under Chapter 13 of that Title.
The term illegal drugs does not mean the use of a controlled
substance pursuant to a valid prescription or other uses
authorized by aii.
(b) The Contractor agrees to institute and maintain a program
for achieving that objective of a drug-free work force. While
this clause defines criteria for such a program, contractors are
encouraged to implement alternative approaches comparable to the
criteria in paragraph (c) that are designed to achieve the
objectives of this clause.
(c) Contractor programs shall include the following, or
appropriate alternatives:
(1) Employee assistance programs emphasizing high level
direction, education, counseling, rehabilitation, and
coordination with available community resources;
(2) Supervisory training to assist in identifying and
addressing illegal drug use by Contractor employees;
(3) Provision for self-referrals as well as supervisory
referrals to treatment with maximum respect for individual
confidentiality consistent with safety and security issues;
(4) Provision for identifying illegal drug users, including
testing on a controlled and carefully monitored basis. Employee
drug testing programs shall be established taking account of the
following:
(i) The Contractor shall establish a program that provides for
testing for the use of illegal drugs by employees in sensitive
positions. The extent of and criteria for such testing shall be
determined by the Contractor based on considerations that include
the nature of the work being performed under the contract, the
employees duties, the efficient use of Contractor resources, and
t he risks to health, safety, or national security that could
result from the failure of an employee adequately to discharge
his or- her position.
(ii) In addition, the Contractor may establish a program for
employee drug testing--
(IA) When there is a reasonable suspicion that an
employee uses illegal drugs; or
ii) When an employee has been involved in an accident or unsafe
practice;
40
(C:) As part of or as a follow-up to counseling or rehabilitation
for illegal drug use;
(1)) As part of a voluntary employee drug testing program.
(iii) The Contractor may establish a program to test applicants
for employment for illegal drug use.
(iv) For- the purpose of administering this clause, testing for
illegal drugs may be limited to those substances for which
testing is prescribed by section 2.1 of Subpart B of the
Mandatory Guidelines for Federal Workplace Drug Testing Programs
(53 FR 11980 (April 11, 1988)), issued by the Department of
Health and Human Services.
(d) Contractors shall adopt appropriate personnel procedures
to deal with employees who are found to be using drugs illegally.
Contractors shall not allow any employee to remain on duty or
perform in a sensitive position who is found to use illegal drugs
until such time as the Contractor, in accordance with procedures
established by the Contractor, determines that the employee may
perform in such a position.
(e) The provisions of this clause pertaining to drug testing
program shall not apply to the extent they are inconsistent with
state or local law, or with an existing collective bargaining
agreement; provided that with respect to the latter, the
Contractor agrees that those issues that are in conflict will be
a subject of negotiation at the next collective bargaining
session.
31. CLEAN AIR AND WATER
(a) Air Act, as used in this clause, means the Clean Air Act
(42 U.S.C. 7401, et seq.).
Clear air standards, as used in this clause, means-
(1) Any enforceable rules, regulations, guidelines, standards,
limitations, orders, controls, prohibitions, work practices, or
other requirements contained in, issued under, or otherwise
adopted under the Air Act or Executive Order 11738;
(2) An applicable implementation plan as described in section
110(d) of the Air Act (42 U.S.C. 7410(d));
(3) An approved implementation procedure or plan under section
111(c) or section 111(d) of the Air Act (42 U.S.C.
7411(c) or (d)); ()r
(4) An approved implementation procedure under section 112(d)
of the Air Act (42 U.S.C. 7412(d)).
OI Clean water standards, as used in this clause, means any
enforceable limitation, control, condition, prohibition,
standard, or other- requirement promulgated under the Water Act
or contained in a permit issued to a discharger by the EPA or by
a State under an approved program, as authorized by section 402
of the Water Act (33 U.S.C. 1342), or by local government to
ensure compliance with pretreatment regulations as required by
section 307 of the Water ..kct (33 U.S.C. 1317).
Compliance, as used in this clause, means compliance with-
(1) Clear air or water standards; or
(2) A schedule or plan ordered or approved by a court of
competent jurisdiction, the EPA, or an air or water pollution
control agency under the requirements of the Air Act or Water Act
and related regulations.
Facility, as used in this clause, means any building, plant,
installation, structure, mine, vessel or other floating craft,
location, or site of operations, owned, leased, or supervised by
a Contractor or subcontractor, used in the performance of a
contract or subcontract. When a location or site of operators
includes more than one building, plant, installation, or
structure, the entire location or site shall be deemed a
facility, except when the Administrator, or a designee, of the
EPA determines that independent facilities are collocated in one
geographic,-al area.
Water Act, as used in this clause, means Clean Water Act (33
U.S.C. 1251, et seq.).
(b) The Contractor agrees-
(1) To comply with the requirements of section 114 of the Clear
Air Act (4, U.S.C. 7414) and section 308 of the Clean Water Act
(33 U.S.C. 1:318) relating to inspection, monitoring, entry,
reports, and information, as well as other requirements specified
in section 114 and section 308 of the Air Act and the Water Act,
and all regulations and guidelines issued to implement those acts
before the award of this contract;
(2) That no portion of the work required by this prime contract
will be performed in a facility listed on the EPA List of
Violating Facilities on the date when this contract was awarded
unless and until the EPA eliminates the name of the
facility from the listing;
(3) To use best efforts to comply with clean air standards and
clean water standards at the facility in which the contract
is being performed; and
(4) To insert the substance of this clause into any nonexempt
subcontract, including this subparagraph (b)(4).
SECTION J - LIST OF DOCUMENTS AND ATTACHMENTS
Not Applicable to this Lease Agreement.
PART IV - REPRESENTATIONS AND INSTRUCTIONS
SECTION K - REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS
TO OFFERORS
1. CERTIFICATE OF INDEPENDENT PRICE DETERMINATION
(a) The offeror certifies that
(1) The rents in this offer have been arrived at
independently, without, for the purpose of restricting
competition, any consultation, communication, or agreement with
any other offeror or competitor relating to (i) those rents, (ii)
the intention to submit an offer, or (iii) the methods or factors
used to calculate the rents offered;
(2) The rents in this offer have not been and will not be
knowingly disclosed by the offeror, directly or indirectly, to
any other offeror or competitor before bid opening (in the case
of a sealed bid solicitation) or contract award (in the case of a
negotiated solicitation unless otherwise required by law; and
(3) No attempt has been made or will be made by the offeror to
induce any other concern to submit or not to submit an offer for
the purpose of restricting competition.
(b) Each signature on the offer is considered to be a
certification by the signatory that the signatory--
(1) Is the person in the offerors organization responsible for
determining the rents being offered in this bid or proposal, and
that the signatory has not participated and will not participate
in any action contrary to subparagraphs (a)(1)through (a)(3)
above; or
(2) (i) Has been authorized, in writing, to act as agent for
the following principals in certifying that those principals have
not participated, and will not participate in any action contrary
to subparagraphs (a)(1) through (a)(3) above
(insert full name of person(s) in the offerors organization
Roland H. Webb.
responsible for determining the rents offered in this bid or
proposal, and the title of his position in the offerors
organization)
As an authorized agent, does certify that the principals named in
subdivision (b)(2)(i) above have not participated, and will not
participate, in any action contrary to subparagraphs (a)(1)
through (a)(3) above; and
(iii) As an agent, has not personally participated and will
not participate, in any action contrary to subparagraphs (a)(1)
through (a)(3) above.
(c) If the offeror deletes or modifies subparagraph (a)(2)
above, the offeror must furnish with its offer a signed statement
setting forth in detail the circumstances of the disclosure.
2. CONTINGENT FEE REPRESENTATION AND AGREEMENT
(a) Representation. The offeror represents that, except for
full-time bonafide employees working solely for the offeror,
the offeror -
(Note: The offeror must check the appropriate boxes. For
interpretation of the representation, including the term bona
fide employee, see subpart 3.4 of the Federal Acquisition
Regulation.)
(1) has, X has not employed or retained any person or company
to solicit or obtain this contract; and
(2) has, X has not paid or agreed to pay to any person or
company employed or retained to solicit or obtain this contract
any commission, percentage, brokerage, or other fee contingent
upon or resulting from the award of this contract.
(b) Agreement. The offeror agrees to provide information
relating to the above Representation as requested by the
Contracting Officer and, when subparagraph (a)(1) or (a)(2) is
answered affirmatively, to promptly submit to the Contracting
Officer -
(1) A completed Standard Form 119, Statement of Contingent or
Other Fees, (SF 119); or
(2) A signed statement indicating that the SF 119 was
previously submitted to the same contracting office, including
the date and applicable solicitation or contract number, and
representing that the prior SF 119 applies to this offer or
quotation.
3. TYPE OF BUSINESS ORGANIZATION
The offeror or quoter, by checking the applicable box, represents
that-
(a) It operates as x a corporation incorporated under the
laws
an individual, - a
of the State of Delaware partnership, _ a nonprofit organization,
or
a joint
(b) If the offeror or quoter is a foreign entity, it operates
as
an individual, . a partnership, a nonprofit organization, a joint
venture, or _ a corporation, registered for business in
untry)
4. PLACE OF PERFORMANCE
(a) The offeror, in the performance of any contract resulting
from this solicitation, _ intends, X does not intend (check
appropriate box) to use one or more Plants or facilities located
at a different address from the address of the offeror as
indicated in this proposal.
(b) If the offeror checks intends in paragraph (a) above, it
shall insert in the spaces provided below the required
information:
Place of Performance (Street
Address, City, County, State,
Zip Code)
Name and Address of owner and Operator of the Plant or Facility
if other than Bidder
5. MINIMUM OFFER ACCEPTANCE PERIOD
(a) Acceptance period as used in this provision,- means the
number of calendar days available to the Government for awarding
a contract from the date specified in this solicitation for
receipt of proposals.
(b) This provision supersedes any language pertaining to the
acceptance period that may appear elsewhere in this solicitation.
47
(c) The Government requires a minimum acceptance period of
twenty) calendar days.
(d) In the space provided immediately below, offerors may
specify a longer acceptance period: calendar
days.
(e) An offer allowing less than the Governments minimum
acceptance period will be rejected.
(f) The offeror agrees to execute all that it has undertaken
to do, in compliance with its bid, if that bid is accepted in
writing within (1) the acceptance period stated in paragraph (c)
above or (2) any longer acceptance period stated in
paragraph (d) above.
6. CERTIFICATION OF NONSEGREGATED FACILITIES
(a) Segregated facilities as used in this provision, means any
waiting rooms, work areas, rest rooms and wash rooms, restaurants
and other eating areas, time clocks, locker rooms and other
storage or dressing areas, parking lots, drinking fountains,
recreation or entertainment areas, transportation, and housing
facilities provided for employees that are segregated by explicit
directive or are in fact segregated on the basis of race, color,
religion or national origin, because of habit, local custom or
otherwise.
(b) By the submission of this offer, the offeror certifies
that it does not and will not maintain or provide for its
employees any segregated facilities at any of its establishments,
and that it does not and will not permit its employees to perform
their services at any location under its control where segregated
facilities are maintained. The offeror agrees that a breach of
this certification is a violation of the Equal Opportunity clause
in the contract.
(c) The offeror further agrees that (except where it has
obtained identical certifications from proposed subcontractors
for specific time periods) it will -
(1) Obtain identical certifications from proposed
subcontractors before the award of subcontracts under which the
subcontractor will be subject to the Equal Opportunity clause;
(2) Retain the certifications in the files; and
(3) Forward the following notice to the proposed
subcontractors (except if the proposed subcontractors have
submitted identical certifications for specific time periods):
NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR
CERTIFICATIONS OF NONSEGREGATED FACILITIES
A Certification of Nonsegregated facilities must be submitted
before the award of a subcontract under which the subcontractor
will be subject to the Equal opportunity clause. The
certification may be submitted either for each subcontract or for
all subcontracts during a period (i.e., quarterly, semiannually,
or annually).
NOTE: The penalty for making false statements in offers is
prescribed in 18 U.S.C. 1001.
7. PREVIOUS CONTRACTS AND COMPLIANCE REPORTS
The offeror represents that -
(a) It x has, has not participated in a previous contract or
subcontract subject either to the Equal Opportunity clause of
this solicitation, the clause originally contained in Section 310
of Executive Order 10925, or the clause contained in Section 201
of Executive Order No. 11114;
(b) It X - has, has not, filed all required compliance
reports; and
(c) Representations indicating submission of required
compliance reports, signed by proposed subcontractors, will be
obtained before subcontract awards.
8. AFFIRMATIVE ACTION COMPLIANCE
The offeror represents that (a) it X has developed and has on
file, has not developed and does not have on file, at each
establishment, affirmative action programs required by the rules
and regulations of the Secretary of Labor (41 CFR 60-1 and 60-2),
or (b) it has not previously had contracts subject to the written
affirmative action programs requirement of the rules and
regulations of the Secretary of Labor.
9. CLEAN AIR AND WATER CERTIFICATION
The offeror certifies that
(a) Any facility to be used i e performance of this proposed
contract is
I is not listed on the
Environmental Protection Agency (EPA) List of Violating
Facilities;
(b) The offeror will immediately notify the Contracting
officer, before award, of the receipt of any communication from
the Administrator, or a designee, of the EPA, indicating that any
facility that the Offeror proposes to use for the performance of
the contract is under consideration to be listed on the EPA List
of Violating Facilities; and
(c) The Offeror will include a certification substantially the
same as this certification, including this paragraph (c), in
every nonexempt subcontract.
10. TAXPAYER IDENTIFICATION
(a) Definitions
Common parent, as used in this solicitation provision, means that
corporate entity that owns or controls an affiliated group of
corporations that files its Federal income tax returns on a
consolidated basis, and of which the offeror is a member.
Corporate status, as used in this solicitation provision, means a
designation as to whether the offeror is a corporate entity
(e.g., sole proprietorship or partnership), or a corporation
providing medical and health care services.
Taxpayer Identification Number (TIN), as used in this
solicitation provision, means the number required by the IRS to
be used by the offeror in reporting income tax and other returns.
(b) The offeror is required to submit the information required
in paragraphs (c) through (e) of this solicitation provision in
order to comply with reporting requirements of 26 U.S.C. 6041,
6041A, and 6050M and implementing regulation issued by the
Internal Revenue Service (IRS). If the resulting contract is
subject to the reporting requirements described in 4.902(a), the
failure or refusal by the offeror to furnish the information may
result in a 20 percent reduction of payments otherwise due under
the contract.
(c) Taxpayer Identification Number (TIN).
X TIN: 13-2906669
TIN has been applied to. TIN is not required because:
offeror is a nonresident alien, foreign corporation, or foreign
partnership that does not have income effectively connected with
the conduct of a trade or business in the U.S. and does not have
an office or place of business or a fiscal paying agent in the
U.S.; offeror is an agency or instrumentality of a foreign
government offeror is and agency or instrumentality of a Federal,
state, or local government; other. State basis.
(d) Corporate Status. corporation providing medical and health
care services, or engaged in the billing and collecting of
payments for such
services;
X other corporate entity Not a corporate entity; Sole
proprietorship Partnership Hospital or extended care facility
described in 26 CFR 501(c)(3) that is exempt from taxation under
26 CFR 501(a).
(e) Common Parent
Offeror is not owned or controlled by a common parent as defined
in paragraph (a) of this clause.
- -X Name and TIN of common parent
Name Todd Shipyards Corporation TIN 13-5438577
11. AUTHORIZED NEGOTIATORS
The offeror or quoter represents that the following persons are
authorized to negotiate on its behalf with the Government in
connection with the request for proposals: (list names, titles,
and telephone numbers of the authorized negotiators).
Jim Anderson
623-1635 Ext. 171
12. CERTIFICATION REGARDING DEBARMENT, SUSPENSION, PROPOSED
DEBARMENT, AND OTHER RESPONSIBILITY MATTERS
(a)(1) The Offeror certifies, to the best of its knowledge and
belief, that-
(i) The Offeror and/or of its Principals--
(A) Are are not /X/ presently debarred, suspended, proposed
for debarment, or declared ineligible for the award of contracts
by any Federal agency;
(B) Have have not /x/, within a three-year period preceding
this offer, been convicted of or had a civil judgment rendered
against them for: commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing a
public (Federal, state, or local) contract or subcontract;
violation of Federal or state antitrust statutes relating to the
submission of offers; or commission of embezzlement, theft,
forgery, bribery, falsification or destruction of records, making
false statements, or receiving stolen property; and
(C) Are / are not /X/ presently indicted for, or otherwise
criminally or civilly charged by a governmental entity with,
commission of any of the offenses enumerated in subdivision
(a)(1)(i)(B) of this provision.
(ii) The Offeror has has not /X/, within a three-year period
preceding this offer, had one or more contracts terminated for
default by any Federal agency.
(2) Principals, for the purposes of this certification, means
officers; directors; owners; partners; and, persons having
primary management or supervisory responsibility within a
business entity (e.g., general manger; plant manager; head of a
subsidiary, division, or business segment, and similar
positions).
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF
AN AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE,
FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER
SUBJECT TO PROSECUTION UNDER SECTION 1001, TITLE 18, UNITED
STATES CODE.
(b) The Offeror shall provide immediate written notice to the
Contracting officer if, at any time prior to contract award, the
Offeror learns that its certification was erroneous when
submitted or has become erroneous by reason of changed
circumstances.
(c) A certification that any of the items in paragraph (a) of
this provision exists will not necessarily result in withholding
of an award under this solicitation. However, the certification
will be considered in connection with a determination of the
Offerors responsibility. Failure of the offeror to furnish a
certification or provide such additional information as requested
by the Contracting Officer may render the offeror nonresponsible.
(d) Nothing contained in the foregoing shall be construed to
require establishment of a system of records in order to render,
in good faith, the certification required by paragraph (a) of
this provision. The knowledge and information of an Offeror is
not required to exceed that which is normally possessed by a
prudent person in the ordinary course of business dealings.
(e) The certification in paragraph (a) of this provision is a
material representation of fact upon which reliance was placed
when making award. If it is later determined that the Offeror
knowingly rendered an erroneous certification, in addition to
other remedies available to the Government, the Contracting
Officer may terminate the contract resulting from this
solicitation for default.
13. CERTIFICATION REGARDING A DRUG-FREE WORKPLACE
(a) DEFINITIONS
Controlled substance means a controlled substance in schedules
I through V of section 202 of the Controlled Substance Act (21
U.S.C. 812) and as further defined in regulation at 21 CFR
1308.11 - 1308.15.
Conviction means a finding of guilt (including a plea of nolo
contenders) or imposition of the sentence, or both, by any
judicial body charged with the responsibility to determine
violations of the Federal or State criminal drug statutes.
Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing,
possession or use of any controlled substance.
Drug-free workplace means the site(s) for the performance of work
done by the Contractor in connection with a specific contract at
which employees of the Contractor are prohibited from engaging in
the unlawful manufacture, distribution, dispensing, possession,
or use of a controlled substance.
Employee means an employee of a Contractor directly engaged in
the performance of work under a Government contract. Directly
engaged is defined to include all direct cost employees and any
other Contractor employee who has other than a minimal impact or
involvement in contract performance.
Individual means an offeror/contractor that has no more than one
employee including the offeror/contractor.
(b) By submission of its offer, the offeror, if other than an
individual, who is making an offer that equals or exceeds
$25,000, certifies and agrees that, with respect to all employees
of the offeror to be employed under a contract resulting from
this solicitation, it will--no later than 30 calendar days after
contract award (unless a longer period is agreed to in writing),
for contracts of 30 calendar days or more performance duration;
or as soon as possible for contracts of less than 30 calendar
days performance duration, but in any case, by a date prior
to
when performance is expected to be completed--
(1) Publish a statement notifying such employees that the
unlawful manufacture, distribution, dispensing, possession or use
of a controlled substance is prohibited in the Contractors
workplace and specifying the actions that will be taken against
employees for violations of such prohibition;
(2) Establish an ongoing drug-free awareness program to inform
such employees about--
(i) The dangers of drug abuse in the workplace;
(ii) The Contractors policy of maintaining a drug-
free workplace;
(iii) Any available drug counseling, rehabilitation, and
employee assistance programs; and
(iv) The penalties that may be imposed upon employees for drug
abuse violations occurring in the workplace;
(3) Provide all employees engaged in performance of the
contract with a copy of the statement required by subparagraph
(b)(1) of this provision;
(4) Notify such employees in writing in the statement required
by subparagraph (b)(1) of this provision that, as a condition of
continued employment on the contract resulting from this
solicitation, the employee will--
(i) Abide by the terms of the statement; and
(ii) Notify the employer in writing of the employees
conviction under a criminal drug statute for a violation
occurring in the workplace no later than 5 calendar days after
such conviction;
(5) Notify the Contracting Officer in writing within 10
calendar days after receiving notice under subdivision (b)(4)(ii)
of this provision, from an employee or otherwise receiving actual
notice of such conviction. This notice shall include the
position title of the employee; and
(6) Within 30 calendar days after receiving notice under
subdivision (b)(4)(ii) of this provision of a conviction, take
one of the following actions within respect to any employee who
is convicted of a drug abuse violation occurring in the
workplace:
(i) Take appropriate personnel action against such
employee; up to and including termination; or
(ii) Require such employee to satisfactorily
participate on a drug abuse assistance or rehabilitation program
approved for such purposes by a Federal, State, or local health,
law enforcement, or other appropriate agency.
(7) Make a good faith effort to maintain a drug-free workplace
through implementation of subparagraphs (b)(1) through (b)(6) of
this provision.
(c) By submission of its offer, the offeror, if an individual
who is making an offer of any dollar value, certifies and agrees
that the offeror will not engage in the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled
substance in the performance of the contract resulting from this
solicitation.
(d) Failure of the offeror to provide their certification
required by paragraphs (b) or (c) of this provision, renders the
offeror unqualified and ineligible for award (See FAR 9.104-1(g)
and 19.
(e) In addition to other remedies available to the Government,
the certification in paragraphs (b) or (c) of this provision
concerns a matter within the jurisdiction of an agency of the
United States and the making of a false, fictitious, or
fraudulent certification may render the maker subject to
prosecution under Title 18, United States Code, Section 1001.
2
Project 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
December 29, 1994
The parties enter into this agreement for mutual
consideration of the promises contained herein. This
agreement is between Todd Pacific Shipyards Corporation,
(the Employer) and The Pacific Coast Metal Trades District
Council, AFL-CIO (the Union), on behalf of its affiliated
international and local unions, its parent Metal Trades
Department, AFL-CIO, and its affiliate, the Puget Sound
Metal Trades Council, AFL-CIO. (The Employer and the Union
together shall be the Parties.)
PURPOSE
The purpose of this agreement is to provide stable
employment for the Employers employees and a stable
workforce for the Employer for work on two Washington State
Ferry (WSF) Projects for which the Employer is currently pre
qualified to bid: the Jumbo Ferry New Construction Projects
(Jumbo Ferries), and the Super Ferry Renovation Projects
(Super Ferries). The two projects are identified by WSF
contract numbers:
_____________________________________;
and
______________________________________.
These two projects are sometimes referred to
collectively in this Agreement as the Ferry Projects.
SCOPE OF WORK
Unless specifically identified and agreed in this document,
the terms of this agreement shall apply only to work
performed on and charged to the two Ferry Project contracts.
Each contract involves one initial vessel with options for
up to two more vessels to be exercised by the State of
Washington.
EFFECTIVE DATE AND DURATION
This Agreement shall become effective if and only if the
Employer is awarded either or both the Jumbo Ferries and
Super Ferries contracts by the Washington State Ferries
Division of the Washington State Department of
Transportation. This Agreement and all its terms shall
automatically expire with the expiration of the warranty
period for the Ferry Projects contracts awarded to the
Employer, but in no case more than one calendar year after
the last vessel constructed or renovated under such
contracts is delivered to WSF. It is currently estimated
that WSF will take delivery of its final vessel under each
contract and option during the calendar year 1999 and that
the warranty period will expire during the calendar year
2000. In the event work under this agreement (including
warranty work) continues past March 31, 2000, the parties
agree to negotiate wage and benefit rates to be applied to
such work. Extensions of this agreement shall be permitted
only if approved in writing by both the Employer and the
Union. If for any reason the Employer should be awarded
either or both of the Ferry Projects and then later have
them terminated by WSF prior to their completion, then this
Agreement shall also immediately terminate.
ECONOMIC AND OTHER CONDITIONS
Except as specifically provided by this document, all
provisions of the current basic collective bargaining
agreement and any successor agreements between the Parties
shall continue to govern all conditions of work on the Ferry
Projects. The modifications in conditions for the Ferry
Projects are as follows:
WAGES AND FRINGE BENEFITS
4/1/95 4/1/96 4/1/97 4/1/98
4/1/99
Wage Wage Wage Wage
Wage
$.15 $.10 & Fringe $.25
$.25
Fringe Fringe Fringe
Fringe
$.15 $.05 $.25 $.15*
$.15*
* The COLA will only be paid to the extent the COLA due
(using the formula set forth in the current collective
bargaining agreement) exceeds $.25 in the applicable year,
calculating from November 1, 1997 through October 31, 1998
and November 1, 1998 and October 31, 1999. In the event the
entire additional $.15 is not utilized in the first year
(1998), the remainder shall be carried over to the last year
of the agreement. In the event the cumulative amount is not
used in the final year, it will drop down into profits
available for profit sharing.
SHIFTS
Second Shift: An eight and one-half (8 1/2) hour period
less thirty (30) minutes for meals on the employees 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 twenty-five (25) cents for each hour worked.
Third Shift: An eight and one-half (8 1/2) hour period less
thirty (30) minutes for meals on the employees 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 fifty (50) cents for each hour worked.
HOLIDAYS
The employees birthday will no longer be a paid holiday.
PREMIUMS
There shall be no premium pay excepting that which is set
forth in Schedule A.
LABORERS (New Construction Only)
Laborers working aboard the vessel shall receive their
Schedule A one dollar premium for on shipboard work at a
time to be agreed to by the Employer and the Union.
CAPITAL IMPROVEMENTS
All work projects contained in the Fiscal 96 Capital Plan
shall be performed by the shipyard workforce where
practicable and shall be paid at the shipyard rate.
APPRENTICES
Pension contributions for all apprentices shall begin after
the apprentice has worked 1000 hours.
SENIORITY
All current seniority employees will be afforded the
opportunity to bid onto a new separate seniority list
(Project Seniority List PSL). This list shall be created
for the purposes of establishing a separate craft seniority
for the WSF Project. Current Todd craft seniority shall not
be affected should an employee choose or not choose to be
included on this list. A Master Seniority List (MSL) shall
be maintained which shall include the Employees choosing the
WSF Project per craft.
Employees within the bargaining unit shall be afforded the
opportunity to elect to work under the WSF Project or to
work on all other work performed under the current existing
Collective Bargaining Agreement. The selection shall be
based upon current seniority within the classification of
the Craft or Union. For the purposes of this Agreement
Seniority shall be defined as provided in Article 3.5 of the
Collective Bargaining Agreement.
Step 1.
The Company shall use the existing seniority list as the
basis to start the selection process for the Project
Seniority List (PSL). The selection process would result in
three (3) seniority lists. The original or MSL, the PSL
(above) and a list of employees who elect not to go on the
PSL, the Other Work List (OWL).
Step 2.
At a date to be determined by the Steering Committee, all
employees on the MSL will be given the option by seniority
of electing to be on the PSL. Employees who so elect shall
be placed on the PSL in the order they are asked from the
MSL. These employees will continue to work on Other Work
until they were needed on the WSF Project Work, at that time
they will be given an opportunity to reject assignment to
the WSF Project Work and remain on the OWL. If they are
assigned and go to the WSF Project Work, they must remain on
that work until completed.
Step 3.
If no work is available for employees on the OWL and all
employees on the PSL are working on the WSF Project Work,
employees on the OWL will be offered WSF Project Work by
seniority. If they accept WSF Project Work, they must stay
on the WSF work until laid off or the Project ends . When
they accept assignment to WSF Project Work, they will be
placed on the bottom of the PSL.
Step 4.
When WSF Project Work winds down, is between ships, or when
Project Work has Stand Down Days of three (3) or more
consecutive work days and an employee on the PSL is laid off
from WSF Project Work, that employee will be allowed to bump
any employee on the OWL in accordance with the basic labor
agreement. Employees moving to the OWL list due to the lack
of work between ships or Stand Down Days in excess of three,
must return to WSF Project Work when it is once again
available. All time spent working on the PSL and OWL will
count as time on the MSL. (Stand Down Days shall be those
days that work is unavailable for any reason excepting as
set forth in Article 14 of the Collective Bargaining
Agreement.)
Step 5.
In the event there is need for a Special Skill not available
from employees on the appropriate list (OWL or PSL) the
Company, with agreement of the Steering Committee, may
assign by seniority, employees who posses those Special
Skills to that work regardless of the restrictions set forth
in the above steps. Those employees transferred shall be
paid at the appropriate rate for the work performed.
Further, there will be exceptions to this seniority clause
based on equipment and functions as determined by the
Steering Committee.
PROFIT SHARING PLAN
There shall be a profit sharing plan agreed to between the
parties that details the sharing of all profits during the
term of the project agreement (see attached, incorporated
herein by reference.)
NO-STRIKE, NO-LOCKOUT AND INTEREST ARBITRATION
While this Ferry Project Agreement is in effect, the Parties
agree that there shall be no strikes or lockouts related to
disputes arising from work on either the Ferry Projects, or
any other bargaining unit work of the Employer covered by
labor agreements between the Union and the Employer, or for
economic reasons during bargaining for successor basic labor
agreements. The Employer specifically agrees not to
implement any offers for new labor agreements.
If the Parties cannot reach agreement for successor basic
labor agreements, their differences shall be resolved by
interest arbitration, using the procedures set forth for a
single arbitrator in the current basic labor agreement, and
in successor agreements. The Arbitrator shall not have
authority to change any non-contested issues and Articles,
nor issues and articles mutually submitted by the parties as
agreed upon during bargaining. The Parties must
simultaneously submit their complete positions in writing to
the Arbitrator and each other within 30 calendar days after
the Arbitrator is selected, together with any supporting
documents, data, and arguments.
The Arbitrator shall have complete authority to decide
whether a hearing, further position statements, or brief are
necessary, and if so, on which subjects. The Arbitrator
must notify the Parties about the issues for any hearing,
further positions statements or brief. If the Arbitrator
requires a hearing, further position statements, or briefs,
they must all occur within 60 days after the Arbitrator is
selected.
All communications occurring between the parties and the
Arbitrator outside of a hearing, including brief, must be
made in writing with simultaneous copies provided to all
concerned by identical means, e.g., fax, mail, overnight
letter, courier delivery, etc. Under no circumstances shall
the arbitrators final opinion and award issue more than 90
days after the Arbitrator has been selected. The Arbitrator
shall have full authority to make his or her final award
retroactive to expiration of the end of the last expired
basic collective bargaining agreement.
Within these rules, the Arbitrator shall have complete
authority to set wages and conditions for a new labor
agreement.
STEERING COMMITTEE
The parties shall maintain a steering committee which shall
have authority to administer, interpret, and resolve
problems which may occur with the operation of this
agreement. The number of committee members shall consist of
an equal number of persons of whom half shall be appointed
by the Employers General Manager, and half shall be
appointed by the President of the Pacific Coast Metal Trades
District Council.
In witness whereof the parties herein have executed this
Agreement this _____ day of December, 1994.
Todd Pacific Shipyards Corporation Pacific Coast Metal
Trades
District Council
______________________________
_________________________________
by: Roland Webb by: Jack Sloan
Vice President and General Manager President
<PAGE>
LABOR PROFIT SHARING PLAN
Todd Pacific Shipyards Corporation (the Company) and
The Pacific Coast Metal Trades District Council, AFL-CIO
(the Union), on behalf of its affiliated international and
local unions, its parent Metal Trades Department, AFL-CIO,
and its affiliate, the Puget Sound Metal Trades Council, AFL-
CIO, agree to establish a Profit Sharing Plan, herein after
referred to as the Plan, whereby employees covered by the
Collective Bargaining Agreement and the Ferry Project
Agreement shall be entitled to participate in the profits of
the Company as outlined in the Plan.
ELIGIBILITY:
All employees of the Company covered by its Collective
Bargaining Agreement and Ferry Project Agreement and
employed at the Companys Seattle Shipyard on the effective
date of this Agreement, laid off employees with recall
rights upon recall, and newly hired employees on the date
they complete the probationary period contained in the
Collective Bargaining Agreement, shall be eligible to
participate in the Plan. Employees who complete their
probationary period shall be considered eligible under the
Plan from their first date of hire.
FINANCIAL STATEMENTS:
The Companys Statement of Operations for the Seattle
Shipyard shall be used as the basis for calculations of
profits under the Plan. The fiscal year shall end on the
Sunday nearest March 31 of each year. An example of the
format of the Statement of Operations is contained in
attached Exhibit #1.
For the purposes of the Plan, the Company agrees to
prepare the Statement of Operations for the Seattle Shipyard
in accordance with generally accepted accounting principles.
In addition, the Company agrees to consistently apply these
principles and to present its Statement of Operations in the
same manner as the Statement of Operations for fiscal year
1995.
TERM:
The term of the Profit Sharing Plan shall follow the Ferry
Project Agreement, dated December 29, 1994.
DEFINITION OF PROFITS:
Profits shall be defined as Income Before Income Taxes
of the Seattle Shipyard, as shown on the Companys Statement
of Operations, except that: (a) any costs expensed for
bonuses to employees not subject to the Companys Collective
Bargaining Agreement will be added back to Income Before
Income Taxes; (b) any costs expensed for profit sharing
payments anticipated under this Plan will be added back to
Income Before Income Taxes; and (c) allocated costs expensed
by the Company for corporate expenses of Todd Shipyards
Corporation will be added back to Income Before Income
Taxes. The result of these adjustments will be Adjusted
Income Before Income Taxes.
Profits, as defined under the Plan, will become subject to
the provisions of this Plan after the later of (a) the award
of one of the Ferry Contracts, or (b) the beginning of
Fiscal Year 1996.
DEFINITIONS:
For the purpose of the Plan, the following definitions
shall apply:
Net Sales: Sales minus discounts, rebates, and
adjustments.
Income Before Income Taxes (IBT): As appearing on the
face of the audited Statement of Operations, Income Before
Income Taxes shall include Net Sales, less all Direct Costs,
Overhead Expenses, and Other Income/Expense.
Adjusted Income Before Income Taxes(AIBT): Income
Before Income Taxes with additive adjustments for (1) any
costs expensed for bonuses to employees not subject to the
Companys Collective Bargaining Agreement; and (2) allocated
costs expensed by the Company for corporate expenses of Todd
Shipyards Corporation.
Adjusted Income Before Income Taxes Margin(AIBTM):
AIBT divided by Net Sales.
Bargaining Unit Ferry Project Direct Attendance Hours:
Shall include all hours attended by eligible employees and
charged to the two Ferry Project contracts, with overtime
hours being calculated at one (1) hour for each hour worked.
All Other Bargaining Unit Attendance Hours: Shall
include all hours attended by eligible employees, whether
direct or indirect, and not charged to the two Ferry Project
contracts, with overtime hours being calculated at one (1)
hour for each hour worked.
ACCOUNTING METHODS AND ALLOCATION OF INCOME AND EXPENSE
METHODS:
Unless otherwise provided in the Plan, accounting
methods and income and expense allocation methods shall be
consistent with the same methods used in the preparation of
the Fiscal Year 1995 Statement of Operations. These methods
shall remain in effect for the period of the Plan, unless
the parties mutually agree to change the methods.
PROFIT SHARING FORMULA:
Profits subject to sharing shall be calculated by
repeatedly multiplying Net Sales by one per-cent (1%) to
create Profit Layers, the cumulative sum of which cannot
exceed AIBT. The first four Profit Layers (of 1% times Net
Sales for each Layer) are not subject to sharing. Provided
that AIBT exceeds the sum of the preceding four Profit
Layers, the Profit Sharing Pool shall be as follows:
50% of the Fifth Profit Layer, plus
25% of the Sixth Profit Layer, plus
25% of the Seventh Profit Layer, plus
10% of all subsequent Profit Layers.
The Table below outlines sample calculations of Profit
Layers and the Profit Sharing Pool, assuming an Adjusted
Income Before Income Taxes Margin of 10%.
Hypothetical Net Sales 120,000,000
Profit
Profit
AIBT Profit Profit Sharing
Sharing
Margin Layer Layer $ Labor % Co. % Layer
Pool
1.00% First 1,200,000 0.00% 100.00% 0
0
2.00% Second 1,200,000 0.00% 100.00% 0
0
3.00% Third 1,200,000 0.00% 100.00% 0
0
4.00% Fourth 1,200,000 0.00% 100.00% 0
0
5.00% Fifth 1,200,000 50.00% 50.00% 600,000
600,000
6.00% Sixth 1,200,000 25.00% 75.00% 300,000
900,000
7.00% Seventh 1,200,000 25.00% 75.00% 300,000
1,200,000
8.00% Eighth 1,200,000 10.00% 90.00% 120,000
1,320,000
9.00% Ninth 1,200,000 10.00% 90.00% 120,000
1,440,000
10.00% Tenth 1,200,000 10.00% 90.00% 120,000
1,560,000
POOLS:
The Profit Sharing Pool shall be divided according to
attendance hours between those employees working on the
Ferry Projects (as defined in the Ferry Project Agreement
dated December 29, 1994) and all other eligible employees in
a ratio of 80%/20%. Further, all Profit Sharing Pool monies
attributable to Ferry Project hours will be divided by
shift, with 50% of the monies going to 1st shift and 50% of
the monies going to 2nd/3rd shift. This will result in the
creation of three Sub-Pools: the Repair Pool, the 1st Shift
Ferry Pool, and the 2nd/3rd Shift Ferry Pool.
The Repair Pool will be accomplished by the following
calculations:
(a) Multiply all Bargaining Unit Ferry Project Direct
Attendance Hours by 4 to get Weighted Ferry Project
Attendance Hours;
(b) Add the Weighted Ferry Project Attendance Hours to All
Other Bargaining Unit Attendance Hours to get Total
Attendance Hours;
(c) Divide All Other Bargaining Unit Attendance Hours by
Total Attendance Hours to get the Repair Pool Proportion;
(d) Multiply the Repair Pool Proportion times the Profit
Sharing Pool to get the Repair Pool.
The 1st Shift Ferry Pool will be accomplished by
subtracting the Repair Pool from the Profit Sharing Pool and
multiplying the difference by 50%.
The 2nd/3rd Shift Ferry Pool will be equal to the 1st
Shift Ferry Pool.
HOURLY PAYMENT RATES:
The Profit Sharing Hourly Payment Rate will vary by Sub-
Pool.
The Repair Pool Profit Sharing Hourly Payment Rate will
be calculated by dividing the Repair Pool by All Other
Bargaining Unit Attendance Hours.
The 1st Shift Ferry Pool Profit Sharing Hourly Payment
Rate will be calculated by dividing the 1st Shift Ferry Pool
by Bargaining Unit Ferry Project Direct Attendance Hours
which were incurred on the 1st Shift.
The 2nd/3rd Shift Ferry Pool Profit Sharing Hourly
Payment Rate will be calculated by dividing the 2nd/3rd
Shift Ferry Pool by Bargaining Unit Ferry Project Direct
Attendance Hours which were incurred on the 2nd and 3rd
Shifts.
The Individual Employee Profit Sharing Payment is
calculated for each eligible employee by multiplying the
relevant Profit Sharing Hourly Payment Rate by the
appropriate Attendance Hours, as set forth below:
Category of Hours Attendance Hours X Hourly Profit =
Profit Sharing
Sharing Payment
Rate
Non-Ferry Hours All Other Bargaining X Repair Pool Profit
= Non-Ferry
Bargaining Unit Sharing Hourly
Profit
Attendance Hours Payment Rate
Sharing
1st Shift Ferry Project X 1st Shift Ferry =
1st Shift
Ferry Hours Bargaining Unit Pool Profit
Ferry Profit
Attendance Hours, Sharing Hourly
Sharing
incurred on 1st Shift Payment Rate
2nd/3rd Shift Ferry Project X 2nd/3rd Shift =
2nd/3rd
Ferry Hours Bargaining Unit Ferry Pool
Shift Ferry
Attendance Hours, Profit Sharing
Profit
incurred on 2nd and Hourly Payment
Sharing
3rd Shift Rate
Repair Hours All Other Bargaining X Repair Pool =
Repair Profit
Unit Attendance Sharing Hourly
Sharing
Hours Payment Rate
Ferry Premium Approved Ferry Premium X Ferry Premium =
Ferry Premium
Premium Hours Incurred Pool Profit
Profit
Sharing Hourly
Sharing
Payment Rate
Totals By Person
The above Profit Sharing Formula shall be calculated as
soon as possible after the close of the fiscal year.
Payment to the eligible employees shall be made by separate
check by June 30 of the calendar year in which the fiscal
year ends.
Should the payment not be made by June 30. The company
shall pay interest at the prime rate on the Profit Sharing
Pool until the date payment is made.
Employees entitled to an Employee Profit Sharing
Payment, who are not on the active payroll at the time
payment is made, shall have their checks mailed to their
last address on file with the Company at the time active
employees payment are made. In the event an employee dies
before payment is made, their payment shall be made to the
person designated as beneficiary on the Group Life Insurance
Plan provided for in the Collective Bargaining Agreement.
Any Employee Profit Sharing Payments not distributed
shall be held in escrow, in an interest bearing account, and
added to the Profit Sharing Pool calculated for the
following fiscal year.
Profit Sharing Payments made for one fiscal year shall
not be used as an expense in the preparation of the
Operating Statement of the following year.
AUDIT OF PROFIT SHARING PLAN:
The Adjusted Income Before Income Taxes calculation
shall be made in accordance with the Plan and shall be
subjected to audit by a Certified Public Accounting firm,
who shall certify that the AIBT is fairly stated and in
accordance with the Plan.
The Certified Public Accounting firm shall meet with
the Union and Company and review their findings concerning
the administration of the Plan and the calculation of the
Profit Sharing Pool, Profit Sharing Hourly Payment, and
Employee Profit Sharing Payment.
Should the Union question the Profit Sharing
Calculation or any aspect of the administration of the Plan,
the Company shall make available to the Certified Public
Accounting firm and a representative of the Union all
necessary records, reports, statements and schedules to
audit the preparation of the Statement of Operations and
calculation of the Profit Sharing Formula and payments. If
the Certified Public Accounting firm, after review,
determines there is or is not an error, the Company and
Union agree to be bound by the Certified Public Accounting
firms determination.
In the event an error is found in the preparation of
the Statement of Operations or calculation of the Profit
Sharing Formula and Payments, the Profit Sharing
Calculations shall be made using the correct information and
any additional payment shall be made within two (2) weeks of
the determination of the error.
SALE, CHANGE OF OWNERSHIP OR BANKRUPTCY:
In the event the Company or the Seattle Shipyard is
sold, changes ownership or either a voluntary or involuntary
bankruptcy occurs, the Profit Sharing Calculations contained
in the Section entitled Profit Sharing Formula shall be made
using the monthly and quarterly Operating Statements as
defined in the Plan for the period beginning with the first
day of the fiscal year in which the sale, change of
ownership or bankruptcy occurs and ending with the last day
of the last full month prior to the sale, change of
ownership or bankruptcy.
Any Profit Sharing Payments earned under this Plan
shall be considered compensation accruing and payable as
provided above in the event of a bankruptcy filing.
<PAGE>
EXHIBIT 1
Todd Pacific Shipyards Corporation
Statement of Operations
Net Sales
Direct Cost:
Direct Labor
Related Labor
Direct Material
Total Direct Cost
Gross Margin
% of Sales
Overhead Expense
Operating Income/(Loss)
% of Sales
Other Income/(Expense):
Interest Income - Net
Contracts Loss Reserves
Other
Subtotal
Income Before Income Taxes
% of Sales
Federal Income Tax
Net Income
% of Sales
STATE OF WASHINGTON
DEPARTMENT OF NATURAL RESOURCE
Brian J. Boyle
Commissioner of Public Lands
Olympia, Washington 98504
HARBOR AREA LEASE NO. HA-2202
This lease replaces the lease made and entered into on
the 21st day of March, 1971, by and between the state of
Washington, acting by and through the Department of Natural
Resources, and Todd Pacific Shipyards Corporation: which
lease was subsequently amended by Amendment to Lease HA-2202
dated on the 15th day of July, 1982.
BY THIS LEASE, by and between the STATE OF WASHINGTON,
acting by and through the Department of natural Resources,
hereinafter called the Lessor and TODD SHIPYARDS
CORPORATION, hereinafter called Lessee, the Lessor leases
to the Lessee on the terms and conditions as hereinafter set
forth, the Following described harbor area situate in King
County, Washington to wit:
All harbor area lying in front of a portion of
vacated sixteenth Avenue SW, Seattle Tide Lands, include in
the following described tract:
Beginning at the northeast corner block 404, and
running thence N 76 42 13E 153.924 feet along the inner
harbor line; thence northerly 616.527 feet to the former
outer harbor line, thence S 76 42 12 W 153.924 feet along
the outer harbor line, thence southerly 616.527 feet to
inner harbor line and the point of beginning, as shown on
the 1969 Supplemental Map of Seattle Harbor on file in the
office of the commissioner of Public Lands at Olympia,
Washington and further shown on the attached Exhibit A.
The above description contains 92,479 square feet, more or
less
SECTION 1 OCCUPANCY
1.1 Term. This lease shall commence on the 21st day of
March, 1985 and continue to the 21st day of March, 2001.
SECTION 2 USE OF PREMISES
2.1 Permitted Use. Moorage of boats and ships, and
maintenance and operation of piers and drydocks used in
connection with the lessees ship construction and repair
business.
Lessee-owned improvements located upon the lease premises
shall be shown on Exhibit A, dated January 27, 1982, titled
Proposed Revision to lease Harbor Areas 1927 and 2202, Todd
Drawing Y114-54 a copy of which is attached hereto and by
this reference, is made a part of this lease
SECTION 3 PAYMENT
3.1 Rent.
a) Annual Rent. Initial annual rent is the amount of
$5,476.00, as determined by the lessor in accordance with
Chapter 221, Laws of 1984 (RCW 79.90.450 - .902) or as
amended by subsequent legislation, is due and payable in
advance by the lessee to the lessor and is the essence of
this lease, and is a condition precedent to the continuance
of this lease or any fights thereunder. Payment is to be to
the Department of Natural Resources, Olympia, Washington,
98504.
b) Inflation Adjustment. Annual rent shall be adjusted
each year according to the change in the producer Price
Index, as provided by regulations of the Department of
Natural resources.
c) Interest Penalty for Past Due Rent Balances. A one
percent (1%) charge, per month, shall be due to lessor, from
Lessee, on any rent balance which is more than thirty (30)
days past due.
3.2 Payment. The payment of the rental fixed to the
lessor each year in advance, is the essence of this lease,
and the same shall be, and is a condition precedent to the
execution and continuance of this lease, or any rights
thereunder. Payment is to be made to the Department of
Natural Resources, Olympia, Washington 98504.
3.3 Revaluation of Rent The Lessor shall at the end of
the first four (4) year period of the lease term and at the
end of each subsequent four (4) year period of the lease
term, determine the annual rental in accordance with RCW
79.90.480 or as amended by subsequent legislation.
3.4 Leasehold Tax. The Lessee shall pay to the Lessor at
Olympia, Washington 98504, the leasehold tax, if applicable,
as set forth in chapter 61, Laws of 1976, 2nd Ex. Sess., or
as may be amended. The tax shall be due and payable at the
same time rental charged herein is due and payable. Failure
to pay said tax when due and payable shall be considered a
breach of the provisions of this lease and the lessor shall
be entitled to all remedies they are entitled to by law,
and the remedies provide herein for a breach of a provisions
of this lease. Any delinquent taxes shall be a debt to the
lessor and in the event the lessor is subject to any
penalties or interest because of the failure of the Lessee
to pay such taxes , such penalties and interest shall be
payable by lessee to the lessor and shall be considered a
debt to the lessee In the event the Lessor suffers any cost
of what so ever nature, including attorney fees, or other
cost of litigation in collecting said tax, such cost shall
be payable by the Lessee and shall be considered a debt due
and owing to the Lessor by the Lessee
SECTION 4 RESERVATIONS AND CONDITIONS OF USE
4.1 Discrimination. The Lessee covenants and agrees that
in the performance of this lease agreement, the Lessee shall
conduct its activities in a manner that will assure fair,
equal and non-discriminatory treatment of all persons
regardless of race, creed, sex, martial status or ethnic
origin. Notwithstanding any exemption contained in State or
federal law, the Lessee shall comply with all federal and
State laws, rules nor regulations concerning hiring and
employment and assuring the service of all patrons,
customers, members or invitees without discrimination as to
any persons race, creed, sex, martial status, or ethnic
origin
Non-compliance with this clause by the lessee shall
constitute a breach of this lease and the lessor may
appropriate formal or informal actions to assure compliance
or may , at its discretion, terminate this lease upon 30
days notice to lessee setting forth the claimed violation
violations and giving Lessee a right to appeal to the
Commissioner of public Lands for a contested case hearing in
accordance with the State Administrative procedure Act
(RCW34.04).
4.2 Regulations. The Lessor shall have the right to
regulate, under rules established by its maintenance and
design requirements of all improvements, rate of wharfage ,
dockage and other tolls to be imposed by the Lessee upon
commerce for any of the purpose for which leased harbor
areas may be used, and to change such regulations and rates
from time to time
4.3 Termination. The Lessor shall have the right to
terminate this lease upon breach of any of the terms or
conditions contained herein, including the obligation to pay
the specified rental contained herein, or for the failure
or refusal to erect within a reasonable time hereafter and
continuously to operate and maintain in upon the harbor area
herein described the wharfs docks, buildings or other
structures represented in the exhibits of improvements
proposed to be erected herein, which have heretofore been
filed with the Lessor, or as altered with the consent and
approval of the lessor and entered upon its records. In
addition, the Lessor shall have the right to terminate this
lease for violation of any state or federal law, rule,
regulation, order or permit required there under governing
the uses authorized pursuant to the terms of this lease.
4.4 Improvements. No improvements shall be placed upon
the harbor area without the prior written authorization of
the Lessor. Authorized improvements constructed or placed
on the leased premises during the term of this lease by the
lessee, unless otherwise specified, are the property of the
Lessee. Upon the termination or expiration of this lease,
the lessee agrees to sever, remove and dispose of those
improvements designated by the lessor. On the premises,
within six months from date of termination or expiration.
In those cases where the lessee agrees that the Lessor may
remove such improvements and charge the Lessee for cost of
removal and disposal. All improvements allowed to remain on
the area herein described, upon termination or expiration
of this lease, shall be the property of the Lessor.
4.5 Unauthorized Improvements. All improvements made on
or to the premise without the written consent of the Lessor
shall immediately become the property of the lessor. The
lessor may, at its option, require the Lessee to remove and
dispose of any or all improvements, and in those instances
where such action is not taken by the Lessee, the lessor may
remove such improvements, charging the Lessee for the cost
of the removal and disposal, or cancel the lease.
4.6 Entry. The lessor shall have access to the premise
at all reasonable times for the purpose of securing
compliance with the terms and conditions of this lease.
4.7 Access The Lessor reserves the right of access to
and across the leasehold premise for all purposes and
further reserves the right to grant easement and other land
uses on the premises to others when the easement or other
land uses applied for will not unduly interfere with the
use to which the Lessee is putting the premises, or
interfere unduly with the approved plan of development for
premises. No easement or other land uses shall be granted
to third parties, until damages to the lease holder have
been paid to the Lessee, or waiver signed by the lessee.
4.8 Restrictions on Use. In connection with use of the
premise, the Lessee shall:
(1) conform to applicable laws and regulations of any
public authority affecting the premises and the use thereof,
and correct at the Lessees own expense, any failure of
compliance created through the Lessees fault, or by reason
of the Lessees use.
(2) remove no valuable material without prior written
consent of the lessor.
(3) Not make or suffer to be made, any filling in of the
leased area or any deposit of rock, earth, ballast, refuse,
garbage or other matter within such area except as approved
in writing by the lessor.
SECTION 5 REQUIREMENTS
5.1 Assignment and Sublease. This lease, or any portion
thereof, may not be assigned, mortgaged, sublet or otherwise
transferred without the prior written consent of the Lessor.
In granting such consent, the lessor reserves the right to
change the terms and conditions of this lease as it may
affect the assignee. Further, if the Lessee is a
corporation or partnership and if at any time during the
term of this lease, any part or all of the corporate shares
or partnership interest of the lessee shall be transferred
by sale, assignment, bequest, inheritance, operation of law,
or other dispositions so as to result in a change in the
present control of the corporation or partnership by the
person or persons now owing a majority of the shares, or
change in the holding of the corporate or partnership
interest, the same shall constitute an assignment of this
lease and as such shall require prior written consent of the
Lessor. failure to obtain written approval of any
assignment defined in this lease shall be grounds for
cancellation.
5.2 Maintenance
(1) The Lessee, at his sole cost and expenses, shall at all
at time keep, or cause all improvements (regardless of
ownership) to be kept, in as good condition and repair as
originally constructed or as hereafter put, except for
reasonable use.
(2) The Lessee shall not allow debris or refuse to
accumulate on the leased premises, caused either by himself
or any person authorized on the premises by the Lessee.
Failure to comply with this provision shall be cause to
permit the Lessor to remove the debris and refuse and
collect the cost of such removal from the Lessee and /or
cancel this lease.
5.3 Conditions of Premises and Liability.
(1) The premises have been inspected by lessee and are
accepted in their present condition Lessee agrees to defend
and hold lessor harmless from any and all claims suffered,
or alleged to be suffered on the premises, or arising out of
operations on the premises
(2) The Lessee shall carry with a responsible company or
companies satisfactory to the State, a sufficient amount of
fire and casualty insurance to recover the value of any or
all improvements locates on the leased premises. A copy of
such insurance policy or policies is to be endorsed and
delivered to the State with provisions of ten (10) days
notice of change, expiration and/or cancellation to the
State. In the event of fire or casualty damage to any
improvements owned by the state, or required to be left on
the leased premises at the expiration of this lease, the
paid insurance benefits shall be used to immediately replace
said improvements in a manner acceptable to the State or, if
directed by the State, rehabilitate the area in a manner
suitable to the State. Any portion of the insurance
proceeds not so utilized shall be returned to the State or
if so permitted, to be used to satisfy any outstanding
obligations incurred by reason of this lease being utilized
for loan security. In the event of fire or casualty damage
to any improvement owned by the Lessee, the paid insurance
benefits shall be used to either replace the improvement, or
in lieu thereof, rehabilitate the area in a manner suitable
to the State. The Lessee shall guarantee that all subleases
shall have provisions to either replace their own damaged
improvements or to rehabilitate the area as defined above.
5.4 Assessment. the Lessee shall pay all the annual
payments on all assessments that may be legally charged,
weather or not such assessments have been levied against
the leasehold or Lessor by the assessing agency.
5.5 Insolvency of Lessee. If the Lessee becomes
insolvent, bankrupt, a receiver appointed, or his interest
is transferred by operation of law, the Lessor may cancel
this lease at its option. Insolvency as used herein, will
mean the inability of the Lessee to meet obligations as they
come due.
SECTION 6 MISCELLANEOUS
6.1 No Partnership. The Lessor is not a partner nor a
joint venturer with the Lessee in connection with the
business carried on under this lease and shall have no
obligation with respect to the Lessees debts or other
liabilities.
6.2 Non-Waiver Waiver by either party of strict
performance or any provisions of this lease shall not be a
waiver of, nor prejudice the partys right to require strict
performance of the same provisions in the future, or any
other provisions.
6.3 Attorney Fees. If suit or action is instituted in
connection with any controversy arising out of this lease,
the prevailing party shall be entitled to recover, in
addition to costs, such sum as the court may adjudge
reasonable as attorney fees.
6.4 Succession. Subject to the limitations as stated in
paragraph 5.1 on transfer of the Lessees interest, this
lease shall be binding upon, and inure to the benefit of the
parties, their respective successors and assigns
6.5 Notices. Any notice required or permitted under this
lease shall be given when actually delivered or when
deposited in the United States mail addressed as follows: To
the Lessor: Department of Natural Resources, Public Lands
building, Olympia, Washington 98504. To the Lessee: At the
address given by the Lessee in the signature block, or as
shown on later official documents of record with this lease
6.6 Liens.
(1) No person shall have the right to file or place any
lien of any kind or character upon the land or improvements
within the leasehold premises without the prior written
consent of the Lessor
(2) In the event liens or other charges are placed on the
leasehold premises , including land or improvements, arising
out of the Lessees actions directly or indirectly, the
Lessee shall immediately cause such liens or charges to be
discharged. The Lessor may forthwith cancel this lease if
Lessee fails to discharge such liens or charges after 10
days notice to do so by Lessor. The Lessee shall pay and
indemnify the Lessor for all cost, damages or charges of
whatsoever nature, including attorneys fees necessary to
discharge such liens or charges, whether such cost, damages
or charges are incurred prior or subsequent to any
cancellation of this lease.
6.7 Litigation. In the event this lease, its terms, its
uses, its occupation or it in any way becomes a matter of
litigation, the Lessor shall be notified of such litigation
within fifteen days after such litigation begun. Failure to
notify the Lessor of such actions shall be cause for
cancellation or termination of this lease.
6.8 Lessors Right to Cure Defaults.
(1) If the lessee fails to perform any requirements or
obligations under this lease the lessor shall have the
option to correct the obligation of the lease after thirty
days written notice to the lessee. All of the Lessors
expenditures to correct the default shall be reimbursed by
the Lessee on demand, with interest at the rate of one
percent per month accrued from the date of expenditure by
the lessor.
(2) In the event any violation or breach of provisions of
this lease is causing damage to the leasehold premises or
the lease is utilizing the leasehold premises in a manner
not permitted by the provisions of this lease, or in any
case damages are occurring to the leasehold premises, the
Lessor may immediately enter upon the leasehold premises and
take such action as necessary to cease such damage or use.
In the event the damages or use is occurring by reason of a
violation or breach of the provisions of this lease, the
Lessee shall be liable for all cost incurred by the lessor
by reasons of such violation The lessor, at its option may
send notice to the Lessee of such violations and the Lessee
shall immediately cease such use or violation and correct
such violations.
6.9 Security The lessee shall furnish a surety bond in
such amount as may be determined by Lessor in accordance
with Title 79 RCW, as amended, as a guarantee of the
faithful performance of the conditions and terms prescribed
in this lease Security other than a surety bond may be
substituted if first approved in writing by lessor. The
initial amount of the surety bond as of the date of this
lease shall be $10.000.00.
6.10 Legislative Changes. The Lessee further agrees that
the provisions contained in paragraphs 3.1,3.3 and 4.4 shall
be subject to any changes in legislation affecting rental
rates and improvements.
The Lessee expressly agrees to all covenants herein, and
binds himself for the payment hereinbefore specified
Executed this 7th day of August, 1985.
STATE OF WASHINGTON
DEPARTMENT OF NATURAL
RESOURCES
/s/ James A.
Stern
JAMES A. STERN
Department
Supervisor
Signed this 20th day of June, 1985.
TODD SHIPYARDS CORPORATION
/s/ C. H. Oddson, Asst. Secy. &
Asst. Treasurer
P.O.Box 3806, Terminal Station
Seattle, WA 98124
App. No. HA-2202
pl
27107 150 164
* If Lessee is a corporation, complete Certification of
Acknowledgment
Form RES 75-1809
<PAGE>
STATE OF Washington )
COUNTY OF King )
On the 20th day of June, 1985, before me
personally appeared C. H. Oddson
to me known to be the Asst. Secy. & Asst Treasurer
of the corporation that executed the within and foregoing
instruments and acknowledged said instrument to be the free
and voluntary act and deed of the corporation, for the uses
and purposes therein mentioned, and on oath stated that he
was authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year first above
written.
/s/Jackie A. Winkler
Notary Public in and for the
State of
Washington residing
Seattle, Washington
<PAGE>
STATE OF WASHINGTON
DEPARTMENT OF NATURAL RESOURCES
Brian J. Boyle
Commissioner of Public Lands
Olympia, WA 98504
Amendment to Lease No. HA-2202
Whereas, the lessee has requested that Harbor Area Lease No.
2202 be amended to include a strip of harbor area
approximately 25 feet in width abutting upon its easterly
boundary, said strip now included within Harbor Area Lease
NO. 2067, which is being canceled; it is therefore,
Agreed:
1) The description of Harbor Area Lease No. 2202 is amended
to read as follows:
All harbor areas lying in front of a portion of
vacated Sixteenth Avenue SW: Seattle Tide Lands , included
in the following described tract:
Beginning at the northeast corner of block 404, and
running thence N 76 42 13 E 153.924 feet along the inner
harbor line; thence northerly 616.527 feet to the former
outer harbor line, thence S 76 42 13 w 153 9234 Feet along
the outer harborline, thence southerly 616.527 to the inner
harbor line and the point of beginning, as shown on the 1969
Supplemental Map of Seattle Harbor on file in the office of
the Commissioner of Public Lands at Olympia, Washington and
as further shown on the attached Exhibit A.
2) Annual payment for said lease are adjusted as follows:
May 15,1982 to March 21, 1983 $936.58
(for additional area, present leases
No. HA-2202 being paid up to March 21, 1983)
March 21, 1983 to March 21, 1984 6,365.00
March 21, 1984 to March 21, 1985 8,997.00
March 21, 1985 to March 21, 1986 12,080.00
* rental revaluation due on this date as per the terms
of the agreement.
3) All other terms and conditions of said lease shall not be
affected by these amendments.
The Lessee expressly agrees to all covenants herein and
binds himself for any payment hereinbefore specified.
TODD SHIPYARDS CORPORATION
BY C. H. Oddson, Asst. Secy, &
Asst Treasurer
Executed this 19th day of July, A.D. 1982
STATE OF WASHINGTON
DEPARTMENT OF NATURAL
RESOURCES
/s/ Russell W. Cahill
Supervisor
STATE OF WASHINGTON
DEPARTMENT OF NATURAL RESOURCES
Brian J. Boyle
Commissioner of Public Lands
Olympia, Washington 98504
HARBOR AREA LEASE NO. 2590
BY THIS LEASE, by and between the STATE OF WASHINGTON,
acting by and through the Department of Natural Resources,
hereinafter called the Leasor and TODD PACIFIC SHIPYARDS
CORPORATION, hereinafter called the Leasee, the Lessor
leases to the Leasee on the terms and conditions as
hereinafter set forth, the following described harbor area
situate in King County, Washington, to wit:
That portion of the harbor area lying in front of Block 404,
Seattle Tide Lands, within the following described tract:
Beginning at the Northwest corner of Block 404, Seattle Tide
Lands, proceed North 0 00 00 East along the east line of the
West Waterway a distance of 616.527 feet, thence South 76 42
13 West along the original outer harbor line a distance of
128.443 feet to the outer harbor line, thence North 0 00 00
East along the outer harbor line a distance of 265 feet,
thence North 76 42 13 East a distance of 128.443 feet to the
east line of the West Waterway produced, thence North 0 00
00 East along the east line of the West Waterway produced, a
distance of 351-040 feet, thence North 76 42 13 East a
distance of 385 feet, thence South 0 00 00 West a distance
of 956.04 feet, thence North 76 42 13 east a distance of
115.00 feet, thence North 0 00 00 East a distance of 440.00
feet to the original outer harbor line, thence North 76 42
13 East along the original outer harbor line a distance of
85.701 feet, thence South 0 00 00 West a distance of 616.527
feet to the inner harbor line, thence South 76 42 13 West
along the inner harbor line a distance of 585.701 feet to
the point of beginning, as shown on the official maps of
Seattle Tide Lands on the file in the office of he
commissioner of Public Lands at Olympia, Washington, and as
further shown on the attached Exhibit A, containing
approximately 528.652 square feet.
SECTION 1 OCCUPANCY
1.1 Term. This lease shall commence on the 13th day of
December, 1982 and continue to the 13th day of December,
2012
SECTION 2 USE OF PREMISES
2.1 PERMITTED USE. The lessee shall have use of he leased
premises foe the purposes of building and maintaining
wharves, docks and other structures for the convenience of
navigation and commerce as shown on the exhibits approved by
the Lessor and on file in the office of the Lessor.
SECTION 3 PAYMENT
3.1 Rental. Annual rental in the amount of $ (see
attachment), which represents 10 percent of the full and
true value of the harbor area herein described as determined
by the Lessor, in accordance with the provisions of Chapter
97, Laws of 1969. First Extraordinary Session, or as
amended by subsequent legislation .
3.2 Payment. the payment of the rental fixed to the
Lessor each year in advance, is the essence of this lease,
and the same shall be, and is a condition precedent to the
execution and continuance of this lease or any rights
thereunder. Payment is to be written to the Department of
Natural Resources, Olympia, Washington 98504.
3.3 Adjustment. The Lessor shall at the end of the first
five (50) year period of he lease term and at the end of
each subsequent five (5) year period of the lease term,
determine the full and true value in money of the herein
described harbor area exclusive of improvements, unless the
improvements are State-owned, in which case they shall be
included, which value shall be the value at which the
property would be taken in payment of a just debt from a
solvent debtor and such valuation shall be utilized in
computation of rental for the five (5) year period
following.
3.4 Leasehold Tax. The Lessee shall pay to the Lessor at
Olympia, Washington 98504 the leasehold tax, if applicable
as set forth in chapter 61, Laws of 1976, 2nd Ex. Session or
as may be amended. The tax shall be due and payable at the
same time the rental charged herein is due and payable.
Failure to pay said tax when due and payable shall be
considered a breach of the provisions of this lease and the
Lessor shall be entitled to all remedies they are entitled
to by law, and the remedies provided herein for a break in a
provision of this lease. Any delinquent taxes shall be a
debt to the Lessor and in the event the Lessor is subject to
any penalties or interest because of the failure of the
Lessee to pay such taxes, such penalties and interest shall
be payable by the Lessee to the Lessor and shall be
considered a debt to the Lessor. In the event the Lessor
suffers any costs of whatsoever nature including attorney
fees, or other costs of litigation in collecting said tax,
such costs shall be payable be the Lessee and shall be
considered a debt due and owing to the Lessor by the Lessee.
SECTION 4 RESERVATIONS AND CONDITIONS OF USE
4.1 Discrimination. The Lessee covenants and agrees that
in the performance of this lease agreement, the lessee shall
conduct its activities in a manner that will assure fair,
equal and non-discriminatory treatment of all persons
regardless of race, creed, sex, marital status or ethnic
origin. Notwithstanding any exemption contained in State or
federal law, the Lessee shall comply with all federal and
State laws, rules or regulations concerning hiring and
employment and assuring the service of all patrons,
customers, members or invitees without discrimination as to
any persons race, creed, sex, marital status or ethic
origin.
Non- compliance with this clause by the Lessee shall
constitute a breach of this lease and the Lesser may
initiate appropriate formal or informal action to assure
compliance and may, at its discretion terminate its lease
upon 30 days notice to lessee setting forth the claimed
violation or violations and giving the Lessee a right to
appeal to the Commissioner of Public Lands for a contested
case hearing in accordance with the State Administrative
Procedures Act (RCW 34.04).
4.2 Regulations. The Lessor shall have the right to
regulate, under rules established by it, maintenance and
design requirements of all improvements, rates of wharfage,
dockage and other tolls to be imposed by the Lessee upon
commerce for any of the purposes for which leased harbor
areas may be used, and to change such regulations and rates
from time to time.
4.3 Termination. the Lessor shall have the right to
terminate this lease upon breach of any of the terms or
conditions contained herein, or for the failure or refusal
to erect within a specified rental contained herein, or for
the failure or refusal to erect within a reasonable time
hereafter and continuously to operate and maintain in and
upon the harbor _____ herein described the wharfs, docks,
buildings or other structures represented in the exhibits of
improvements proposed to be erected therein, which have
heretofore been filed with the Lessor, or as altered with
the consent and approval of the Lessor and entered upon its
records. In addition, the Leassor shall have the right to
terminate this lease for violation of any State or federal
law, rule, regulation, order or permit required thereunder
governing the uses authorized pursuant to the terms of this
lease.
4.4 Improvements. No improvement shall be placed upon the
harbor area without the prior written authorization of the
Lessor. Authorized improvements constructed or placed on
the leased premises during the term of this lease by the
Lessee, unless otherwise specified, ______ the property of
the Lessee. Upon the termination or expiration of this
lease, the ____ agrees to cover, remove and dispose of these
improvements designated by the Lessor on the premises,
within six months from date of termination or expiration.
In those cases where the Lessor requires removal of
improvements and such action is not taken by the Lessee, the
Lessee agrees that the Lessor may remove such improvements
and charge the Lessee for cost of removal and disposal. All
improvements allowed to remain on the ____ herein described,
upon termination or expiration of this lease, shall be the
property of the Lessor.
4.5 Acquisition. The Lessor reserves unto itself, port
district, county, city or other public agency in the
territory where the portion of the harbor area described in
this lease is located, the right to assume and thereafter
hold this lease upon acquirement of the tidelands contiguous
thereto and fronting thereon, without any value for said
lease except for improvements thereon where such
improvements are owned by the Lessee.
4.6 Entry. the lessor shall have access to the premises at
all reasonable times for the purpose of securing compliance
with the terms and conditions of this lease.
4.7 Access. The Lessor reserves the right of access to
and across the leasehold premises for all purposes and
further reserves the right to grant easements and other land
uses on the premises to others when the easement or other
land uses applied for will not unduly interfere with the use
to which the Lessee in putting the premises, or interface
unduly with the approved plan of development of the
premises. No easement or other land uses shall be granted
to third parties, until damages to the lease holder have
been paid to the Lessee, or waiver signed by the lessee.
4.8 Restrictions on Use. In connection with use of the
premises, the Leasee shall:
(1) Conform to applicable laws and regulations of any
public authority affecting the premises and the use thereof,
and correct at the Lessees own expense, any failure of
compliance created through the Lessees fault, or by reason
for the Lessees use.
(2) Remove no valuable material without prior written
consent of the Lessor.
(3) Not make or suffer to be made, any filling in of the
leased area or any deposit of rock, earth, ballast, refuse,
garbage or other matter within such area except as approved
in writing by the Lessor.
SECTION 5 REQUIREMENTS
5.1 Assignment and Sublease. this lease, or any portion
thereof, may not be assigned, mortgaged, sublet or otherwise
transferred without the prior written consent of the Lessor.
In granting such consent, the Lessor reserves the right to
change the terms and conditions of this lease as it may
affect the assignee. Further, if the Lessee is a
corporation or partnership and if at any time during the
term of this lease, any part or all of the corporate shares
or partnership interests of Th. Lessee shall be transferred
by sale, assignment, bequest, inheritance, operation of law,
or other dispositions so as to result in a change in the
present control of the corporation or partnership by the
person or persons now owning a majority of the shares, or
change in the holding of the corporate pr partnership
interest, the same shall constitute an assignment of this
lease and as such shall require prior written consent of the
lessor. Failure to obtain written approval of any
assignment defined in this lease shall be grounds for
cancellation.
5.2 Maintenance.
(1) The Lessee, at his sole cost and expense, shall at all
times keep, or cause all improvements (regardless of
ownership) to be kept, in as good condition and repair as
originally constructed or as hereafter put, except for
reasonable use.
(2) the Lessee shall not allow debris or refuse to
accumulate on the leased premises, caused either by himself
or any person authorized on the premises by the Lessee.
Failure to comply with this provision shall be cause to
permit the Lessor to remove the debris and refuse and
collect the cost of such removal from the Lessee and /or
cancel this lease.
5.3 Condition of the Premises and Liability.
(1) The premises have been inspected by the Lessee and are
accepted in their present condition. Lessee agrees to
defend and hold Lessor harmless from any and all claims
suffered, or alleged to be suffered on the premises, or
arising out of operations on the premises.
(2) The Lessee shall carry with a responsible company of
companies satisfactory to the State, a sufficient amount of
fire and casualty insurance to recover the value of any or
all improvements located on the leased premises. A copy of
such insurance policy or policies is to be endorsed and
delivered to the State with provision of ten (10) days
notice of change, expiration and / or cancellation to the
State. In the event of fire or casualty damage to any
improvement owned by the State, or required to be left on
the leased premises at the expiration of this lease, the
paid insurance benefits shall be used to immediately replace
said improvements in a manner acceptable to the State or, if
directed by the State, rehabilitate the area in a manner
suitable to the State. Any portion of the insurance
proceeds not so utilized shall be returned to the State or
if so permitted, to be used to satisfy any outstanding
obligations incurred by reason of this lease being utilized
for loan security. In the event of fire or casualty damage
to any improvement owned by the Lessee, the said insurance
benefits shall be used to either replace the improvement, or
in lieu thereof, rehabilitate the area in a manner suitable
to the State. The Leasee shall guarantee that all
sublessees shall have provisions to either replace their own
damaged improvements or to rehabilitate the area as defined
above.
5.4 Assessments. The Lessee shall pay all the annual
payments on all assessments that may be legally charged,
whether or not such assessments have been levied against the
leasehold or the Lessor by the assessing agency.
5.5 Insolvency of Lessee. If the Lessee becomes
insolvent, bankrupt, a receiver appointed, or his interest
is transferred by operation of law, the Lessor may cancel
this lease at its option. Insolvency as used herein, will
mean the inability of the Lessee to meet obligations as they
come due.
SECTION 6 MISCELLANEOUS
6.1 No Partnership. The Lessor is not a partner nor a
joint venturer with the Lessee in connection with the
business carried on under this lease and shall have no
obligation with respect to the Lessees debts or other
liabilities.
6.2 Non-Waiver. Waiver by either party of strict
performance or any provisions of this lease shall not be a
waiver of, nor prejudice the partys right to require strict
performance of the same provision in the future, or of any
other provision.
6.3 Attorney Fees. If suit or action is instituted in
connection with any controversy arising out of this lease,
the prevailing party shall be entitled to recover, in
addition to costs, such sum as the court may adjudge
reasonable as attorney fees.
6.4 Succession. Subject to the limitations as stated in
paragraph 5.1 on transfer of the Lessees interest, this
lease shall be binding upon, and inure to the benefit of the
parties, their respective successors and assigns.
6.5 Notices. Any notice required or permitted under this
lease shall be given when actually delivered or when
deposited in the United States mail addressed as follows: To
the Lessor: Department of Natural Resources, Public Lands
Building, Olympia, Washington 98504. To the Lessee: At the
address given by the Lessee in the signature block, or as
shown on later official documents of record with this lease.
6.6 Liens.
(1) No person shall have the right to file or place any
lien of any kind or character upon the land or improvements
within the leasehold premises without the prior written
consent of the Lessor.
(2) In the event liens or other charges are placed on the
leasehold premises, including land improvements, arising out
of the Lessees actions directly or indirectly, the Lessee
shall immediately cause such liens or charges to be
discharged. The Lessor may forthwith cancel this lease if
Lessee fails to discharge such liens or charges after ten
days notice to do so by the Lessor. The lessee shall pay
and indemnify the lessor for all costs, damages or charges
of whatsoever nature, including attorneys fees necessary to
discharge such liens or charges, whether such costs, damages
or charges are incurred prior or subsequent to any
cancellation of this lease.
6.7 Litigation. In the event this lease, its terms, its
use, its occupation or it in any way becomes a matter of
litigation, the Lessor shall be notified of such litigation
within fifteen days after such litigation is begun. Failure
to notify the Lessor of such action shall be cause for
cancellation or termination of this lease.
6.8 Leasors Right to Cure Defaults
(1) If the Lessee fails to perform any requirements or
obligations under this lease, the Leassor shall have the
option to correct the obligation of the lease after thirty
days written notice to the Lessee. All of the Lessors
expenditures to correct the default shall be reimbursed by
the Lessee on demand, with interest at the rate of one
percent per month accrued from the date of expenditure by
the Lessor.
(2) In the event any violation or breach of the provisions
of this lease is causing damage to the leasehold premises or
the Lessee is utilizing the leasehold premises in a manner
not permitted by the provisions of this lease, or in any
case damages are occurring to the leasehold premises, the
Lessor may immediately enter upon the leasehold premises and
take such action as necessary to cease such damages or use.
In the event the damages or use is occurring by reason of a
violation or breach of the provisions of this lease, the
Lessee shall be liable for all costs incurred by the Lessor
by reasons of such violations. The Lessor, _______ option
may send notice to the Lessee of such violations and the
Lessee shall immediately cease such use or violation and
correct and remedy such violations.
6.9 Bond. Lessee shall furnish a bond in the amount of
$35.000.00 as a guarantee for the performance of all the
conditions set up and prescribed in this lease in all and
every part thereof.
6.10 Legislative Changes. The Lessee further agrees that
the provisions contained in paragraph 3.1, 3.3 and 4.4 shall
be subject to any changes in legislation affecting rental
rates and improvements.
The Lessee expressly agrees to all covenants herein, and
binds himself for the payment herein before specified.
Executed this day of
, 19
STATE OF WASHINGTON
DEPARTMENT OF NATURAL RESOURCES
JAMES A. STERNS
Supervisor
For BRIAN J. BOYLE, Commissioner
Signed this day of
, 19
TODD PACIFIC SHIPYARDS CORPORATION
By,
Title
P.O. Box 3806
Seattle, WA 98124
Lessee is a corporation, complete Certificate of
Acknowledgment
App. No. HA-2590
FORM RES 75-1809
CERTIFICATE OF
CORPORATE ACKNOWLEDGMENT
STATE OF )
) ss
COUNTY OF )
On this day of
, 19 , before me
Personally appeared
to me known to be the
of the corporation that executed the within and foregoing
instrument and acknowledged said instrument to be the free
and voluntary act and deed of the corporation, for the uses
and purposes therein mentioned, and on oath stated that (he
was) (they were) authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year first above written.
Notary Public in and for the State of
residing at
Rental Schedule Attachment
3.1 Rental
Date
December 13, 1982 to July 1, 1983
Rent*
$17,302.45
*Rental for subsequent periods shall be later determined by
_____ Lessor in accordance with the rules then in effect.
The annual rental is ordinarily based on the Departments
rate of return times the value of the land. Chapter 21,
Laws of 1982, First Extraordinary Session, has placed
certain limits on the rental to be collected up through July
1, 1983, and the above rental reflects those requirements.
EXHIBIT MAP
HARBOR AREA LEASE BOND NO.
STATE OF WASHINGTON )
) ss
County of
)
We,
of
,
as principal , and we,
as sureties, all of the State of Washington, County of
, do
confess ourselves ______________ to the State of Washington
in the penal sum of
Dollars,
and to the payment of which ______________ held and firmly
bound, and do by these presents bind ourselves, our and
___________ heirs, executors, administrators or assigns,
jointly and severally, firmly by _________ presents.
Sealed with our ______________ this day
of , A.D., 19
The condition of __________ obligation is such that,
Whereas, the principal , in the foregoing bond
_____ into a certain lease and contract No. with
the State of Washington ____ (which is hereto attached and
made a part of this instrument), whereby the _______ bounden
principal ___________ leased from the State of Washington
the part, ______ of property described in said hereto
attached lease and contract, __________ conditions set up in
said lease and contract: Now, therefore, if the ________
named lessee , the principal herein, shall and
contract ______ in all and every part thereof, then this
bond shall be considered satisfied ____ discharged;
otherwise it shall have full force and effect.
Approved for general
Date: Signature: Principal
Title
Assistant Attorney
Mailing Address
Surety
Insurance commissioners Approval:
Mailing Address
Signature: Attorney in fact
Signature: Resident Agent
Agency
Mailing Address
Suretys Seal
<PAGE>
EXHIBIT A
Map of Todd Pacific Shipyard Unable to copy
<PAGE>
STATE OF WASHINGTON
DEPARTMENT OF NATURAL RESOURCES
Brian J. Boyle
Commissioner of Public Lands
Olympia, Washington 98504
HARBOR AREA LEASE NO.22-090038
BY THIS LEASE, by and between the STATE OF WASHINGTON,
acting by and through the Department of Natural Resources,
hereinafter called the Lessor, and TODD SHIPYARDS
CORPORATION, a New York Corporation, hereinafter called the
Lessee, the Lessor leases to the Lessee on the terms and
conditions as hereinafter set forth, the following described
harbor area situate in king county, Washington, to wit:
That Portion of the northeast quarter of Section 12,
township 24 North, Range 4 East, W.M., King County,
Washington, being that portion of the West Waterway further
described as follows:
Beginning at the northwest corner of Block 404,
Seattle Tide Lands, said corner being the true point of
beginning; proceed S 76 4213 W along the inner harbor line a
distance of 128.44 feet to the pierhead line; thence N 00 00
E along said pierhead line a distance of 616.53 feet to
outer harbor line as it existed prior to April 1969; thence
N 76 42 13 E along said outer harbor line a distance of
128.44 feet to the east line of the West Waterway; thence S
0 00 00W along said east line a distance of 616.53 feet to
the true point of beginning. The above described premises
contain 77,006 square feet, more or less.
SECTION 1 OCCUPANCY
1.1 Term This lease shall commence on the 1st day of
September 1986 and continue to the 1st day of September
2003.
SECTION 2 USE OF PREMISES
2.1 Permitted Use. The Lessee shall have use of the
leased premises for the purpose of moorage of boats and
ships, and maintenance and operation of piers and dry-docks
used in connection with Lessees ship construction and repair
business. The lease premises and Lessee-owned improvements
thereon shall be shown on the exhibit and approved by the
Lessor: Exhibit A - drawing entitled Harbor areas Leases and
Waterways permit - Todd Drawing Y - 114-60 prepared by
Lessee on March 18, 1983, a copy of which is on file with
Lessor.
SECTION 3 PAYMENT
3.1 Rent.
(1) Annual Rent. Initial annual rent in the amount
of $9,402.00, and subsequent annual rent, as determined by
the Lessor in accordance with chapter 221, Laws of 1984( RCW
79.90.450 - .902) or as amended by subsequent legislation,
is due and payable in advance by the lessee to the Lessor
and is the essence of this lease, and is a condition
precedent to the continuance of this lease or any rights
thereunder. Payment is to be to the Department of Natural
Resources, Olympia, Washington 98504
(2) Inflation adjustment. after payment of the
initial rent, annual rent shall be adjusted each year
thereafter according to the change in the Producer Price
Index, as provided by regulations of the Department of
Natural Resources.
(3) Interest Penalty for Past Due Rent Balances. A
one percent charge, per month, shall be due to the Lessor,
from the Lessee, on any rent balance which is more than
thirty days past due.
3.2 Leasehold Tax. The lessee shall pay to the Lessor at
Olympia, Washington 98504, the leasehold tax, if applicable,
as set forth in chapter 61, Laws of 1976, 2nd Ex. Sess., or
as may be amended. The tax shall be due and payable at the
same time the rental charged herein is due and payable.
Failure to pay said tax when due and payable shall be
considered a breach of the provisions of this lease and the
Lessor shall be entitled to all remedies they are entitled
to by law, and the remedies provided herein for a breach of
a Provision of this lease. Any delinquent taxes shall be a
debt to the lessor and in the event the Lessor is subject to
any penalties or interest because of the failure of the
Lessee to pay such taxes, such penalties and interest shall
be payable by the Lessee to the Lessor and shall be
considered a debt to the Lessor. In the event the Lessor
suffers any cost of whatsoever nature, including attorney
fees, or other cost of litigation in collecting said tax,
such cost shall be payable by the lessee and shall be
considered a debt due and owing to the Lessor by the Lessee.
3.3 Revaluation of Rent. The lessor shall at the end of
the first four year period of the lease term and at the end
of each subsequent four year period of lease term, determine
the annual rental in accordance with RCW 70.90.480 or as
amended by subsequent legislation.
SECTION 4 RESERVATIONS AND CONDITIONS OF USE
4.1 Discrimination. The Lessee covenants and agrees
that in the performance of this lease agreement, the Lessee
shall conduct its activities in a manner that will assure
fair, equal and non-discriminatory treatment of all persons
regardless of race, creed, sex,
marital status or ethnic origin. Notwithstanding any
exemption contained in state or federal law, the Lessee
shall comply with all federal and state laws, rules or
regulations concerning hiring and employment and assuring
the service of all patrons, customers, members
or invitees without discrimination as to any persons race,
creed, sex marital status or ethnic origin.
Non compliance with this clause by the Lessee shall
constitute a breach of this lease and the Lessor may
initiate appropriate formal or informal actions to assure
compliance or may, at its discretion, terminate this Lease
upon thirty days notice to the Lessee setting forth the
claimed violation or violations and giving the Lessee a
right to appeal to the Commissioner of Public Lands for a
contested case hearing in accordance with the State
administrative procedures Act (RCW 34.040
4.2 Improvements. No improvements in addition to those
authorized by the permitted use clause herein, shall be
placed upon the harbor area without the prior written
authorization of the Lessor. authorized improvements
constructed or placed on the leased premises during the term
of this lease by Lessee, unless otherwise specified, are the
property of the Lessee. Upon the cancellation or expiration
of this lease, the Lessee agrees to sever, remove and
dispose of these improvements on the premises designated by
the Lessor with in six months from date of termination or
expiration. In those cases where the Lessor requires
removal of improvements and such action is not by the
Lessee, the Lessee agrees that the Lessor may remove such
improvements and charge the Lessee for cost of removal and
disposal. All improvements allowed to remain on the area
herein described, upon termination or expiration of this
lease, shall be the property of the lessor.
4.3 Unauthorized Improvements. All improvements made on
or to the premises without the written consent of the lessor
shall immediately become the property of the Lessor. The
Lessor may, at its option, require the Lessor to remove and
dispose of any or all improvements, and in those instances
where such action is not taken by the Lessee, the Lessor may
remove such improvements, charging the Lessee for the cost
of the removal and disposal, and cancel the lease..
4.4 Entry. the lessor shall have access to the premises
at all reasonable times for the purpose of securing
compliance with the terms and conditions of this lease.
4.5 Access. The Lessor reserves the right of access to
and across the leasehold premises for all purposes and
further reserves the right to grant easement and other land
uses on the premises to others when the easement or other
land uses applied for will not unduly interfere with the use
to which the Lessee is putting the premises or interfere
unduly with the approved plan of development for the
premises. No easement or other land uses shall be granted
to third parties until payment for damages to the leasehold
have been paid to the Lessee or a waiver of damages is
signed by the Lessee.
4.6 Restrictions on Use. In connection with use of the
premises, the Lessee shall:
(1) Conform to applicable laws, regulations,
permits, or order of any public authority affecting the
premises and the use thereof, and correct at the Lessees own
expense and failure of compliance created through the
Lessees fault or by reason of the Lessees use.
(2) Remove no valuable material without prior
written consent of the Lessor.
(3) Not make, or suffer to be made, any filling in
of the leased area or any deposit of rock; earth; ballast;
refuse; garbage; waste matter; chemical, biological or other
toxic waste; hydrocarbons, any other pollutants; or other
matter within such area except as approved in writing by the
Lessor.
4.7 Regulations. The Lessor shall have the right to
regulate, under rules established by it, maintenance and
design requirements of all improvements, rates of wharfage,
dockage and other tolls to be imposed by the Lessee upon
commerce for any of the purposes for which leased harbor
areas may be used, and change such regulations and rates
from time to time.
SECTION 5 REQUIREMENTS
5.1 Assignment and Sublease. This lease, or any portion
thereof, may not be assigned, mortgaged, sublet or otherwise
transferred without the prior written consent of the Lessor.
In granting such consent the Lessor reserves the right to
change the terms and conditions of this lease as it may
affect the assignee. Further, if the Lessee is a
corporation or partnership interest of the Lessee shall be
transferred by sale assignment, bequest, inheritance,
operations of law, or other disposition so as to result in a
change in the present control of the corporation or
partnership by the person or persons now owning a majority
of the shares, or change in the holding of the corporate or
partnership interest, the same shall constitute an
assignment of this lease and as such shall require prior
written consent of the Lessor.
Failure to obtain written approval of any assignment defined
in this lease shall be grounds for cancellation.
5.2 Maintenance. (1) The Lessee, at its sole cost and
expense, shall at all times keep, or cause all improvements
regardless of ownership to be kept, in as good condition and
repair as originally constructed or as hereafter put, except
for reasonable use.
(2) The Lessee shall not allow debris
or refuse to accumulate on the leased premises, caused
either by itself or any person on the premises. Failure to
comply with this provision shall be cause to permit the
Lessor to remove the debris and refuse and collect the cost
of such removal from the Lessee and/or cancel this lease.
5.3 Condition of Premises and Liability. (1) The
premises have been inspected by the Lessee and are accepted
in their present condition. The Lessee agrees to defend and
hold Lessor harmless from any and all claims suffered, or
alleged to be suffered on the premises, or arising out of
operations on the premises.
(2) The Lessor, its employees and agents shall not be
liable for any injury (including death) to any persons or
for damage to any property regardless of how such injury or
damage be caused, sustained or alleged to have been
sustained by the Lessee or by others as a result of any
condition (including existing or future defects in the
premises) or occurrence (including failure or interruption
of utility service) whatsoever related in any way to the
premises and the areas adjacent thereto or related in any
was to the Lessees use or occupancy of the premises and of
areas adjacent thereto. The Lessee agrees to defend and to
hold and save the Lessor harmless from all liability or
expense (including expense of litigation) in connection with
any such items of actual or alleged injury or damage. In
addition, the Lessee shall, at its own expense, maintain
proper liability insurance with a reputable insurance
company or companies satisfactory to the Lessor in the
minimum limits of $250,000 (per person) and $500,000 (per
accident or occurrence) for bodily injury and death, and in
the minimum limit of $250,000 (per accident) for property
damage, and hereafter in such increased amounts as the
parties may from time to time mutually agree upon, to
indemnify both the Lessor and the Lessee against any such
Liability or expense. The Lessor shall be named as
additional insured, and shall be furnished with appropriate
evidence to establish (1) that the Lessees insurance
obligation as herein provided have been met, and (2) that
the insurance policy or policies as herein provided are not
subject to cancellation without at least ninety (90) days
advance written notice to the Lessor. The Lessee shall
furnish to the Lessor from time to time evidence of renewal
of insurance as required.
5.4 Assessments. the Lessee shall pay all the annual
payment on all assessment that may be legally charged,
weather or not such assessment have been levied against the
leasehold or the lessor by assessing agency.
5.5 Insolvency of the Lessee. If the lessee becomes
insolvent, bankrupt, a receiver appointed, or his interest
is transferred by operation of law, the Lessor may cancel
this lease at its option. Insolvency as used herein, will
mean the inability of the Lessee to meet obligations as they
become due.
SECTION 6 MISCELLANEOUS
6.1 No Partnership. The Lessor is not a partner nor a
joint venture with the Lessee in connection with the
business carried on under this lease and shall have no
obligation with respect to the Lessees debts or other
liabilities
6.2 Non-Waiver. Waiver by either party of strict
performance of any provision of this lease shall not be a
waiver of, nor prejudice the partys right to require strict
performance of the same provision or of any other provisions
in the future.
6.3 Attorneys fees. if suite or action is instituted in
connection with any controversy arising out of this lease,
the prevailing party shall be entitled to recover, in
addition to cost, such sum as the court may adjudge
reasonable as attorneys fees/
6.4 Succession. Subject to the limitations as stated in
paragraph 5.1 on transfer of the Lessees interest, this
lease shall be binding upon, and insure to the benefit of
the parties, there respective successors and assigns.
6.5 Notices. Any notices required or permitted under
this lease shall be given when actually delivered or when
deposited in the United States Mail addressed as follows: To
the Lessor: Department of Natural Resources, Mail Stop QW-
21, Olympia Washington 98504 To the Lessee: at the address
given by the Lessee in the signature block, or as shown on
later official documents of record with this lease.
6.6 Liens.
(1) No person shall have the right to file or place
any lien of any kind or character upon the land or
improvements within the leasehold premises without the prior
written consent of the Lessor.
(2) In the event unauthorized liens or other charges
are placed on the leasehold premises, including land or
improvements, arising out of the Lessees actions directly or
indirectly, the lessee shall immediately cause such liens or
charges to be discharged. The Lessor may forthwith cancel
this lease if the Lessee fails to discharge such liens or
charges after ten days to do so by the Lessor. The Lessee
shall pay indemnify the Lessor for all cost, damage or
charge of whatsoever nature, including attorneys fees
necessary to discharge such lien or charges, whether such
cost, damage or charges are incurred prior or subsequent to
any cancellation of this lease.
6.7 Default. If the Lessee shall violate or default any
of the covenants and agreements contained herein, including
the obligation to pay rent, then the Lessor may cancel this
lease provided that the lessee has been notified of the
violation or default thirty days prior to such cancellation
and such violation or default has not been corrected within
such time. In the event the Lessor elects to cancel this
lease, all improvements located thereon shall become the
property of the state of Washington.
6.8 Lessors Right to Cure Default.
(1) If the Lessee fails to perform any requirement
or obligations under this lease, the Lessor shall have the
option to correct any default of this lease by the Lessee
after thirty days written notice to the Lessee. All of the
Lessors expenditures to correct the default shall be
reimbursed by the Lessee on demand, with interest at the
rate of one percent per month accrued from the date of
expenditure by the Lessor.
(2) In the event any violation or breach of the
provision of this lease is causing damage to the leasehold
premises or the Lessee is utilizing the Leasehold premises
in a manner not permitted by the provisions of this lease,
or in any case damages are occurring to the leasehold
premises, the Lessor may immediately enter upon leasehold
premises and take action as necessary to cease such damage
or use. In the event the damage to the leasehold is the
lessee shall be liable for all cost incurred by the Lessor
if the Lessee acts to cure such damages. The Lessor, at its
option may send notice to lessee of such violations and the
Lessee shall immediately cease such use or violations and
correct and remedy such violations.
6.9 Security. The lessee shall furnish a surety bond in
such amount as may be determined by the lessor in accordance
with title 79 RCW, as amended, as a guarantee of faithful
performance of the conditions and terms prescribed in this
lease. Security other than a surety bond may substituted if
first approved in writing by the Lessor. The amount of the
surety bond as of the date of this lease shall be
$20.000.00.
6.10 Litigation. in the event this lease, its terms. its
use its occupation or it in any way becomes a matter of
litigation, the lessor shall be notified of such litigation
within fifteen days after such litigation is begun. Failure
to notify the Lessor of such action shall be cause for
cancellation or termination of this lease.
The Lessee expressly agrees to all covenants herein, and
binds himself for the payment hereinbefore specified.
Executed this 18th day of February, 1987
STATE OF WASHINGTON
DEPARTMENT OF NATURAL
RESOURCES
JAMES A. STERNS,
Supervisor
Signed this 9th day of January, 1987
TODD SHIPYARDS
CORPORATION
C.H. Oddson-Asst.
Secy.
& Asst.
Treasure
P.O. Box 3806
Terminal Station
Seattle, WA 98124
<PAGE>
CERTIFICATE OF
CORPORATE ACKNOWLEDGEMENT
STATE OF Washington)
COUNTY OF King )
On this 9th day of Janurary, 1987, before me
personally appeared C.H. Oddson
.
to me known to be the Asst. Secretary & Assistant Treasure
Of the Corporation that executed the within and foregoing
instrument, Lease No. 22-090038, and acknowledged said
instrument to be the free and voluntary act and deed of the
corporation, for the use and purpose therein mentioned, and
on oath stated that ( he was) (they were) authorized to
execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year first above
written
cic Jackie A. Winkler
Notary Public in and for the
State of
Washington residing at
Seattle, Washington
<PAGE>
CERTIFICATE OF
DEPARTMENTAL ACKNOWLEDGMENT
STATE OF WASHINGTON )
)
COUNTY OF THURSTON )
On this 18th day of February, 1987, before me
personally appeared James A. Stearns, to me known to be the
Supervisor of the Department of Natural Resources that
executed the within and foregoing instrument, No 22-090038,
and he acknowledged said instrument to be the free and
voluntary act and deed of the department for the uses and
purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed my official seal the day and year first above
written.
Ann M. Reiter
Notary Public in and for
the State of
Washington residing at
Olympia
STATE OF WASHINGTON
DEPARTMENT OF NATURAL RESOURCES
Brian J. Boyle
Commissioner of Public Lands
Olympia, Washington 98504
HARBOR AREA LEASE NO. 22-090039
BY THIS LEASE, by and between the STATE OF WASHINGTON,
acting by and through the Department of Natural Resources,
hereinafter called the Lessor, and TODD SHIPYARDS
CORPORATION, a New York Corporation, hereinafter called the
Lessee, the Lessor leases to the Lessee on the terms and
conditions as hereinafter set forth, the following described
harbor area situate in King County, Washington, to wit:
That portion of the northeast quarter of Section
12, Township 24 North, Range 4 East, W.M., King County,
Washington, being that portion of the West Waterway
containing approximately 138,334 square feet and further
described as follows:
Beginning at the northwest corner of Block 404,
Seattle Tide Lands, said corner being the true point of
beginning; proceed S 0 00 00 W along the east line of the
West Waterway a distance of 1,106.67 feet to a point 181.88
feet south of, measured along said east line, the
intersection of the northerly margin of vacated S.W. Florida
Street with said east line of the West Waterway; Thence S.
70 42 13 W a distance of 128.44 feet to the pierhead line;
Thence N 0 00 00 E along said pierhead line a distance of
1,106.67 feet to the inner harbor line; thence N 76 42 13 E
along said inner harbor line a distance of 28.44 feet to the
true point of beginning.
The above described area contains 138.334 square feet,
more or less.
SECTION 1 OCCUPANCY
1.1 Term. This lease shall commence on the 1st day of
September 1986 and continue to the 1st day of September 1st
day of September 2003.
SECTION 2 USE OF PREMISES
2.1 Permitted Use. The Lessee shall have use of the
leased premises for the purposes of moorage of boats and
ships, and maintenance and operation of piers and drydocks
used in connection with Lessees ship construction and repair
business. The lease premises and Lessee-owned improvements
there on shall be as shown on the exhibit and approved by
the Lessor: Exhibit A - drawing, entitled Harbor Area
Leases and Waterway Permits - Todd Drawing Y-114-60 prepared
by Lessee on March 18, 1983, a copy of which is on file with
Lessor.
SECTION 3 PAYMENT
3.1 Rent.
(1) Annual Rent. Initial annual rent in the amount
of $16,877.00 and subsequent annual rent, as determined by
the Lessor in accordance with Chapter 221, Laws of 1984 (RCW
79.90.450 - .902), or as amended by subsequent legislation,
is due and payable in advance by the Lessee to the Lessor
and is the essence of this lease, and is a condition
precedent to the continuance of this lease or any rights
thereunder. Payment is to be to the Department of Natural
Resources, Olympia, Washington 98504.
(2) Inflation Adjustment. After payment of the
initial rent, annual rent shall be adjusted each year
thereafter according to the change in the Producer Price
Index, as provided by regulations of the Department of
Natural Resources.
(3) Interest Penalty for Past Due Rent Balances. A one
percent charge, per month, shall be due to the Lessor, from
the Lessee, on any rent balance which is more than thirty
days past due.
3.2 Leasehold Tax. The Lessee shall pay to the Lessor at
Olympia, Washington 98504, the leasehold tax, if applicable,
as set forth in chapter 61, Laws of 1976, 2nd Ex. Sess., or
as may be amended. The tax shall be due and payable at the
same time the rental charged herein is due and payable.
Failure to pay said tax when due and payable shall be
considered a breach of the provisions of this lease and the
Lessor shall be entitled to all remedies they are entitled
to by law , and the remedies provided herein for a breach of
a provision of this lease. Any delinquent taxes shall be a
debt to the Lessor and in the event the Lessor is subject to
any penalties or interest because of the failure of the
Lessee to pay such taxes, such penalties or interest shall
be payable by the Lessee to the Lessor and shall be
considered a debt to the Lessor. In the event the Lessor
suffers any cost
of whatsoever nature , including Attorney fees, or other
cost of litigation in collecting said tax, such cost shall
be payable by the Lessee and shall be considered a debt due
and owing to the lessor by the lessee.
3.3 Revaluation of Rent. The Lessor shall at the end of
the first four year period of the lease term and at the end
of each subsequent four year period of the lease term
determine the annual rental in accordance with RCW 79.90.480
or as amended by subsequent legislation.
SECTION 4 RESERVATIONS AND CONDITIONS OF
USE
4.1 Discrimination The Lessee covenants and agrees that in
the performance of this lease agreement, the Lessee shall
conduct its activities in a manner that will assure fair,
equal and non-discriminatory treatment of all persons
regardless of race, creed, sex, marital status or ethnic
origin. Notwithstanding any exemption contained in state or
federal law, the Lessee shall comply with all federal and
state laws, rules or regulations concerning hiring and
employment and assuring the service of all patrons,
customers, members or invitees without discrimination as to
any persons race, creed, sex, marital status or ethnic
origin.
Non- compliance with this clause by the lessee shall
constitute a breach of this lease and the lessor may
initiate appropriate formal or informal actions to assure
compliance or may, at its discretion, terminate this lease
upon giving thirty days notice to the lessee setting forth
the claimed violation or violations and giving the lessee a
right to appeal to the commissioner of Public Lands for a
contested case hearing in accordance with the State
Administrative Procedure Act (RCW 34.04).
4.2 Improvements. No Improvements in addition to those
authorized by The Permitted Use clause herein, shall be
placed upon the Harbor area without the prior written of the
lessor. Authorized improvements constructed or placed on
the leased premises during the term of this lease by the
lessee, unless otherwise specified, are the property of the
lessee. Upon cancellation or expiration of this lease, are
the property of the Lessee Upon cancellation or expiration
of this lease, the lessee agrees to sever, remove and
dispose of those improvements on the premises designated by
the lessor within six months of the termination or
expiration . In those cases where the lessor requires
removal of improvements and such action is not taken by the
Lessee, the Lessee agrees that the Lessor may remove such
improvements and charge the lessee for cost of removal and
disposal. All improvements allowed to remain on the area
herein described, upon termination or expiration of this
lease shall be the property of the lessor.
4.3 Unauthorized Improvements. All improvements made on or
to the premises without the written consent of the Lessor
shall immediately become the property of the Lessor. The
Lessor may , at its option, require the Lessee to remove and
dispose of any or all improvements, and in those instances
where such action is not taken by the Lessee, the Lessor may
remove such improvements, charging the Lessee for the cost
of the removal and disposal, and cancel the lease..
4.4 Entry. The Lessor shall have access to the promises at
all reasonable times for the purpose of securing compliance
with the terms and conditions of this lease.
4.5 Access. The Lessor reserves the right of access to and
across the leasehold premises for all purposes and further
reserves the right to grant easements and other land uses on
the premises to others when the easement or other land uses
applied for will not unduly interfere with the use to which
the Lessee is putting the premises or interfere unduly with
the approved plan of development for the premises. No
easement or other land uses shall be granted to third
parties until payment for damages to the leasehold have been
paid to the Lessee or a waiver of damages is signed by the
Lessee.
4.6 Restrictions on Use In connection with use of the
premises, the Lessee shall:
(1) Conform to applicable laws, regulations, permits,
or order of any public authority affecting the premises and
the use thereof, and correct at the Lessees own expense any
failure of compliance created through the Lessees fault or
by reason of the Lessees use.
(2) Remove no valuable material without prior written
consent of the Lessor.
(3) Not make, or suffer to be made, any filling in of
the leased area or any deposit of rock; earth; ballast;
refuse; garbage; waste matter; chemical, biological or other
toxic wastes; hydrocarbons, any other pollutants; or other
matter within such area except as approved in writing by the
Lessor.
4.7 Regulations. The Lessor shall have the right to
regulate, under rules established by it, maintenance and
design requirements of all improvements, rates of wharfage,
dockage and other tolls to be imposed by the Lessee upon
commerce for any of the purposes for which leased harbor
areas may be used, and to change such regulations and rates
from time to time.
SECTION 5 REQUIREMENTS
5.1 Assignment and sublease. This lease, or any portion
thereof, may not be assigned, mortgaged, sublet or otherwise
transferred without the prior written consent of the Lessor.
In granting such consent the Lessor reserves the right to
change the terms and conditions of this lease as it may
affect the assignee. Further, if the Lessee is a
corporation or partnership and if at any time during the
term of this
5.2 Maintenance.
(1) The Lessee, at its sole cost and expense, shall at
all times keep, or cause all improvements regardless of
ownership to be kept, in as good condition and repair as
originally constructed or as hereafter put, except put
except for reasonable use.
(2) The Lessor shall not allow debris or refuse to
accumulate on the leased premises, caused either by itself
or any person on the premises. Failure to comply with this
provision shall be cause to permit Lessor to remove the
debris and refuse and collect the cost of such removal from
the Lessee and/or cancel this lease
5.3 Condition of premises and Liability.
(1) The premises have been inspected by the lessee and
are accepted in their present condition. The lessee agrees
to defend and hold lessor harmless from any and all claims
suffered, or alleged to be suffered on the premises , or
arising out of operations on the premises.
(2)the Lessor its employees and agents shall not be
liable for any injury (including Death) to any persons or
for damage to any property regardless of how such injury or
damage be caused, sustained or alleged to have been
sustained by the lessee or by others as a result of any
condition (including existing or future defects in the
premises) or occurrence ( including failure or interruption
of utility services) whatsoever related in any way to the
premises and the area adjacent thereto or related in any way
to the lessees use or occupancy of the premises and of the
areas adjacent thereto. The Lessee agrees to defend and to
hold and save the Lessor harmless from all liability or
expense ( including expense of litigation) in connection
with any such items of actual or alleged injury or damage.
In addition, the Lessee shall, at its own expense, maintain
proper liability insurance with a reputable insurance
company or companies satisfactory to the Lessor in the
minimum limits of $250,000 (per person) and $500.000 ( per
accident or occurrence) for bodily injuries and death, and
a minimum limit of $250,000 Per accident for property
damage, and hereafter in such increased amounts as the
parties may from time to time mutually agree upon, to
indemnify both the Lessor and the Lessee against any such
liability or expense. The Lessor shall be named as
additional insured, and shall furnished with appropriate
evidence to establish (1) the Lessees insured obligations as
herein provided have been met, and (2) that the insurance
policy or policies as herein required are not subject to
cancellation without at least ninety (90) days advance
written notice to the Lessor. three Lessee shall furnish to
the lessor from time to time evidence of renewal of
insurance as required.
5.4 Assessments. The Lessee shall pay all the annual
payments on all assessments that may be legally charged,
weather or not such assessments have been levied against the
leasehold or the Lessor by the assessing agency.
5.5 Insolvency of the Lessee. If the Lessee becomes
insolvent, bankrupt, a receiver appointed, or his interest
is transferred by operation of law, the lessor may cancel
this lease at its option insolvency as used herein, will
mean the inability of the lessee to meet obligations as they
may come.
SECTION 6 MISCELLANEOUS
6.1 No Partnership. The Lessor is not a partner nor joint
venturer with the Lessee in connection with the business
carried on under this lease and shall have no obligation
with respect to the lessees debts or other liabilities.
6.2 Non-Waiver. Waiver by either party of strict
performance of any provisions of this lease shall not be a
waiver of nor prejudice there partys right to require strict
performance of the same provisions or of any
6.3 Attorneys Fees. If suit or action is instated in
connection with any controversy arising out of this lease,
the prevailing party shall be entitled to recover, in
addition to cost, such sum as the court may adjudge
reasonable as attorneys fees.
6.4 Succession. Subject to the limitations as stated in
paragraph 5.1 on transfer of the lessees interest, this
lease shall be binding upon, and insure to the benefit of
the parties, their respective successors and assigns.
6.5 Notices. any notice required or permitted under this
lease shall be given when actually delivered or when
deposited in the United States mail addressed as follows: To
the Lessor: Department of Natural Resources, Mail Stop QW-
21, Olympia, Washington 98504. To the Lessee: At the address
given by the Lessee in signature block, or as shown on later
official documents of record with this lease.
6.6 Liens.
(1) No person shall have the right to file or place
any lien of any kind or character upon the land or
improvements within the leasehold premises without the prior
written consent of the lessor.
(2) In the event unauthorized lien or other charges
are placed on the leasehold premises, including land or
improvements, arising out of the Lessees actions directly or
indirectly, the Lessee shall immediately cause such liens to
be discharged. The Lessor may forthwith cancel this lease
if the Lessee fails to discharge such liens or charges after
ten days notice to do so by the lessor. the Lessee shall
pay and indemnify the Lessor for all cost, damage or charge
of whatsoever nature including attorneys fees necessary to
discharge such liens or charges, weather such cost, damage
or charges are incurred prior or subsequent to any
cancellation of this lease.
6.7 Default. If the lessee shall violate or default any of
the covenants and agreements contained herein, including the
obligation to pay rent, then the lessor may cancel this
lease provided that the lessee has been notified of the
violation or default thirty days prior to such cancellation
and such violation or default has not been corrected within
such time. In the event the Lessor elects to cancel this
lease all improvements located thereon shall become the
property of the State of Washington.
6.8 Lessors Right to Cure Defaults.
(1) If the Lessee fails to perform any requirements or
obligations under this lease the Lessor shall have the
option to correct any default of this lease by the Lessee
after thirty days written notice to the Lessee. All of the
Lessors expenditures to correct the default shall be
reimbursed by the Lessee on demand, with interest at the
rate of one percent per month accrued from the date of
expenditure by the Lessor.
(2) In the event any violation or breach of the
provisions of this lease is causing damage to the leasehold
premises or the Lessee is utilizing the leasehold premises
in a manner not permitted by the provisions of this lease,
or in any case damages are occurring to the leasehold
premises, the Lessor may immediately enter upon the
leasehold premises and take such action as necessary to
cease such damages or use. In the event the damage to the
leasehold is occurring the Lessee shall be liable for all
costs incurred by the Lessor if the Lessor acts to cure such
damages. The Lessor, at its option may send notice to the
Lessee of such violations and the Lessee shall immediately
cease such use or violation and correct and remedy such
violations.
6.9 Security. The Lessee shall furnish a surety bond in
such amount as may be determined by the Lessor in accordance
with Title 79 RCW, as amended, as guarantee of the faithful
performance of the conditions and terms prescribed in this
lease. Security other than a surety bond may be substituted
if first approved in writing by Lessor. The amount of the
surety bond as of the date of this lease shall be
$33,500.00.
6.10 Litigation. In the event this lease, its terms, its
use, its occupation or it in any way becomes a matter of
litigation, the Lessor shall be notified of such litigation
within fifteen days after such litigation is begun. Failure
to notify the Lessor of such action shall be cause for
cancellation or termination of this lease.
The Lessee expressly agrees to all covenants herein,
and binds himself for the payment herein before specified.
Executed this 21st day of January, 1987.
STATE OF WASHINGTON
DEPARTMENT OF NATURAL
RESOURCES
JAMES A. STEARNS,
Supervisor
Signed this 10th day of December, 1986.
TODD SHIPYARDS CORPORATION
C. H. Oddson, Asst. Secy. &
Asst. Treasure
P.O. Box 3806 - Terminal
Station
Seattle, WA 98124
<PAGE>
CERTIFICATE OF
DEPARTMENTAL ACKNOWLEDGMENT
STATE OF WASHINGTON)
)ss
COUNTY OF THURSTON )
On this 21st day of January, 1987, before me
personally appeared James A. Stearns, to me known to be the
supervisor of the Department of Natural Resources that
executed the within and foregoing instrument, No. 22-090039,
and acknowledged said instrument to be the free and
voluntary act and deed of the Department for uses and
purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year first above
written
Ana M. Reita
Notary Public in
and for the
State of Washington
residing at
Olympia
<PAGE>
CERTIFICATE OF
CORPORATE ACKNOWLEDGMENT
STATE OF WASHINGTON)
)ss
COUNTY OF KING )
On this 10th day of December, 1986, before me
personally appeared C. H. Oddson ,
____________________________________________________________
__________
to me known to be the Asst. Secy. & Asst.
Treasurer_______________
of the Corporation that executed the within and foregoing
instrument, Lease No. 22-090039, and acknowledged said
instrument to be the free and voluntary act and deed of the
Corporation, for uses and purposes therein mentioned, and on
oath stated that he(he was)(they were) authorized to execute
said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year first above
written
Jackie A.
Winkler
Notary Public in
and for the
State of Washington
residing at
Seattle,
Washington
TODD SHIPYARDS CORPORATION
SAVINGS INVESTMENT PLAN Amended and Restated
Effective April 1, 1989
TABLE OF CONTENTS PAGE
PREAMBLE 1
SECTION 1 - DEFINITIONS 2
1.01 - Account 2
1.02 - Administrative Committee 2
1.03 - After-tax Contribution Account 2
1.04 - Beneficiary 2
1.05 - Board of Directors 2
1.06 - Break-in-Service 3
1.07 - Code 3
1.08 - Compensation. 3
1.09 - Disabled 3
1.10 - Earnings 4
1.11 - Effective Date 4
1.12 - Eligible Employee 4
1.13 - Employee 4
1.14 - Employer. 4
1.15 - Employer Matching Contribution Account 4
1.16 - Employment Commencement Date 5
1.17 - ERISA 5
1.18 - Highly Compensated Employee 5
1.19 - Hour of 5
1.20 - Normal Retirement Date 6
1.21 - Participant 6
1.22 - Plan. 6
1.23 - Plan Administrator 6
1.24 - Plan Year 6
1.25 - Pre-tax Contribution Account 7
1.26 - Rollover Account 7
1.27 - Service 7
1.28 - Trust or Trust Fund 7
1.29 - Trustee 7
1.30 - Valuation Date 7
1.31 - Year of Service 7
SECTION 2 - PARTICIPATION 8
2.01 - Eligibility for Participation 8
2.02 - Participation 8
2.03 - Reemployment After Termination 8
2.04 - Employees in a Bargaining Unit 8
2.05 - Leased Employees 8
SECTION 3 - SALARY REDUCTION 9
3.01 - Salary Reduction Agreement 9
3.02 - Modification of Salary Reduction Agreement 9
3.03 - Procedure for Making and Revoking Salary Reduction
Agreement 10
3.04 - Non-Discrimination Provision For Deferrals (ADP Test)
10
SECTION 4 - PLAN CONTRIBUTIONS 11
4.01 - Participant and Employer Contributions 11
4.02 - Non-Discrimination Provision for Employer Matching
Contributions
(ACP Test) 12
4.03 - Multiple Use of Alternative Limitations Under ADP and
ACP Test 12
4.04 - Additional Limitation on Contributions
4.05 - Return of Contributions 13
4.06 - Participant Rollovers 15
SECTION 5 - ACCOUNT ADMINISTRATION 16
5.01 - Types of Accounts 16
5.02 - Investment of Contribution 16
5.03 - Valuation of the Trust Fund 17
5.04 - Allocation of Trust Fund Earnings and Losses to
Participant Account 18
5.05 - Account Statements 18
5.06 - Disposition of Forfeitures 18
5.07 - PAYSOP Account - Discontinued 18
SECTION 6 - VESTING AND BENEFITS 19
6.01 - Vesting 19
6.02 - Benefits Upon Termination 20
6.03 - Forfeitures 20
6.04 - Vesting Upon Reemployment 20
6.05 - Time of Benefit Payment 21
6.06 - Withdrawals Prior to Termination 21
6.07 - Loans 23
SECTION 7 - FORMS OF PAYMENT 25
7.01 - Form of Payment - Hired Post-April 1, 1989 25
7.02 - Forms of Payment - Hired Pre-April 1, 1989
SECTION 8 - DEATH BENEFIT 28
8.01 - Pre-Retirement Death Benefits - Hired Post-April 1, 1989
28
8.02 - Pre-Retirement Death Benefits - Hired Pre-April 1, 1989
28
8.03 - Post-Retirement Death Benefits 29
SECTION 9 - LIMITATION ON CONTRIBUTIONS 30
9.01 - Maximum Annual Contribution to the Plan 30
9.02 - Additional Limitation Relating to Defined Benefit Plans
31
SECTION 10 - TOP HEAVY PROVISIONS 32
10.01 - Scope 32
10.02 - Top Heavy Statuws 32
10.03 - Minimum Contribution 34
10.04 - Limitation to Annual Additions in Top Heavy Plan 35
10.05 - Vesting 35
SECTION 11 - ADMINISTRATION OF THE PLAN 36
11.01 - Plan Administrator 36
11.02 - Organization and Procedures 36
11.03 - Duties and Authority 36
11.04 - Expenses and Assistance 37
11.05 - Bonding and Insurance 37
11.06 - Claims Procedure 37
11.07 - Appeal Procedure 38
11.08 - Plan Administration - Miscellaneous 39
11.09 - Domestic Relations Orders 41
11.10 - Plan Qualification 42
11.11 - Deductible Contribution 42
11.12 - Payment of Benefits Through Purchase of Annuity
Contract 42
SECTION 12 - AMENDMENT AND TERMINATION 44
12.01 - Amendment - General 44
12.02 - Amendment - Consolidation or Merger 44
12.03 - Termination of the Plan. 44
12.04 - Allocation of the Trust Fund on Termination of Plan
44
SECTION 13 - FUNDING 45
13.01 - Contributions to the Trust Fund 45
13.02 - Trust Fund for Exclusive Benefit of Participants
45
13.03 - Trustee 45
13.04 - Investment Manager 45
13.05 - Employer Common Stock 46
SECTION 14 - FIDUCIARIES 47
14.01 - Limitation of Liability of the Employer and Other 47
14.02 - Indemnification of Fiduciaries 47
14.03 - Scope of Indemnification 47
SIGNATURE PAGE 48
APPENDIX I 49
PREAMBLE
THIS SAVINGS PLAN (hereinafter referred to as the Plan and known
as the Todd Shipyards Corporation Savings Investment Plan) is
amended and restated effective April 1, 1989 by Todd Shipyards
Corporation (hereinafter Employer).
WHEREAS, the Plan is a profit sharing plan and was established
effective July 1, 1984 to provide retirement benefits for
Eligible Employees; and
WHEREAS, the purpose of the Plan is to attract and retain
Eligible Employees by providing them with an opportunity to save
for their retirement, to permit them to derive benefits related
to the financial results of the Todd Shipyards Corporation and
affiliated companies, and to acquire an equity interest in the
Employer; and
WHEREAS, the Plan was amended and restated effective as of April
1, 1985 in order to (i) reflect the merger of the Todd Shipyards
Corporation Stock Ownership Plan into this Plan on September 15,
1985, and (ii) comply with the Retirement Equity Act of 1984; and
WHEREAS, the Employer desires to again amend and restate the
Plan in order to (i) reflect the termination of PAYSOP Accounts
effective April 1, 1989 and subsequent distribution of such
Accounts, (ii) effect certain additional Plan changes, and (iii)
comply with the Tax Reform Act of 1986 and subsequent federal
legislation; and
WHEREAS, the Plan shall be maintained for the exclusive benefit
of covered employees, and is intended to comply with the Internal
Revenue Code of 1986, as amended, including without limitation
Section 401(k) thereof, the Employee Retirement Income Security
Act of 1974, as amended, and other applicable law;
NOW, THEREFORE, except as otherwise specified herein, the
Employer does hereby amend and restate the Plan as set forth in
the following pages effective April 1, 1989, except that any
change required by federal law, including without limitation
amendments to the Internal Revenue Code, the Employee Retirement
Income Security Act, or the Age Discrimination in Employment Act
or regulations or rulings issued pursuant thereto shall be
effective on the latest date on which such change may become
effective and comply with such laws.
<PAGE> SECTION 1 DEFINITIONS
The following terms when used herein shall have the following
meaning, unless a different meaning is plainly required by the
context. Capitalized terms are used throughout the Plan text for
terms defined by this and other sections.
1.01 Account Account means a Participants Employer Matching
Contribution Account, Pre-tax Contribution Account, After-tax
Contribution Account and Rollover Account, if any.
1.02 Administrative Committee
Administrative Committee means the Committee as from time to
time constituted and appointed by the Board of Directors to
administer the Plan.
1.03 After-tax Contribution Account
After-tax Contribution Account means an account established and
maintained by the Trustee to hold a Participants after-tax
contributions to the Plan. No after-tax contributions to the
Plan shall be made after March 31, 1989.
1.04 Beneficiary
Beneficiary means the person or persons designated to be the
Beneficiary by the Participant in writing to the Administrative
Committee. In the event a married Participant designates someone
other than his or her spouse as Beneficiary, such initial
designation or subsequent change shall be invalid unless the
spouse consents in a writing, which is notarized or witnessed by
a Plan representative. If a Participant fails to designate a
Beneficiary or no designated Beneficiary survives the
Participant, the Beneficiary shall be the Participants spouse if
he or she survives the Participant, or if there is no surviving
spouse the Participants estate.
1.05 Board of Directors
Board of Directors shall mean the Board of Directors of Todd
Shipyards Corporation.
1.06 Break-in-Service Break-in-Service means any Plan Year in
which an employee has less than 501 Hours of Service and which
ends after terminating employment with the Employer. Solely for
purposes of determining a Break-in-Service, Hours of Service
shall also include all periods for which no compensation is
received during temporary absences due to sickness, accident,
military service, authorized leave of absence, jury duty, layoff,
or absence (of a male or female employee) due to pregnancy, birth
or adoption of a child, or caring for a child immediately
following birth or adoption, subject to the limitation described
below During such periods of temporary absence, Hours of Service
shall be credited in accordance with the employees regular work
schedule.
Where a temporary absence due to a pregnancy, birth or adoption
of a child, or caring for a child immediately following birth or
adoption occurs during two Plan Years, hours are credited only in
the first Plan Year if such hours are necessary to prevent a
Break-in-Service. If such hours are not needed in the first
Plan Year to avoid a Break-in-Service, then the total number of
hours attributable to such leave including those that occurred in
the first Plan Year shall be credited in the second Plan Year.
Notwithstanding the foregoing, a Break-in-Service for a
Participant who terminated employment prior to April 1, 1989
shall be determined under the terms of the Plan in effect at the
time employment terminated.
1.07 Code
Code means the Internal Revenue Code of 1986, as amended and
including all regulations promulgated pursuant thereto.
1.08 Compensation
Compensation, for any Plan Year, has the meaning set forth in
Section 415(c)(3) of the Code, provided, for purposes of
determining who is a Highly Compensated Employee, Compensation
shall also include Participant pre-tax contributions to this
Plan and elective employee contributions to a cafeteria plan
described in Code Section 125.
Notwithstanding the foregoing, Compensation in excess of
$200,000 shall be disregarded. This $200,000 limit shall be
automatically adjusted to the maximum permissible dollar
limitation permitted by the Commissioner of the Internal Revenue
Service.
1.09 Disabled
Disabled means that the employee is completely unable because of
an accidental bodily injury or sickness to engage in the
material and substantial duties of his or her occupation.
1.10 Earnings
Earnings for each Plan Year means the total wages earned by an
from the Employer which are considered wages under Section
3401(a) of the Code, and including any employee salary reduction
contributions to this or another benefit plan; excluding
overtime, bonuses, and other special compensation, such as
severance pay.
Notwithstanding the foregoing, annual remuneration during the
Plan Year in excess of $200,000 shall be disregarded; provided,
however, this $200,000 limit shall be automatically adjusted to
the maximum dollar limitation permitted by the Commissioner of
the Internal Revenue Service.
1.11 Effective Date
Effective Date means July 1, 1984, or with respect to any
Employer specified in appendices to this Plan, the date such
Employer adopted the Plan.
1.12 Eligible Employee
Eligible Employee means any Employee who is a full-time,
regular, Employee who is not a leased employee or covered under
a collective bargaining agreement where retirement benefits were
the subject of good faith bargaining which does not provide for
retirement benefits under this Plan.
1.13 Employee
Employee means any person, other than a nonresident alien, who
is employed by the Employer as a common law employee and any
leased employee within the meaning of Code Section 414(n)(2);
provided, however, if leased employees constitute less than
twenty percent of the Employers non-highly compensated work
force, the term Employee shall not include a leased employee who
is covered by a plan maintained by the leasing organization which
meets the requirements of Code Section 414(n)(5). No person
shall be an Employee solely by reason of serving on the Board of
Directors, or acting as a consultant to the Employer.
1.14 Employer
Employer means Todd Shipyards Corporation, a New York
corporation. For purposes other than Sections 11, 12 and 13,
the term Employer shall also include such other corporations as
provided from time to time in appendices to this Plan.
1.15 Employer Matching Contribution Account
Employer Matching Contribution Account means an account
established and maintained by the Trustee to receive a
Participants share of Employer matching contributions to the
Plan.
1.16 Employment Commencement Date
Employment Commencement Date means the date on which an Eligible
Employee first completes an Hour of Service for the Employer
during the current period of employment.
1.17 ERISA
ERISA means the Employee Retirement Income Security Act of 1974,
as amended, and including all regulations promulgated pursuant
thereto.
1.18 Highly Compensated Employee
Highly Compensated Employee means an employee who, during the
Plan Year or the preceding twelve-month period is included in one
of the following categories as within the meaning of Section
414(q) of the Code and regulations thereunder:
(a) an employee who was at any time a 5% owner of an Employer;
(b) an employee who received Compensation from an Employer in
excess of the dollar limitation under Section 414(q)(1)(B) of the
($81,720 for the Plan Year ending December 31, 1989);
(c) an employee who received Compensation from an Employer in
excess of the dollar limitation contained in Section
414(q)(1)(C) of the Code ($54,480 for the Plan Year ending
December 31, 1989) and was in the Top Paid Group as defined in
Section 414(q)(4) of the Code; or
(d) an officer of an Employer whose annual Compensation exceeds
50% of the dollar limitation under Section 415(b)(1)(A) of the
Code ($49,032 for the Plan Year ending December 31, 1989).
An employee described in subparagraphs (b) through (d) above for
the Plan Year in question, who is not one of the 100 highest
paid employees in the current Plan Year, will not be considered
a Highly Compensated Employee for the current year unless he or
she was a Highly Compensated Employee in the preceding Plan
Year.
No more than 50 employees shall be considered officers or if
less, no more than the greater of (i) 3 or (ii) 10% of all
employees shall be considered officers. If all officers earn
less than the Compensation threshold in subparagraph (d) above,
then the highest paid officer shall be considered highly
compensated.
A former employee shall be considered a Highly Compensated
Employee if he or she was a Highly Compensated Employee when he
or she separated from service or at any time after attaining age
55.
1.19 Hour of Service
Hour of Service means each hour for which an employee is paid or
entitled to payment on account of:
(a) performance of duties for the Employer,
(b) a period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or
leave of absence. No more than 501 Hours of Service shall be
credited under this paragraph for any single continuous period
(whether or not such period occurs in a single computation
period). Hours under this paragraph shall be calculated and
credited pursuant to 29 CFR 2530.200b-2(b) and (c), which are
incorporated herein by this reference; and
(c) an award of back pay, irrespective of mitigation of damages,
agreed to by the Employer. However, hours credited under (a) or
(b) above shall not also be credited under this subsection (c).
With respect to all employees or any nondiscriminatory class of
employees, and in lieu of crediting actual Hours of Service, the
Employer may elect to credit a specified number of hours
depending on the employees normal pay period, for each pay period
in which the employee has at least one Hour of Service, as
follows: Pay Period Hours Credited Weekly 45 Semi-monthly
95 Bi-weekly 95 Monthly 190
1.20 Normal Retirement Date
Normal Retirement Date means the first day of the month
coinciding with or immediately preceding the Participants sixty-
fifth (65th) birthday.
1.21 Participant
Participant means any Eligible Employee who qualifies for
participation pursuant to Section 2. A non-vested Participant
shall cease to be a Participant on the date he or she
terminates. A vested Participant shall cease to be a
Participant when his or her benefit payments are completed.
1.22 Plan
Plan means the Todd Shipyards Corporation Savings Investment Plan
either in its previous or present form or as amended from time to
time.
1.23 Plan Administrator
Plan Administrator means the person or entity designated in
Section 11 to administer the Plan.
1.24 Plan Year
Plan Year means the twelve month period commencing each April 1
and ending each March 31 from and after the Effective Date;
provided, however, that the first Plan Year began July 1, 1984
and ended March 31, 1985.
1.25 Pre-tax Contribution Account
Pre-tax Contribution Account means an account established and
maintained by the Trustee to receive a Participants pre-tax
contributions to the Plan.
1.26 Rollover Account
Rollover Account means an account established and maintained by
the Trustee to hold a Participants rollover contribution to
the Plan.
1.27 Service
Service with the Employer means periods for which an employee is
paid or entitled to payment for the performance of duties for
the Employer.
1.28 Trust or Trust Fund
Trust or Trust Fund means the trust fund into which shall be paid
all contributions and from which all benefits shall be paid under
this Plan.
1.29 Trustee
Trustee means the trustee or trustees who receive, hold, invest,
and disburse the assets of the Trust in accordance with the
terms and provisions set forth in a trust agreement.
1.30 Valuation Date
Valuation Date means the last business day of each calendar
quarter and the last business day of any other calendar month as
the Plan Administrator may designate from time to time.
1.31 Year of Service
Year of Service means each April 1 to March 31 period in which an
employee has 1,000 or more Hours of Service.
An employees Years of Service shall also include service with any
employer which is a member of a controlled group of corporations
(within the meaning of section 414(b) of the Code) which includes
the Employer, service with any trade or business under common
control (within the meaning of Section 414(c) of the Code) with
the Employer, and service with any employer which is a member of
an affiliated service group (within the meaning of Section
414(m) of the Code) which includes the Employer. Where the
Employer maintains the plan of a predecessor employer, service
for such predecessor employer will be treated as service for the
Employer, as required by the Code.
SECTION 2 PARTICIPATION
2.01 Eligibility for Participation
Each Eligible Employee who is not already a Participant, shall
qualify to become a Participant in this Plan on the six-month
anniversary of his or her Employment Commencement Date, provided
he or she is an Eligible Employee on such date.
Notwithstanding the foregoing, in no event shall an Eligible
Employee qualify for participation later than the completion of a
twelve consecutive month period within which the employee has at
least 1,000 Hours of Service. The twelve-month period used for
this determination shall start on the employees Employment
Commencement Date and April firsts thereafter.
2.02 Participation
Each Eligible Employee shall be notified of Plan eligibility and
shall be provided with an enrollment form, which includes a
salary reduction agreement. Each Eligible Employee shall indicate
a percentage of salary he or she elects to contribute to the Plan
and any additional information requested on the enrollment form.
If an Eligible Employee does not complete an enrollment form when
he or she first qualifies for participation, he or she may
complete an enrollment form at any later date. Participation
shall commence on the first day of the month coinciding with or
following 30 days after the date an Eligible Employee submits an
enrollment form to the Administrative Committee.
2.03 Reemployment After Termination
Upon the reemployment of a terminated former Participant as an
Eligible Employee, he or she shall immediately become a
Participant.
An employee who terminates prior to becoming a Participant and is
later reemployed shall become a Participant upon satisfying the
requirements of Section 2.01 and 2.02 after becoming reemployed.
Service during the prior period of employment shall be
disregarded for purposes of determining eligibility for
participation under this Plan.
2.04 Employees in a Bargaining Unit
An employee belonging to a collective bargaining unit, which has
entered an agreement with the Employer that does not provide for
retirement benefits under this Plan, shall not qualify for
participation. If such an employee is a Participant when such an
agreement is entered, the employee shall cease active
participation on the effective date of the bargaining agreement.
2.05 Leased Employees
Notwithstanding any Plan provision to the contrary, for purposes
of applying the qualified plan requirements set forth in Section
414(n)(3) of the Code, the term Employees shall have the meaning
set forth in Plan Section 1.13 herein. However, a leased
Employee shall not be eligible to become a Participant in this
Plan.
SECTION 3 SALARY REDUCTION
3.01 Salary Reduction Agreement
(a) General An employee who qualifies for participation and
desires to become a Participant (or resume active participation
pursuant to Section 2.03 or 3.02) shall enter a salary reduction
agreement with the Employer. Such agreement shall authorize the
Employer to make payroll deductions equal to a whole percentage
of Earnings for each Plan Year. Payroll deductions shall be
equal to a whole percentage of Earnings between 1% and 16% and
shall be designated as pre-tax contributions. Payroll deductions
shall be based on Earnings on the first day of each payroll
period. The salary reduction agreement shall be effective on the
date when the employee commences (or resumes) participation and
shall remain in effect until such agreement is superseded by a
subsequent agreement or revoked. Contributions shall be deducted
from Participant Earnings each payroll period, except for those
periods in which the contribution amount exceeds the amount
remaining after other payroll deductions. In the event a
deduction is not taken in a payroll period, the Administration
Committee, with sole discretion, shall determine whether there
will be a make-up deduction in a subsequent payroll period.
(b) Maximum Dollar Contribution Notwithstanding the foregoing,
pre-tax contributions for any calendar year shall not exceed the
maximum dollar limitation on elective deferrals under Section
402(g) of the Code ($7,627 for 1989).
3.02 Participant Modification of Salary Reduction Agreement
The payroll deduction percentages designated in the Participants
salary reduction agreement shall continue in effect regardless of
changes in Earnings until the Participant elects in writing to
change the percentage. A Participant may change the contribution
amount effective on the first day of the first payroll period
commencing during a calendar quarter by completing a new salary
reduction agreement and submitting it to the Administrative
Committee. Such agreement must be submitted to the
Administrative Committee at least thirty (30) days in advance of
the date it will become effective. Completion of a salary
reduction agreement shall automatically revoke all prior salary
reduction agreements entered into by a Participant.
A Participant may discontinue contributions effective on the
first day of any future payroll period by submitting a request
form to the Administrative Committee prior to the effective date.
A Participant may resume contributions with respect to any future
payroll period, which is the first complete payroll period during
a calendar quarter, by completing a new salary reduction
agreement and submitting it to the Administrative Committee at
least thirty (30) days before the beginning of such payroll
period.
3.03 Procedure for Making and Revoking Salary Reduction
Agreement
The salary reduction agreement and any modification or
revocation thereof shall be made by the Participant on such form,
within such time and in accordance with such rules and procedures
as prescribed by the Administrative Committee.
3.04 Non-Discrimination Provision For Deferrals (ADP Test)
For each Plan Year, the Plan must meet one of the actual deferral
percentage (hereinafter ADP) tests described below to satisfy the
non-discrimination requirement. For purposes of this ADP test,
Eligible Employees who do not qualify for participation pursuant
to Section 2 shall not be considered.
(a) The ADP for the group of Eligible Employees who are Highly
Compensated Employees does not exceed the ADP for all other
Eligible Employees multiplied by 1.25; or
(b) The ADP for the group of Eligible Employees who are Highly
Compensated Employees (i) is not more than two percentage higher
than the ADP for all other Eligible Employees and (ii) does not
exceed the ADP for all other Eligible Employees multiplied by 2.
The ADP for a specified group of Eligible Employees shall be the
average
of the ratios (calculated separately for each employee in the
group to the nearest one-hundredth of one percent of the
employees Compensation) of (i) Participant pre-tax contributions
to (ii) the employees Compensation, determined in accordance with
Code Section 401(k) and regulations pursuant thereto.
In applying the foregoing tests, Compensation paid to and pre-tax
contributions on behalf of family members (as defined in Code
Section 414(q)(6)(B)) of a Highly Compensated Employee who is a
5% owner or in the group consisting of the ten Highly Compensated
Employees paid the greatest Compensation shall be attributed to
the Highly Compensated Employee, and such family member shall not
be considered a separate employee.
SECTION 4 PLAN CONTRIBUTIONS
4.01 Participant and Employer Contributions
(a) Participant Payroll Deduction Contributions The Employer
shall make a Participant contribution on behalf of each active
Participant in an amount equal to 100% of the pre-tax payroll
deduction amount pursuant to the Participants salary reduction
agreement for each payroll period. Participant contributions
shall be credited to the Participants Pre-tax Contribution
Account. The Employer shall pay the Participant contribution for
each payroll period to the Trustee within a reasonable time
after the last payroll period in each month.
(b) Employer Matching Contributions (1) Basic Matching
Contribution The Employer may make a discretionary Employer
basic matching contribution for any calendar quarter in an
amount equal to a specified percentage of the first 6% of each
Participants pre- tax contributions. The Board of Directors
shall determine the percentage match, if any, to be
contributed each quarter, depending on the profits and
performance of the Employer. This basic matching contribution
shall be credited to the Employer Matching Contribution
Account, and shall be paid in cash to the Trustee within a
reasonable time after each calendar quarter. (2) Supplemental
Matching Contribution The Employer may also make a
discretionary Employer supplemental matching contribution for any
Plan Year on behalf of each Participant who is employed on the
last day of the Plan Year and each Participant who terminated
during the Plan Year due to termination of employment on or after
Normal Retirement Date, total and permanent Disability, or death.
The Board of Directors shall determine each Plan Year whether a
supplemental matching contribution will be made and the amount,
if any, depending on the profits and performance of the Employer.
Employer supplemental matching contributions shall be credited to
the Employer Matching Contribution Account, and shall be paid in
cash to the Trustee within a reasonable time after the last
payroll period in the Plan Year.
(c) Time of Contribution In no event shall contributions for any
Plan Year be made later than the time prescribed by law (i) for
the deduction of such contributions for purposes of federal
income tax, as determined by the applicable provisions of the
Code, or (ii) for making such contributions under a cash or
deferred arrangement (within the meaning of Section 401(k) of
the Code).
4.02 Non-Discrimination Provision for Employer Matching
Contributions (ACP Test)
For each Plan Year the Plan must meet one of the average
contribution percentage (hereinafter ACP) tests described below
to satisfy this non-discrimination requirement. For purposes of
this ACP test, Eligible Employees who do not qualify for
Participation pursuant to Section 2 shall not be considered.
(a) The ACP for the group of Eligible Employees who are Highly
Compensated Employees does not exceed the ACP for all other
Eligible Employees multiplied by 1.25; or
(b) The ACP for the group of Eligible Employees who are Highly
Compensated Employees (i) is not more than two percentage points
higher than the ACP for all other Eligible Employees and (ii)
does not exceed the ACP for all other Eligible Employees
multiplied by 2.
The ACP for a specified group of Eligible Employees shall be the
average of the ratios (calculated separately for each employee in
the group to the nearest one-hundredth of one percent of the
employees Compensation) of (i) Employer matching contributions on
behalf of each such employee, to (ii) the employees Compensation,
determined in accordance with Code Section 401(m) and regulations
pursuant thereto.
In applying the foregoing tests, Compensation paid to and pre-tax
contributions on behalf of family members (as defined in Code
Section 414(q)(6)(B)) of a Highly Compensated Employee who is a
5% owner or in the group consisting of the ten Highly Compensated
Employees paid the greatest Compensation shall be attributed to
the Highly Compensated Employee, and such family member shall not
be considered a separate employee.
4.03 Multiple Use of Alternative Limitations Under ADP and ACP
Tests
If the sum of the ADP and ACP for Highly Compensated Employees
determined under Section 3.04 and Section 4.02, respectively,
after correcting any excess deferrals or contributions pursuant
to Section 4.05, exceeds the Aggregate Limit defined below, then
Highly Compensated Employee contributions shall be further
limited pursuant to this section. This multiple use limitation
shall be applied in accordance with the provisions of Proposed
Treas. Reg. Sections 1.401(m)-1 and 1.401(m)-2.
The Aggregate Limit means the sum of:
(a) 1.25 multiplied by the greater of (i) the ACP, or (ii) the
ADP for the group of all Eligible Employees who are not Highly
Compensated Employees, and
(b) the lesser of: (1) two plus the lesser of (i) the ACP, or
(ii) the ADP for the group of all Eligible Employees who are not
Highly Compensated Employees, or (2) two multiplied by the
lesser of (i) the ACP, or (ii) the ADP for the group of all
Eligible Employees who are not Highly Compensated Employees.
In the event contributions exceed this Aggregate Limit,
Participant pre-tax contributions shall be considered excess
contributions pursuant to the applicable subparagraph of Section
4.05 and shall be returned to Highly Compensated Employees
pursuant thereto.
4.04 Additional Limitation on Contributions
If at any time during a Plan Year the Administrative Committee
determines on a projected basis that it is necessary to reduce
the Participant pre-tax contributions or Employer matching
contributions to satisfy the dollar limit on annual deferrals,
the ADP non-discrimination test, the ACP non-discrimination test,
or the multiple use of alternative limitations test, it shall
have the authority to do so in such amounts and for such periods
of time as it shall deem necessary under the circumstances.
the Administrative Committee may, in its sole discretion, elect
to aggregate Employer matching contributions with pre-tax
employee contributions to the extent necessary to satisfy the ADP
discrimination test. Notwithstanding any Plan provisions to the
contrary, any Employer matching contributions so aggregated shall
be 100% vested and may not be withdrawn upon hardship.
4.05 Return of Contributions
(a) Mistake of Fact If the amount of contribution made to the
Plan by the Employer for any Plan Year is in excess of the
amount required under Section 4.01, and such excess payment is
due to mistake of fact, the Employer shall have the right to
recover such excess contribution within one year after the date
the contribution is made to the Trustee. The return of a
contribution shall be permitted hereunder only if the amount so
returned (i) is the excess of the amount actually contributed
over the amount which would have otherwise been contributed, (ii)
does not include the earnings attributable to such contribution,
and (iii) is reduced by any losses attributable to such
contribution.
(b) Contributions in Excess of Dollar Limitation An excess
deferral exists if pre-tax contributions under this Plan together
with any other plans subject to the deferral limit in Code
Section 402(g) (for 1989 this limit is $7,627) exceed such dollar
limitation for any calendar year. In the event an excess deferral
exists in plans maintained by the Employer, such excess
deferral, adjusted for investment gains or losses, less amounts
previously returned pursuant to subparagraph (c), shall be
distributed no later than April 15 following the calendar year in
which the excess deferral occurred. In the event an excess
deferral exists in plans maintained by the Employer and any other
employer, and a Participant submits a written request for a
return of excess deferrals by March 1 following the calendar year
in which an excess deferral occurs, the Administrative Committee
shall distribute such excess deferral, adjusted for investment
gains or losses, less amounts previously returned pursuant to
subparagraph (c), no later than April 15 following the calendar
year in which the excess deferral occurred. Such written
request shall contain information which the Administrative
Committee may require.
(c) ADP Excess Contribution An ADP excess contribution exists if
contributions under this Plan on behalf of Highly Compensated
Employees fail to meet the ADP test described in Section 3.04.
Within twelve months after the end of the Plan Year for which
there is an excess, contributions which exceed the ADP
limitation adjusted for earnings and losses, less amounts
previously returned pursuant to subparagraph (b), shall be
distributed to Highly Compensated Employees by reducing each
Highly Compensated Employees deferral in the order of deferral
percentages beginning with the highest.
(d) ACP Excess Contributions An ACP excess contribution exists
if contributions under this Plan on behalf of Highly Compensated
Employees fail to meet the ACP test described in Section 4.02.
Within twelve months after the end of the Plan Year for which
there is an excess, Employer matching contributions which exceed
the ACP limitation adjusted for earnings and losses of Highly
Compensated Employees shall be forfeited by reducing each Highly
Compensated Employees Employer matching contributions in the
order of contribution percentages beginning with the highest.
(e) Vesting Exception Notwithstanding the vesting provisions of
Section 6, a Participant shall not have a nonforfeitable right
to excess contributions which are returned or forfeited pursuant
to this Section 4.05.
4.06 Participant Rollovers
An Eligible Employee may request in writing that the
Administrative Committee permit acceptance of a rollover amount
which was distributed from another qualified plan or conduit
Individual Retirement Account (IRA). The amount must be rolled
over by the Eligible Employee within 60 days of receiving the
distribution from the other plan or conduit IRA. The
Administrative Committee shall have total discretion over
acceptance of such amounts into this Plan; provided, rollovers of
any type of property other than cash will not be accepted. In
the event an Eligible Employee is permitted to contribute a
rollover amount, such amount shall be allocated to a separate,
fully vested account and subject to the same terms of the Plan
as other amounts in a Pre-tax Contribution Account, provided,
amounts in a Rollover Account may not be withdrawn upon
hardship.
If the Eligible Employee never satisfies the participation
requirements of Section 2, the Eligible Employee shall be
considered a Participant only with respect to the rollover
amount, and such amount shall be distributed in a lump sum upon
termination of employment.
SECTION 5 ACCOUNT ADMINISTRATION
5.01 Types of Accounts
All contributions shall be made to the Trust Fund which will have
the following types of active accounts for each Participant:
(a) Pre-tax Contribution Account (b) Employer Matching
Contribution Account (c) Rollover Account
In addition, the Trust Fund may have the following inactive
account for each Participant:
(d) After-Tax Contribution Account
No new contributions shall be made to inactive accounts after
March 31, 1989, however, they shall continue to be credited with
investment earnings and losses.
5.02 Investment of Contributions
The Trust Fund shall be divided into one or more investment
subfunds. Initially there shall be the following four subfunds:
(a) Diversified Equity Fund (Fund A) A fund consisting of
common or capital stocks, notes, debentures or preferred stocks
convertible into common or capital stocks, or in other similar
types of equity investments, whether domestic or foreign (but
excluding securities of the Employer or its affiliates) or
securities issued by a mutual fund primarily invested in such
items (whether or not including stock or securities of the
Employer or its affiliates).
(b) Income Fund (Fund B) A fund consisting of securities
producing current income (excluding securities of the Employer or
its affiliates) or securities issued by a mutual fund
primarily invested in such securities (whether or not including
securities of the Employer or its affiliates).
(c) United States Government Obligations Fund (Fund C) A fund
consisting of United States Government bonds, United States
Treasury bills and other instruments issued or guaranteed by the
United States.
(d) Todd Common Stock Fund (Fund D) A fund consisting
exclusively of Todd Shipyards Corporation Common Stock.
Notwithstanding the foregoing, any subfund may hold for
investment any assets permitted by the terms of the Trust
agreement, including without limitation, cash or other types of
short-term investments. Additional subfunds may be established
by agreement between the Administrative Committee and the
Trustee.
Each Participant may direct the Administrative Committee to
invest his or her Accounts among the available investment
subfunds. An investment request shall remain effective with
regard to all subsequent amounts credited to a Participants
Account, until changed in accordance with the provisions of this
section.
(e) Upon Enrollment Upon becoming a Participant, an Employee
may allocate future contributions to his or her Account among the
investment subfunds in 25% increments, by giving written
direction to the Administrative Committee. If an employee fails
to make an election, 100% of the contribution will be allocated
to the U.S. Government Obligations Fund (Fund C).
(f) Changing Future Contributions A Participant may change
his or her investment election with respect to future
contributions, effective on the first day of the first payroll
period beginning on or after the first day of any calendar
quarter, by giving written direction to the Administrative
Committee at least thirty (30) days before the beginning of the
calendar quarter. Future contributions must be allocated among
the investment subfunds in 25% increments.
(g) Changing Existing Contributions A Participant may change
his or her investment election with respect to an existing
Account by giving written direction to the Administrative
Committee at least thirty (30) days before the beginning of a
calendar quarter. Existing account balances may be moved among
the various investment options so that the amount invested in a
particular option as of the Valuation Date which immediately
precedes the applicable January 1, April 1, July 1, or October
1, represents 25%, 50%, 75% or 100% of the total value of the
Participants Accounts as of that Valuation Date. Assets shall be
moved among investment subfunds to effect this change as soon as
administratively feasible following the applicable Valuation
Date.
5.03 Valuation of the Trust Fund
The fair market value of the Trust Fund shall be determined as
of each Valuation Date and at any time specifically requested by
the Plan Administrator. Any portion of the Trust Fund held under
an insurance contract in which asset values are only maintained
on a book value basis shall have that portion of the Trust Fund
valued at book value rather than market value.
5.04 Allocation of Trust Fund Earnings and Losses to
Participant Accounts
As of each Valuation Date, any increase or decrease in the fair
market value (including interest, dividends, realized and
unrealized gains and losses) of any subfund shall be allocated
among the Participant Accounts on the basis of the interests in
the particular subfund held in the Accounts as of the immediately
preceding Valuation Date, adjusted for contributions,
distributions and transfers made since that date.
Notwithstanding the foregoing, in the event a terminated
Participant has received a distribution of his or her vested
benefit, the nonvested portion of his or her Participants Account
shall not be credited with Trust Fund earnings and losses
pursuant to this section after the Valuation Date which coincides
with or next follows the date of termination of employment.
5.05 Account Statements
Each Participant shall be provided with a statement of his or
her Accounts under the Plan showing the Account values as of each
Valuation Date. If within thirty (30) days after the statement
is mailed the Participant makes no objection to the statement, it
shall become binding and conclusive on the Participant and any
Beneficiary.
5.06 Disposition of Forfeitures
As of the end of each Plan Year, amounts forfeited pursuant to
Section 6, if any, by any Participant shall be used first to
restore Accounts pursuant to Section 6.03, and then shall be
allocated among the Employer Matching Contribution Accounts of
each Participant who is employed on the last day of the Plan
Year, in the same proportion as each such Participants pre-tax
contributions up to 6% of Earnings bears to the aggregate of all
pre-tax contributions up to 6% of Earnings made by Participants
who will receive a share of the forfeiture.
5.07 PAYSOP Account - Discontinued
Prior to April 1, 1989, the Plan permitted PAYSOP contributions
which were allocated to PAYSOP Accounts on behalf of each
Participant. Effective April 1, 1989, no new PAYSOP
contributions shall be made to the Plan and PAYSOP Accounts shall
be distributed or transferred as determined by the Administrative
Committee as soon as administratively feasible thereafter.
SECTION 6 VESTING AND BENEFITS
6.01 Vesting
(a) Participant Pre-tax Contribution Account Each Participant
shall have a 100% vested, nonforfeitable right to his or her
Pre-tax Contribution Account.
(b) Participant After-tax Contribution Account Each
Participant shall have a 100% vested, nonforfeitable right to
his or her After-tax Contribution Account.
(c) Rollover Account Each Participant shall have a 100%
vested, nonforfeitable right to his or her Rollover Account.
(d) Employer Matching Contribution Account Each Participant
shall have a vested, nonforfeitable right to his or her Employer
Matching Contribution Account based on his or her Years of
Service multiplied by the appropriate vesting percentage in
accordance with the following table: Years of Service Percent
Vested Less than 1 year 0% 1 year 20% 2 years 40% 3
years 60% 4 years 80% 5 years or more 100% In addition,
each Participant shall have a 100% vested, nonforfeitable right
to his or her Employer Matching Contribution Account upon his or
her Normal Retirement Date, death, or Disability, provided he or
she is an Employee on such date. In the event the Participant has
received a prior distribution from his or her Employer Matching
Contribution Account, the vested portion of the Account balance
(including the amount which may yet be restored pursuant to
Section 6.03) following the distribution shall be determined by
application of the following formula: X = P(AB+D) - D; where X
equals the vested amount P equals the employees vested interest
in the Employer Matching Contribution Account at the time of
subsequent distribution; AB equals the balance of the Account at
the time of subsequent distribution; and D equals the amount
previously distributed from the Employer Matching Contribution
Account. Notwithstanding the foregoing, this formula does not
apply if the Participant has repaid the prior distribution
pursuant to Section 6.04(b). Also, the formula does not apply if
the prior distribution may not be repaid because the Participant
has incurred five or more consecutive one year Breaks-in-
Service, or because five years or more have elapsed since the
date of reemployment.
6.02 Benefits Upon Termination
A Participant shall be eligible to receive a distribution of his
or her Accounts, to the extent vested, upon termination of
employment, death or Disability.
Notwithstanding the foregoing, in the event a Participant again
becomes an employee before benefits commence, he or she shall no
longer be eligible to receive a distribution.
6.03 Forfeitures
In the event a Participant terminates prior to becoming 100%
vested in his or her Employer Matching Contribution Account, the
non-vested shall be forfeited upon a one year Break-in-Service.
The amount forfeited shall equal the non-vested balance as of
the Valuation Date coinciding with or next following termination
of employment.
If such Participant returns to Service before suffering five
consecutive one year Breaks-in-Service, the amount forfeited
shall be restored as of the last day of the Plan Year in which
the Participant returns to Service and repays in full any prior
distribution according to Section 6.04.
Assets to restore amounts forfeited shall be taken first from
current forfeitures. If forfeitures are inadequate to fully
reinstate the Account, assets shall be taken from investment
earnings. In the event that current year forfeitures and
investment earnings are inadequate to fully reinstate the
Account, the Employer shall make a contribution in addition to
the contributions required under Section 4.01 equal to the
balance necessary to fully reinstate the Account.
If a terminated Participant is reemployed after sustaining five
consecutive one year Breaks-in-Service, the amount forfeited
shall not be restored.
6.04 Vesting Upon Reemployment
(a) Years of Service If a terminated employee later becomes a
Participant again following reemployment, all Years of Service
before and after the Break-in-Service shall be taken into
account in determining the Participants vested interest in the
Employer Matching Contribution Account established upon
reemployment.
(b) Repayment If a Participant forfeited all or a portion of
his or her EmployerMatching Contribution Account upon termination
and he or she returns to Service prior to incurring five
consecutive one year Breaks-in-Service, the Participant may
elect to repay the amount previously distributed from his or her
Employer Matching Contribution Account.Such Participant may
elect to repay his or her prior distributionwithin five years
following reemployment. The forfeited amount shall be restored
upon such repayment pursuant to Section 6.03.Amounts repaid shall
be 100% vested and shall be invested in the same manner as future
contributions.
6.05 Time of Benefit Payment
(a) Benefit Commencement A Participant who is eligible for
benefits may request benefit commencement by written notice to
the Administrative Committee. Benefits may commence at any time
following termination and on or before April 1 following the
calendar year in which the Participant attains age 70-1/2.
Benefits shall be paid as soon as practical following a request
for payment and determination of the amount of payment under
Section 6.05(b). If such a Participant fails to request benefit
commencement, benefits shall commence on or immediately
preceding April 1 following the calendar year in which the
Participant attains age 70-1/2. In no event shall benefits
commence later than April 1 following the calendar year in
which the Participant attains age 70-1/2, regardless of whether
the Participant continues in Service after that date.
(b) Amount of Payment The amount distributed shall be based
on the Account balance determined as of the later of: (i) the
Valuation Date coinciding with or following the date the
Participant terminates employment, or (ii) any later Valuation
Date which next precedes the date benefits commence.
(c) Small Benefits Notwithstanding any election to
commence benefits or lack thereof, the Administrative Committee
shall distribute a benefit which is $3,500.00 or less, as soon
as practical following termination of employment, death or
Disability, without Participant or Beneficiary consent.
Benefits shall be paid in cash; provided, however if the
Participants Account is invested in Employer common stock,
benefits shall be paid in whole shares of common stock which
are credited to the Participants Account and the remainder of
the benefit, including fractional shares of stock shall be
paid in cash.
6.06 Withdrawals Prior to Termination
(a) General Withdrawal A Participant may apply to the
Administrative Committee for withdrawal of all or a portion of
the following Accounts at the following times prior to
termination of employment:
Account Time of Withdrawal After-tax Contribution Account
Any time Pre-tax Contribution Account After age 59-1/2 Vested
Employer Matching Contribution Account After age 59-1/2
Rollover Account After age 59-1/2 A withdrawal request by a
married Participant shall be invalid unless the written request
is signed by the Participants spouse and the spouses signature
is notarized, or witnessed by a Plan representa-tive. A
Participant may not request a withdrawal more than once each
calendar quarter. The minimum amount which may be withdrawn is
the lesser of $250 and the total vested Account balance which may
be withdrawn. A withdrawal shall be paid within a reasonable
time following thirty (30) days after the Administrative
Committee receives the request.
(b) Hardship Withdrawal A Participant may apply to the
Administrative Committee for a hardship withdrawal prior to
termination of employment of his or her:
(i) Pre-tax Contribution Account (formerly referred to as the
Basic Contribution Account) balance as of December 31, 1988,
and
(ii) Pre-tax contributions after December 31, 1988,
excluding earnings thereon. All hardship withdrawals are
subject to Administrative Committee approval. A withdrawal
request by a married Participant shall be invalid unless the
written request is signed by the Participants spouse and the
spouses signature is notarized, or witnessed by a Plan
representative. A hardship withdrawal shall only be approved if
it is for a specific type of expense and if it is necessary to
satisfy such expense. Hardship withdrawals are available only to
pay for the following expenses:
(iii) medical expenses described in Code Section 213(d)
incurred by the Participant, or his or her spouse or dependents
(as defined in Code Section 152);
(iv) purchase (excluding mortgage payments) of a principal
residence for the Participant;
(v) tuition for the next semester or quarter of
post-secondary education for the Participant, his or her spouse,
children, or dependents; or
(vi) preventing eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the
Participants principal residence.
A distribution shall be deemed to be necessary to satisfy an
expense described in (iii) through (vi) above if both of the
following requirements are satisfied:
(vii) the distribution is not in excess of the amount of such
expense; and
(viii) the Participant has obtained all distributions
(other than hardship distributions), and all nontaxable loans
currently available under all plans maintained by the Employer.
A hardship distribution shall be deducted first from the
category of available amounts described in (b)(ii) herein and
then from the category of available amounts described in (b)(i)
herein. Any amount remaining in a Participants Pre-tax
Contribution Account after a hardship withdrawal shall be
distributed in accordance with the terms of the Plan.
Participant pre-tax and after-tax contributions to this or any
other qualified retirement plan or non-qualified deferred
compensation plan maintained by the Employer shall be
suspended for twelve (12) months after a hardship withdrawal.
Following a 12-month suspension, the Participant may resume
contributions pursuant to Section 3.02.
In addition, the Participant may not make a pre-tax
contribution to the Plan or any other plan maintained by the
Employer for the Participants taxable year immediately
following the taxable year of the hardship withdrawal, in
excess of pre-tax contributions allowable in Section 3.01 for
the next taxable year less the amount of such Participants pre-
tax contributions for the taxable year of the hardship
withdrawal.
Notwithstanding the foregoing, a Participant whose
contributions have been suspended for twelve months due to a
hardship withdrawal shall be deemed to be an Eligible Employee
for purposes of the ADP test in Section 3.04, ACP test in
Section 4.02, and multiple use test in Section 4.03.
6.07 Loans
(a) General
A Participant may apply to the Administrative Committee for a
loan from his or her vested Accounts prior to termination.
The Participants vested nonforfeitable right to his or her
Accounts shall be determined without regard to any accumulated
deductible employee contributions as the term is defined in
Code section 72(o). Loan amounts shall be deducted from each
vested Account in the same proportion that each vested Account
balance bears to the total vested balance of all Accounts.
Only one loan may be outstanding at any time, and a subsequent
loan may not be made until 30 days after the date a previous
loan is repaid in full.
A loan application of a married Participant shall be invalid
unless his or her spouse consents to the loan by signing the
loan application and the spouses signature is notarized or
witnessed by a Plan representative.
(b Minimum and Maximum Loan Amount
The minimum amount which may be borrowed is $1,000. In no
event shall a loan at the time it is made exceed the lesser of:
Total Vested Account Balance Maximum Loan Amount Less
than $20,000 $10,000 $20,000 or more The lesser of: (i)
$50,000 less the highest outstanding loan balance during the
twelve-month period, or (ii) 50% of the total vested
Account balance.
(c) Repayments The Participant may elect to repay the loan over
any whole year term which does not exceed five years; provided,
however, that the term for a loan used to purchase a primary
residence for the Participant may not be longer than fifteen
years. Once the loan is made, the repayment term may not be
changed, provided, however, the Participant may elect to pre-pay
the full outstanding loan balance at any time during the
repayment term. Loans shall be repaid level payments made
through payroll deduction each pay period until the loan is
repaid. Payroll deductions shall commence with the first pay
period following the loan distribution. A Participant who is on
an approved leave of absence may continue repaying a loan by
personal check each pay period. A fixed reasonable rate of
interest shall be charged for the term of the loan. Each
repayment shall be credited to each Account of a Participant in
the same proportion that amounts were deducted from each Account
to fund the loan. Repayments will be invested in the same manner
as new contributions are invested. In the event a non-Key
Employee as defined in Section 10.02(g) wishes to deduct
interest payments on a loan used to purchase a principle
residence for the Participant, the Participant must provide all
the documentation required by the Administrative Committee and
pay any expenses associated with documenting a mortgage or deed
of trust. Such documentation and loan collateral shall be
subject to acceptance by the Administrative Committee.
SECTION 7 FORMS OF PAYMENT
7.01 Form of Payment - Hired Post-March 31, 1989
A Participant whose Employment Commencement Date is on or after
April 1, 1989 shall receive his or her benefit in the form of a
lump sum payment which represents the Participants entire
interest in the Plan. Unless the Participant elects otherwise,
lump sum payments shall be made in whole shares of Employer
common stock allocated to the Participants Account and the
remainder of his or her Account including fractional shares of
Employer common stock shall be paid in cash. Alteratively, a
Participant may elect to receive the entire lump sum payment in
cash. Such election must be made in writing and submitted to the
Administrative Committee with the election to commence benefits.
7.02 Forms of Payment - Hired Pre-April 1, 1989
Only a Participant whose Employment Commencement Date was prior
to April 1, 1989 shall be subject to the form of payment
provisions stated in this Section 7.02. Such a Participant may
elect any one of the options described in (a) through (d) below
within ninety days prior to his or her annuity starting date.
Such election must be made in writing and submitted to the
Administrative Committee with the election to commence benefits.
(a) Whole Life Annuity A Whole Life Annuity shall be payable
monthly from the annuity starting date to the first of the month
preceding death.
(b) Joint and Survivor Annuity A reduced Joint and Survivor
Annuity shall be payable monthly to a terminated Participant
from the annuity starting date to the first of the month
preceding death. Following the Participants death, a monthly
benefit equal to 50% of the reduced amount payable to the
Participant shall be payable for life to the Participants spouse
if living at the time of the Participants death. A Participant
may not elect a joint annuitant other than his or her spouse. If
the spouse dies after the Participants annuity starting date,
the Participants payments will be in the same reduced amount as
is otherwise payable under the Joint and Survivor Annuity. If
the spouse dies prior to the Participants annuity starting date,
any election of a form of benefit under this Section 7.02(b)
shall be automatically cancelled. If the Participant dies prior
to his or her annuity starting date, the spouse shall not be
entitled to receive any payments under this Section 7.02(b).
However, the spouse may be entitled to a benefit under Section
8.02.
(c) Installments Installment payments made quarterly or
annually in accordance with the Participants election, over a
specified number of years, not to exceed five years. Each
installment payment shall be determined by dividing the total
value of the participants Accounts immediately before the
installment is paid by the number of such remaining installments
(including that installment). The Participants Account which is
not yet distributed shall continue to be credited with
investment earnings and losses pursuant to section 5.04. A
Participant may not elect a period over which installment
payments shall be made which is expected, as of the annuity
starting date, to exceed the Participants or Beneficiarys life
expectancies. Also, a Participant may only elect a period of
installments if the present value of benefits payable to the
Participant is more than 50% of the present value of the
benefits payable to the Participant and Beneficiary together,
determined as of the date payments are to commence under the
Plan.
(d) Lump Sum A Lump Sum distribution shall be a single sum
payment which represents the Participants entire interest in the
Plan. Unless the Participant elects otherwise, lump sum
payments shall be made in whole shares of Employer common stock
allocated to the Participants Account and the remainder of his
or her Account including fractional shares of Employer common
stock shall be paid in cash. Alternatively, a Participant may
elect to receive cash and only some of the total whole shares of
Employer common stock, or all cash.
(e) Automatic Form of Benefit Unless the Participant elects
otherwise, benefits shall be paid as provided below: (1) Married
Participants Any Participant who is married on the annuity
starting date shall automatically be deemed to have elected the
50% Joint and Survivor Annuity option, effective as of such
date, with his or her spouse as the joint annuitant (the
Statutory 50% Joint and Survivor Annuity Option). A Participant
may reject the Statutory 50% Joint and Survivor Annuity Option
by filing a written notice with the Administrative Committee
prior to his or her annuity starting date. Such notice must be
signed by the Participants spouse and the spouses signature must
be notarized, or witnessed by a Plan representative. In event
the Statutory 50% Joint and Survivor Annuity Option is rejected
and another form is not elected, benefits shall be paid in the
form of a Whole Life Annuity. A Participant may file a rejection
notice or revoke any such notice at anytime during the 90-day
election period described above. (2) Other Participants Any
other Participant shall receive his or her benefits in the form
of a Whole Life Annuity.
(f) Explanation of Forms of Payment The Administrative
Committee shall furnish each Participant with a written
explanation of the terms and conditions of the forms of payment
upon the earlier of termination of employment, and nine months
prior to the date the Participant first becomes eligible for
retirement benefits under the Plan.
SECTION 8 DEATH BENEFIT
8.01 Pre-Retirement Death Benefits - Hired Post-March 31, 1989
If a Participant whose Employment Commencement Date is on or
after April 1, 1989 dies prior to the commencement of benefits,
the Beneficiary shall receive a lump sum payment which represents
the Participants entire interest in the Plan. Benefits shall
commence as soon as practical following the Valuation Date
coinciding with or next following the Participants death. Unless
the Beneficiary elects otherwise, the lump sum benefit shall be
paid in whole shares of Employer common stock allocated to the
Participants Account and the remainder of the Account, including
fractional shares of Employer common stock shall be paid in cash.
Alternatively a Beneficiary may elect to receive the entire lump
sum payment in cash. Such election must be made in writing and
submitted to the Administrative Committee prior to the date
benefits commence.
8.02 Pre-Retirement Death Benefits - Hired Pre-April 1, 1989
If a Participant whose Employment Commencement Date was prior to
April 1, 1989 dies prior to the commencement of benefits, the
Beneficiary shall receive a distribution of the Participants
Accounts at the time and in the form described below.
(a) Benefit Commencement Benefits for a non-spouse Beneficiary
shall commence as soon as practical following the Valuation Date
coinciding with or next following the Participants death. A
spouse Beneficiary who is eligible for death benefits may request
benefit commencement by written notice to the Administrative
Committee. Benefits may commence at any time after the
Participants death and on or before April 1 following the
calendar year in which the Participant would have attained age
70-1/2. Benefits shall be paid as soon as practical following a
request for payment. If the spouse Beneficiary fails to request
benefit commencement, benefits shall commence on or immediately
preceding April 1 following the calendar year in which the
Participant would have attained age 70-1/2 if he or she had
survived.
(b) Form of Payment Death benefits for a non-spouse Beneficiary
shall be paid in form of a lump sum payment. Unless the non-
spouse Beneficiary elects otherwise, the lump sum shall be paid
in whole shares of Employer common stock allocated to the
Participants Account and the remainder of the Account including
fractional shares of Employer common stock shall be paid in
cash. Alternatively, a non-spouse Beneficiary may elect to
receive the entire lump sum payment in cash. Such election must
be made in writing and submitted to the Administrative Committee
prior to the date benefits commence. Death benefits for a spouse
Beneficiary shall be paid in the form of a whole life annuity
unless the spouse Beneficiary files a written rejection with the
Administrative Committee of the whole life annuity and instead
elects to receive a lump sum form of payment as described in
Section 7.02(d).
(c) Amount of Payment The amount distributed shall be based on
the Account balance determined as of the later of: (i) the
Valuation Date coinciding with or next following the date of the
Participants death, or (ii) any later Valuation Date which next
precedes the date benefits commence.
(d) Small Benefits Notwithstanding any request for benefit
commencement, or lack thereof, the Administrative Committee shall
distribute any benefit which is $3,500.00 or less pursuant to
Section 6.05(c).
8.03 Post-Retirement Death Benefits If a Participant dies after
retirement benefits have commenced, no benefits will be payable
under the Plan other than the retirement benefits payable under
the form of payment in effect.
SECTION 9 LIMITATION ON CONTRIBUTIONS
9.01 Maximum Annual Contribution to the Plan
(a) Primary Rule Notwithstanding any other Plan provision to the
contrary, the Annual Additions to a Participants Accounts in this
Plan and any other defined contribution plan maintained by the
Employer shall not exceed the lesser of $30,000 or 25% of the
Participants Compensation.
(b) Annual Additions Defined For purposes of Section 9, the
term Annual Additions for any Participant in any Plan Year means
the sum of: (1) the amount of Employer contributions and
Participant pre-tax and after-tax contributions allocated to a
Participants Accounts; (2) forfeitures allocated to the
Participants Accounts; and (3) with respect only to the $30,000
limitation, amounts attributable to retiree medical benefits on
behalf of a key employee in a separate account in a welfare fund
subject to Code Section 419A.
(c) Cost-of-Living Adjustment The $30,000 limit prescribed
above shall be automatically adjusted for cost-of-living
increases, to the maximum permissible dollar limitation
determined by the Commissioner of Internal Revenue. The dollar
amount applicable in computing the maximum contribution for any
Participant shall be the dollar amount in effect for the
calendar year in which the contribution is made.
(d) Remedy If for any Plan Year the Annual Additions exceed the
foregoing limitations, the Employer shall distribute or forfeit
any amounts required under Section 4.05, then allocate the excess
to a suspense account. The suspense account shall be credited
with investment earnings and losses as of each Valuation Date in
the same manner as Participant Accounts pursuant to Section 5.04
Such suspense account is for accounting purposes only and shall
remain in the Trust Fund to be reallocated as provided below.
Contents of the suspense account shall be allocated to all
Participant Accounts on the next Valuation Date in the same
manner as Employer Basic Matching Contributions pursuant to
Section 4.01(b). So long as any amount remains in the suspense
account, the Employer shall not contribute to the Plan any
amount which would cause an additional allocation to the
suspense account. In the event of a complete or partial
termination of the Plan, or a complete discontinuance of Employer
matching contributions, the amount in the suspense account shall
be allocated among Participant Accounts as though it were a Basic
Matching Contribution made on the Valuation Date preceding the
date of such complete or partial termination or discontinuance
of contributions.
9.02 Additional Limitation Relating to Defined Benefit Plans
(a) Primary Rule For Participants who participate in this Plan
and a defined benefit plan maintained by the Employer, the sum
of (1) and (2) below for any calendar year may not exceed 1.0,
as determined by the Administrative Committee. (1) The defined
benefit plan fraction for any year is equal to the quotient of
(i) divided by (ii) below expressed as a fraction: (i) The
projected annual benefit, (determined by projecting service, but
not earnings, to normal retirement age) of the Participant under
the Plan determined as of the close of the year. (ii) The
lesser of: (a) 1.25 multiplied by the dollar limitation in
effect for defined benefit plans under Section 415 of the Code
for such year, or (b) 1.4 multiplied by 100% of the
Participants average annual Compensation (based on the three
consecutive years which produce the highest average, or the
longest consecutive period if the Participant has less than
three consecutive years of Service). (2) The defined contribution
plan fraction for any year is equal to the quotient of (i)
divided by (ii) below expressed as a fraction: (i) The sum of
the Annual Additions to the Participants Accounts for the
current year, as of the close of the year, and for all prior
years from and after the Employment Commencement Date. (ii) The
sum of the lesser of the following amounts for such year and for
each prior year of Service with the Employer (regardless of
whether a plan was in existence during those years): (a) 1.25
multiplied by the dollar limitation in effect for defined
contribution plans under Section 415 of the Code for such year,
or (b) 1.4 multiplied by 25% of a Participants Compensation for
such year.
(b) Remedy If such sum exceeds 1.0, the Annual Additions to
this defined contribution Plan shall be reduced to the extent
necessary to satisfy the limitations of this section.
SECTION 10 TOP HEAVY PROVISIONS
10.01 Scope
Notwithstanding any Plan provision to the contrary, for any Plan
Year in which the Plan is Top Heavy within the meaning of Section
416(g) of the Code, the provisions of this Section 10 shall
govern to the extent they conflict with or specify additional
requirements to the Plan provisions governing Plan Years which
are not Top Heavy.
10.02 Top Heavy Status
(a) Top Heavy This Plan shall be Top Heavy if, as of the
Determination Date, (1) the Present Value of Accrued Benefits of
Key Employees, or (2) the sum of the Aggregate Accounts of Key
Employees under this Plan and any plan of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued
Benefits or the Aggregate Accounts of all Participants under
this Plan and any plan of an Aggregation Group, determined in
accordance with Code Section 416(g) and regulations thereunder.
The Present Value of Accrued Benefits and/or Aggregate Account
balance of a Participant who was previously a Key Employee but is
no longer a Key Employee (or his or her Beneficiary), shall not
be taken into account for purposes of determining Top Heavy
status. Further, a Participants Present Value of Accrued Benefits
and/or Aggregate Account balance shall not be taken into account
if he or she has not performed services for the Employer at any
time during the five year period ending on the Determination
Date.
(b) Super Top Heavy This Plan shall be Super Top Heavy if, as
of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees, or (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and any plan of an
Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits or the Aggregate Accounts of all
Participants under this Plan and any plan of an Aggregation
Group.
(c) Determination Date Whether the Plan is Top Heavy for any
Plan Year shall be determined as of the Determination Date.
Determination Date means (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
(d) Valuation Date Valuation Date means, for purposes of
determining Top Heaviness, the Determination Date instead of the
meaning set forth in Section 1.30.
(e) Aggregate Account Aggregate Account means, with respect to
a Participant, the sum of: (i) his or her account balances as of
the Valuation Date; (ii) contributions after the Valuation
Date due as of the Determination Date; (iii) distributions
prior to the Valuation Date, made during the Plan Year that
contains the Determination Date and the four preceding Plan
Years.
(f) Present Value of Accrued Benefits The Present Value of
Accrued Benefits with respect to a defined benefit plan shall be
based upon the Participants accrued benefits and the actuarial
assumptions as determined under the provisions of the applicable
defined benefit plan.
(g) Key Employee Key Employee means an employee or former
employee (and his or her Beneficiaries) who, at any time during
the Plan Year containing the Determination Date or any of the
four preceding Plan Years, is included in one of the following
categories as within the meaning of Section 416(i)(l) of the Code
and regulations thereunder: (i) an officer of the Employer whose
annual Compensation exceeds 50% of the dollar limitation under
Code Section 415(b)(1)(A) (for 1989 this amount is $49,032),
provided that no more than 50 employees shall be considered
officers, or if less, the greater of 10% of the employees or 3,
(ii) one of the ten employees owning the largest interest in
the Employer who owns more than a 0.5% interest of the Employer,
and who earns more than the dollar limitation under Section
415(c)(1)(A) of the Code (for 1989, this amount is $30,000),
(iii) an employee who owns more than 5% of the Employer, or
(iv) an employee who owns more than 1% of the Employer with
annual Compensation from the Employer that exceeds $150,000.
(h) Aggregation Group Aggregation Group means the group of
plans that must be considered as a single plan for purposes of
determining whether the plans within the group are Top Heavy
(Required Aggregation Group), or the group of plans that may be
aggregated for purposes of Top Heavy testing (Permissive
Aggregation Group). The Determination Date for each plan must
fall within the same calendar year in order to aggregate the
plans. (i) The Required Aggregation Group includes each plan of
the Employer in which a Key Employee is a participant in the
Plan Year containing the Determination Date or any of the four
preceding Plan Years, and each other plan of the Employer which,
during this period, enables any plan in which a Key Employee
participates to meet the minimum participation standards or
non-discriminatory contribution requirements of Code Sections
401(a)(4) and 410.
(ii) A Permissive Aggregation Group may include any Employer
sponsored plan, provided the group as a whole continues to
satisfy the minimum participation standards and
non-discriminatory contribution requirements of Code Sections
401(a)(4) and 410. Each plan belonging to a Required Aggregation
Group shall be deemed Top Heavy, or non-Top Heavy in accordance
with the groups status. In a Permissive Aggregation Group that is
determined Top Heavy only those plans that are required to be
aggregated shall be Top Heavy. In a Permissive Aggregation Group
that is not Top Heavy, no plan in the group shall be Top Heavy.
10.03 Minimum Contribution
(a) General Rule For any Plan Year in which the Plan is Top
Heavy, the total Employer contribution under Section 4.01 and any
forfeitures allocated to any non-key Participants account shall
not be less than 3% of such Participants Compensation.
Participant contributions under Section 4.01(a) are not
considered when determining whether this 3% requirement is
satisfied. However, in the event the Employer contributions and
forfeitures allocated to each Key Employees account do not
exceed 3% of his or her Compensation, such Employer contributions
and forfeitures for non-Key Employees are only required to equal
the highest percentage of Compensation, including Participant
pre-tax contributions under Section 4.01(a), allocated to any Key
Employees accounts for that Plan Year. The minimum contribution
must be made on behalf of all non-Key Participants who are
employed on the last day of the Plan Year including non-Key
Employees who (1) failed to complete a Year of Service, or (2)
declined to make any mandatory contributions to the Plan or enter
a salary reduction agreement.
(b) Special Two Plan Rule Where this Plan and a defined benefit
plan belong to an Aggregation Group that is determined Top Heavy,
the minimum contribution required under paragraph (a) above
shall be increased to 5%.
10.04 Limitation to Annual Additions in Top Heavy Plan
For any Top Heavy Plan Year in which the Employer does not make
the extra minimum allocation provided below, 1.0 shall replace
the 1.25 factor found in the denominators of the defined benefit
and defined contribution plan fractions under Section 9.02.
If this Plan is Top Heavy, but is not Super Top Heavy, the
fractions set forth in Section 9.02 shall remain unchanged
provided the Employer makes an extra minimum allocation for
non-Key Participants. The extra allocation (in addition to the
minimum contribution set forth in 10.03) shall equal at least one
percent (1%) of a non-Key Participants compensation.
10.05 Vesting
For any Top Heavy Plan Year, a Participants Accounts shall
remain subject to the vesting provisions in Section 6.01.
SECTION 11 ADMINISTRATION OF THE PLAN
11.01 Plan Administrator
The Plan Administrator shall be the Employer. The Board of
Directors shall appoint an Administrative Committee composed of
three or more persons which shall carry out the general
administration of the Plan. Every member of the Administrative
Committee shall be deemed a fiduciary. No Administrative
Committee member who is an employee shall receive compensation
with respect to his or her service on the Administrative
Committee. Any member of the Administrative Committee may resign
by delivering written resignation to the Board of Directors and
to the Secretary of the Administrative Committee. The Board of
Directors may remove or replace any member of the Administrative
Committee at any time. The General Counsel of the Employer shall
be the agent of the Plan for service of legal process.
11.02 Organization and Procedures
The Administrative Committee shall elect a chairman from the
members of the Administrative Committee and a secretary, who may
or may not be a member of the Administrative Committee. The
secretary shall have the primary responsibility for keeping a
record of all meetings and acts of the Administrative Committee
and shall have custody of all documents, the preservation of
which shall be necessary or convenient to the efficient
functioning of the Administrative Committee. All reports
required by law may be signed by the chairman or another member
of the Administrative Committee designated by the Committee, on
behalf of all members of the Administrative Committee.
The Administrative Committee shall act by a majority of its
members in office and may adopt such by-laws and regulations as
it deems desirable for the conduct of its affairs.
11.03 Duties and Authority
(a) Administrative Duties The Administrative Committee shall
administer the Plan in a non-discriminatory manner for the
exclusive benefit of Participants and their Beneficiaries. The
Administrative Committee shall perform all such duties as are
necessary to supervise the administration of the Plan and to
control its operation in accordance with the terms thereof,
including, but not limited to, the following: (1) Make and
enforce such rules and regulations as it shall deem necessary or
proper for the efficient administration of the Plan; (2)
Interpret the provisions of the Plan and determine, in its
absolute discretion, any question arising under the Plan, or in
connection with the administration or operation thereof; (3)
Determine, in its absolute discretion, all considerations
affecting the eligibility of any employee to be or become a
Participant; (4) Determine eligibility for and amount of
retirement benefits for any Participant; (5) Authorize and direct
the Trustee with respect to all disbursements of benefits under
the Plan; (6) Employ and engage such persons, counsel and agents
and to obtain such administrative, clerical, medical, legal,
audit and actuarial services as it may deem necessary in carrying
out the provisions of the Plan.
(b) Investment Authority The Administrative Committee shall
have responsibility and authority with respect to the management,
acquisition, disposition or investment of Plan assets to the
extent such responsibility and authority is not delegated to an
Investment Manager or Trustee.
(c) General Authority The Administrative Committee shall have
all powers necessary or appropriate to carry out its duties,
including the power to construe in its absolute discretion;
ambiguous or seemingly inconsistent provisions of the Plan. Any
interpretation or construction of or action by the Administrative
Committee with respect to the Plan and its administration shall
be conclusive and binding upon any and all parties and persons
affected hereby, subject to the exclusive appeal procedure set
forth in Section 11.07.
11.04 Expenses and Assistance
All reasonable expenses which are necessary to operate and
administer the Plan may be deducted from the Trust Fund or paid
directly by the Employer, at the Employers discretion.
11.05 Bonding and Insurance
To the extent required by law, every Administrative Committee
member, every fiduciary of the Plan and every person handling
Plan funds shall be bonded. The Administrative Committee shall
take such steps as are necessary to assure compliance with
applicable bonding requirements. The Administrative Committee
may apply for and obtain fiduciary liability insurance insuring
the Plan against damages by reason of breach of fiduciary
responsibility at the Plans expense and insuring each fiduciary
against liability to the extent permissible by law at the
Employers expense.
11.06 Claims Procedure
(a) Conditions of Payment Benefit payments under the Plan shall
not be payable prior to the fulfillment of the following
conditions: (1) The Administrative Committee has been furnished
with such applications, consents, proofs of birth, address, form
of benefit and other information the Administrative Committee
deems necessary; (2) The Participant is eligible to receive
benefits under the Plan as determined by the Administrative
Committee. The amount of benefit payable to a Participant or
Beneficiary shall be determined under the terms of the Plan in
effect at the time the Participant terminates employment. The
time benefits commence to a Participant or Beneficiary and the
form of payment shall be determined under the terms of the Plan
in effect at the time benefits commence.
(b) Commencement of Payment Unless a Participant elects
otherwise, the payment of benefits shall commence no later than
60 days after the end of the Plan Year in which the latest of the
following occurs: (1) the date the Participant attains age 65,
(2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or (3) the Participant
terminates Service with the Employer. If the information required
in Section 11.06(a) above is not available prior to such date,
the amount of payment required to commence will not be
ascertainable. In such event, the commencement of payments shall
be delayed until no more than 60 days after the date the amount
of such payment is ascertainable. Where the vested Accounts
exceed $3,500, in no event shall payments commence prior to the
Participant attaining Normal Retirement Age without Participant
consent. Spouse consent shall also be required if the
Participant is married and his or her Employment Commencement
Date was prior to April 1, 1989. Notwithstanding the foregoing,
in no event shall payments commence later than April 1 following
the calendar year in which the Participant attains age 70-1/2,
regardless of whether he or she remains in Service after that
date.
11.07 Appeal Procedure
(a) Notice of Denial Any time a claim for benefits is wholly or
partially denied, the Participant or Beneficiary (hereinafter
Claimant) shall be given written notice of such action within 90
days after the claim is filed, unless special circumstances
require an extension of time for processing. If there is an
extension, the Claimant shall be notified of the extension and
the reason for the extension within the initial 90 day period.
The extension shall not exceed 180 days after the claim is filed.
Such notice will indicate the reason for denial, the pertinent
provisions of the Plan on which the denial is based, an
explanation of the claims appeal procedure set forth herein, and
a description of any additional material or information necessary
to perfect the claim and an explanation of why such material or
information is necessary.
(b) Right to Request Review Any person who has had a claim for
benefits denied by the Administrative Committee, or is otherwise
adversely affected by action of the Administrative Committee,
shall have the right to request review by the Administrative
Committee. Such request must be in writing, and must be made
within 60 days after such person is advised of the Administrative
Committees action. If written request for review is not made
within such 60-day period, the Claimant shall forfeit his or her
right to review. The Claimant or a duly authorized
representative of the Claimant may review all pertinent
documents and submit issues and comments in writing.
(c) Review of Claim The Administrative Committee shall then
review the claim. It may hold a hearing if it deems it necessary
and shall issue a written decision reaffirming, modifying or
setting aside its former action within 60 days after receipt of
the written request for review, or 120 days if special
circumstances, such as a hearing, require an extension. The
Claimant shall be notified in writing of any such extension
within 60 days following the request for review. A copy of the
decision shall be furnished to the Claimant. The decision shall
set forth its reasons and pertinent plan provisions on which it
is based. The decision shall be final and binding upon the
Claimant and the Administrative Committee and all other persons
involved.
11.08 Plan Administration - Miscellaneous
(a) Limitations on Assignments Benefits under the Plan may not
be assigned, sold, transferred, or encumbered, and any attempt to
do so shall be void. The interest of a Participant in benefits
under the Plan shall not be subject to debts or liabilities of
any kind and shall not be subject to attachment, garnishment or
other legal process, except as provided in Section 11.09
relating to Domestic Relations Orders.
(b) Masculine and Feminine, Singular and Plural Whenever used
herein, pronouns shall include the opposite gender, and the
singular shall include the plural, and the plural shall include
the singular, whenever the context shall plainly so require.
(c) No Additional Rights No person shall have any rights in or
to the Trust Fund, or any part thereof, or under the Plan, except
as, and only to the extent, expressly provided for in the Plan.
Neither the establishment of the Plan, the granting of a
retirement allowance nor any action of the Employer or the
Administrative Committee shall be held or construed to confer
upon any person any right to be continued as an employee, or,
upon dismissal, any right or interest in the Trust Fund other
than as herein provided. The Employer expressly reserves the
right to discharge any employee at any time.
(d) Governing Law This Plan shall be construed in accordance
with applicable federal law and the laws of the State of
Washington, wherein venue shall lie for any dispute arising
hereunder.
(e) Disclosure to Participants Each Participant shall be
advised of the general provisions of the Plan and, upon written
request addressed to the Administrative Committee, shall be
furnished any information requested regarding the Participants
status, rights and privileges under the Plan as may be required
by law.
(f) Income Tax Withholding Requirements Any retirement benefit
payment made under the Plan will be subject to any applicable
income tax withholding requirements. For this purpose, the
Administrative Committee shall provide the Trustee with any
information the Trustee needs to satisfy such withholding
obligations and with any other information that may be required
by regulations promulgated under the Code.
(g) Severability If any provision of this Plan shall be held
illegal or invalid for any reason, such determination shall not
affect the remaining provisions of this Plan which shall be
construed as if said illegal or invalid provision had never been
included.
(h) Facility of Payment In the event any benefit under this
Plan shall be payable to a person who is under legal disability
or is in any way incapacitated so as to be unable to manage his
or her financial affairs, the Administrative Committee may direct
payment of such benefit to a duly appointed guardian, committee
or other legal representative of such person or in the absence of
a guardian or legal representative, to a custodian for such
person under a Uniform Gift to Minors Act or to any relative of
such person by blood or marriage, for such persons benefit. Any
payment made in good faith pursuant to this provision shall fully
discharge the Employer and the Plan of any liability to the
extent of such payment.
(i) Correction of Errors Any Employer contribution to the Trust
Fund made under a mistake of fact (or investment proceed of such
contribution if a lesser amount) shall be returned to the
Employer within one year after payment of the contribution. In
the event an incorrect amount is paid to a Participant or
Beneficiary, any remaining payments may be adjusted to correct
the error. The Administrative Committee may take such other
action it deems necessary and equitable to correct any such
error.
(j) Missing Persons In the event a distribution is required to
commence under Section 6.05 and the Participant or Beneficiary
cannot be located, the Participants Account shall be forfeited
on the last day of the fifth Plan Year following the Plan Year in
which distribution was supposed to commence. Such forfeiture
shall be used to reduce Employer matching contributions. If the
affected Participant or Beneficiary later contacts the Employer,
his or her Account shall be reinstated and distributed as soon as
practical. The Employer shall reinstate the amount forfeited by
making a special Employer contribution equal to such amount and
allocating it to the affected Participants or Beneficiarys
Account. Such reinstatement shall not be considered an annual
addition for purposes of the limitations on contributions on
benefits pursuant to Code Section 415. Prior to forfeiting any
Account, the Employer shall attempt to contact the Participant
or Beneficiary by return receipt mail at his or her last known
address according to the Employers records, and by the letter
forwarding services offered through the Internal Revenue Service,
or the Social Security Administration, or such other means as
the Administrative Committee deems appropriate.
11.09 Domestic Relations Orders
Notwithstanding any Plan provisions to the contrary, benefits
under the Plan may be paid to someone other than the Participant
or Beneficiary pursuant to a Qualified Domestic Relations Order,
in accordance with Section 414(p) of the Code. A Qualified
Domestic Relations Order is a judgment, decree, or order (Order)
(including approval of a property settlement agreement) that:
(a) relates to the provision of child support, alimony payments
or marital property rights to a spouse, former spouse, child
or other dependent of a Participant;
(b) is made pursuant to a state domestic relations law
(including a community property law);
(c) creates or recognizes the existence of an alternate payees
right to, or assigns to an alternate payee the right to,
receive all or a portion of the benefits payable to a Participant
under the Plan;
(d) specifies the name and last known address of the Participant
each alternate payee;
(e) specifies the amount or method of determining the amount of
benefit payable to an alternate payee;
(f) names each plan to which the order applies; (g) does not
require any form, type or amount of benefit not otherwise
provided under the Plan;
(h) does not conflict with a prior Domestic Relations Order that
meets the other requirements of this section.
Payments to an alternate payee pursuant to a Qualified Domestic
Relations Order may commence at any time, regardless of the
Participants age or whether the Participant terminates or
continues employment.
The Administrative Committee shall determine whether an Order
meets the requirements of this section within a reasonable period
after receiving an Order. The Administrative Committee shall
notify the Participant and any alternate payee that an Order has
been received. Any amounts which are to be paid pursuant to the
Order, during the period while its qualified status is being
determined, shall be held in a separate account under the Plan
for any alternate payee pending determination that an Order meets
the requirements of this section. If within 18 months after such
a separate account is established, the order has not been
determined to be a qualified Order, the amount in the separate
account shall be distributed to the individual who would have
been entitled to such amount if there had been no order.
11.10 Plan Qualification
Any modification or amendment of the Plan may be made
retroactive, as necessary or appropriate, to establish and
maintain a qualified plan pursuant to Section 401 of the Code,
and ERISA and regulations thereunder and exempt status of the
Trust Fund under Section 501 of the Code.
Notwithstanding anything herein to the contrary, this Plan shall
be contingent upon a favorable Internal Revenue Service ruling
that the Plan is qualified under Code Section 401(a), as amended,
and exempt from income taxation under Code Section 501(a). In
the event the Plan is not recognized as a qualified plan, or the
assets of the Plan are not exempt under Section 501 of the Code,
and the Plan is not amended retroactively for any reason to
correct the defaults, then the Plan shall be void ab initio and
all amounts contributed by the Employer to the Plan, plus
investment earnings, less expenses paid, shall be returned within
one year.
11.11 Deductible Contribution
Notwithstanding anything herein to the contrary, any
contribution by the Employer to the Trust Fund is conditioned
upon the deductibility of the contribution by the Employer under
the Code and, to the extent any such deduction is disallowed, the
Employer may within one year following a final determination of
the disallowance, demand repayment of such disallowed
contribution and the Trustee shall return such contribution less
any losses attributable thereto within one year following the
disallowance.
11.12 Payment of Benefits Through Purchase of Annuity Contract
In lieu of paying benefits directly from the Trust to a
Participant or Beneficiary, the Administrative Committee may
direct the Trustee to purchase with Trust assets, an individual
annuity contract from an insurance company which, as far as
possible, provides benefits equal to (or actuarially equivalent
to) those provided in the Plan for such Participant or
Beneficiary, but provides no optional form of retirement income
or benefit which would not be permitted under the Plan. Upon the
purchase of such annuity, the liability of the Plan and Trust
will terminate with respect to benefits so purchased and for
which the premiums are duly paid. Such an individual annuity
contract may be purchased by the Trustee on a single-premium
basis and may be purchased at any time benefits are payable to
provide the benefits due under the Plan to the Participant or a
Beneficiary on or after the date of such purchase.
Any annuity contract distributed by the Trustee to a Participant
or Beneficiary under the provisions of the Plan shall bear on the
face thereof the designation NOT TRANSFERABLE, and such contract
shall contain a provision to the effect that the contract may not
be sold, assigned, discounted or pledged as collateral for a loan
or as security for the performance of an obligation or for any
other purposes to any person other than the issuer thereof.
SECTION 12 AMENDMENT AND TERMINATION
12.01 Amendment - General
The Employer shall have the right to amend, terminate, or
partially terminate this Plan at any time subject to any advance
notice or other requirements of ERISA. The Board of Directors
shall adopt a resolution to amend the Plan and such resolution
shall authorize an officer of the Employer to execute the
amendment on behalf of the Employer.
12.02 Amendment - Consolidation or Merger
In the event this Plan, its assets and its liabilities are
merged into, transferred to or otherwise consolidated with any
other retirement plan, then such must be accomplished so as to
ensure that each Participant would (if the other retirement plan
then terminated) receive a benefit immediately after the merger,
transfer or consolidation, which is equal to or greater than the
benefit the Participant would have been entitled to receive
immediately before the merger, transfer or consolidation (as if
the Plan had then terminated). This provision shall not be
construed as limiting the powers of the Employer to appoint a
successor Trustee.
12.03 Termination of the Plan
The termination of the Plan shall not cause or permit any part
of the Trust Fund to be diverted to purposes other than for the
exclusive benefit of the Participants, or cause or permit any
portion of the Trust Fund to revert to or become the property of
the Employer at any time prior to the satisfaction of all
liabilities with respect to the Participants.
Upon termination of this Plan, the Administrative Committee
shall continue to act for the purpose of complying with the
preceding paragraph and shall have all power necessary or
convenient to the winding up and dissolution of the Plan as
herein provided. While so acting, the Administrative Committee
shall be in the same status and position with respect to other
persons as if the Plan remained in existence.
12.04 Allocation of the Trust Fund on Termination of Plan
In the event a complete or partial termination of the Plan, or
upon complete discontinuance of contributions under the Plan,
with respect to all Participants or a specified group or groups
of Participants, the Trustee shall allocate and segregate a
proportionate interest in the Trust Fund for the benefit of
affected Participants.
All Accounts accrued by the affected Participants shall be 100%
vested and non-forfeitable. The Administrative Committee shall
direct the Trustee to allocate the assets of the Trust Fund to
those affected Participants.
SECTION 13 FUNDING
13.01 Contributions to the Trust Fund
As a part of this Plan the Employer shall maintain a Trust Fund.
From time to time, the Employer shall make contributions to the
Trust Fund in accordance with Section 4.
13.02 Trust Fund for Exclusive Benefit of Participants
The Trust Fund is for the exclusive benefit of Participants.
Except as provided in Sections 4.05, 11.10 and 11.11, no portion
of the Trust Fund shall be diverted to purposes other than this
or revert to or become the property of the Employer at any time
prior to the satisfaction of all liabilities with respect to the
Participants.
13.03 Trustee
As a part of this Plan, the Employer has entered into an
agreement with a Trustee who is designated by the Board of
Directors. The Employer has the power and duty to appoint the
Trustee and it shall have the power to remove the Trustee and
appoint successors at any time. As a condition to exercising its
power to remove any Trustee hereunder, the Employer must first
enter into an agreement with a successor Trustee.
13.04 Investment Manager
The Administrative Committee has the power to appoint, remove or
change from time to time an Investment Manager to direct the
investment of all or a portion of the Trust Fund held by the
Trustee. For purposes of this section Investment Manager shall
mean any fiduciary (other than the Trustee) who:
(a) has the power to manage, acquire, or dispose of any asset of
the Plan;
(b) is either (1) registered as an investment advisor under the
Investment Advisors Act of 1940, or (2) is a bank, or (3) is an
insurance company qualified under the laws of more than one
state to perform the services described in subparagraph (a); and
(c) has acknowledged in writing that he or she is a fiduciary
with respect to the Plan.
<PAGE> 13.05 Employer Common Stock
(a) Purchase of Common Stock Common stock of the Employer
acquired with contributions to the Trust shall be initially
valued and carried in the Accounts of Participants at the
average per share price paid by the Trustee for all such common
stock acquired during the period between Valuation Dates.
Employer common stock and other assets of the Trust Fund may be
acquired by the Trustee through open-market or privately
negotiated transactions.
(b) Purchase of Common Stock through Participant Accounts
Whenever the Trustee is authorized or required to sell shares of
Employer common stock from any of a Participants Accounts, it may
in its absolute discretion, purchase for the benefit of the Trust
Fund the shares to be sold at their value (as determined by the
(c) Voting A Participant shall be entitled to direct the
exercise of voting rights or other rights with respect to whole
and fractional shares of Employer common stock allocated to any
of his or her Accounts. The Employer shall provide to each
Participant materials pertaining to the exercise of such rights
containing all the materials distributed to shareholders of the
Todd Shipyards Corporation. A Participant shall have the
opportunity to exercise any such rights within the same time
period as shareholders of the Todd Shipyards Corporation. Any
shares of common stock with respect to which a Participant
declines to exercise voting or other rights shall not be voted by
the Trustee. Any shares of common stock held by the Trustee
which as of the record date are not allocated to the Account of
any Participant shall be voted by the Trustee.
SECTION 14
FIDUCIARIES
14.01 Limitation of Liability of the Employer and Others
To the extent permitted by law, no Participant shall have any
claim against the Employer, or the Administrative Committee, or
against their directors, officers, members, agents or
representatives, for any benefits under the Plan, and such
benefits shall be payable solely from the Trust Fund; nor shall
the Employer, nor the Administrative Committee or their
directors, officers, members, agents or representatives incur any
liability to any person for any action taken or suffered or
omitted to be taken by them under the Plan in good faith.
14.02 Indemnification of Fiduciaries
In order to facilitate the recruitment of competent fiduciaries,
the Employer adopting this Plan agrees to provide the
indemnification as described herein. This provision shall apply
to employees who are considered Plan fiduciaries including
without limitation, Administrative Committee members, any agent
of the Administrative Committee, or any other officers, directors
or employees. Notwithstanding the preceding, this provision
shall not apply and indemnification will not be provided for any
Trustee or Investment Manager appointed as provided in this Plan.
14.03 Scope of Indemnification
The Employer agrees to indemnify an employee fiduciary as
described above for all acts taken in good faith in carrying out
his or her responsibilities under the terms of this Plan or other
responsibilities imposed upon such fiduciary by ERISA. This
indemnification for all acts is intentionally broad but shall not
provide indemnification for embezzlement or diversion of Plan
assets for the benefit of the employee fiduciary. The Employer
agrees to indemnify employee fiduciaries described herein for all
expenses of defending an action by a Participant, Beneficiary or
government entity, including all legal fees for counsel selected
with the consent of the Employer and other costs of such defense.
The Employer will also reimburse an employee fiduciary for any
monetary recovery in any court or arbitration proceeding. In
addition, if the claim is settled out of court with the
concurrence of the Employer, the Employer will indemnify an
employee fiduciary for any monetary liability under said
settlement.
The Todd Shipyards Corporation Savings Investment Plan is amended
and restated, effective on April 1, 1989.
IN WITNESS WHEREOF, the Employer has caused this Plan to be duly
executed on this ____________ day of _______________________,
1989.
FOR TODD SHIPYARDS CORPORATION
__________________________________
_______________________________
Witness Authorized Officer
_______________________________
Title
APPENDIX I
Employer as defined in Section 1.14 shall also include the
following employers during the specified periods of time.
Employer Beginning Ending
1. Todd Pacific Shipyards Corporation July 1, 1984 --
Acknowledged and Accepted
By: _____________________
Title: __________________
Date: ___________________
TODD SHIPYARDS CORPORATION
RETIREMENT SYSTEM
Article 1. Definitions
1.01 Accrued Benefit means, as of any date of determination on or
before June 30, 1989, the normal Retirement Allowance computed
under Section 4.01(b) as of that date on the basis of the Members
Average Final Compensation and Credited Service to that date.
Effective July 1,1989, Accrued Benefit means, as of any date of
determination, the projected normal Retirement Allowance computed
under Section 4.01(b) on the basis of the Members Average Final
Compensation as of that date and the number of years of Credited
Service the Member would have completed if he had remained in
service as an Employee until his Normal Retirement Age multiplied
by a fraction, the numerator of which is the number of years of
the Members Credited Service as of the date of determination and
the denominator of which is the number of years of Credited
Service the Member would have completed had he remained in
service as an Employee until his Normal Retirement Age.
Notwithstanding the foregoing, a Members Accrued Benefit shall
not be reduced below his Accrued Benefit as of July 22, 1991
under the terms of the Retirement System in effect on June 30,
1989.
1.02 Accumulated Contributions means the total of a Members
mandatory contributions to the Retirement System prior to July 1,
1979, plus interest at a rate determined by the Retirement Board
from time to time prior to July 1, 1976; 5% per annum from July
1, 1976 to June 30, 1988; and on and after July 1, 1988, the
interest rate specified in Code Section 411(c)(2)(C)(iii) to
Normal Retirement Age or the Annuity Starting Date, if later.
Effective July 1, 1979, no further Member contributions were
required or permitted.
1.03 Affiliated Company means any company not participating in
the Retirement System which is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code) which
also includes as a member the Company; any trade or business
under common control (as defined in Section 414(c) of the Code)
with the Company; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in
Section 414(m) of the Code) which includes the Company; and any
other entity required to be aggregated with the Company pursuant
to regulations under Section 414(o) of the Code. Notwithstanding
the foregoing sentence, for purposes of Section 4.07, the
definitions in Sections 414(b) and (c) of the Code shall be
modified as provided in Section 415(h) of the Code.
1.04 Annuity Starting Date means the first day of the first
period for which an amount is paid as an annuity or any other
form.
1.05 Average Final Compensation means the average annual
Compensation of a Member during the three consecutive years in
the last ten or less years of his Credited Service affording the
highest such average, or during all of the years of his Credited
Service if less than three years.
1.06 Beneficiary means the person or persons named by a Member by
written designation filed with the Retirement Board to receive
payments after the Members death.
1.07 Board of Directors means the Board of Directors of Todd
Shipyards Corporation.
1.08 Break in Service means a period which constitutes a break in
an Employees Continuous Service, as provided in Section 3.01(a).
1.09 Code means the Internal Revenue Code of 1986, as amended.
1.10 Company means Todd Shipyards Corporation or any successor by
merger, purchase or otherwise, with respect to its employees; or
any other company participating in the Retirement System as
provided in Section 10.03 with respect to its employees.
1.11 Compensation means the basic straight-time cash remuneration
paid to an Employee for services rendered to the Company,
including any pre-tax contributions under The Todd Shipyards
Corporation Savings Investment Plan or under a cafeteria plan (as
defined under Section 125 of the Code and its applicable
regulations), excluding piecework and all other bonuses, overtime
pay and all other forms of special pay. Effective July 1, 1991,
Compensation means the total cash remuneration paid to an
Employee on or after July 1, 1991 for services rendered to the
Company, determined prior to any pre-tax contributions under The
Todd Shipyards Corporation Savings Investment Plan or under a
cafeteria plan (as defined under Section 125 of the Code and its
applicable regulations), provided that the Average Final
Compensation of a Member who retired prior to July 1, 1991 shall
not be adjusted. The Compensation for a period of absence which
is counted as Credited Service shall be the Members rate of
Compensation in effect immediately before the period of absence.
However, effective as of July 1, 1989, Compensation taken into
account for any purpose under the Retirement System shall not
exceed $200,000 per Plan Year, provided that the imposition of
the limitation on Compensation shall not reduce an Employees
Accrued Benefit below the amount of Accrued Benefit determined as
of June 30, 1989. In determining the Compensation of a Member
for purposes of this limitation, the rules of Section 414(q)(6)
of the Code shall apply, except in applying those rules, the term
family shall include only the spouse of the Member and any lineal
descendants of the Member who have not attained age 19 before the
close of the year. The applicable limitation as determined by
the Commissioner of Internal Revenue as of January 1, 1990 and as
of each subsequent calendar year shall become effective as the
maximum Compensation to be taken into account for Retirement
System purposes as of the first day of the Plan Year beginning
within each such calendar year in lieu of the $200,000 limitation
set forth in the second preceding sentence.
1.12 Continuous Service means service recognized for purposes of
determining eligibility for membership and benefits under the
Retirement System, determined as provided in Section 3.01.
1.13 Covered Compensation means for any Member the lesser of (a)
his average annual Compensation for the three-consecutive-Plan
Year period ending with the year of the determination computed by
excluding Compensation for any Plan Year in excess of the taxable
wage base in effect under Section 230 of the Social Security Act
at the beginning of the Plan Year or (b) the average of the
taxable wage bases in effect under Section 230 of the Social
Security Act for each year in the 35-year period ending with the
year in which the Member attains his Social Security Retirement
Age. In determining a Members Covered Compensation for any Plan
Year, the taxable wage base for the current Plan Year and any
subsequent Plan Year shall be assumed to be the same as the
taxable wage base in effect as of the beginning of the Plan Year
for which the determination is made.
1.14 Credited Service means service recognized for purposes of
computing the amount of any benefit, determined as provided in
Section 3.02.
1.15 Effective Date means August 1, 1940.
1.16 Employee means any person employed by the Company who
receives compensation other than a pension, severance pay,
retainer or fee under contract, but excluding any Leased Employee
and any person who is included in a unit of employees covered by
a collective bargaining agreement which does not provide for his
membership in the Retirement System.
1.17 Equivalent Actuarial Value means equivalent value determined
on the basis of the applicable factors set forth in Appendix A.
1.18 ERISA means the Employee Retirement Income Security Act of
1974, as amended.
1.19 Hour of Service means, with respect to any applicable
computation period, (a) each hour for which the employee is paid
or entitled to payment for the performance of duties for the
Company or an Affiliated Company, (b) each hour for which an
employee is paid or entitled to payment by Affiliated Company on
account of a period during which no duties are performed, whether
or not the employment relationship has terminated, due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence, but not
more than 501 hours for any single continuous period, (c) each
hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Company or an Affiliated
Company, excluding any hour credited under (a) or (b), which
shall be credited to the computation period or periods to which
the award, agreement or payment pertains, rather than to the
computation period in which the award, agreement or payment is
made, and (d) solely for purposes of determining whether an
employee has incurred a Break in Service under the Retirement
System, each hour for which an employee would normally be
credited under paragraph (a) or (b) above during a period of
Parental Leave but not more than 501 hours for any single
continuous period. However, the number of hours credited to an
employee under this paragraph (d) during the computation period
in which the Parental Leave began, when added to the hours
credited to an employee under paragraphs (a) through (c) above
during that computation period, shall not exceed 501. If the
number of hours credited under this paragraph (d) for the
computation period in which the Parental Leave began is zero, the
provisions of this paragraph (d) shall apply as though the
Parental Leave began in the immediately following computation
period. No hours shall be credited on account of any period
during which the Employee performs no duties and receives payment
solely for the purpose of complying with unemployment
compensation, workers compensation or disability insurance laws.
The Hours of Service credited shall be determined as required by
Title 29 of the Code of Federal Regulations, Section 2530.200b-
2(b) and (c).
1.20 Leased Employee means any person as so defined in Section
414(n) of the Code.
1.21 Limitation Year means the calendar year.
1.22 Member means any person included in the membership of the
Retirement System, as provided in Article 2.
1.23 Normal Retirement Age means an Employees 65th birthday.
1.24 Normal Retirement Date means the first day of the calendar
month coinciding with or immediately following an Employees
Normal Retirement Age.
1.25 Parental Leave means a period commencing on or after July 1,
1985 in which the Employee is absent from work immediately
following his or her active employment because of the Employees
pregnancy, the birth of the Employees child, the placement of a
child with the Employee in connection with the adoption of that
child by the Employee, or for purposes of caring for that child
for a period beginning immediately following birth or placement.
1.26 Plan Year means the 12-month period beginning on any July 1.
1.27 Qualified Joint and Survivor Annuity means an annuity
described in Section 5.01(b).
1.28 Retirement Allowance means annual payments under the
Retirement System as provided in Article 5.
1.29 Retirement Board means the individuals named by the Board of
Directors to administer and supervise the Retirement System as
provided in Article 7.
1.30 Retirement System means the Todd Shipyards Corporation
Retirement System as set forth in this document or as amended
from time to time.
1.31 Severance Date means the earlier of (a) the date an Employee
quits, retires, is discharged or dies, or (b) the first
anniversary of the date on which an Employee is first absent from
service, with or without pay, for any other reason such as
vacation, sickness, disability, layoff or leave of absence.
1.32 Social Security Retirement Age means age 65 with respect to
a Member who was born before January 1, 1938; age 66 with respect
to a Member who was born after December 31, 1937 and before
January 1, 1955; and age 67 with respect to a Member who was born
after December 31, 1954.
1.33 Spousal Consent means written consent given by a Members
spouse to an election made by the Member which specifies the form
of Retirement Allowance and Beneficiary or Beneficiaries
designated by the Member. Except in the case of a change to the
form of benefit under Section 5.01(b) providing a Retirement
Allowance for a Member who is married on his Annuity Starting
Date, the specified form or specified Beneficiary shall not be
changed unless further Spousal Consent is given. Spousal Consent
shall be duly witnessed by a Retirement System representative or
notary public and shall acknowledge the effect on the spouse of
the Members election. The requirement for Spousal Consent may be
waived by the Retirement Board if it is established that there is
no spouse, that the spouse cannot be located, that a legal
separation has occurred, or for such other reasons as may be
determined in accordance with applicable law. Spousal Consent
shall be applicable only to the particular spouse who provides
such consent.
1.34 Suspendible Month means a month in which the Member receives
payment from the Company or an Affiliated Company for at least
eight days of service during that month.
1.35 Trustee means the trustee or trustees by whom the funds of
the Retirement System are held, as provided in Article 8.
Article 2. Membership
2.01 Membership Requirements Every Employee of the Company on
June 30, 1979 who was a Member of the Retirement System on June
30, 1979 shall continue to be a Member on and after July 1, 1979
but no Member contributions shall be required or permitted.
Every other person in the employ of the Company shall become a
Member of the Retirement System as of the first day of the
calendar month, beginning with July 1, 1979, coincident with or
immediately following the date he completes six months of
Continuous Service, provided he is then an Employee. However, an
Employee whose first day of employment was on or after his 65th
birthday and prior to July 1, 1988 shall be eligible to become a
Member on the later of July 1, 1988 or the first day of the
calendar month coinciding with or immediately following the date
he completes six months of Continuous Service, provided he is
then an Employee.
2.02 Determination of Service For purposes of this Article, an
Employee shall be credited with six months of Continuous Service
if he completes at least 500 Hours of Service during the six-
month period beginning on the date he first completes an Hour of
Service, or beginning on any six month anniversary of the date he
first completes an Hour of Service if he does not complete 500
Hours of Service in the initial period. A full-time Employee
shall be credited with 45 Hours of Service for each week in which
the Employee completes one Hour of Service. A full-time Employee
for this purpose is one who performs, or whose regular, stated
work schedule would require him to perform, 30 or more Hours of
Service per week.
2.03 Events Affecting Membership An Employees membership in the
Retirement System shall end when he is no longer employed by the
Company if he is not entitled to either an immediate or a
deferred Retirement Allowance under the Retirement System.
Membership shall continue while on approved leave of absence from
service, but no Credited Service shall be counted for that
period, except as specifically provided in Article 3 with respect
to a leave of absence or service in the Armed Forces of the
United States.
2.04 Membership upon Reemployment If an Employees membership in
the Retirement System ends and he again becomes an Employee, he
shall be considered a new Employee for all purposes of the
Retirement System, except as provided in Section 3.03.
2.05 Collective Bargaining
(a) The provisions of Section 1.16 notwithstanding, if the
Company is required, pursuant to a collective bargaining
agreement, to contribute on behalf of any Member, other than
under this Retirement System, to provide pension benefits, such
Members participation in the Retirement System shall continue
during the period for which the Company must make such payments.
A Member shall receive Continuous Service, but not Credited
Service, for such period.
(b) Any person included in a unit of employees covered by a
collective bargaining agreement under which the Company has
agreed to make payments to any other qualified plan to provide a
pension may, if such person is not already a Member, become a
Member provided(i) the Retirement Board finds that such person
has been promoted by the Company to a position involving
supervisory responsibility, whether or not he continues to be
covered by a collective bargaining agreement; and(ii) the
Company is no longer required to contribute on his behalf to
another pension fund or trust.
Upon becoming a Member, the Employee shall receive Continuous
Service, as provided in Section 3.01, for his service with the
Company while he was covered by a collective bargaining
agreement, and shall receive both Continuous Service and Credited
Service, as provided in Sections 3.01 and 3.02, for service
rendered subsequent to the date of his membership in the
Retirement System. His benefit, upon subsequent retirement or
termination, shall, for the period prior to his membership in the
Retirement System, be equal to the pension benefit the Employee
would have been entitled to receive upon retirement under the
provisions (as in effect at the time he became a Member of the
Retirement System) of any other pension or retirement plan to
which the Company was required to contribute on his behalf under
the terms of a collective bargaining agreement, multiplied by a
fraction, the numerator of which is his period of participation
in such other plan and the denominator of which is the number of
years of participation he would have had under such other plan if
he had participated until his Normal Retirement Age or
thereafter; provided that such benefit shall be reduced by any
vested pension under such other plan.
Article 3. Service
3.01 Continuous Service
(a) Except as hereinafter provided, an employees period of
employment with the Company or an Affiliated Company, whether or
not as an Employee as herein defined, shall be Continuous Service
for purposes of the Retirement System. Continuous Service shall
begin on the date the Employee first completes an Hour of Service
and end on the Employees Severance Date. If an Employees
employment is terminated and he is later reemployed within one
year, the period between his Severance Date and the date of his
reemployment shall be included in his Continuous Service.
However, if his employment is terminated during a period of
absence from service for reasons such as vacation, sickness,
disability, layoff or leave of absence approved by the Company,
Continuous Service shall be counted for the period from his
Severance Date to the date of his reemployment only if he is
reemployed within one year of the first day of that absence. No
Continuous Service shall be recognized during any period prior to
July 1, 1979 when an Employee was eligible to become a Member and
did not have an election on file to make contributions under the
Retirement System. If an Employee did not elect to become a
Member prior to July 1, 1979 when first eligible, any service
after he became eligible for membership and prior to becoming a
Member shall be excluded from his Continuous Service. A Break in
Service shall occur if an Employee is not reemployed within one
year after a Severance Date, provided, however, that if an
Employees employment is terminated or if the Employee is
otherwise absent from work because of Parental Leave, a Break in
Service shall occur only if the Employee is not reemployed or
does not return to active service within two years of his initial
absence date; and provided further that the first year of such
absence for Parental Leave, measured from the initial absence
date, shall not be considered in determining the Employees period
of Break in Service for purposes of Section 3.03(d). If the
Employee has a Break in Service, any period before the Break in
Service shall be excluded from his Continuous Service, except as
provided in Section 3.03.
(b) With respect to any person who was employed on or before
June 30, 1976, Continuous Service for service rendered prior to
that date shall be equal to the Credited Service recognized
through June 30, 1976 under the Retirement System in effect on
that date. However, if such a person became a Member after the
Effective Date, Continuous Service shall also include his period
of service after the Effective Date and prior to the date he
first became eligible for membership. With respect to any person
who, prior to June 30, 1976, was promoted from service covered by
another pension plan to a position of supervisory responsibility
and who became a Member under Section 2.05 (or provision of
similar intent under the Retirement System as in effect on June
30, 1976), Continuous Service shall also include his period of
service as a member of such plan.
(c) If an Employee shall have been absent from the service of
the Company because of service in the Armed Forces of the United
States and if he shall have returned to the service of the
Company or an Affiliated Company having applied to return while
his reemployment rights were protected by law, that absence shall
not count as a Break in Service, but instead shall be counted as
Continuous Service.
(d) A period during which an Employee is on a leave of absence
approved by the Company shall not be considered as a Break in
Service. Under rules uniformly applicable to all Employees
similarly situated, the Retirement Board may authorize Continuous
Service to be counted for any portion of that period of leave
which is not counted as Continuous Service under paragraph (a) of
this Section.
(e) For purposes of determining eligibility for membership and
vesting, each of the following periods of service shall be
counted in a persons Continuous Service to the extent that it
would be recognized under paragraph (a) through (c) above with
respect to Employees: (i) a period of service as an employee, but
not an Employee, of the Company, (ii) a period of service as an
employee of an Affiliated Company, and (iii) in the case of a
person who is a Leased Employee before or after a period of
service as an Employee or a period of service described in (i)
or (ii) above, a period during which he has performed services
for the Company or an Affiliated Company as a Leased
Employee.The Break in Service rules of Section 3.03 shall be
applied as though all such periods of service were service as an
Employee.
3.02 Credited Service
(a) Except as provided below, all Continuous Service rendered
while a Member on or after July 1, 1976, excluding service prior
to a Break in Service which resulted in a loss of Continuous
Service, shall be Credited Service under the Retirement System.
In addition, a Member who was a Member on June 30, 1976 shall
receive credit for any Credited Service recognized as such under
the Retirement System in effect on June 30, 1976 for service
rendered before that date which is included in his Continuous
Service. Any period of absence counted as Continuous Service
under Section 3.01(c) or (d) shall not be counted as Credited
Service unless it is included in paragraph (b) below. Any period
between a Severance Date and a reemployment date which is counted
as Continuous Service as provided in Section 3.01(a) shall not be
counted as Credited Service.
(b) Credited Service shall include any period of absence from
service with the Company due to service in the Armed Forces of
the United States which is counted in a Members Continuous
Service as described in Section 3.01(c), provided that if such
period occurs after his date of membership and prior to July 1,
1979, the Employee made the contributions required under the
Retirement System with respect to such period. Under rules
uniformly applicable to all Employees similarly situated, the
Retirement Board may count as Credited Service any period, not
more than two years, during which an Employee is on an approved
leave of absence which is counted as Continuous Service as
described in Section 3.01(d), provided that if such period occurs
after his date of membership and prior to July 1, 1979, the
Employee made the contributions required under the Retirement
System with respect to such period.
(c) Credited Service shall not be granted for any period in
which a Member is not an Employee but is in the employ of the
Company, or in the employ of an Affiliated Company, or performing
services for the Company or an Affiliated Company as a Leased
Employee.
3.03 Restoration of Retired Member or Other Former Employee to
Service
(a) If a Member in receipt of a Retirement Allowance is restored
to service with the Company as an Employee, the following shall
apply: (i) If his restoration to service occurs prior to his
Normal Retirement Date, the portion of his Retirement Allowance
attributable to Company contributions shall cease and any
election of an optional benefit in effect with respect to the
part of the Retirement Allowance attributable to Company
contributions shall be void. If his restoration to service
occurs after his Normal Retirement Date, the part of (i) his
Retirement Allowance attributable to Company contributions shall
be suspended during each Suspendible Month (unless the
provisions of Sections 4.02(c) and 5.05(b) are applicable), and
(ii) any optional benefit shall remain in effect, unless the
Member shall elect otherwise; in the event of his death during
the period of restoration, any payment in one sum due under the
Retirement System upon death after retirement shall be payable,
and any Retirement Allowance which would have been payable to his
surviving spouse had he not been restored to service shall be
payable. Any payments under an optional form of benefit, if one
has been elected and become effective, shall commence. (ii) Any
Continuous Service and Credited Service to which he was entitled
when he retired or terminated service shall be restored to him.
(iii) Upon later retirement or termination, his Retirement
Allowance shall be based on the benefit formula then in effect
and his Compensation and Credited Service before and after the
period when he was not in the service of the Company, reduced by
an amount of Equivalent Actuarial Value to the benefits, if any,
other than a disability Retirement Allowance, he received
before the earlier of the date of his restoration to service or
his Normal Retirement Date. (iv) The part of the Members
Retirement Allowance attributable to Company contributions upon
later retirement payable with respect to Credited Service
rendered before his previous retirement or termination of
service shall never be less than the amount of his previous
Retirement Allowance attributable to Company contributions
modified to reflect any option in effect on his later
retirement.(v) Upon later retirement of a Member in service after
his Normal Retirement Date, payment of the Members Retirement
Allowance shall resume no later than the third month after the
latest Suspendible Month during the period of restoration, and
shall be adjusted, if necessary, in compliance with Title 29 of
the Code of Federal Regulations, Section 2530.203-3 in a
consistent and nondiscriminatory manner.
(b) If a Member entitled to but not in receipt of a Retirement
Allowance or a former Member who did not receive a lump sum
settlement is restored to service and if such Member or former
Member did not incur a Break in Service, his Continuous Service
and Credited Service shall be determined as provided in Sections
3.01 and 3.02. If such former Member is restored to service as
an Employee, he shall again become a Member as of his date of
restoration to service.
(c) If a Member entitled to but not in receipt of a Retirement
Allowance is restored to service with the Company after having
had a Break in Service or if a former Member who received a lump
sum settlement in lieu of a Retirement Allowance is restored to
service with the Company, the following shall apply: (i) Upon
completion of six months of Continuous Service, determined as
provided in Section 2.02, following the Break in Service the
Continuous Service to which he was previously entitled shall be
restored to him, and, if applicable, he shall again become a
Member as of his date of restoration to service as an Employee.
(ii) Any Credited Service to which the Member was entitled at
the time of his termination of service shall be restored to him,
provided he repays the amount of any Accumulated Contributions
or any lump sum settlement received upon his initial termination
of service together with interest at the rate prescribed by
Section 411(a)(7)(C) of the Code on that amount to the date of
repayment, except that if the lump sum settlement was equal to
the full present value of his Accrued Benefit at the time of his
termination, he shall not be permitted to repay that amount and
that Credited Service shall not be restored to him. (iii) Upon
later termination or retirement of a Member whose previous
Credited Service has been restored under this paragraph (c), his
Retirement Allowance shall be based on the benefit formula then
in effect and his Compensation and Credited Service before and
after the period when he was not in the service of the Company,
reduced by an amount of Equivalent Actuarial Value to the
benefits, if any, other than a disability Retirement Allowance,
he received before his restoration to service.
(d) If a former Member who is not entitled to a Retirement
Allowance is restored to service after having had a Break in
Service, the following shall apply: (i) Upon completion of six
months of Continuous Service, determined as provided in Section
2.02, following the Break in Service, he shall again become a
Member as of his date of restoration to service as an Employee.
(ii) Upon his restoration to membership, the Continuous Service
to which he was previously entitled shall be restored to him if
the total number of consecutive one-year Breaks in Service does
not equal or exceed the greater of (A) five, or (B) the total
number of years of his Continuous Service before his Break in
Service, determined at the time of the Break in Service,
excluding any Continuous Service disregarded under this
paragraph (d) by reason of any earlier Break in Service. If any
such former Member was restored to service prior to July 1,
1985, or if he had a Break in Service on June 30, 1985 and the
number of his consecutive one-year Breaks in Service as of that
date would have resulted in the exclusion of his previously
accrued Continuous Service under the Plan provisions then in
effect, then clause (A) of the preceding sentence shall not be
applicable, and his previously accrued Continuous Service shall
be excluded. (iii) Any Credited Service to which the Member was
entitled at the time of his termination of service which is
included in the Continuous Service so restored shall be restored
to him. (iv) Upon later termination or retirement of a Member
whose previous Credited Service has been restored under this
paragraph (d), his Retirement Allowance, if any, shall be based
on the benefit formula then in effect and his Compensation and
Credited Service before and after the period when he was not an
Employee.
Article 4. Eligibility for and Amount of Benefits
4.01 Normal Retirement
(a) The right of a Member to his normal Retirement Allowance
shall be nonforfeitable as of his Normal Retirement Age. A
Member may retire from service on a normal Retirement Allowance
beginning on his Normal Retirement Date or he may postpone his
retirement and remain in service after his Normal Retirement
Date, in which event the provisions of Section 4.02 shall be
applicable.
(b) Subject to the provisions of Section 5.01, the annual normal
Retirement Allowance payable upon retirement on a Members Normal
Retirement Date shall be equal to 1-3/4% of the Members Average
Final Compensation multiplied by his years of Credited Service,
reduced by the lesser of (i) 1/2% of his Covered Compensation for
each year of his Credited Service not in excess of 35 years or
(ii) 50% of the benefit that would be provided if the benefit
were limited to the employer-provided portion thereof, were based
on the Members Covered Compensation (in lieu of his Average Final
Compensation) and had been determined without regard to the
reduction; provided that
(1) the Accrued Benefit of a Member who is a Member on or after
July 1, 1989 and who is a highly compensated employee (as defined
in Section 414(q)(1)(A) or (B) of the Code) during the Plan Year
ending in 1990 shall not be less than such Members Accrued
Benefit on June 30, 1989 under the terms of the Retirement System
as then in effect and determined as if the Member had terminated
employment on that date;
(2) the Accrued Benefit of a Member who is a Member on or after
July 1, 1989 and who is a highly compensated employee (as defined
in Section 414(q)(1)(A) or (B) of the Code) during the Plan Year
ending in 1991 but not the Plan Year ending in 1990 shall not be
less than such Members Accrued Benefit on June 30, 1990 under the
terms of the Retirement System as in effect on June 30, 1989 and
determined as if the Member had terminated employment on that
date; and
(3) the Accrued Benefit of a Member who is a Member on or after
July 1, 1989 and who is not a highly compensated employee (as
defined in Section 414(q)(1)(A) or (B) of the Code) in either the
Plan Year ending in 1990 or the Plan Year ending in 1991 shall
not be less than such Members Accrued Benefit on July 22, 1991 or
date of employment termination, if earlier, assuming the terms of
the Retirement System as in effect prior to July 1, 1989 had
remained in effect through July 22, 1991 and determined as if the
Member had terminated employment on that date.
4.02 Late Retirement
(a) If a Member postpones his retirement as provided in Section
4.01(a), he shall be retired from service on a late Retirement
Allowance on the first day of the calendar month after the
Retirement Board receives his written application to retire.
(b) The late Retirement Allowance shall be an immediate
Retirement Allowance beginning on the Members late retirement
date and, subject to the provisions of Section 5.01, shall be
equal to the greater of (i) an amount determined in accordance
with Section 4.01(b) based on the Members Credited Service and
Average Final Compensation as of his late retirement date, or
(ii) the amount of Retirement Allowance to which the Member would
have been entitled under Section 4.01(b) if he had retired on his
Normal Retirement Date, increased by an amount of Equivalent
Actuarial Value to the monthly payments which would have been
payable with respect to each month during the postponement period
which is not a Suspendible Month. Any monthly payment amount
determined under clause
(ii) above with respect to any month which is not a Suspendible
Month shall be computed as if the Member had retired as of his
Normal Retirement Date, and recomputed as of the first day of
each subsequent Plan Year during which payment would have been
made to reflect additional accruals, if any.
(c) In the event a Members Retirement Allowance is required to
begin under Section 5.05(b) while the Member is in active
service, such required beginning date shall be the Members
Annuity Starting Date (except that such a Member shall not become
entitled to elect an optional form of benefit until the date of
the Members actual retirement or other termination of employment)
and the Member shall receive a late Retirement Allowance
commencing on or before such required beginning date in an amount
determined as if he had retired on such date. As of each
succeeding January 1 prior to the Members actual late retirement
date (and as of his actual late retirement date), the Members
Retirement Allowance shall be recomputed to reflect additional
accruals. The Members recomputed Retirement Allowance shall then
be reduced by the Equivalent Actuarial Value of the total
payments of his late Retirement Allowance made with respect to
Suspendible Months of continued employment which were paid prior
to each such recomputation to arrive at the Members late
Retirement Allowance; provided that no such reduction shall
reduce the Members late Retirement Allowance below the amount of
late Retirement Allowance payable to the Member prior to the
recomputation of such Retirement Allowance.
4.03 Early Retirement
(a) A Member who has not reached his Normal Retirement Date but
who reached his 55th birthday and completed ten years of
Continuous Service was eligible to be retired from service on an
early Retirement Allowance on the first day of the calendar month
after the Retirement Board received his written application to
retire, if such retirement occurred prior to October 1, 1987. If
such retirement occurs on or after October 1, 1987, a Member who
has not reached his Normal Retirement Date but who has reached
his 55th birthday must complete five years of Continuous Service
in order to be retired from service on an early Retirement
Allowance on the first day of the calendar month after the
Retirement Board receives his written application to retire.
(b) The early Retirement Allowance shall be a deferred
Retirement Allowance beginning on the Members Normal Retirement
Date and, subject to the provisions of Section 5.01, shall be
equal to his Accrued Benefit. However, the Member may elect to
receive an early Retirement Allowance beginning on the last day
of any calendar month before his Normal Retirement Date. In that
case, the Members Retirement Allowance shall be equal to his
Accrued Benefit, reduced by 5/12 of one per cent for each month
by which the date the Members early Retirement Allowance begins
precedes his Normal Retirement Date.
4.04 Vesting
(a) A Member shall at all times be 100% vested in, and have a
nonforfeitable right to, his Accrued Benefit derived from his
Accumulated Contributions. Effective October 1, 1987, a Member
shall be 100% vested in, and have a nonforfeitable right to, his
Accrued Benefit derived from Company contributions upon
completion of five years of Continuous Service. If the Members
employment with the Company is subsequently terminated for
reasons other than retirement or death, he shall be eligible for
a deferred vested Retirement Allowance after the Retirement Board
receives his written application for such Retirement Allowance.
(b) The deferred vested Retirement Allowance shall begin on the
Members Normal Retirement Date and, subject to the provisions of
Section 5.01, shall be equal to his Accrued Benefit. However,
the Member may elect to have his deferred vested Retirement
Allowance begin on the last day of any calendar month after his
55th birthday and before his Normal Retirement Date. In that
case, the Members Retirement Allowance shall be equal to the
deferred vested Retirement Allowance otherwise payable at his
Normal Retirement Date reduced by 5/9 of one per cent for each of
the first 60 months and 5/18 of one per cent for each of the next
60 months by which the date the Members deferred vested
Retirement Allowance begins precedes his Normal Retirement Date.
4.05 Disability Retirement
(a) A Member who has not reached his Normal Retirement Date but
who has completed five years of Continuous Service shall be
retired from service on a disability Retirement Allowance
beginning on the first day of the calendar month not less than 30
nor more than 90 days after the Retirement Board receives written
application for the Retirement Allowance made by or for the
Member, but only if a physician or physicians designated by the
Retirement Board shall certify that the Member is totally and
permanently disabled. For purposes of the Retirement System,
totally and permanently disabled shall mean that the Member is
totally incapacitated, mentally or physically, for the further
performance of duty, that such incapacity is likely to be
permanent, that such Member should be retired and that the
incapacity was not caused by, or did not occur, during employment
other than that of the Company.
(b) Subject to the provisions of Section 5.01, the disability
Retirement Allowance payable prior to the Members eligibility for
a disability benefit or an unreduced benefit for age under Title
II of the Social Security Act shall be equal to 1-3/4% of the
Members Average Final Compensation multiplied by his years of
Credited Service. The disability Retirement Allowance payable
after eligibility for such Social Security benefit shall be equal
to his Accrued Benefit as of his date of disability retirement;
provided, however, that the disability Retirement Allowance shall
not be less than 25% of the Members Average Final Compensation.
The disability Retirement Allowance shall only be payable subject
to continuance of the Members disability as provided in paragraph
(d) of this Section 4.05. In no event shall the disability
Retirement Allowance exceed the normal Retirement Allowance which
would have been payable had the Member continued in service to
his Normal Retirement Date with no change in his Average Final
Compensation. If a Member in receipt of a disability Retirement
Allowance dies prior to commencement of Social Security benefits,
the Retirement Allowance payable in accordance with Section
5.01(b) to the surviving spouse shall be based on the Members
Accrued Benefit as of the date of disability retirement.
(c) The Retirement Board shall, under rules uniformly applicable
to all Employees similarly situated, offset against the part of a
Members disability Retirement Allowance attributable to Company
contributions any amount paid or payable on account of disability
to the Member or his dependents as a result of premiums, taxes or
contributions paid by the Company under any workers compensation
law or policy, or similar plan, whether self-insured or
otherwise, exclusive of fixed statutory payments for the loss of
any bodily member.
(d) As a condition of his continuing to receive a disability
Retirement Allowance, the Retirement Board may require any Member
receiving a disability Retirement Allowance, who has not reached
his Normal Retirement Date, to undergo a medical examination by a
physician or physicians designated by the Retirement Board, such
examination to be made at the Members residence or other mutually
agreed-upon place. If any Member refuses to submit to such
medical examination, the part of his disability Retirement
Allowance attributable to Company contributions shall cease until
he no longer refuses to submit to such medical examination. If
his refusal continues for a year, all rights to the disability
Retirement Allowance shall cease and the election of an optional
benefit if one has been elected shall no longer be effective. If
the Retirement Board finds from such medical examination or
otherwise that the disability of a Member receiving a disability
Retirement Allowance who has not yet reached his Normal
Retirement Date has ceased and he has regained his earnings
capacity in whole or in part, the part of his disability
Retirement Allowance attributable to Company contributions shall
be discontinued or reduced proportionately; provided, however,
that the Member shall be entitled to have his original disability
Retirement Allowance restored in whole or in part prior to his
Normal Retirement Date if, on the basis of a medical examination
by a physician or physicians designated by the Retirement Board,
the Retirement Board finds that he has again lost earning
capacity because of the same disability. In the event that the
Members disability Retirement Allowance is discontinued as above
provided, if the Member does not again become an Employee, he
shall be entitled to retire on an early Retirement Allowance as
of the first day of the calendar month immediately after his
disability Retirement Allowance ceases, if at the date of
disability retirement he had completed the eligibility
requirements for such Retirement Allowance, or to receive a
deferred vested Retirement Allowance beginning on his Normal
Retirement Date, or after age 55. In either case, the Retirement
Allowance shall be equal to his Accrued Benefit at the time of
his disability retirement, reduced as provided in Section 4.03(b)
or Section 4.04(b), as applicable.
4.06 Spouses Retirement Allowance
(a) On and after August 23, 1984, if a married Member: (i) dies
in active service and prior to his Annuity Starting Date having
met the requirements for any Retirement Allowance, or (ii) dies
after retiring on any Retirement Allowance, or after terminating
service on or after August 23, 1984 with entitlement to a
deferred vested Retirement Allowance, but in either case before
his Annuity Starting Date, or (iii) terminates employment on or
after July 1, 1976 and before August 23, 1984 with entitlement to
a deferred vested Retirement Allowance, and then dies on or after
July 1, 1985 but before his Annuity Starting Date, a spouses
Retirement Allowance shall be payable to his surviving spouse for
life, provided in the cases described in (ii) and (iii) above, no
election was made to waive the spouses coverage in accordance
with Section 4.06(c) and (d).
(b) The spouses Retirement Allowance shall commence and be the
Retirement Allowance which would have been payable to the spouse
under the form provided in Section 5.01(b), had the Members
Retirement Allowance commenced on the last day of the month
preceding his death, reduced by 1/16 of 1% for each month during
the period in which the coverage for the spouse was in effect;
and (iii) in the case of the death of a Member who has terminated
service with a deferred vested Retirement Allowance that has not
yet commenced, the spouses Retirement Allowance shall be equal
to the Retirement Allowance that would have been payable to the
spouse if the Member had elected to have the Retirement
Allowance begin on the last day of the month preceding his
death, or, if later, his attainment of age 55 in the form
provided in Section 5.01(b). The spouse may elect to receive
the benefit commencing on the last day of any month (after the
Member would have attained age 55) up to the Members Normal
Retirement Date, in which case the spouses Retirement Allowance
shall be calculated by taking into account the age the Member
and the spouse would have attained at that commencement date.
The deferred vested benefit payable to the Member, and after his
death, to his surviving spouse, shall be reduced by his
applicable percentage shown in the following table for each
month during the period in which the coverage was in effect;
provided, however, that no such reduction shall be made with
respect to any period before the later of (i) the date the
Retirement Board furnishes the Member the notice of his right to
waive the spouses Retirement Allowance in accordance with
paragraph (d) below or (ii) the commencement of the election
period specified in paragraph (e) below.
Annual Reduction for Spouses Coverage After Termination of
Service with a Deferred Vested Benefit
Age Reduction
60 - 65 1%
55 - 60 50/100 of 1%
50 - 55 25/100 of 1%
40 - 50 15/100 of 1%
Under 40 5/100 of 1%
Notwithstanding any provision in this paragraph (b) to the
contrary, the spouses Retirement Allowance shall commence on
what would have been the Members Normal Retirement Date (or the
first day of the month following his date of death, if later),
unless the spouse elects earlier commencement. If the spouse
does not elect earlier commencement, the spouses Retirement
Allowance payable pursuant to subparagraphs (ii) or (iii) shall
be based upon the amount the spouse would have received if the
Retirement Allowance to which the Member was entitled at his
date of death had commenced on his Normal Retirement Date (or
the first day of the month following his date of death, if
later), in the form provided in Section 5.01(b) and the Member
had died immediately thereafter, reduced as provided in
subparagraphs (ii) and (iii).
(c) The Company shall furnish to each Member who retired on an
early deferred Retirement Allowance or terminates service with
entitlement to a deferred vested Retirement Allowance that has
not yet commenced a written explanation in non-technical language
which describes (A) the terms and conditions of the spouses
Retirement Allowance, including an explanation of the relative
financial effect on the Members Retirement Allowance of an
election to waive the spouses Retirement Allowance, (B) the
Members right to make, and the effect of, an election to waive
the spouses Retirement Allowance, (C) the rights of the Members
spouse, and (D) the right to make, and the effect of, a
revocation of such an election. The Company shall furnish the
written explanation of the spouses Retirement Allowance to each
Member who retired on an early deferred Retirement Allowance or
terminates service with entitlement to a deferred vested
Retirement Allowance that has not yet commenced upon such
retirement or termination of service. The written explanation
described above shall be furnished to a Member even though he is
not married.
(d) An election to waive the spouses Retirement Allowance
provided under this Section, or any revocation of that election,
may be made at any time during the period beginning on the date
of the Members termination of employment, and ending on the
Members Annuity Starting Date or his date of death, if earlier.
Any election to waive the spouses Retirement Allowance or any
revocation of that election shall be made on a form provided by
the Retirement Board, and shall be effective when received by the
Retirement Board. Any election to waive the spouses Retirement
Allowance shall be effective only if it includes Spousal Consent
to such election.
(e) Notwithstanding the provisions of paragraph (a) above, a
Member whose service terminated on or after January 1, 1976 and
prior to August 23, 1984, and who is entitled to a vested
Retirement Allowance pursuant to the provisions of Section
4.04(a) but who is not yet in receipt thereof, may elect, on or
after August 23, 1984 and prior to the commencement date of his
vested Retirement Allowance, to have the provisions of this
Section 4.06 apply to him.
4.07 Maximum Benefit Limitation
(a) The maximum annual Retirement Allowance attributable to
Company contributions payable to a Member under the Retirement
System in the form of a single life annuity, when added to any
pension attributable to contributions of the Company or an
Affiliated Company provided to the Member under any other
qualified defined benefit plan, shall be equal to the lesser of
(1) $90,000 or (2) the Members average annual remuneration during
the three consecutive calendar years of his membership in the
Retirement System affording the highest such average, or during
all of the years in which he was a Member of the Retirement
System if less than three years, subject to the following
adjustments:
(i) If the Member has not been a Member of the Retirement System
for at least 10 years, the maximum annual Retirement Allowance in
clause (1) above shall be multiplied by the ratio which the
number of years of his membership in the Retirement System bears
to 10. This adjustment shall be applied separately to the amount
of the Members Retirement Allowance resulting from each change in
the benefit structure of the Retirement System, with the number
of the years of membership in the Retirement System being
measured from the effective date of each such change.
(ii) If the Member has not completed 10 years of Continuous
Service, the maximum annual Retirement Allowance in clause (2)
above shall be multiplied by the ratio which the number of years
of his Continuous Service bears to 10.
(iii) If the Retirement Allowance begins before the Members
Social Security Retirement Age but on or after his 62nd birthday,
the maximum Retirement Allowance in clause (1) above shall be
reduced by 5/9 of one per cent for each of the first 36 months
plus 5/12 of one per cent for each additional month by which the
Member is younger than the Social Security Retirement Age at the
date his Retirement Allowance begins. If the Retirement
Allowance begins before the Members 62nd birthday, the maximum
Retirement Allowance in clause (1) above shall be of Equivalent
Actuarial Value to the maximum benefit payable to age 62 as
determined in accordance with the preceding sentence.
(iv) If the Retirement Allowance begins after the Members
Social Security Retirement Age, the maximum Retirement Allowance
in clause (1) above shall be of Equivalent Actuarial Value, based
on an interest rate of five per cent per year in lieu of the
interest rate otherwise used in the determination of Equivalent
Actuarial Value, to that maximum benefit payable at the Social
Security Retirement Age.
(v) If the Members Retirement Allowance is payable as a joint
and survivor Retirement Allowance with his spouse as the
Beneficiary, the modification of the Retirement Allowance for
that form of payment shall be made before the application of the
maximum limitation, and, as so modified, shall be subject to the
limitation.
(vi) As of January 1 of each calendar year commencing on or
after January 1, 1988, the dollar limitation as determined by the
Commissioner of Internal Revenue for that calendar year shall
become effective as the maximum permissible dollar amount of
Retirement Allowances payable under the Retirement System during
the Limitation Year ending within that calendar year, including
Retirement Allowances payable to Members who retired prior to
that Limitation Year, in lieu of the dollar amount in clause (1)
above.
(b) In the case of a Member who is also a member of a defined
contribution plan of the Company or an Affiliated Company, his
maximum benefit limitation shall not exceed an adjusted
limitation computed as follows:
(i) Determine the defined contribution fraction.
(ii) Subtract the result of (i) from one (1.0).
(iii) Multiply the dollar amount in clause (1) of paragraph (a)
above by 1.25.
(iv) Multiply the amount described in clause (2) of paragraph
(a) above by 1.4.
(v) Multiply the lesser of the result of (iii) or the result of
(iv) by the result of (ii) to determine the adjusted maximum
benefit limitation applicable to the Member.
(c) For purposes of this Section:(i) the defined contribution
fraction for a Member who is a member of one or more defined
contribution plans of the Company or an Affiliated Company shall
be a fraction the numerator of which is the sum of the following:
(A) the Companys and Affiliated Companys contributions credited
to the Members accounts under the defined contribution plan or
plans, (B) with respect to Limitation Years beginning before
1987, the lesser of the part of the Members contributions in
excess of 6 per cent of his compensation or one-half of his total
of contributions to such plan or plans, and with respect to of
Limitation Years beginning after 1986, all of the Members of
contributions to such plan or plans, and (C) any forfeitures
allocated to his accounts under such plan or plans, but reduced
by any amount permitted by regulations promulgated by the
Commissioner of Internal Revenue; and the denominator of which is
the lesser of the following amounts determined for each year of
the Members Continuous Service: (D) 1.25 multiplied by the
maximum dollar amount allowed by law for that year; or (E) 1.4
multiplied by 25% of the Members remuneration for that year. At
the direction of the Retirement Board, the portion of the
denominator of that fraction with respect to Limitation Years
ending before 1983 shall be computed as the denominator for the
Limitation Year ending in 1982, as determined under the law as
then in effect, multiplied by a fraction the numerator of which
is the lesser of: (F) $51,875, or (G) 1.4 multiplied by 25% of
the Members remuneration for the Limitation Year ending in 1981,
and the denominator of which is the lesser of: (H) $41,500, or
(I) 25% of the Members remuneration for that Limitation Year;
(ii) a defined contribution plan means a pension plan which
provides for an individual account for each member and for
benefits based solely upon the amount contributed to the members
account, and any income, expenses, gains and losses, and any
forfeitures of accounts of other members which may be allocated
to that members accounts, subject to (iii) below;
(iii) a defined benefit plan means any pension plan which is not
a defined contribution plan; however, in the case of a defined
benefit plan which provides a benefit which is based partly on
the balance of the separate account of a member, that plan shall
be treated as a defined contribution plan to the extent benefits
are based on the separate account of a member and as a defined
benefit plan with respect to the remaining portion of the
benefits under the plan; and (iv) the term remuneration with
respect to any Member shall mean the wages, salaries and other
amounts paid in respect of such Member by the Company or an
Affiliated Company for personal services actually rendered,
determined after any pre-tax contributions under a qualified cash
or deferred arrangement (as defined under Section 401(k) of the
Code and its applicable regulations) or under a cafeteria plan
(as defined under Section 125 of the Code and its applicable
regulations), and shall include, but not by way of limitation,
bonuses, overtime payments and commissions; and shall exclude
deferred compensation, stock options and other distributions
which receive special tax benefits under the Code.
(d) Notwithstanding the preceding paragraphs of this Section, a
Members annual Retirement Allowance payable under this Retirement
System, prior to any reduction required by operation of paragraph
(b) above, shall in no event be less than
(i) the benefit that the Member had accrued under the Retirement
System as of June 30, 1983, with no changes in the terms and
conditions of the Retirement System on or after July 1, 1982
taken into account in determining that benefit, or
(ii) the benefit that the Member had accrued under the
Retirement System as of June 30, 1987, with no changes in the
terms and conditions of the Retirement System after May 5, 1986
taken into account in determining that benefit.
4.08 Transfers and Employment with an Affiliated Company
(a) If an Employee (i) becomes employed by the Company in any
capacity other than as an Employee as defined in Article 1, or
(ii) becomes employed by an Affiliated Company, or (iii) becomes
a Leased Employee, he shall retain any Credited Service he has
under this Retirement System. Upon his later retirement or
termination of employment with the Company or Affiliated Company
(or upon benefit commencement in the case of a Leased Employee),
any benefits to which the Employee is entitled under the
Retirement System shall be determined under the Retirement System
provisions in effect on the date he ceases to be an Employee as
defined in Article 1, and only on the basis of his Credited
Service accrued while he was an Employee as defined in Article 1.
(b) Subject to the Break in Service provisions of Article 3, in
the case of a person who (i) was originally employed by the
Company in any capacity other than as an Employee as defined in
Article 1, or (ii) was originally employed by an Affiliated
Company, or (iii) was originally providing services to the
Company as a Leased Employee, and thereafter becomes an Employee,
upon his later retirement or termination of employment, the
benefits payable under the Retirement System shall be computed
under the Retirement System provisions in effect at that time,
and only on the basis of the Credited Service accrued while he is
an Employee as defined in Article 1.
4.09 Death Benefit
(a) Upon receipt of proof satisfactory to the Retirement Board
of the death of a Member in service prior to his Normal
Retirement Date, a death benefit shall be payable to his
Beneficiary in a lump sum. If no benefit is payable pursuant to
Section 4.06, the death benefit shall be equal to:
(i) the Members Accumulated Contributions, if any, plus,
(ii) 60% of the deceased Members average annual compensation
over the period of his Credited Service or, if the amount would
be greater, over the last three years of such service, provided
that the portion of the lump sum benefit computed under this
subparagraph (ii) shall not exceed $5,000. If a spouses
Retirement Allowance is payable pursuant to Section 4.06, the
death benefit shall be determined in accordance with subparagraph
(ii) above.
(b) Upon receipt of proof satisfactory to the Retirement Board
of the death of a Member who retired under Section 4.01, 4.02,
4.03 or 4.05, a death benefit of $3,000 shall be payable to his
Beneficiary in a lump sum.
(c) Upon receipt of proof satisfactory to the Retirement Board
of the death of a former Member who is eligible for but not in
receipt of a deferred vested Retirement Allowance, a death
benefit equal to the Members Accumulated Contributions, if any,
shall be payable to the Beneficiary in a lump sum, provided that
no spouses Retirement Allowance is payable pursuant to Section
4.06.
4.10 Benefit Adjustment for Members Who Withdrew Their
Contributions as of July 1, 1979 The Accrued Benefit of a Member
who withdrew his contributions and suspended his membership as of
July 1, 1979 pursuant to the provisions of Article 11 as in
effect prior to July 1, 1979 for the period up to the date of the
withdrawal is reduced by the Member-provided Allowance, computed
at July 1, 1979 on the basis of the Members mandatory
contributions and Code Section 411(c) as then in effect.
Article 5. Payment of Retirement Allowances
5.01 Automatic Form of Payment
(a) If the Member is not married on his Annuity Starting Date,
his Retirement Allowance shall be payable in monthly installments
ending with the last monthly payment before death, unless the
Member has elected an optional benefit as provided in Section
5.02. However, if the Member has retired for disability, the
provisions of Section 4.05 relating to continuance of disability
shall apply.
(b) If the Member is married on his Annuity Starting Date, and
if he has not elected an optional form of benefit as provided in
Section 5.02, the Retirement Allowance payable shall be in the
form of a Qualified Joint and Survivor Annuity of Equivalent
Actuarial Value to the Retirement Allowance otherwise payable,
providing for a reduced Retirement Allowance payable to the
Member during his life, and after his death providing that one-
half of that reduced Retirement Allowance will continue to be
paid during the life of, and to, the spouse to whom he was
married at his Annuity Starting Date.
(c) In any case, a lump sum payment of Equivalent Actuarial
Value shall be made in lieu of all benefits if the present value
of the Retirement Allowance payable to or on the behalf of the
Member, determined as of his date of death or termination of
employment, whichever is earlier, amounts to $3,500 or less. In
determining the amount of a lump sum payment payable under this
paragraph, the interest rate to be used shall be an interest rate
no greater than that which would be used by the Pension Benefit
Guaranty Corporation for valuing immediate or deferred annuities,
whichever is applicable, for single employer plans that terminate
on the first day of the third month prior to the date of
distribution. The lump sum payment shall be made as soon as
administratively practicable following the Members death or the
date of his termination of employment. In the event a Member is
not entitled to any Retirement Allowance upon his termination of
employment, he shall be deemed cashed-out under the provisions of
this paragraph (c) as of the date he terminated service.
Effective March 1, 1992, a lump sum payment shall be made with
respect to any Member who terminated employment prior to that
date if the present value of the Retirement Allowance payable in
the normal form at the Members Normal Retirement Date or Annuity
Starting Date, if later, as of March 1, 1992 amounts to $3,500 or
less.
(d) A married Member entitled to, but not in receipt of, a
Retirement Allowance as of August 23, 1984 who terminated service
on or after September 2, 1974 but before July 1, 1976 may elect,
prior to his Annuity Starting Date, to have his Retirement
Allowance payable in accordance with the provisions of paragraph
(b) above.
5.02 Optional Forms of Payment Any Member may, subject to the
provisions of Section 5.03, elect to convert the Retirement
Allowance otherwise payable to him into an optional benefit of
Equivalent Actuarial Value, as provided in one of the options
named below; provided, however, that if the Beneficiary is not
the Members spouse, the Retirement Allowance payable to the
Member under the option shall in no event be less than 51% of the
value of the Retirement Allowance payable under the option to the
Member and his Beneficiary.
Option 1. A Retirement Allowance payable for the Members life,
with no Retirement Allowance payable after his death.
Option 2. A reduced Retirement Allowance payable during the
Members life, and after his death payable during the life of,
and to, the Beneficiary named by him when he elected the option.
Option 3. A reduced Retirement Allowance payable during the
Members life, and after his death payable at one-half the rate
of his modified Retirement Allowance during the life of, and to,
the Beneficiary named by him when he elected the option.
Option 4. A lump sum payment of Equivalent Actuarial Value to
the Retirement Allowance and death benefit, if any, otherwise
payable to the Member provided, however, that the Member
demonstrates a state of health which is, in the opinion of a
physician mutually acceptable to the Member and the Retirement
Board, sufficient to qualify for the issuance of an individual
life insurance policy (other than on conversion) at standard
rates by John Hancock Mutual Life Insurance Company.
In determining the amount of a lump sum optional benefit
available under this Section, the interest rate to be used shall
in no event exceed (i) the rate that would be used by the Pension
Benefit Guaranty Corporation for valuing immediate or deferred
annuities, whichever is applicable, for single employer plans
that terminate on the first day of the Plan Year in which the
Annuity Starting Date occurs, provided that the lump sum payment
does not exceed $25,000 when determined using that rate, or (ii)
the rate equal to 120% of the interest rate specified in clause
(i) if the lump sum payment determined under clause (i) exceeds
$25,000. In no event however, shall the interest rate in clause
(ii) in the preceding sentence be used to provide a lump sum
payment of less than $25,000.
If a Member dies after Retirement Allowance payments have
commenced, any payments continuing on to his spouse or
Beneficiary shall be distributed at least as rapidly as under the
method of distribution being used as of the Members date of
death.
5.03 Election of Options
(a) A married Members election of any option shall only be
effective if Spousal Consent to the election is received by the
Retirement Board, unless: (i) the option provides for monthly
payments to his spouse for life after the Members death, in an
amount equal to at least 50% but not more than 100% of the
monthly amount payable under the option to the Member, and (ii)
the option is of Equivalent Actuarial Value to the Qualified
Joint and Survivor Annuity.
(b) The Company shall furnish to each Member, no less than 30
days and no more than 90 days, before his Annuity Starting Date a
written explanation in non-technical language of the terms and
conditions of the Retirement Allowance payable to the Member in
the normal and optional forms described in Sections 5.01 and
5.02. Such explanation shall include a general description of
the eligibility conditions for, and the material features and
relative values of, the optional forms of Retirement Allowances
under the Retirement System, any rights the Member may have to
defer commencement of his Retirement Allowance, the requirement
for Spousal Consent as provided in paragraph (a) above, and the
right of the Member to make, and to revoke, elections under
Section 5.02. An election under Section 5.02 shall be made on a
form provided by the Retirement Board and may be made during the
90-day period ending on the Members Annuity Starting Date, but
not prior to the date the Member receives the written explanation
described in this paragraph (b).
(c) An election of an option under Section 5.02 may be revoked
on a form provided by the Retirement Board, and subsequent
elections and revocations may be made at any time and from time
to time during the 90-day election period. An election of an
optional benefit shall be effective on the Members Annuity
Starting Date. A revocation of any election shall be effective
when the completed form is filed with the Retirement Board. If a
Member who has elected an optional benefit dies before the date
the election of the option becomes effective, the election shall
be revoked except as provided in Section 4.06(c). If the
Beneficiary designated under an option dies before the date the
election of the option becomes effective, the election shall be
revoked.
(d) Prior to July 1, 1991, a former Member eligible for a
deferred vested Retirement Allowance under Section 4.04 may, by
written notice to the Retirement Board prior to the date his
deferred vested Retirement Allowance commences, elect Option 1
under Section 5.02. Such election may be revoked prior to the
commencement of the deferred vested Retirement Allowance.
Effective July 1, 1991, a former Member eligible for a deferred
vested Retirement Allowance under Section 4.04 may, by written
notice to the Retirement Board prior to the date his deferred
vested Retirement Allowance commences, elect, or revoke any
election of, any optional form of benefit under Section 5.02.
5.04 Return of Accumulated Contributions Upon the cessation of
payments for any reason of the Retirement Allowance or other
benefit payable to any retired Member, former Member or surviving
spouse of a Member, the excess, if any, of the Members
Accumulated Contributions at retirement or prior death over the
total benefit payments made to him or on his behalf, as the case
may be, including the death benefit, if any, provided under
Section 4.09, shall be paid in one sum to the Members
Beneficiary. If the Beneficiary is not living, then the payment
shall be made in one lump sum to the beneficiary designated by
the person last in receipt of such Retirement Allowance or other
benefit, or if no such beneficiary is living, to the executor or
administrator of such person.
5.05 Commencement of Payments
(a) Except as otherwise provided in Article 4 or this Article 5,
payment of a Members Retirement Allowance shall begin as soon as
administratively practicable following the latest of (i) the
Members 65th birthday, (ii) the fifth anniversary of the date on
which he became a Member, or (iii) the date he terminates service
with the Company, (but not more than 60 days after the close of
the Plan Year in which the latest of (i), (ii) or (iii) occurs).
(b) Notwithstanding the preceding paragraph, in the case of a
Member who owns either (i) more than five per cent of the
outstanding stock of the Company or (ii) stock possessing more
than five per cent of the total combined voting power of all
stock of the Company, the Members Retirement Allowance shall
begin not later than the April 1 following the calendar year in
which he attains age 70-1/2. On and after July 1, 1989, payment
of any Members Retirement Allowance shall begin not later than
April 1 of the calendar year following the calendar year in which
he attains age 70-1/2, provided that such commencement in active
service shall not be required with respect to a Member who
attains age 70-1/2 prior to January 1, 1988 and who is not a five
per cent owner as described above. A Member who attained age 70-
1/2 in 1988, who had not retired as of January 1, 1989 and who is
not a five per cent owner shall not be required to commence
payment until April 1, 1990.
5.06 Distribution Limitation
Notwithstanding any other provision of this Article 5, all
distributions from this Retirement System shall conform to the
regulations issued under Section 401(a)(9) of the Code, including
the incidental death benefit provisions of Section 401(a)(9)(G)
of the Code. Further, such regulations shall override any plan
provision that is inconsistent with Section 401(a)(9) of the
Code.
Article 6. Contributions
6.01 Company ContributionsIt is the intention of the Company to
continue the Retirement System and make the contributions that
are necessary to maintain the Retirement System on a sound
actuarial basis and to meet the minimum funding standards
prescribed by law. However, subject to the provisions of Article
10, the Company may discontinue its contributions for any reason
at any time. Any forfeitures shall be used to reduce the
Companys contributions otherwise payable.
6.02 Return of Contributions
(a) The Companys contributions to the Retirement System are
conditioned upon their deductibility under Section 404 of the
Code. If all or part of the Companys deductions for
contributions to the Retirement System are disallowed by the
Internal Revenue Service, the portion of the contributions to
which that disallowance applies shall be returned to the Company
without interest, but reduced by any investment loss attributable
to those contributions. The return shall be made within one year
after the disallowance of deduction.
(b) The Company may recover without interest the amount of any
of its contributions to the Retirement System made on account of
a mistake in fact, reduced by any investment loss attributable to
such a contribution, if recovery is made within one year after
the date of such a contribution.
Article 7. Administration of Retirement System
7.01 Appointment of Retirement Board
The general administration of the Retirement System and the
responsibility for carrying out the provisions of the Retirement
System shall be placed in a Retirement Board of not less than
three persons appointed from time to time by the Board of
Directors to serve at the pleasure of the Board of Directors.
Any person appointed a member of the Retirement Board shall
signify his acceptance by filing written acceptance with the
Board of Directors and the Secretary of the Retirement Board.
Any member of the Retirement Board may resign by delivering his
written resignation to the Board of Directors and the Secretary
of the Retirement Board.
7.02 Duties of Retirement Board
The members of the Retirement Board shall elect a chairman from
their number and a secretary who may be but need not be one of
the members of the Retirement Board; may appoint from their
number such subcommittees with such powers as they shall
determine; may authorize one or more of their number or any agent
to execute or deliver any instrument or make any payment on their
behalf; may retain counsel, employ agents and provide for such
clerical, accounting, actuarial and consulting services as they
may require in carrying out the provisions of the Retirement
System; may direct the Trustee in the management of the assets of
the Retirement System; may appoint one or more investment
managers to direct the Trustee in the management of the assets of
the Retirement System; and may allocate among themselves or
delegate to other persons all or such portion of their duties
under the Retirement System, other than those granted to the
Trustee under the trust agreement adopted for use in implementing
the Retirement System, as they, in their sole discretion, shall
decide.
7.03 Meetings
The Retirement Board shall hold meetings upon such notice, at
such place or places, and at such time or times as it may from
time to time determine.
7.04 Action of Majority
Any act which the Retirement System authorizes or requires the
Retirement Board to do may be done by a majority of its members.
The action of that majority expressed from time to time by a vote
at a meeting or in writing without a meeting shall constitute the
action of the Retirement Board and shall have the same effect for
all purposes as if assented to by all members of the Retirement
Board at the time in office. No member of the Retirement Board
who is a Member shall participate in any deliberation concerning
solely his own rights and benefits under the Retirement System.
7.05 Compensation
No member of the Retirement Board who is a full-time employee of
the Company shall receive any compensation from the Retirement
System for his services as such. Any member of the Retirement
Board who is not a full-time employee may receive from the
Company or the Retirement System reasonable compensation for his
service as a member of the Retirement Board in such amount as may
be determined from time to time by the Board of Directors.
7.06 Establishment of Rules
Subject to the limitations of the Retirement System, the
Retirement Board from time to time shall establish rules for the
administration of the Retirement System and the transaction of
its business. The Retirement Board shall have discretionary
authority to interpret the Retirement System, reconcile
inconsistencies therein and supply omissions therefrom. The
Boards powers include, but are not limited to, determinations as
to an individuals eligibility for Retirement System
participation, the right to and amount of any benefit payable
under the Retirement System and the date on which any individual
ceases to be a Member. The determinations of the Retirement
Board shall be conclusive and final to the extent permitted by
applicable law.
7.07 Prudent Conduct
The members of the Retirement Board shall use that degree of
care, skill, prudence and diligence that a prudent man acting in
a like capacity and familiar with such matters would use in a
similar situation.
7.08 Actuary
As an aid to the Retirement Board in fixing the rate of
contributions payable to the Retirement System, and as regards
other aspects of the System requiring actuarial expertise, the
actuary designated by the Retirement Board shall make annual
actuarial valuations of the contingent assets and liabilities of
the Retirement System, and shall submit to the Retirement Board
the rates of contribution which he recommends for use and shall
supply other actuarial information on request.
7.09 Maintenance of Accounts
The Retirement Board shall cause to be maintained accounts
showing the fiscal transactions of the Retirement System and
shall cause to be kept in convenient form such data as may be
necessary for actuarial valuations of the Retirement System. The
Retirement Board shall prepare annually a report giving a brief
account of the operation of the Retirement System for the past
year. That report shall be submitted to the Board of Directors
and shall be filed in the office of the Retirement System, where
it shall be open to inspection by any Member.
7.10 Service in More than One Fiduciary Capacity
Any individual, entity or group of persons may serve in more than
one fiduciary capacity with respect to the Retirement System
and/or the funds of the Retirement System.
7.11 Limitation of Liability
Neither the Company, the members of the Board of Directors, the
members of the Retirement Board, nor any officer, employee or
agent of the Company shall incur any liability individually or
cause any other individuals or the Company to incur any liability
for any act (or failure to act) done (or omitted) in good faith
in relation to the Retirement System or the funds of the
Retirement System. However, this limitation shall not act to
relieve any such person from liability with respect to any
fiduciary responsibility, obligation or duty under Part 4, Title
I of ERISA.
7.12 Indemnification
Each member of the Retirement Board, each member of the Board of
Directors, and the officers, employees and agents of the Company
shall be indemnified against any and all liabilities arising by
reason of any act, or failure to act, in relation to the
Retirement System or the funds of the Retirement System,
including, without limitation, expenses reasonably incurred in
the defense of any claim relating to the Retirement System or the
funds of the Retirement System, and amounts paid in any
compromise or settlement relating to the Retirement System or the
funds of the Retirement System, except for any act (or failure to
act) done (or omitted) in bad faith. The foregoing
indemnification shall be limited to amounts not recoverable from
an insurer and shall be satisfied from the funds of the
Retirement System to the extent of those funds and to the extent
permitted under ERISA and other applicable law; otherwise, from
the assets of the Company.
7.13 Named Fiduciary
The Retirement Board shall be a named fiduciary within the
meaning of Section 402(a) of ERISA.
Article 8. Management of Funds
8.01 Trustee
All the funds of the Retirement System shall be held by a Trustee
appointed from time to time by the Board of Directors under a
trust instrument adopted, or as amended, by the Board of
Directors for use in providing the benefits of the Retirement
System and paying its expenses not paid directly by the Company.
The Company shall have no liability for the payment of benefits
under the Retirement System nor for the administration of the
funds paid over to the Trustee.
8.02 Exclusive Benefit Rule
Except as otherwise provided in this Retirement System document,
no part of the corpus or income of the funds of the Retirement
System shall be used for, or diverted to, purposes other than for
the exclusive benefit of Members and other persons entitled to
benefits under the Retirement System, before the satisfaction of
all liabilities with respect to them. No person shall have any
interest in or right to any part of the earnings of the funds of
the Retirement System, or any right in, or to, any part of the
assets held under the Retirement System, except as and to the
extent expressly provided in the Retirement System.
8.03 Appointment of Investment Manager
Pursuant to its authority to direct the management of assets of
the Retirement System, the Retirement Board shall have the
authority to appoint, remove or change, from time to time,
persons constituting Investment Managers, as defined in Section
3(38) of ERISA, and the Retirement Board may delegate to such
Investment Managers the exclusive authority to manage (including
the power to acquire and dispose of) all or such portion of the
funds of the System as the Retirement Board shall designate at
any time or from time to time.
Article 9. General Provisions
9.01 Nonalienation
Except as required by any applicable law, no benefit under the
Retirement System shall in any manner be anticipated, assigned or
alienated, and any attempt to do so shall be void. In the event
that the Retirement Board finds that any Member or other person
entitled to benefits under the Retirement System has become
bankrupt or that any attempt has been made to anticipate, assign
or alienate any of his Retirement System benefits, then, if the
Retirement Board so directs, such benefit shall cease and shall
be held or applied to or for such Member or other person entitled
to benefits, his spouse, children, parents or other blood
relatives of any of them. However, payment shall be made in
accordance with the provisions of any judgment, decree, or order
which: (a) creates for, or assigns to, a spouse, former spouse,
child or other dependent of a Member the right to receive all or
a portion of the Members benefits under the Retirement System
for the purpose of providing child support, alimony payments or
marital property rights to that spouse, child or dependent, (b)
is made pursuant to a State domestic relations law, (c) does not
require the Retirement System to provide any type of benefit, or
any option, not otherwise provided under the Retirement System,
and (d) otherwise meets the requirements of Section 206(d) of
ERISA, as amended, as a qualified domestic relations order, as
determined by the Retirement Board.If the present value of any
series of payments meeting the criteria set forth in clauses (a)
through (d) above amounts to $3,500 or less, a lump sum payment
of Equivalent Actuarial Value, determined in the manner described
in Section 5.01(d), shall be made in lieu of the series of
payments.
9.02 Conditions of Employment Not Affected by Retirement System
The establishment of the Retirement System shall not confer any
legal right upon any Employee or other person for a continuation
of employment, nor shall it interfere with the right of the
Company to discharge any Employee and to treat him without regard
to the effect which that treatment might have upon him as a
Member or potential Member of the Retirement System.
9.03 Facility of Payment
If the Retirement Board shall find that a Member or other person
entitled to a benefit is unable to care for his affairs because
of illness or accident or because he is a minor, the Retirement
Board may direct that any benefit due him, unless claim shall
have been made for the benefit by a duly appointed legal
representative, be paid to his spouse, a child, a parent or other
blood relative, or to a person with whom he resides. Any payment
so made shall, to the amount thereof, be a complete discharge of
the liabilities of the Retirement System for that benefit.
9.04 Information
Each Member or other person entitled to a benefit, before any
benefit shall be payable to him or on his account under the
Retirement System, shall file with the Retirement Board the
information that it shall require to establish his rights and
benefits under the Retirement System.
9.05 Top-Heavy Provisions
(a) The following definitions apply to the terms used in this
Section:(i) applicable determination date means the last day of
the preceding Plan Year; (ii) top-heavy ratio means the ratio
of (A) the present value of the cumulative Accrued Benefits
under the Retirement System for key employees to (B) the present
value of the cumulative Accrued Benefits under the Retirement
System for all key employees and non- key employees; provided,
however, that if an individual has not performed services for
the Company at any time during the five-year period ending on
the applicable determination date, any accrued benefit for such
individual (and the account of such individual) shall not be
taken into account; (iii) applicable valuation date means the
date within the preceding Plan Year as of which annual
Retirement System costs are or would be computed for minimum
funding purposes; (iv) key employee means an employee who is in
a category of employees determined in accordance with the
provisions of Section 416(i)(1) and (5) of the Code and any
regulations thereunder, and, where applicable, on the basis of
the Employees remuneration (defined as set forth in Section
4.07(c)(iv)) from the Company or an Affiliated Company; (v) non-
key employee means any employee who is not a key employee; (vi)
average remuneration means the average annual remuneration of a
Member for the five consecutive years of his Continuous Service
after December 31, 1983 during which he received the greatest
aggregate remuneration from the Company or an Affiliated Company,
excluding any remuneration for service after the last Plan Year
with respect to which the Retirement System is top-heavy; (vii)
required aggregation group means each other qualified plan of the
Company or an Affiliated Company (including plans that terminated
within the five-year period ending on the applicable
determination date) in which there are members who are key
employees or which enables the Retirement System to meet the
requirements of Section 401(a)(4) or 410 of the Code;
and(viii)permissive aggregation group means each plan in the
required aggregation group and one or more other qualified
plan(s) of the Company or an Affiliated Company, if the
resulting aggregation group continues to meet the requirements
of Sections 401(a)(4) and 410 of the Code.
(b) For purposes of this Section, the Retirement System shall be
top-heavy with respect to any Plan Year beginning on or after
January 1, 1984, if as of the applicable determination date the
top-heavy ratio exceeds 60 per cent. The top-heavy ratio shall
be determined as of the applicable valuation date in accordance
with Section 416(g)(3) and (4)(B) of the Code on the basis of the
1979 George B. Buck Mortality Table and an interest rate of five
per cent per year compounded annually. For purposes of
determining whether the Retirement System is top-heavy, the
present value of Accrued Benefits under the Retirement System
will be combined with the present value of accrued benefits or
account balances under each other plan in the required
aggregation group, and, in the Companys discretion, may be
combined with the present value of accrued benefits or account
balances under any other qualified plan(s) in the permissive
aggregation group. The accrued benefit of a non-key employee
under the Retirement System or any other defined benefit plan in
the aggregation group shall be (i) determined under the method,
if any, that uniformly applies for accrual purposes under all
plans maintained by the Company or an Affiliated Company, or (ii)
if there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule described in Section 411(b)(1)(C) of the Code.
(c) The following provisions shall be applicable to Members for
any Plan Year with respect to which the Retirement System is top-
heavy: (i) In lieu of the vesting requirements specified in
Section 4.04, any Member who has completed three years of
Continuous Service shall be fully vested in, and have a
nonforfeitable right to, his Accrued Benefit determined in
accordance with the provisions of Section 1.01 and subparagraph
(ii) below. (ii) The Accrued Benefit of a Member who is a non-
key employee attributable to Company contributions shall not be
less than two per cent of his average remuneration multiplied by
the number of years of his Continuous Service, not in excess of
10, during the Plan Years for which the Retirement System is top-
heavy. That minimum benefit shall be payable at a Members
Normal Retirement Date. If payments commence at a time other
than the Members Normal Retirement Date, the minimum Accrued
Benefit attributable to Company contributions shall be of
Equivalent Actuarial Value to that minimum benefit. (iii) With
respect to benefits accruing during any Plan Year ending before
June 30, 1989 for which the Retirement System is top-heavy,
remuneration taken into account under the Retirement System may
not exceed the first $200,000 of annual remuneration paid to an
Employee for services rendered to the Company, as reported on
Form W-2, or such larger amount as may be established from time
to time by the Commissioner of Internal Revenue. (iv) The
multiplier 1.25 in Sections 415(e)(2)(B)(i) and (3)(B)(i) of the
Code shall be reduced to 1.0, and the dollar amount $51,875 in
Section 415(e)(6)(B)(i)(I) of the Code shall be reduced to
$41,500.
(d) If the Retirement System is top-heavy with respect to a Plan
Year and ceases to be top-heavy for a subsequent Plan Year, the
following provisions shall be applicable:
(i) The Accrued Benefit derived from Company contributions in
any such subsequent Plan Year shall not be less than the minimum
Accrued Benefit provided in paragraph (c)(ii) above, computed as
of the end of the most recent Plan Year for which the Retirement
System was top-heavy. (ii) If a Member has completed three
years of Continuous Service on or before the last day of the
most recent Plan Year for which the Retirement System was top-
heavy, the vesting provision set forth in paragraph (c)(i) above
shall continue to be applicable.
9.06 Offsets
The Retirement Board shall, upon direction of the Board of
Directors uniformly applicable to all Employees similarly
situated, deduct from any Retirement Allowance under the
Retirement System an appropriate portion or all of any amount
paid or payable to or on account of any Member under the
provisions of any present or future law, pension or benefit
scheme of any sovereign government, or any of its political
subdivisions, on account of which contributions have been made or
premiums or taxes have been paid by the Company. The deductible
amount shall be determined by principles analogous to those
employed in determining the amount of permitted disparity in
similar circumstances under Section 401(l) of the Code. However,
benefits payable under Title II of the Social Security Act are
not to be used to reduce the benefits otherwise provided under
this Retirement System except as specifically provided in Article
4.
9.07 Construction
(a) The Retirement System shall be construed, regulated and
administered under ERISA as in effect from time to time, and the
laws of the State of Washington, except where ERISA controls.
(b) The masculine pronoun shall mean the feminine where
appropriate, and vice versa.
(c) The titles and headings of the Articles and Sections in this
document are for convenience only. In case of ambiguity or
inconsistency, the text rather than the titles or headings shall
control.
9.08 Prevention of Escheat
If the Retirement Board cannot ascertain the whereabouts of any
person to whom a payment is due under the Retirement System, or
identify a Members spouse or Beneficiary, within five years after
such benefit becomes payable or would become payable if such
person applied therefor, the Retirement Board shall, if it so
elects and upon receiving advice from counsel, direct that such
payment and all remaining payments otherwise due such person be
forfeited and the amount thereof applied to reduce the
contributions of the Company. Upon such forfeiture, the
Retirement System and the trust shall have no further liability
therefor except that, in the event such person or his Beneficiary
later notifies the Retirement Board of his whereabouts and
requests the payment or payments due him under the Retirement
System, the forfeited benefit shall be reinstated and the amounts
so applied shall be paid to him in accordance with the provisions
of the Retirement System.
Article 10. Amendment, Merger and Termination
10.01 Amendment of Retirement System
The Board of Directors reserves the right at any time and from
time to time, and retroactively if deemed necessary or
appropriate, to amend in whole or in part any or all of the
provisions of the Retirement System. However, no amendment shall
make it possible for any part of the funds of the Retirement
System to be used for, or diverted to, purposes other than for
the exclusive benefit of persons entitled to benefits under the
Retirement System, before the satisfaction of all liabilities
with respect to them. No amendment shall be made which has the
effect of decreasing the Accrued Benefit of any Member
attributable to Company contributions or of reducing the
nonforfeitable percentage of the Accrued Benefit of a Member
attributable to Company contributions below the nonforfeitable
percentage computed under the Retirement System as in effect on
the date on which the amendment is adopted or, if later, the date
on which the amendment becomes effective.
10.02 Merger, Consolidation or Transfer
The Retirement System may not be merged or consolidated with, and
its assets or liabilities may not be transferred to, any other
retirement system unless each person entitled to benefits under
the Retirement System would, if the resulting plan were then
terminated, receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before
the merger, consolidation, or transfer if the Retirement System
had then terminated.
10.03 Additional Participating Companies
(a) If any company is now or becomes a subsidiary or associated
company of the Company, the Board of Directors may include the
employees of that company in the membership of the Retirement
System upon appropriate action by that company necessary to adopt
the Retirement System. In that event, or if any persons become
Employees of the Company as the result of merger or consolidation
or as the result of acquisition of all or part of the assets or
business of another company, the Board of Directors shall
determine to what extent, if any, credit and benefits shall be
granted for previous service with the subsidiary, associated or
other company, but subject to the continued qualification of the
trust for the Retirement System as tax-exempt under the Code.
(b) Any subsidiary or associated company may terminate its
participation in the Retirement System upon appropriate action by
it, in which event the portion of the funds of the Retirement
System held on account of Members in the employ of that company
shall be determined by the Retirement Board in accordance with
the rules established by Section 414(l) of the Code and the
regulations thereunder and shall be segregated by the Trustee as
a separate trust, pursuant to certification to the Trustee by the
Retirement Board, continuing the Retirement System as a separate
retirement system for the employees of that company under which
the board of directors of that company shall succeed to all the
powers and duties of the Board of Directors, including the power
to terminate such separate retirement system and the power to
appoint a retirement board to act with respect to such separate
retirement system.
10.04 Termination of Retirement System
The Board of Directors may terminate the Retirement System for
any reason at any time. In case of a termination or partial
termination of the Retirement System, the rights of affected
Members to the benefits accrued under the Retirement System to
the date of the termination or partial termination shall be
nonforfeitable to the extent then funded. In the case of a
complete termination, (i) the funds of the Retirement System
shall be used to provide all accrued benefits under the
Retirement System as of the date of complete termination, except
as provided in Section 6.02, and (ii) any funds remaining, due to
erroneous actuarial computation, after satisfaction of all
liabilities of the Retirement System, shall be returned to the
Company. The Retirement Board shall arrange for the provision of
the accrued benefits of the System by purchase of an annuity
contract or contracts or otherwise as the Board of Directors may
determine, all in accordance with Section 4044 of ERISA, or
corresponding provision of any applicable law in effect at the
time.
10.05 Limitation Concerning Highly Compensated Employees or
Highly Compensated Former Employees
(a) The provisions of this paragraph shall apply to any Member
who is one of the 25 highly compensated employees or highly
compensated former employees of the Company or Affiliated Company
with the greatest compensation in any Plan Year. The amount of
the annual payments to any one of the Members to whom this
paragraph applies shall not be greater than an amount equal to
the payments that would be made on behalf of the Member under a
single life annuity that is of Equivalent Actuarial Value to the
sum of the Members Accrued Benefit and any other benefits of the
Member under the Retirement System.
(b) If, (i) after payment of the Retirement Allowance or other
benefits to any one of the Members to whom this Section applies,
the value of Retirement System assets equals or exceeds 110 per
cent of the value of current liabilities (as that term is defined
in Section 412(l)(7) of the Code) of the Retirement System, or
(ii) the value of the Accrued Benefit and other benefits of any
one of the Members to whom this Section applies is less than one
per cent of the value of current liabilities of the Retirement
System, the provisions of paragraph (a) above will not be
applicable to the payment of benefits to such Member.
(c) To the extent permitted by law, if any Member to whom
paragraph (a) applies elects to receive a lump sum payment in
lieu of his Retirement Allowance, and the provisions of paragraph
(b) above are not met with respect to such Member, the Member
shall be entitled to receive his benefit in full provided he
shall agree to repay to the Retirement System any portion of the
lump sum payment which would be restricted by operation of the
provisions of paragraph (a), and shall provide adequate security
to guarantee that repayment in accordance with rules established
by the Internal Revenue Service.
(d) In the event the Retirement System is terminated, the
restriction of this Section shall not be applicable if the
benefits payable to any highly compensated employee and any
highly compensated former employee is limited to a benefit that
is nondiscriminatory under Section 401(a)(4) of the Code.
(e) If it should subsequently be determined by statute, court
decision acquiesced in by the Commissioner of Internal Revenue,
or ruling by the Commissioner of Internal Revenue, that the
provisions of this Section are no longer necessary to qualify the
Retirement System this Section shall be ineffective without the
necessity of further amendment to the Retirement System.
TODD SHIPYARDS CORPORATION
RETIREMENT SYSTEM
Effective as of August 1, 1940
Amended and Restated as of July 1, 1989
And Further Amended as of July 1, 1991
DOC:P03421CL.WP5
TODD SHIPYARDS CORPORATION
RETIREMENT SYSTEM
TABLE OF CONTENTS Page
Article 1. Definitions 1
Article 2. Membership 10
2.01 Membership Requirements 10
2.02 Determination of Service 10
2.03 Events Affecting Membership 11
2.04 Membership upon Reemployment 11
2.05 Collective Bargaining 11
Article 3. Service 13
3.01 Continuous Service 13
3.02 Credited Service 15
3.03 Restoration of Retired Member or Other Former Employee to
Service 16
Article 4. Eligibility for and Amount of Benefits 21
4.01 Normal Retirement 21
4.02 Late Retirement 22
4.03 Early Retirement 24
4.04 Vesting 25
4.05 Disability Retirement 25
4.06 Spouses Retirement Allowance 28
4.07 Maximum Benefit Limitation 32
4.08 Transfers and Employment with an Affiliated Company 37
4.09 Death Benefit 38
4.10 Benefit Adjustment for Members Who Withdrew Their
Contributions as of July 1, 1979 39
Article 5. Payment of Retirement Allowances 40
5.01 Automatic Form of Payment 40
5.02 Optional Forms of Payment 41
5.03 Election of Options 43
5.04 Return of Accumulated Contributions 45
5.05 Commencement of Payments 45
5.06 Distribution Limitation 46
Article 6. Contributions 47
6.01 Company Contributions 47
6.02 Return of Contributions 47
Article 7. Administration of Retirement System 48
7.01 Appointment of Retirement Board 48
7.02 Duties of Retirement Board 48
7.03 Meetings 49
7.04 Action of Majority 49
7.05 Compensation 49
7.06 Establishment of Rules 50
7.07 Prudent Conduct 50
7.08 Actuary 50
7.09 Maintenance of Accounts 51
7.10 Service in More than One Fiduciary Capacity 51
7.11 Limitation of Liability 51
7.12 Indemnification 52
7.13 Named Fiduciary 52
Article 8. Management of Funds 53
8.01 Trustee 53
8.02 Exclusive Benefit Rule 53
8.03 Appointment of Investment Manager 53
Article 9. General Provisions 55
9.01 Nonalienation 55
9.02 Conditions of Employment Not Affected by Retirement System
56
9.03 Facility of Payment 56
9.04 Information 56
9.05 Top-Heavy Provisions 57
9.06 Offsets 60
9.07 Construction 61
9.08 Prevention of Escheat 61
Article 10. Amendment, Merger and Termination 63
10.01 Amendment of Retirement System 63
10.02 Merger, Consolidation or Transfer 63
10.03 Additional Participating Companies 64
10.04 Termination of Retirement System 65
10.05 Limitation Concerning Highly Compensated Employees or
Highly Compensated Former Employees 65
Appendix A Actuarial Tables and Factors
Appendix B Retirement Allowance Increases for Certain Former
Members and Certain Retired Members
Appendix C Special Early Retirement Allowance
Appendix D Special Early Retirement Offer - 1991
Appendix E Retiree Medical Benefits
INTRODUCTION
Effective August 1, 1940, Todd Shipyards Corporation established
the Todd Shipyards Corporation Retirement System (Retirement
System) for the benefit of such of its employees as are eligible
thereunder. The Retirement System was subsequently amended and
restated several times for compliance and plan design purposes.
This amendment and restatement of the Retirement System is
effective as of July 1, 1989. Except as otherwise specifically
provided herein, the rights and benefits of any Member who
retires or whose employment is terminated are determined in
accordance with the provisions of the Retirement System in
effect and operative at the time of such retirement or
termination.
Appendix A
ANNUITY VALUES AND PRESENT VALUE FACTORS
Any lump sum benefit provided under Option 4 of Section 5.02 and
Section 5.01(c), and the adjustment which might be required under
Section 4.02(b), are based on values interpolated from Tables 2
or 4, or as shown on Table 3 of
this Appendix A, as applicable. The interest rate used in these
cases is determined as follows:
Immediate annuities - 85% of the equivalent interest rate,
rounded to the nearest 1/10 of 1%, for retireds determined using
the Buck Forward Interest Rate Index for U.S. Government
Securities for the month that is three months before the members
date of retirement. In any event, the interest rates described
above shall not be greater than the interest rate that would be
used (three months prior to the date of distribution) by the
Pension Benefit Guaranty Corporation (PBGC) for determining the
present value of a lump sum distribution on plan termination.
Deferred annuities - The interest rate(s) that would be used
(three months prior to the date of distribution) by the PBGC for
determining the present value of a lump sum distribution on plan
termination.
Death benefit - The equivalent interest rate, rounded to the
nearest 1/10% of 1%, for retireds determined using the PBGC
Interest Rate for the month that is three months before the
members date of retirement.
Appendix B
Retirement Allowance Increases for Certain Vested Members and
Certain
Retired Members
Effective for Retirement Allowance payments made after July 1,
1979, the Retirement Allowance payable to or on behalf of every
Member who retired or who terminated employment with entitlement
to a deferred vested Retirement Allowance prior to July 1, 1978
shall be increased as follows:
(a) for a former Member or retired Member whose benefit
commenced prior to July 1, 1968, the increase shall be 41.2%;
(b) for a former Member or retired Member whose benefit
commenced after June 30, 1968 but before July 1, 1975, the
increase shall be 7.2% plus 0.4% for each month between the
Members benefit commencement date and July 1, 1975; and
(c) for a former Member or retired Member whose benefit
commenced after June 30, 1975 but before July 1, 1978, the
increase shall be 0.2% for each month between the Members
benefit commencement date and July 1, 1978.
For purposes of this Appendix, the benefit commencement date
hereinabove mentioned shall be the earliest date under the
Retirement System that the Retirement Allowance of the former
Member or retired Member could have first commenced following
retirement or termination of employment if such Member had made
any permissible election to have his Retirement Allowance
commence. In the case of a Member who had reached age 65 and was
in active service on July 1, 1978, the earliest date shall be his
Normal Retirement Date. In determining the percentage increase
of the Retirement Allowance paid or payable to any spouse or
Beneficiary of a former Member or retired Member, the benefit
commencement date shall be that of the former Member or retired
Member in respect of which such spouse or Beneficiary will be
receiving benefits.
Appendix C
Special Early Retirement Allowance
(a) (i) If, on July 15, 1987, a Member was an Employee of the
Company or an Affiliated Company and, as of such date, was
eligible for a normal Retirement Allowance under Section 4.01 or
an early Retirement Allowance under Section 4.03, and if such
Member notified the Retirement Board in writing, no earlier than
July 15, 1987 and no later than September 15, 1987, of his
election to retire as a special early retiree under this
Appendix C as of his special early retirement date (as
hereinafter defined), then a special early Retirement Allowance
was payable to such Member. (ii) A Member who met the
requirements set forth in (a)(i) above and who, prior to July
15, 1987, notified the Retirement Board in writing of his
election to retire on a normal or early Retirement Allowance as
of August 1, 1987 or September 1, 1987 was also considered to be
a special early retiree. (iii) The special early retirement date
meant October 1, 1987, except that the special early retirement
date of a special early retiree described in (a)(ii) above was
August 1, 1987 or September 1, 1987, as elected by such special
early retiree.
(b) The special early Retirement Allowance was payable to a
special early retiree who (i) timely filed his notification of
intention to retire with the Retirement Board, (ii) met the
eligibility requirements described in
(a)(i) above and (iii) either terminated employment with the
Company and all Affiliated Companies for any reason other than
death or disability on his special early retirement date, or
terminated employment with the Company and all Affiliated
Companies due to death or disability on or after the date of
filing of the notification, but before his special early
retirement date.
(c) The basic special early Retirement Allowance was a benefit
commencing on the special early retirement date equal to 110% of
the normal or early Retirement Allowance calculated in accordance
with the terms of the Plan in effect at such time, provided that
the increase in such Retirement Allowance, prior to the
adjustment of the normal form of benefit for a married Member or
an optional form of benefit for any Member, could not be less
than $25 nor more than $250.
(d) In addition to the basic special early Retirement Allowance
described in (c) above, a special early retiree who had not yet
reached age 62 on his special early retirement date received a
special supplemental Retirement Allowance of $400, commencing on
the date the basic special early Retirement Allowance commenced
and ending with the last payment preceding the earlier of the
death of the special early retiree or the last day of the month
in which the special early retiree reached age 62. The special
supplemental Retirement Allowance was payable only to the special
early retiree and only as a temporary life annuity payable
monthly and not subject to any of the options and elections
applicable to other Retirement Allowances provided under this
Retirement System.
Appendix D
Special Early Retirement Offer - 1991
(a) A special early Retirement Allowance shall be payable to a
special early retiree (as hereinafter defined) who qualifies
therefor by reason of (i) his timely filing of a notification of
his intention to retire as a special early retiree as hereinafter
provided, (ii) his satisfying the eligibility requirements
hereinafter described, and (iii) either (A) termination of his
employment with the Company and all Affiliated Companies for any
reason other than his death or disability on his special early
retirement date (as hereinafter defined) or (B) termination of
his employment with the Company and all Affiliated Companies by
reason of his death or disability on or after the date of the
filing of the notification described in (i) above and prior to
his special early retirement date, all in accordance with this
Appendix D. The special early Retirement Allowance shall be paid
in addition to the regular Retirement Allowance payable under
Article 4.
(b) For the purposes of this Appendix D:
(1) Special early retiree means a Member who
(i) on November 1, 1991 is an Employee of the Company or an
Affiliated Company with five years of Continuous Service and,
as of December 30, 1991, would be eligible for normal, late or
early retirement under Section 4.01(a), 4.02(a) or Section
4.03(a) and
(ii) has notified the Retirement Board in writing, not earlier
than November 1, 1991 and not later than December 30, 1991, of
his election to retire as a special early retiree on his special
early retirement date and to cease to perform any services as an
Employee of the Company or any Affiliated Company on such date.
A Member who meets the conditions set forth in (i) above and
who, prior to November 1, 1991, had notified the Retirement
Board in writing of his election to retire on a normal, late or
early Retirement Allowance as of November 1, 1991 or December 1,
1991 shall also be treated as a special early retiree under this
Appendix D.
(2) Special early retirement date means January 1, 1992, except
in the case of a special early retiree described in the final
sentence of Section (b)(1) above, in which case the special early
retirement date shall be the effective date of retirement
(November 1, 1991 or December 1, 1991, as the case may be)
elected by such special early retiree.
(c) The basic special early Retirement Allowance payable to a
special early retiree or on his behalf shall be a benefit
commencing on his special early retirement date equal to 40% of
his Average Final Compensation as defined in Section 1.05, for a
period certain of seven years (1/12 of the annual amount for a
period certain of 84 consecutive months) commencing on January 1,
1992. If the special early retiree is married on the date the
special early Retirement Allowance commences, the special early
retiree shall receive a Qualified Joint and Survivor Annuity of
Equivalent Actuarial Value to the special early Retirement
Allowance otherwise payable, unless the special early retiree
elects, with Spousal Consent, to receive the special early
Retirement Allowance over a period certain of seven years.
If the special early retiree is not married on the date the
special early Retirement Allowance commences, the special early
Retirement Allowance shall be paid in monthly installments of
Equivalent Actuarial Value to the special early Retirement
Allowance otherwise payable for the life of the special early
retiree, unless the special early retiree elects to receive the
special early Retirement Allowance over a period of seven years.
Notwithstanding any provision of this Section (c) to the
contrary, a lump sum payment of Equivalent Actuarial Value shall
be paid in lieu of the special early Retirement Allowance
otherwise payable if the special early retiree effectively elects
Option 4 under Section 5.02 with respect to his regular
Retirement Allowance.
(d) In addition to the basic special early Retirement Allowance
described in Section (c) above, a special early retiree who has
not yet attained age 65 on his special early retirement date
shall receive a special supplemental allowance in a monthly
amount of $300, commencing on the date the basic special early
Retirement Allowance commences and ending with the last payment
preceding the earlier of the death of the special early retiree
or the last day of the month in which the special early retiree
attains age 65. This special supplemental allowance shall be
payable only to the special early retiree and only as a temporary
life annuity payable monthly and shall not be subject to any of
the options and elections applicable to other Retirement
Allowances provided under this Retirement System.
Appendix E Retiree Medical Benefits
(a) Provision of Medical Benefits. The provisions of this
Appendix E of the Retirement System provide for the payment of
medical benefits to eligible former employees of the Company and
to their spouses and dependents. The Board of Directors has the
right to discontinue providing such benefits at any time, as well
as the right to change any aspect of the arrangements for their
provision, including without limitation the class of eligible
retired former employees and the classes of eligible spouses and
dependents of retired former employees, the types of benefits
covered, the amounts paid for payment or reimbursement of retired
former employees, spouses and dependents for medical services,
the identity of any insurer involved, the means by which the
medical benefits are provided and the institution of a
requirement for contributions by covered retired former employees
or covered spouses or dependents of retired former employees. In
the event of any such discontinuance or change, payments or
reimbursement of covered expenses incurred prior to the effective
date of the discontinuance or change would not be adversely
affected.
(b) Eligibility for Medical Benefits. (i) A former employee of
the Company who has received a distribution from the Retirement
System, is receiving a distribution from the Retirement System
or who has retired and is entitled to receive a distribution
from the Retirement System (retired former employee) will be
eligible for reimbursement or payment of covered medical
expenses, as hereinafter described, provided he or she (1) was a
retired former employee of the Company on April 1, 1990 and was
then covered (whether or not since deceased) under John Hancock
Mutual Life Insurance Company Group Policy No. 1321B GTC-300 with
Exhibits 5 and 6, as retroactively made effective as of such
date, or the 1989-1990 Group Health Cooperative of Puget Sound
Agreement with Todd Shipyards Corporation, or the 1989-1990
Kaiser Permanente Kaiser Foundation Health Plan, Inc. Southern
California Group Medical and Hospital Agreement with Todd
Shipyards Corporation or the 1990 Kaiser Health Plan Inc.
Northern California Region Group Service Agreement with Todd
Shipyards Corporation applicable to retired employees, their
spouses and dependents (which, together with all amendments
thereto, substitutes therefor and continuations thereof are
herein referred to as the applicable Policy) for hospital,
surgical, medical and major medical expense of the retired
former employee and his or her spouse and dependents (if any);
(2) is not eligible as a spouse or dependent or otherwise for
coverage under any health or medical benefit plan for employees
of the Company; and (3) continues to satisfy eligibility
requirements applicable to retired employees as set forth in the
provisions of the applicable Policy, which are attached hereto
and incorporated herein by reference and may be changed in
accordance with the terms of the applicable Policy.(ii) The
spouses and dependents of such former employees and any spouses
and dependents of retired former employees, which spouses and
dependents were covered under the applicable Policy on April 1,
1991 are also eligible for reimbursement or payment of covered
medical expenses to the extent, if any, provided in the
applicable Policy, a copy of which is attached hereto and
incorporated herein by reference and may be changed in
accordance with the terms of the Policy.
Coverage shall terminate in accordance with the provisions of
the applicable Policy relating to termination of coverage, which
are attached hereto and incorporated herein by reference and may
be changed in accordance with the terms of the applicable
Policy.
(c) Contributions to the Medical Benefits Account.
(i) Members shall not contribute to the Medical Benefits Account
described in paragraph (c)(ii) below but may be required to
contribute under the applicable Policy through which such
coverage is provided in such amounts as shall be determined from
time to time by the Board of Directors. The Company shall from
time to time contribute to such Medical Benefits Account such
amounts as the Retirement Board shall determine, but not in
excess of the actuarially determined total cost of providing the
medical benefits described in paragraph (d) below taking into
account any Member contributions and any transfers of excess
pension assets to the Medical Benefits Account. Amounts
contributed shall be reasonable and ascertainable as provided in
paragraphs (f), (g) and (j). Anything in this Retirement System
to the contrary notwithstanding, the aggregate amount of the
actual contributions to the Medical Benefits Account described
in paragraph (c)(ii) may not exceed 25% of the total actual
contributions to the Retirement System for all benefits under
the Retirement System (exclusive of contributions that may be
made to fund past service credits) on and after July 1, 1991.
In the event that a Members interest in the Medical Benefits
Account is forfeited prior to termination of the Retirement
System, an amount equal to the amount of the forfeiture must be
applied, as soon as possible, to reduce any Company
contributions to fund the Medical Benefits Account.
(ii) There is hereby established a separate account to provide
the medical benefits payable pursuant to this Appendix E, called
the Medical Benefits Account. All contributions and transfers
to the Medical Benefits Account shall be held in trust by a
trustee for the payment of medical benefits hereunder. All such
contributions and transfers shall be specifically designated to
provide for the payment of medical benefits. If such
contributions or transfers are held by a trustee or trustees
holding funds for the payment of retirement benefits under the
Retirement System, such contributions and transfers (although
held in a separate account as provided above) need not be
segregated or separately invested by the trustee. A portion of
the earnings on trust assets for the payment of both retirement
and medical benefits that have been jointly invested shall be
allocated to the Medical Benefits Account in an equitable and
reasonable manner.
Prior to the satisfaction of all liabilities for medical benefits
under this Appendix E of the Retirement System, no part of the
corpus or income in the Medical Benefits Account shall be used
for, or diverted to, any purpose other than the providing of such
benefits. Reimbursement of the Company for payments of premiums
under the applicable Policy for the provision of medical benefits
thereunder for eligible retired former employees and their
eligible spouses or dependents and reimbursement of the Company
for direct payment or reimbursement to eligible retired former
employees and their eligible spouses and dependents of covered
medical expenses is considered a means of providing such benefits
and is specifically permitted.
In the event that any retired former employee eligible to receive
medical benefits is or was a key employee within the meaning of
Section 416(i) of the Code (determined, where applicable, on the
basis of the employees compensation from the Company as reported
on Form W-2 for the calendar year ending within the Plan Year) at
any time during the Plan Year or any preceding Plan Year during
which contributions were made on behalf of such employee, the
trustee shall establish and maintain a separate account for
medical benefits payable hereunder to such retired former
employee and his or her spouse and dependents and any such
benefits for such retired former employee or such retired former
employees spouse or dependents (to the extent attributable to
Plan Years for which the covered retired former employee is
treated as such a key employee) shall be payable only from such
separate account. No transfers to the Medical Benefits Account
shall be allocated to any such separate account.
(d) Medical Benefits Covered by the System. Medical benefits
under the Retirement System shall be provided through the
applicable Policy by the payment of premiums thereunder or
through reimbursement to the Company of direct payment by the
Company or reimbursement by the Company to eligible retired
former employees and their eligible spouses and dependents of
medical expenses in accordance with the terms and conditions, and
subject to the limitations, set forth in the provisions of the
applicable Policy attached hereto and incorporated herein by
reference and which may be changed in accordance with the terms
of the Policy. Medical benefits shall be provided under the
Retirement System only to the extent there are sufficient funds
to provide such benefits available in the Medical Benefits
Account described in paragraph (c)(ii). Medical benefits
provided under the Retirement System shall be deemed paid first
from assets transferred pursuant to paragraphs (f) and (g) and
income attributable to those assets. In no event shall any
benefits be paid under the Retirement System to the extent the
same benefits are payable under any other plan, program or
arrangement of the Company. The Retirement Board may establish
claims procedures and administrative rules relating to the
provision of medical benefits hereunder to the extent that the
claims procedures and administrative rules under the applicable
Policy do not apply.
(e) Amendment and Termination of Medical Benefits. The Board of
Directors may amend, suspend, terminate, withdraw, or modify
Appendix E of the Retirement System in whole or in part at any
time subject to the provisions of the applicable Policy relating
to benefits following termination or conversion rights. Upon the
satisfaction of all Retirement System liabilities for medical
benefits under the Retirement System, all amounts held in the
Medical Benefits Account described in paragraph (c)(ii) of the
Retirement System will be returned to the Company.
Medical Benefits Account Transactions
(f) Amounts Transferred to Medical Benefits Account for
Qualified Current Retiree Health Liabilities for Taxable Year
Ended on March 31, 1991.
(i) Not later than the due date (including extensions) for
filing the Companys federal income tax return for the Companys
taxable year ended on March 31, 1991, there shall be transferred
from Retirement System assets to the Medical Benefit Account
established pursuant to paragraph (c)(ii) an amount equal to the
lesser of (A) an amount designated by the chief financial officer
of Todd Shipyards Corporation or his delegate not in excess of
the expenditures of the Company for qualified current retiree
health liabilities for the Companys taxable year ended on March
31, 1991 and (B) the excess pension assets of the Retirement
System determined as of June 30, 1991, which is the valuation
date for the Retirement System next preceding the date of such
transfer.
(ii) Promptly after the later of (A) the date of such transfer
and (B) the date of issuance of a determination letter by the
Internal Revenue Service, finding that the addition of Appendix E
to the Retirement System and any related Retirement System
amendments (modified as may be necessary or desirable in order to
secure the issuance of such determination letter) does not
adversely affect the tax-exempt status of the Retirement System
or the related trust, the Retirement System shall pay to the
Company in cash from the Medical Benefits Account an amount equal
to the lesser of (A) the amount held in the Medical Benefits
Account at the time of payment and (B) the total amount of
expenditures of the Company for qualified current retiree health
liabilities for the Companys taxable year ended March 31, 1991,
as certified by the chief financial officer of Todd Shipyards
Corporation.
(g) Amounts Transferred to Medical Benefits Account for
Qualified Current Retiree Health Liabilities for Subsequent
Taxable Years.
(i) Not later than the respective transfer dates specified in
the following table, there shall be transferred from Retirement
System assets to the Medical Benefits Account an amount equal to
the lesser of (A) an amount designated by the chief financial
officer of Todd Shipyards Corporation or his delegate and
certified by the designated officer to be not in excess of the
reasonably estimated expenditures of the Company for qualified
current retiree health liabilities for the Companys taxable year
ended on the respective taxable year closing dates specified in
the following table and (B) the excess pension assets of the
Retirement System determined as of the applicable Retirement
System valuation date next preceding the date of the transfer, as
specified in the following table:
TRANSFER DATE TAXABLE YEAR CLOSING DATE APPLICABLE SYSTEM
VALUATION DATE
March 29, 1992 March 29, 1992 June 30, 1992
March 28, 1993March 28, 1993June 30, 1993
April 3, 1994April 3, 1994June 30, 1994
April 2, 1995April 2, 1995June 30, 1995
March 31, 1996March 31, 1996June 30, 1996
For purposes of this Appendix E, the taxable year closing date
shall be the Sunday closest to March 31.
(ii) After the later of (A) the date of each transfer described
in subparagraph (i) and (B) the date of issuance of an Internal
Revenue Service determination letter finding that the addition of
Appendix E to the Retirement System and any related Retirement
System amendments (modified as may be necessary or desirable in
order to secure the issuance of such determination letter) does
not adversely affect the tax-exempt status of the Retirement
System or the related trust, and on or prior to the taxable year
closing date next following or coinciding with the date of the
transfer, the Retirement System shall pay to the Company in cash
from the Medical Benefits Account an amount designated by the
chief financial officer of Todd Shipyards Corporation or his
delegate and certified by the designating officer to be not in
excess of the expenditures of the Company for qualified retiree
health liabilities for the Companys taxable year during which the
transfer was made.
(h) Restrictions on Use of Amounts Transferred to Medical
Benefits Account.
(i) Amounts transferred to the Medical Benefits Account pursuant
to paragraph (f) (and any income thereon) shall be used only to
pay qualified current retiree health benefits (other than
liabilities of key employees (within the meaning of Section
416(i) of the Code determined, where applicable, on the basis of
the employees compensation from the Company as reported on Form W-
2 for the calendar year ending within the applicable Plan Year)
with respect to the Plan Year ending on June 30, 1990) for the
taxable year of the Company ended on March 31, 1991. Amounts
transferred to the Medical Benefits Account pursuant to paragraph
(g) (and any income thereon) shall be used only to pay qualified
current retiree health benefits (other than liabilities of key
employees (within the meaning of Section 416(i) of the Code
determined, where applicable, on the basis of the employees
compensation from the Company as reported on Form W-2 for the
calendar year ending with or within the applicable Plan Year)
with respect to the Plan Year ending on the June 30 next
preceding the respective taxable year closing dates specified in
the table forming part of paragraph (g)(i).
(ii) Any amounts transferred to the Medical Benefits Account
pursuant to paragraph (f) or (g) (and any income thereon) which
are not used as provided in subparagraph (i) shall be transferred
out of the Medical Benefits Account to the Retirement System.
(i) Vesting of Accrued Pension Benefits.
(i) The accrued pension benefits of each Member or Beneficiary
under the Retirement System shall become nonforfeitable in the
same manner which would be required if the Retirement System had
terminated immediately before each transfer made to the Medical
Benefits Account pursuant to paragraph (f) or (g).
(ii) With respect to the transfer described in paragraph (f),
the accrued pension benefits under the Retirement System of any
Member who separated from the service of the Company during the
period beginning on April 1, 1990 and ending on December 15, 1991
and the accrued pension benefits of any beneficiary of such a
Member shall also be recomputed so as to become nonforfeitable in
the same manner which would be required if the Retirement System
had terminated immediately before such separation from service.
With respect to a transfer pursuant to paragraph (g), the accrued
pension benefits under the Retirement System of a Member who
separated from the service of the Company during the one-year
period ending on the date of the transfer and the accrued
benefits of any beneficiary of such a Member shall become
nonforfeitable in the same manner which would be required if the
Retirement System had terminated immediately before such
separation.
(j) Minimum Employer Cost Requirements. The applicable employer
cost for each taxable year of the Company during the cost
maintenance period shall not be less than the applicable employer
cost for each of the two taxable years of the Company immediately
preceding the taxable year of the Company in which a transfer
described in paragraph (f) or (g) is made.
For purposes of this paragraph (j), the term applicable employer
cost means, with respect to any taxable year of the Company, the
amount (determined separately (i) for individuals eligible for
benefits under Title XVIII of the Social Security Act at any
time during the taxable year and (ii) with respect to individuals
not so eligible) by dividing(A) the qualified current retiree
health liabilities of the Company for such taxable year
determined (1) without regard to any reduction for amounts
previously contributed to a health benefits account or welfare
benefit fund (as defined in Section 419(e) of the Code) to pay
for the qualified current retiree health liabilities, and (2)
in the case of a taxable year of the Company in which no
transfer described in paragraph (f) or (g) occurred, in the same
manner as if there had been such a transfer at the end of the
taxable year, by
(B) the number of individuals to whom coverage for applicable
health benefits was provided during such taxable year.
For purposes of this paragraph (j):
(1) With respect to the transfer described in paragraph (f),
the term cost maintenance period means the period of five
taxable years of the Company beginning with the taxable year of
the Company ended on March 31, 1991; and (2) With respect to
each transfer described in paragraph (g), the term cost
maintenance period means the five taxable years of the Company
beginning with the taxable year of the Company in which the
transfer occurred. If a taxable year of the Company is in two
or more overlapping cost maintenance periods the applicable
employer cost to be taken into account for purposes of this
paragraph (j) shall be the highest applicable employer cost
required to be provided for such taxable year.
(k) Definitions of Appendix E Terms. (i) For purposes of
Appendix E, the term qualified current retiree health liabilities
means, with respect to any taxable year of the Company, the
aggregate amounts (including administrative expenses) which would
have been allowable as a deduction to the Company for such
taxable year with respect to applicable health benefits provided
during such taxable year if: (A) such benefits were provided
directly by the Company, and(B) the Company used the cash
receipts and disbursements method of accounting. A benefit will
be deemed provided for purposes of the foregoing definition (1)
by payment or reimbursement by the Company to eligible retired
former employees and their eligible spouses and dependents of
covered medical expenses or (2) by payment by the Company of
premiums to provide coverage under the Policy. Such benefits
will be deemed provided at the time when such benefits would be
includible in the gross income of the eligible retired former
employees or spouses or dependents if provided directly by the
Company (or would be so includible but for any provision of the
Code excluding such benefit from gross income).
(ii) For purposes of Appendix E, the term applicable health
benefits means health benefits or coverage provided to (A)
retired former employees who, immediately before each transfer
described in paragraphs (f) and (g), are entitled to receive such
benefits upon retirement and (B) their spouses and dependents.
(iii) For purposes of Appendix E, the term excess pension assets
means (A) the amount determined under Section 412(c)(7)(A)(ii)
of the Code (i.e., the lesser of (1) the fair market value of
the Retirement Systems assets or (2) the value of such assets
determined under Section 412(c)(2) of the Code) over (B) the
greater of (1) the amount determined under Section
412(c)(7)(A)(i) of the Code (i.e., (I) the lesser of (I) 150% of
current liability or (II) the accrued liability (including normal
cost) under the Retirement System (determined under the entry age
normal funding method if such accrued liability cannot be
directly calculated under the funding method used for the
Retirement System) or (2) 125% of current liability (as defined
in Section 412(c)(7)(B) of the Code (i.e., the meaning of the
term current liability under Section 412(1)(7) of the Code
determined without respect to subparagraph (D) thereof)).
<PAGE>
ADDENDUM A
PROPOSED AMENDMENTS TO THE
TODD SHIPYARDS CORPORATION RETIREMENT SYSTEM
1. Section 1.08 is amended by adding the following sentence at
the end thereof:
For purposes of Sections 3.03(c)(i) and 3.03(d)(i), a Break in
Service shall mean any Plan Year in which a Member does not
complete 500 Hours of Service.
2. The fifth sentence of Section 1.11 is amended by deleting it
in its entirety and substituting the following in its stead:
In determining the Compensation of a Member who is either (i) a
five per cent owner (as defined in Code Section 416(i)(1)(B)(i))
or (ii) one of the ten most highly compensated employees of the
Company, the Compensation of all persons in the Members family
shall be aggregated, except in applying those rules, the term
family shall include only the spouse of the Member and any lineal
descendants of the Member who have not attained age 19 before the
close of the year.
3. Section 1.20 is amended by deleting it in its entirety and
substituting the following:
1.20 Leased Employee means any person who is not an employee and
who provides services to the Company if -
(A) such services are provided pursuant to an agreement between
the Company and any other person,
(B) such person has performed such services for the Company on
a substantially full-time basis for a period of at least 1 year,
and
(C) such services are of a type historically performed, in the
business field of the Company, by employees.
4. Section 4.01(b) is amended by adding the following
subparagraph (4) at the conclusion thereof:
(4) Except as otherwise provided in Code Section 401(I) and
applicable regulations thereunder, the maximum cumulative
permitted disparity for purposes of computing a Members Normal
Retirement Allowance shall not exceed 35.
5. Section 4.07(c)(iv) is amended by deleting it in its
entirety and substituting the following in its stead:
(iv) the term remuneration with respect to any Member shall
mean the wages, salaries and other amounts paid in respect of
that Member by the Employer or an Affiliated Employer for
personal services actually rendered, determined after any
reduction of Compensation pursuant to Section 3.01 or pursuant to
a cafeteria plan as described in Section 125 of the Code,
including (but not limited to) bonuses, overtime payments and
commissions, compensation based on a percentage of profits,
fringe benefits and reimbursements or other expense allowances
under a non-accountable plan (as described in Treas. Reg. 1.62-
2(a)), but excluding deferred compensation, stock options and
other distributions which receive special tax benefits under the
Code.
6. Section 9.5(a)(iv) is amended by deleting the phrase (1) and
(5) after the reference to Section 416(i).
7. Section 9.05(c)(ii) is amended by deleting the first
sentence and substituting the following in its stead:
The Accrued Benefit attributable to Company contributions of a
Member who is a non-key employee and who completes 1,000 Hours of
Service during a Plan Year, regardless of whether the Member is
employed on any specific date during the Plan year, shall not be
less than two per cent of his average remuneration multiplied by
the number of his years of Continuous Service, not in excess of
10, during the Plan Years for which the Retirement System is top-
heavy.
8. Section 9.05(c)(ii) is further amended by adding the
following sentence at the conclusion thereof:
The minimum benefit provided hereunder shall be provided to all
Members even if they participate in another defined contribution
plan maintained by the Company.
<PAGE>
Amendment No. 1
Appendix F
Special Early Retirement Offer - 1993
(a) A special early Retirement Allowance shall be payable to a
special early retiree (as hereinafter defined) who qualified
therefor by reason of (i) his timely filing of a notification of
his intention to retire as a special early retiree as hereinafter
provided, (ii) his satisfying the eligibility requirements
hereinafter described, and (iii) either (A) termination of his
employment with the Company and all Affiliated Companies for any
reason other than his death or disability on his special early
retirement date (as hereinafter defined) or (B) termination of
his employment with the Company and all Affiliated Companies by
reason of his death or disability on or after the date of the
filing of the notification described in (i) above and prior to
his special early retirement date, all in accordance with this
Appendix F. The special early Retirement Allowance shall be paid
in addition to the regular Retirement Allowance payable under
Article 4.
(b) For the purposes of this Appendix F:
(1) Special early retiree means a Member who
(I) on March 1, 1993 is a full time active administrative
Employee of the Company working at Seattle, Washington, for the
Company or any Affiliated Company, with at least ten years of
Continuous Service and at least five years of Credited Service
and, as of April 30, 1993, will have attained the age of 50 years
or older, and thereby considered eligible for normal, late or
early retirement under Section 4.01(a), 4.02(a) or 4.03(a) and
(ii) has notified the Retirement Board in writing, not earlier
than March 1, 1993 and not later than April 30, 1993 of his
election to retire as a special early retiree on his special
early retirement date and to cease to perform any services as an
Employee of the Company or any Affiliated Company on such date.
A Member who meets the conditions set forth in (i) above and
who, prior to March 1, 1993 had notified the Retirement Board in
writing of his election to retire on a normal, late or early
Retirement allowance as of March 1, 1993 or April 1, 1993 shall
be treated as a special early retiree under this Appendix F.
(2) Special early retirement date means May 1, 1993, except in
the case of a special early retiree described in the final
sentence of Section (b)(1) above, in which case the special early
retirement date shall be the effective date of retirement (March
1, 1993 or April 1, 1993, as the case may be) elected by such
special early retiree.
(c) The special early Retirement Allowance payable to a special
early retiree shall be a benefit commencing on his special early
retirement date equal to 40% of his Average Final Compensation as
defined in Section 1.05 (taking into account only base pay and
overtime pay for the last pay period ending April 30, 1993), for
a period of ten years (1/12 of the annual amount for a period of
120 consecutive months) commencing on May 1, 1993.
(1) Notwithstanding the foregoing, if the special early retiree
is married on the date the special early Retirement Allowance
commences, the special early retiree shall receive a Qualified
Joint and Survivor Annuity which is the Equivalent Actuarial
Value of the special early Retirement Allowance described above
unless one of the following elections is made:
(a) If the special early retiree elects, with Spousal Consent,
to receive the Retirement Allowance under Option 1 in Section
5.02 as a straight life annuity, then the special early
Retirement Allowance will be payable over the ten year period
stated above.
(b) If the special early retiree elects, with Spousal Consent,
to receive the Retirement Allowance in a lump sum, then the
special early Retirement Allowance will be payable in a lump sum
which is the Present Value (using 2/93 PBGC rate) of the special
early Retirement Allowance payable over the ten year period
stated above.
(c) If the special early retiree elects another optional form
of payment under Section 5.02, with Spousal Consent, the
Equivalent Actuarial Value of the special early Retirement
Allowance will be paid in the form so elected.
(2) Notwithstanding the foregoing, if the special early retiree
is not married on the date the special early Retirement Allowance
commences, the special Early Retirement Allowance shall be paid
in a straight life annuity which is the Equivalent Actuarial
Value of the special early Retirement Allowance otherwise payable
unless one of the following elections is made:
(a) If the special early retiree elects to receive the
Retirement allowance under Option 1 in Section 5.02 as a straight
life annuity, then the special early Retirement Allowance will be
payable over the ten year period stated above.
(b) If the special early retiree elects to receive the
Retirement Allowance in a lump sum, then the special early
Retirement Allowance will be payable in a lump sum which is the
Present Value (using 2/93 PBGC rate) of the special early
Retirement Allowance payable over the ten year period stated
above.
(c) If the special early retiree elects another optional form
of payment under Section 5.02, the Equivalent Actuarial Value of
the special early Retirement Allowance will be paid in the form
so elected.
<PAGE>
AMENDMENT NO. 2
TO THE RESTATED PENSION PLAN FOR THE
TODD SHIPYARDS CORPORATION RETIREMENT SYSTEM
I. Effective January 1, 1993, the Pension Plan is amended as
follows:
A new Section 5.07 is added to Article 5 to read:
5.07 Direct Rollovers
This section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributees election under
this Article, a distributee may elect, at the time and in the
manner prescribed by the plan administrator, to have any portion
of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover.
(a) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributees designated Beneficiary, or
for a specified period of ten years or more; any distribution to
the extent such distribution is required under Section 401(a)(9)
of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(b) An eligible retirement plan is an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that
accepts the distributees eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving Spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) A distributee includes an Employee or former Employee. In
addition, the Employees or former Employees surviving Spouse and
the Employees or former Employees Spouse or former Spouse who is
the alternate payee under a Qualified Domestic Relations Order,
as defined in Section 414(p) of the Code, are distributees with
regard to the interest of the Spouse or former Spouse.
(d) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
II. Effective July 1, 1993, the Pension Plan is amended as
follows:
The first paragraph of Article 2, Section 2.01 is designated as
Section 2.01(a) and a new Section 2.01(b) is added to provide as
follows:
2.01 Membership Requirements
(b) Any Employee of the Company on July 1, 1993, who is not
already a Member shall be ineligible to become a Member,
provided, however, any former Member who is entitled to a vested
benefit and who on July 1, 1993, had been rehired as an Employee
shall be eligible to become a Member upon completing the
restoration period as set forth under Section 3.03. Former
Members who are entitled to a vested benefit and who are rehired
after June 30, 1993, or an employee on June 30, 1993, who becomes
an Employee after that date shall not be eligible to participate
hereunder.
III. Effective July 1, 1994, the Pension Plan is amended as
follows:
The first paragraph of Article 1, Section 1.11 is designated
as Section 1.11(a) and new Sections (b)(c)(d) are added to
provide as follows:
1.11 Compensation
(b) In addition to other applicable limitations set forth in
the plan, and notwithstanding any other provision of the plan to
the contrary, for plan years beginning on or after January 1,
1994, the annual compensation of each employee taken into account
under the plan shall not exceed the OBRA93 annual compensation
limit. The OBRA93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living
in accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer
than 12 months, the OBRA93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which
is 12.
(c) For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA93 annual compensation limit set
forth in this provision.
(d) If compensation for any prior determination period is taken
into account in determining an employees benefits accruing in the
current plan year, the compensation for that prior determination
period is subject to the OBRA93 annual compensation limit in
effect for that prior determination period. For this purpose,
for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA93
annual compensation limit is $150,000.
The undersigned Chairman and Secretary of the Retirement Board of
the Todd Shipyards Corporation Retirement System, do hereby
certify that the foregoing amendment to the restated Pension Plan
was duly adopted by the Retirement Board at a meeting duly called
and held on September 29, 1994.
/s/ Patrick W.E. Hodgson
Chairman
/s/ Dale R. Branscomb
Secretary
December 27th, 1994
Roland H. Webb
3023 Alki Ave. S.W.
Apt. C
Seattle, WA 98116
Dear Mr. Webb:
This letter constitutes an employment agreement between you
and Todd Pacific Shipyards Corporation ("TODD"), wherein the
parties agree as follows:
1) Effective with the award of the WSF Jumbo Ferries
Contract to Todd and continuing for the term of that
contract, and if successful for the term of the WSF
Superferry Renovation Contract, Todd shall employ you in the
position of Chief Operating Officer with the title of Vice
President & General Manager or President, upon your election
to such office by Todd's Board of Directors. You shall
report to the Chief Executive Officer of the parent
corporation. Your principal place of employment shall be
Todd's headquarters in Seattle, Washington and you will be
resident in Seattle during the week.
2) You will at all times conduct yourself in Todd's best
interests and will perform the duties and services commonly
associates with your position and such other duties
appropriate to a senior executive officer as may be assigned
on a full-time basis, competently, diligently and to the
best of your abilities.
3) As full compensation for your services, during the term
of this agreement, Todd shall pay you an annual salary at
the rate of $130,000.00 per annum in installments in
accordance with Todd's usual payroll practices. In
addition, you will be entitled to participate during the
term of this agreement in such major medical, hospital, life
insurance and other benefit programs as Todd from time to
time shall keep in effect for its senior executives, and you
shall be entitled to reimbursement of the ordinary and
necessary expenses incurred in connection with your
performance of services hereunder, subject to reporting
requirements as are in effect at Todd.
A bonus plan will be adopted that permits you to earn up to
100% of your salary if Todd is performing at the business
plan used to bid the Jumbo ferries. The annual salary will
be reviewed annually and may be increased at any time by the
Board of Directors of the Corporation.
4) The term of this agreement shall commence effective with
the award of the Jumbo Ferries contract and end with
contract(s) completion, the date of your death or the end of
a three month period of disability that prevents you from
complying with your obligations under this agreement.
5) You represent and warrant that you are not under any
contract which would be breached by your becoming and
remaining employed by Todd under the terms of this
agreement. During the term of this agreement and
thereafter, you shall keep confidential information about
Todd and Todd shall have the right, without the necessity of
posting a bond or proving special damages, to enjoin any
breech of this provision by you.
6) This letter constitutes the entire agreement between us
relating to your employment with the exception of the
existing stock option agreement between Todd and yourself
which shall remain in force. It shall be governed by the
laws of the State of Washington.
7) During the term of this agreement Todd will assist and
support your efforts and reimburse expenses, if any, to
maintain a legal work status in the United States and will
assist in the pursuit of permanent resident status prior to
the expiration of this agreement.
8) During the term of this agreement, your employment may be
terminated by the corporation for dishonesty, willful
misfeasance, repeated failure in bad faith to perform you
duties or the commission of a crime involving moral
turpitude.
In the event you terminate your employment during the year
after the date hereof, without the prior written consent of
the Corporation, your compensation pursuant to Section 3
hereof and all other benefits provided hereunder, shall
terminate on the termination date.
Employee will not:
a) attempt to employ, hire, engage or otherwise associate
with any person employed by the Corporation at the time of
such termination or during any part of the twelve (12)
months preceding said termination or expiration of this
agreement:
b) induce any employees to leave the Corporation;
c) solicit the employment of any employees on his own behalf
or on behalf of any business; or
d) assist any entity to solicit the employment of any
employees;
e) be employed, consult, own or otherwise associate with any
Todd subcontractor supplier.
Please sign below to indicate your agreement with the
foregoing.
Yours very truly,
TODD PACIFIC SHIPYARDS
CORPORATION
/s/ Patrick W.E. Hodgson
By: Patrick W. E. Hodgson
Understood & agreed
/s/ Roland H. Webb
Roland H. Webb
December 28th, 1994
JUMBO MARK II CLASS VESSELS
CONSTRUCTION CONTRACT NO. 00-4464
TABLE OF CONTENTS
ARTICLE PAGE
1. DEFINITIONS, ABBREVIATIONS AND INTERPRETATION OF TERMS 3
2. SCOPE OF WORK 15
3. SPECIFICATIONS, DRAWINGS AND OTHER REQUIREMENTS 17
4. COORDINATION OF CONTRACT DOCUMENTS 19
5. TOTAL CONTRACT PRICE 20
6. OPTION 20
7. PROGRESS PAYMENTS 21
8. SCHEDULES 23
9. CONTRACT REPRESENTATIVES 24
10. CONTRACT PROBLEM REPORTS 25
11. WORKING AND AS-BUILT DRAWINGS 26
12. QUALITY ASSURANCE AND CONTROL PROGRAM 27
13. CONFIGURATION CONTROL AND MANAGEMENT 27
14. INSPECTIONS AND APPROVALS 28
15. HEALTH, SAFETY, SANITATION, SECURITY AND GENERAL SERVICES
29
16. OWNER FURNISHED EQUIPMENT 33
17. DANGEROUS MATERIALS 34
18. INDEFINITE QUANTITY WORK 34
19. CONTRACT CHANGES 36
20. SHARED SAVINGS 41
21. PROTESTS 42
22. DISPUTES AND CLAIMS 44
23. AUDIT 48
24. TESTS AND TRIALS 49
25. DELIVERY 49
26. FAILURE TO COMPLETE ON TIME 51
27. EXTENSION OF TIME 52
28. EARLY DELIVERY BONUS 54
29. DISPOSAL OF SCRAP 54
30. WARRANTY DEFICIENCIES AND REMEDIES 54
31. RIGHTS IN DATA 57
32. PATENTED DEVICES, MATERIALS AND PROCESSES 57
33. TERMINATION FOR DEFAULT 58
34. TERMINATION FOR PUBLIC CONVENIENCE 60
35. SUSPENSION OF WORK 60
36. SUBCONTRACTORS 61
37. EMPLOYMENT OF OTHERS 63
38. RESPONSIBILITIES AND INDEMNITIES 64
39. CONTRACT SECURITY 65
40. INSURANCE 67
41. NO WAIVER OF LEGAL RIGHTS 70
42. ANTITRUST BREACH 70
43. ASSIGNMENT 71
44. COMPUTATION OF TIME 71
45. PERSONAL LIABILITY OF PUBLIC OFFICIALS 71
46. NO THIRD PARTY BENEFICIARIES 71
47. TITLE 71
48. NO ARRESTS OR ATTACHMENTS 72
49. NO WAIVER OF IMMUNITY 72
50. NOTICES 72
51. CHOICE OF LAW AND VENUE 73
52. ESCROW BID DOCUMENTATION 73
53. NOTICE OF LABOR DISPUTES 76
54. DESIGN AND CONSTRUCTION REVIEW BOARD MEETINGS 76
55. MILESTONES 76
53. INTEGRATION, MERGER AND SEVERANCE 78
WASHINGTON STATE FERRIES
JUMBO MARK II CLASS VESSELS
CONSTRUCTION CONTRACT NO. 00-4464
THIS CONTRACT is made and entered into this 30th day of
January, 1995, by and between WASHINGTON STATE FERRIES, a
division of the Washington State Department of Transportation
(hereinafter called WSF) and TODD PACIFIC SHIPYARDS CORPORATION,
a corporation authorized to do business in the State of
Washington (hereinafter called the Contractor).
WITNESS THAT:
WHEREAS, the State desires to construct a maximum of three (3)
Jumbo Mark II Class auto/passenger ferries (hereinafter called
the Vessels or Ships) to enhance the States ferry operations
within Puget Sound, Washington and adjacent Canadian waters; and
WHEREAS, each such Vessel will be 460 x 90, and carry 2500
passengers and 218 vehicles; and
WHEREAS, pursuant to project Legislation in Revised Code of
Washington (RCW) 47.60.770, the State issued an Invitation For
Bids (IFB) to solicit from interested firms bids to construct the
Vessels within the State of Washington; and
WHEREAS, WSF desires to: (i) contract for the construction of
the first Vessel upon execution of this Contract, and (ii)
reserve an Option to construct both the second and third Vessels,
such Option to be in WSFs sole discretion; and
WHEREAS, two (2) firms submitted bids to WSF for this project;
and following bid evaluation, the State selected the Contractors
bid as the lowest responsive and responsible bid, taking into
consideration the IFB requirements and the bid evaluation; and
WHEREAS, the Contractor is duly authorized and qualified to
construct the Vessels, and has signified its capability and
willingness to perform such work in accordance with the terms of:
(i) this Contract, and (ii) the Contractors Prequalification
Application and Bid, and the project IFB (including all Addenda
thereto), all of which are incorporated herein by this reference;
and
WHEREAS, WSF agrees to pay for such Vessel construction in
accordance with and subject to the terms of this Contract;
NOW, THEREFORE, in consideration of the terms, conditions,
covenants and performances contained herein or attached,
referenced and made a part hereof, the parties hereto agree as
follows:
1. DEFINITIONS, ABBREVIATIONS AND INTERPRETATION OF TERMS
The following definitions, abbreviations and interpretations of
terms are meant to assist the establishment of a common meaning
and understanding 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 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 of terms 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
issued by WSF through the date hereof as supplements to the
material entitled Jumbo Mark II Construction Bid Package, but
only to the extent that such Addenda supplement, modify or
interpret Contract Documents.
1.1.2. Arrangement Drawings see Drawing Definitions
1.1.3. As Built Drawings see Drawing Definitions
1.1.4. Assistant Secretary shall mean the Assistant Secretary
for Marine Transportation for the Washington State Department of
Transportation.
1.1.5. Authoritative Agencies or Regulatory Agencies shall mean,
with respect to any particular aspect of the Contract Work, any
governmental or governmental invoked agency including, but not
limited to: the Institute of Electrical and Electronics
Engineers (IEEE), United States Coast Guard (USCG), United States
Public Health Service (USPH), Federal Communication Commission
(FCC), United States Net and Gross Tonnage Admeasurements
(USNGTA), Underwriters Laboratories (UL), Washington State
Department of Labor and Industries (WSL&I), U.S. Department of
Labor (DOL), and others like the American Bureau of Shipping
(ABS), Illumination Engineering Society, etc.; (i) whose approval
may be required to fulfill the obligations of the Contract; (ii)
which have promulgated relevant Regulations; (iii) which are
referenced by this Contract, the Technical Specifications, or the
Drawings, directly or indirectly; or (iv) which in any other
manner has authority with respect to the Contract Work and the
Vessel.
1.1.6. Award Price is the total price awarded for the
construction of the first Vessel.
1.1.7. Bid shall mean the offer of the Contractor submitted on
the prescribed Bid Form for the Contract, which offer has been
accepted, or is being reviewed and considered by WSF.
1.1.8. Bid Documents shall mean the Bidder Information, Bid
Form, Prequalification documents, Bid Security, and all
supplemental information, instruments or documents, which were
provided or submitted by the Contractor to WSF during the IFB
process.
1.1.9. Bid Form is that bound document titled Bid Form which
includes Contractor certifications, pages on which the Contractor
indentified its price for the Contract work, various Attachments,
and the Contractors signature.
1.1.10. Bid Package shall mean that package of information
released by WSF entitled Invitation For Bids - Jumbo Mark II
Construction, Contract Number 00-4464; including Volume I,
Contract Provisions; Volume II, Technical Specification; Volume
III.A. Contract and Illustrative Drawings; Volume III.B. Contract
Guidance Drawings; Volume IV, Owner Furnished Equipment
Information; and Volume V, Illustrative Test Procedures; and
other pertinent information pertaining to the requirements,
provisions and work related to the solicitation.
1.1.11. Bid Price shall mean the Contractors bid price for each
Vessel, as shown on the Bid Form.
1.1.12. Bid Total shall mean the Bid Totals for each Vessel, as
shown on the Bid Form.
1.1.13. Bidder Information is a bound IFB document titled Bidder
Information which provides essential information to bidders for
bid preparation and, in part, for Contract performance.
1.1.14. Change Order shall mean a written order issued by WSF on
WSDOT Form No. 421-003M, describing a change to the Contract in
accordance with the procedures set forth in the Contract Changes
Article.
1.1.15. Change Order Work shall mean that work identified in and
authorized by a WSF approved Change Order.
1.1.16. Commission or Washington State Transportation Commission
shall mean the appointive body having authority over State
transportation matters as provided by law.
1.1.17. Completion Dates
Substantial Completion Date (for each Vessel) 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 completion of the Contract Work for the
Vessel. Delivery occurs at the WSF-determined time when the
Vessel is Substantially Complete. At that time, WSF will
acknowledge Substantial Completion by sending a letter to the
Contractor accepting Vessel custody, specifying the status of
liquidated damages, listing all outstanding work (including non-
physical work), and indicating that all outstanding work becomes
warranty work.
Completion Date (for each Vessel) is the date all of the
Contract Work for such Vessel, including all non-physical (paper)
Contract Work, is completed. It will not be the same date as
Final Acceptance which occurs upon WSF acceptance of Contract
Work for all Vessels at the end of the Contract.. The WSF
Representative will determine when the Completion Date occurs and
will give the Contractor written notice of such Date. Such
notice shall not imply WSF acceptance of the Contract Work.
1.1.18. Contract shall mean all of the Contract Documents
invoked by executing this Contract. What is stated in one part
of the Contract applies to the whole Contract.
1.1.19. Contract Bid Item (or Bid Item) shall mean the work (and
price) specifically set out in the Bid Form for the Contract
Work.
1.1.20. Contract Documents consist of all Bid Pack Volumes and
IFB Addenda, the Contractors Prequalification Application and
Bid, Work Authorization Records, Contract Modifications, Change
Orders, and duly executed Amendments to the Contract, and all
documents specifically referenced therein.
1.1.21. Contract Drawings or Contract Plans (see Drawing
Definitions).
1.1.22. Contract Guidance Drawings (see Drawing Definitions).
1.1.23. Contract Modifications are documents that may be used to
issue no cost changes to Contract wording, or to issue other
changes anticipated within the framework of the Contract that do
not increase or decrease the Total Contract Price.
1.1.24. Contract Security is the form of performance, payment
and warranty security furnished by the Contractor in compliance
with the Contract Security Article.
1.1.25. Contractor is the party to the Contract that is
responsible for construction of the Vessel(s) and performance of
all Contract Work.
1.1.26. Contractors Representatives shall mean those individuals
who have authority to make final decisions on behalf of the
Contractor as designated by written notice to WSF required by the
Contractors Representatives Article. Each Contractors
Representative shall have such power as is set forth in the
written appointment. Reference to the Contractors Representative
for a particular aspect of the Contract Work shall mean the
appropriate Contractors Representative charged with
responsibility for such matters in the written appointment.
1.1.27. Contract Time (for each Vessel) shall mean the time
between the Contract Execution and the Delivery Date of each
Vessel, as per Exhibit 4.
1.1.28. Contract Work shall have the meaning set forth in
Article 2.1. and shall include work authorized for each Vessel by
the Indefinite Quantity Work, Contract Changes and Shared Savings
Articles.
1.1.29. Correction Period shall have the meaning set forth in
the Warranty Deficiencies and Remedies Article.
1.1.30. COTF (Change Order To Follow) Order shall have the
meaning set forth in the Contract Changes Article.
1.1.31. COTF Period shall have the meaning set forth in the
Contract Changes Article.
1.1.32. Definite Work Price shall have the meaning set forth in
the Progress Payments Article.
1.1.33. Deleted Work shall mean Contract Work that is eliminated
by a Change Order or a Contract Modification as provided for in
the Contract Changes Article.
1.1.34. Delivery shall mean turning over of a constructed Vessel
to WSFs care, custody, and control at the designated Delivery
destination in a complete, seaworthy, fully operational
condition, fit to perform its intended services and with all of
the Contract Work performed (provided that Delivery may occur
under such other circumstances as may be acceptable to WSF under
the terms of the Delivery Article). Delivery is part of the
Contract Work.
1.1.35. Delivery Date shall mean the date Delivery occurs. The
Delivery Date for each Vessel is specified in Exhibit 4, and may
be modified by certain Articles of the Contract.
1.1.36. (Vacant)
1.1.37. 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.
1.1.38. Diagrammatic Drawings (see Drawing Definitions).
1.1.39. Drawing Definitions:
Arrangement Drawings are those drawings that show the physical
location of equipment, service, piping, cable runs or any other
category of installation. The term Arrangement Drawings covers:
General Arrangement Drawings which show the location of spaces
and items in relationship to each other; Space Arrangement
Drawings which show the equipment and other items within a space;
and specific System Arrangement Drawings which show how equipment
will be placed, piping will be run, cable runs will be laid and
other services provided. Arrangement Drawings may or may not be
dimensioned, depending on the requirements of the system and/or
equipment being installed. In the case of Arrangement Drawings
that are not dimensioned, the Contractor shall maintain the
relative and proportional physical relationship of items shown.
In the case of dimensioned drawings, the Contractor shall install
the equipment/items to the dimensions shown within the Contract
tolerances for installation. Interferences encountered are the
responsibility of the Contractor to resolve as a part of the base
Contract Work. Deviations from dimensioned drawings and/or
Arrangement Drawings requires written authorization from WSF
prior to implementation.
As Built Drawings are those drawings in each specified category
that are prepared, after installation is complete, by actual
physical measurement. They contain dimensions of equipment,
service and structure, all referenced to established baselines
within the Vessel. They are used for design purposes during the
planning of future modifications and repairs. Therefore, they
must accurately document the Vessel upon completion of all
Contract Work.
Certified Drawings are drawings provided by WSFs Propulstion
Integration, WSFs Main Diesel Engine vendor, or their respective
subcontractors to show details of manufactured pieces of
equipment or systems. These drawings will also include
information for Contractor installation purposes.
Contract Drawings or Contract Plans are terms used
interchangeably and are those drawings, if any, furnished by WSF
and identified as such in the Specifications. They illustrate
some, but not necessarily all of the features and arrangements of
the Vessel to be implemented by the Contractor. Any departure
from these Drawings must be specifically authorized in writing by
WSF.
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, details, and
arrangements of the systems or structures to which they relate.
Contract Guidance Drawings are not Contract Drawings as defined
above. 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.
Diagrammatic Drawings are Contract Drawings or Contract
Guidance Drawings, as designated on the drawing, and shall mean
any Drawing which represents piping, ventilation, and electrical
systems which indicate the relative function of the system
components, valves and fittings, branches, etc. which can be used
as a guide to arrangement and detail drawings. They contain
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.
Drawings shall mean the Contract Drawings/Contract Plans,
Original Drawings, Arrangement Drawings, Contract Guidance
Drawings, Diagrammatic Drawings, and Illustrative Drawings. The
term Drawings does not include the Working Drawings.
Illustrative Drawings are drawings which illustrate how similar
elements of the Contract Work was done on other WSF 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.
Shop Drawings are drawings which illustrate how furniture,
casegoods, partition walls and office items will be custom built.
These drawings will be prepared and submitted to WSF for approval
by the manufacturer to show details of construction, integration
with equipment and configuration to assure acceptable final
appearance and fit.
Vendor Drawings are drawings provided by Vendors to show details
of manufactured pieces of equipment or systems.
Working Drawings shall mean those drawings, sketches,
calculations, etc. prepared by the Contractor for the purpose of
completing the detailed design and providing direction to
installing workers that will insure compliance with Contract
Documents including, but not limited to, those Drawings listed in
Section 100 of the Technical Specification. WSF review of
Working Drawings does not relieve the Contractor of
responsibility for meeting Contract requirements. They shall be
to a level of detail to permit review by WSF and Authoritative
Agencies and to facilitate Vessel construction.
1.1.40. Drydock shall mean the Contractors drydock located at
the Shipyard or such other drydock as WSF may approve in writing.
1.1.41. Eagle Harbor shall mean the WSF maintenance facility
located on Bainbridge Island, Washington.
1.1.42. Events of Default shall have the meaning set forth in
the Termination For Default Article.
1.1.43. Final Acceptance or Final Acceptance Date is the date
that WSFs Manager of Vessel Engineering signs the designation
Date of Acceptance on the Final Contract Voucher Certification
(WSDOT Form #134-146) following completion and Final Acceptance
of all Contract Work for all Vessels. The Contractor is required
to properly execute and forward this form to WSF. This date will
not coincide with the Completion Date of each Vessel.
1.1.44. Final Contract Voucher Certificate shall have the
meaning set forth in the Progress Payments Article.
1.1.45. Government shall mean the United States of America
acting by and through its Cabinet Secretaries and Departments as
noted in the Contract Documents.
1.1.46. Illustrative Drawings (see Drawings definition).
1.1.47. Indefinite Quantity Progress Estimate shall have the
meaning set forth in the Indefinite Quantity Work Article.
1.1.48. Indefinite Quantity Progress Payment shall have the
meaning set forth in the Indefinite Quantity Work Article.
1.1.49. Indefinite Quantity Work shall have the meaning set
forth in the Indefinite Quantity Work Article.
1.1.50. Interim Priced Change Order shall have the meaning set
forth in the Contract Changes Article.
1.1.51. Memorandum of Agreement (MOA) shall mean a document
titled Memorandum of Agreement formalized by signatures of the
designated WSF Representative and a Contractor Representative
setting forth, as necessary, areas of mutual agreement that
establish or define administrative procedures.
1.1.52. Minimum or Maximum Priced Change Orders shall have the
meaning set forth in the Contract Changes Article.
1.1.53. Option Prices shall mean the respective bid prices for
the second and third Vessels (Option Vessels), as shown in the
Total Bid Price For Option Consideration portion of the Bid Form.
1.1.54. Owner Furnished Equipment or OFE shall mean equipment
identified on the Contract Documents as being provided by WSF and
shall be processed in accordance with the Owner Furnished
Equipment Article.
1.1.55. Price /Time Proposal shall mean a proposal of costs,
plus profit, and time as required to perform the change work
involved.
1.1.56. Progress Estimates shall have the meaning set forth in
Progress Payments Article.
1.1.57. Progress Payments shall mean payments made in accordance
with the terms of Progress Payments Article.
1.1.58. Project Engineer shall mean the individual identified in
writing by WSF as the Representative of WSF that is in charge of
the construction oversight for the State and is designated as the
WSF Project Engineer.
1.1.59. Quality Assurance (QA) Quality Control (QC) program
shall mean the Quality Assurance Quality Control program
submitted by the Contractor in compliance with Quality Assurance
and Control Program Article.
1.1.60. Ready For Trials Date is the day that is determined and
agreed, by joint inspection, that the work is reasonably complete
and the Contractor can schedule Dock Trails followed by Sea
Trails. The joint inspection shall be conducted by WSF and the
Contractor to ensure all equipment has been properly tested, all
service systems have been completely installed and tested and/or
approved, all excess material and equipment has been removed from
the Vessel, all spaces have been cleaned and inspected, and all
listed discrepancies are minor in nature and magnitude, and all
unfinished work is considered minor.
1.1.61. Regulations shall mean collectively all applicable
Federal, State, Authoritative Agency and local laws, ordinances
and regulations.
1.1.62. Retainage shall mean a 5% withholding from each Progress
Payment, Indefinite Quantity Progress Payment and Change Order
Work payment pursuant to RCW 60.28.011 and in accordance with the
Progress Payments Article.
1.1.63. Schedules shall mean those schedules identified in the
Schedules Article.
1.1.64. Secretary or Secretary of Transportation shall mean the
Secretary of the Washington State Department of Transportation
and such agents as are authorized to act in his behalf.
1.1.65. Shipyard shall mean the location(s) where the Contract
Work is to be performed or such other location(s) as WSF may
approve in writing.
1.1.66. Single Vessel Construction Price shall be the Total Bid
Price for a particular Vessel altered by any Change Orders for
such Vessel at any given point in time.
1.1.67. Specifications shall mean Volumes II, III, IV and V of
the Bid Package, including all Addenda to such Volumes.
1.1.68. State shall mean the State of Washington Department of
Transportation - Marine Division, acting by and through the
Department or the duly authorized representative as designated in
writing by the Secretary.
1.1.69. Substantial Completion Date (see Completion Date
definition).
1.1.70. Subcontractor shall mean an entity to which the
Contractor subcontracts part of the Contract Work pursuant to the
Subcontractors Article. The official members of a joint venture
Contractor shall not be considered Subcontractors under this
Contract.
1.1.71. Surety shall mean any surety or bond company, or owner
of alternate security, that is responsible for any portion of the
Contract Security; or whose assets may be, in any way, bound to
ensure performance of the Contract requirements, 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.
1.1.72. Termination Claim shall mean the claim presented by the
Contractor pursuant to the Termination For Public Convenience
Article.
1.1.73. Total Bid Price for Award shall have the same meaning as
Award Price.
1.1.74 Total Bid Price For Evaluation shall mean the total bid
for the first, second and third Vessels, as identified and shown
on the Bid Form.
1.1.75. Total Contract Price shall mean the Award Price as
adjusted from time to time pursuant to the terms of this
Contract.
1.1.76. Vessel(s) or Ship(s) are interchangeable throughout the
Contract Documents and are as defined on page 1 of the Contract.
The terms Vessel or Vessel(s) and Ship or Ship(s) may mean (i)
the first Vessel or (ii) any or all three (3) Vessels, depending
on whether WSF exercises its Option for the second and third
Vessels. Generally, the word Vessel means the Vessel under
construction.
1.1.77. WATF (Work Authorization To Follow) Order shall have the
meaning set forth in the Indefinite Quantity Work Article.
1.1.78. WATF Period shall have the meaning set forth in the
Indefinite Quantity Work Article.
1.1.79. Warranty Deficiencies shall have the meaning set forth
in the Warranty Deficiencies and Remedies Article.
1.1.80. Weighted Factor shall mean a value assigned to a work
breakdown item in accordance with the Progress Payments Article
which represents the items 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%) of the Definite Work Price.
1.1.81. Work Authorization Record shall have the meaning set
forth in the Indefinite Quantity Work Article.
1.1.82. Working Drawings (see Drawings definition).
1.1.83. WSF shall have the meaning set forth in the Introduction
paragraph of this Contract.
1.1.84. WSF Expense shall have the meaning set forth in the
Termination For Default Article.
1.1.85. WSF Representative or States Representative shall refer
to the designated Representatives appointed by WSF, which may be
the Project Engineer or other designated Representative. 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.
1.2. Additional definitions relating to other topics are
contained in the appropriate sections of this Contract and other
Contract Documents.
1.3. Abbreviations
1.3.1. 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
ASNT 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
AWWA American Water Works Association
BHD Bulkhead
CEO Chief Engineers Office
CFR Code of Federal Regulations
CL Centerline
DBE Disadvantaged Business Enterprise
DOL United States Department of Labor
DOT United States Department of Transportation
EDR Engineers Day Room
EOS Engineers Operating Station
EPA Environmental Protection Agency
ESR Engineers Storeroom
EWS Engineers Work Shop
FCC Federal Communications Commission
FHWA Federal Highway Administration
FR Frame
FTA Federal Transit Administration
IEEE Institute of Electrical and Electronics Engineers
ISO International Standards Organization
LCP Lead Containing Paint
LPD Lower Passenger Deck
LVD Lower Vehicle Deck
MARAD Maritime Administration, Department of Transportation
MBE Minority Business Enterprise
MSS Manufacturers Standardization Society of the Valve &
Fittings Industry
NAS National Aerospace Standards
NEC National Electrical Code
NEMA National Electrical Manufacturers Association
NFPA National Fire Protection Association
NPT National Standard Taper Pipe Thread
NVIC/NVC Navigation and Vessel Inspection Circular
OFE Owner Furnished Equipment
PCB Polychlorinated Biphenyl
QA Quality Assurance
QC Quality Control
RCW Revised Code of Washington
SAE Society of Automotive Engineers
SCR Silicon Control Rectifier
SNAME Society of Naval Architects and Marine Engineers
SSPC Steel Structures Painting Council
STBD Starboard
Tx Dk Texas Deck
UL Underwriters Laboratories, Inc.
UPD Upper Passenger Deck
USC United States Code
USCG United States Coast Guard
USPHS United States Public Health Service
UVD Upper Vehicle Deck
WAC Washington Administrative Code
WBE Womens Business Enterprise
WHO World Health Organization
WSDOE Washington State Department of Ecology
WSDOLI Washington State Department of Labor and Industries
WSDOT Washington State Department of Transportation
WSF Washington State Ferries
WSTC Washington State Transportation Commission
1.3.2. 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
CO2 Carbon Dioxide
DIA. Diameter
DWG Drawing(s)
Est. Estimate or Estimated
Excl. Excluding
F Fahrenheit
Ft. Foot or Feet
GPH Gallons per hour
GPM Gallons per minute
In. Inch or Inches
Incl. Included
IPS Iron Pipe Size
L Liter
lb. Pound(s)
LF Linear Foot (Feet)
Mech Mechanical
Nat Natural
PRESS Pressure
PSI Pounds per Square Inch
PSIG Pounds per Square Inch Gauge
PSIA Pounds per Square Inch Absolute
PVC Polyvinyl Chloride
QTRS Quarters
RGLTR. Regulator
SECT. Section
STL. Steel
Sq. Ft. Square Foot or Feet
Sq. Yd. Square Yard(s)
1.4. Interpretation of Terms
1.4.1 Approved Marine Construction Practices - The term approved
marine construction practices refers to the construction 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 approved marine
construction practices.
1.4.2. 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/Regulatory Bodies 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 unless specifically mentioned in the
approval itself.
1.4.3. 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.
1.4.4. 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 the
Coordination of Contract Documents Article and subject to any
variation from certain of the Drawings as is permitted or
contemplated by the terms of the Contract Documents.
1.4.5. Days - Any reference to days herein shall be calendar
days unless otherwise specified.
1.4.6. Dollars or $ - Any reference to dollars or use of the
symbol $ herein shall be United States dollars.
1.4.7. Furnish - When the Contract Documents state that the
Contractor is required 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 Delivery, handling and stowing as directed by WSF, or
installing as required by the Contract.
1.4.8. He, She or It - These terms are used interchangeably and
in the sex neuter sense.
1.4.9. Install - When the Contract Documents state that the
Contractor is to install an item, the Contractor shall be
responsible for supplying all labor, tools, equipment, and
material necessary to perform such installation in accordance
with manufacturers instructions and as required by the Contract
Documents. For all installation, including installation of Owner
Furnished Equipment, the Contractor shall supply all electrical
power, water service, lubrication, lighting, ventilation and
other facilities or means required for the complete, in ready to
operate condition, installation, and shall deliver to WSF
complete and operable machinery, equipment, or systems.
1.4.10. 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. All 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.
1.4.11. Provide - When the Contract Documents state that the
Contractor is to provide an item, the Contractor shall furnish
and install the item, making such connections as necessary to
make the item fully operational, i.e., provide engineering,
labor, tools, equipment, furnish such items as foundations,
brackets, braces, electric wiring, piping connections, etc., as
necessary.
2. SCOPE OF WORK
2.1. In constructing (i) the first Vessel, and (ii) the second
and third Vessels if WSF exercises its Option for such Vessels,
including any authorized Indefinite Quantity Work and Change
Order Work, the Contractor shall: (i) 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: (i) it has determined the
methods, materials, labor, and equipment required to perform the
Contract Work; (ii) and that the Contract Time is sufficient for
completion of the Contract Work; (iii) and that the Bid Price is
reasonable in view of the cost of such methods, materials, labor
and equipment. Any costs and time exceeding those bid by the
Contractor will not entitle it to additional compensation except
as may be allowed under the Indefinite Quantity Work Article and
the Contract Changes Article.
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 are
binding obligations of the Contractor under this Contract.
2.4. The Contractor warrants that it 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 Delivery 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
the information and implement the requirements 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 associated
with an enterprise engaged in the business of ship construction,
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, approved marine construction practices 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. The Contractor shall perform all Contract Work at the
Shipyard.
2.10. The Contractor shall complete the Contract Work and shall
effect Delivery in accordance with the Delivery Article.
3. SPECIFICATIONS, DRAWINGS AND OTHER REQUIREMENTS
3.1. WSF will provide Contract Documents to the Contractor as
hard copy. When available and if desired by the Contractor, WSF
will also provide magnetic copies (floppy disks) to the
Contractor. Because such media is readily modified, WSF makes no
guarantee as to the validity of information provided thereon.
Contractor use of information provided on magnetic media shall be
at its own risk without protest or claim recourse.
3.2. The Specifications are hereby incorporated into and made a
part of this Contract by reference. Conflict between the
Technical Specifications and Authoritative Agencies shall be
resolved by complying with the most stringent requirement.
3.3. Drawings
3.3.1 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.
3.3.2 The Contractor is wholly responsible for developing all of
the Working Drawings necessary or advisable to perform the
Contract Work.
3.4. The Addenda are hereby incorporated into and made a part of
this Contract by reference.
3.5. The Contractor shall keep a complete set of the Contract
Documents and Working Drawings at the Contractors work site at
all times in an organized format readily accessible for review by
the WSF Representatives.
3.6. Compliance with Laws, Regulations and Codes
3.6.1. The Contractor warrants that it is familiar with the
Regulations.
3.6.2. 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. Title 49, CFR;
D. USPH Rules and Regulations;
E. ABS, Rules for Building and Classing Steel Vessels;
F. IEEE, Standard No. 45, IEEE Recommended Practice for
Electrical Installations on Shipboard, except for new electric
motors which shall comply with 46 CFR 111.25; and
G. Applicable standards for electrical equipment and lighting as
published by UL.
3.6.3. 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.
3.6.4. The Contractor shall obtain all required permits and
licenses and give or post any notices these require.
3.6.5. Where the Specifications require that any aspect of the
Contract Work conform to certain standards of the MARAD, USCG,
ABS, ASTM, 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.
3.6.6. 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 to enable the USCG to
conduct its review and issue its directive for changes or its
approvals so as not to delay the Contract Work on the Vessel and
Delivery.
3.6.7. 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.
3.6.8. 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.
3.6.9. Attached hereto as Exhibit 1, and by this reference
incorporated herein, 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.
3.6.10. All fees and charges of the Authoritative Agencies
associated with their duties as contemplated by the Contract
Documents shall be for the account of the Contractor.
3.7. Where requirements of the Contract Documents exceed the
requirements of any Authoritative Agency or approved marine
construction practices, the Contract Documents shall prevail.
3.8. The extent of Vessel construction is described in the
Contract Documents. Additional work undertaken by the Contractor
which has not been specifically authorized by the Contract
Documents, or authorized by Work Authorization Record or Change
Order, shall be at the Contractors sole risk and expense.
3.9. 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.
3.10. It is not practicable for the Contract Documents to
enumerate all of the details, fittings or appurtenances required
to perform the work as described in the Bid Package. Failure of
the Contract Documents as existing on the date hereof to outline
or describe all of the details of the work described in the Bid
Package or contemplated therein shall not relieve the Contractor
of its responsibility to perform such work for the Bid 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. In the event of any conflicts or omissions
in the Contract Documents, the order of precedence shall be as
follows:
A. This Contract;
B. Technical Specification (Volume II);
C. Contract Drawings (Volume III A);
D. Bid Documents;
E. OFE Information (Volume IV);
F. Contract Guidance Drawings (Volume III B), and OFE Contract
Guidance Drawings (Volume IV);
G. OFE Illustrative Drawings, (Volume III A); and
H. Other Drawings
Absent express language to the contrary, any Contract
Modifications and Change Orders shall have precedence over all
Contract Documents except the Contract.
5. TOTAL CONTRACT PRICE
5.1. WSF agrees to pay the Contractor the sum of Sixty-eight
Million, Thirty-two Thousand and Thirty-six Dollars
($68,032,036.00) for construction of the first Vessel. If WSF
exercises its option to construct the second and third Vessels,
WSF shall pay the Contractor the sum of Fifty-seven Million,
Three Hundred Ninety-nine Thousand, Two Hundred and Forty-eight
Dollars ($57,399,248.00) for the second Vessel, and Fifty-six
Million, One Hundred Thirty-six Thousand, Eight Hundred and Sixty-
nine Dollars ($56,136,869.00) for the third Vessel. Such
figures, as adjusted from time to time as provided herein, shall
be referred to as the Total Contract Price for the Contract Work.
The Total Contract Price shall include the Option Prices only if
WSF exercises its option for the second and third Vessels.
5.2. WSF will make no adjustment in the Total Contract Price
solely due to inflation occurring during the performance of the
Contract Work.
5.3. 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:
1. for items included in the original Contract Work, the change
takes place after the Bid Due Date; or
2. for items covered by a Change Order, the change takes place
after the date on which the Contract or Change Order was
executed.
5.4. Compensation will be made by negotiated Change Order for
any changes within the scope of RCW 39.04.120. Compensation will
be increased or decreased for the actual dollar amount of changes
in Federal or State taxes meeting the requirements of this
Article; 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 Article.
6. OPTION
6.1. WSF reserves the right to exercise an Option for the
construction of the second and third Vessels at the Bid Prices
shown on the Bid Form. The Option shall be in effect for twelve
(12) months following execution of the Contract. Exercise of
such Option shall be accomplished by a Contract Modification.
Such Vessels may hereinafter be referred to as the second and/or
third Vessels or the Option Vessels.
6.2. It is agreed that WSF is under no obligation to exercise
the Option. The Contractor shall have no claim for damages,
additional compensation, or any other relief if WSF does not
exercise the Option. The Contractor waives all Protest or Claim
rights relative to the non-exercise of such Option.
6.3. WSF may authorize the procurement of Long Lead Time
Material (LLTM) for either of the Option Vessels prior to
exercising the Option. If LLTM procurement is authorized, the
Option Prices will be reduced in dollar amount by the amount of
the LLTM expenditure authorization. Purchase of LLTM will be
accomplished only after authorized by a Change Order.
Authorization to procure LLTM does not obligate WSF to exercise
the Option.
7. PROGRESS PAYMENTS
7.1. Except as otherwise noted or agreed, payment for completed
Contract Work shall be effected through periodic progress
payments (Progress Payments) subject to the Retainage. Each
Vessel shall be progressed separately.
7.2. Progress Payments shall be made monthly for work completed
since the last application for payment. The day of the month and
any change to the billing schedule on which the Progress Payment
is to be paid will be mutually agreed to by the WSF
Representative and the Contractors Representative.
7.3. The portion of the Total Contract Price reflecting Bid Item
No. 1 for the first Vessel shall be the Definite Work Price for
that Vessel. That portion of the Total Contract Price reflecting
Bid Item No. 2 for the Option Vessel shall be the Definite Work
Price for those Vessels, respectively. Before beginning the
Contract Work on each Vessel, the Contractor shall prepare a
document in a form subject to WSFs approval, which will give a
line item breakdown, in accordance with the Contract Documents,
with Weighted Factors reflecting labor, material, and
subcontractor work totaling one hundred percent (100%) of the
Definite Work Price for such Vessel.
7.4. Not less than ten (10) working days before each Progress
Payment is due, the Contractor shall present WSF with a document
(the Progress Estimate) in a format satisfactory to WSF showing
the percentage of completion of each line item i) at the
beginning of the billing period, ii) the change during the
billing period, and, iii) the total current completion at the end
of the billing period. The amount owed for the period shall be
computed from the percent change for the period and shall
separately total Labor, Material and Subcontractors. WSF shall
have the right to change the percentage and resulting payment up
or down as deemed necessary to properly reflect progress on each
line item.
7.5. Every Work Authorization Record and Change Order shall be
separately progressed for labor, material and subcontractor costs
and shall be identified as a separate line item in the Progress
Estimate. Progress Payments for Work Authorization Record and
Change Order work shall otherwise be made in the manner provided
for in this Article.
7.6. As a precondition to each Progress Payment, the Contractor
must also submit a Release of Claims Certification (as discussed
below) and copies of updated Schedules prepared in accordance
with the Specifications.
7.6.1. Despite good faith best efforts, occasions may arise in
which the Contractor does not provide notice of cost and schedule
impacts as required by other Articles of this Contract.
Concurrent with its periodic invoices, throughout the period of
performance of this Contract, beginning thirty (30) days after
Contract execution, the Contractor shall, in a format approved by
WSF, release WSF of all claims (including Subcontractor claims),
known or unknown, which have not been identified to WSF in
writing (Release of Claims Certification). Such release and
Certification shall be valid and effective for the period up to
the date of the preceding Progress Payment. If the Contractor
cites specific exceptions to the release, the Contractor must
comply with the Protests and/or Disputes and Claims Articles as
to such exceptions, and concurrently provide WSF with notice for
each item excepted from the release.
7.7. All progress billing and estimate documents shall be
prepared and submitted by the Contractors (i) on diskettes using
Microsoft EXCEL (latest version) software, and (ii) signed hard
copy, to ensure certification of the data.
7.8. 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.
7.9. Upon approval of the Progress Estimate by WSF, 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 payment and the Progress Estimate for the current payment
period. Retainage is part of the Progress Payment but is paid to
a separate account established in accordance with paragraph 7.11.
below.
WSF will normally process and issue progress payments within
fifteen (15) calendar days from receipt of invoice. However,
payment will not be considered late if a check or warrant is
mailed within thirty (30) calendar days.
Under Chapter 39.76 RCW, if WSF fails to make timely
payment(s), the Contractor may invoice for 1% per month on the
amount overdue or a minimum of $1.00.
7.10. Payments for Materials on Hand
7.10.1. Progress Estimates may include the cost of materials to
be incorporated into the Vessel(s) if said materials have been
paid for by the Contractor, meet the requirements of the Contract
Documents to the extent they are applicable; 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. Material not yet incorporated in the
Vessel(s), for which the Contractor is requesting payment, shall
have identification by a percent complete reflecting the dollar
value of the requested payment in the applicable line item of the
Progress Estimate document required above.
7.10.2. Progress Payments for materials on hand shall not
constitute Acceptance, and any faulty material discovered will be
rejected even though partial payment has been made for that
material.
7.11. The Retainage under this Contract shall be reserved by WSF
as a trust fund for the protection and payment of: (i) the claims
of any person arising under the Contract; and (ii) the State with
respect to taxes imposed pursuant to Title 82 RCW which may be
due from the Contractor. WSF will reserve and release the
Retainage on a per Vessel basis in accordance with the provisions
of RCW 60.28.011.
7.12. In order to make Final Payment to the Contractor, the
Contractor must submit to the WSF Representative a completed
Final Contract Voucher Certification form, and all other
documentation required by this Contract and by law to accomplish
Final Acceptance of all Contract Work, including authorized
Option Work. This includes, but is not limited to, the Affidavit
of Prevailing Wages Paid for the Contractor and each
subcontractor (processed by Labor and Industries), Affidavit of
Amounts Paid to MBEs and/or WBEs, and other documents. 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, and stated amounts,
as are expressly identified and excepted from the Contractors
Certification in the Final Contract Voucher Certificate. Claims
made after submission of the Final Contract Voucher Certificate
are invalid and waived by the Contractor. The Final Estimate
payment will pay any remaining Progress Payments and begin the
process of final Retainage release.
7.13. 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.
8. SCHEDULES
8.1. The Master Construction Schedule (MCS), Drawing Schedule,
Planning Progress Curve (PPC), Structural Construction Inspection
Schedule (SCIS), Master Drawing Schedule (MDS), Electrical
Engineering Schedule (EES) and Material Control Schedule (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. CONTRACT REPRESENTATIVES
9.1. Contractors Representatives
9.1.1. Prior to the commencement of the Contract Work, the
Contractor shall appoint in writing its Contractors
Representatives, designating the functional responsibilities of
and title of each, i.e. Superintendent, etc.
9.1.2. The appropriate Contractors Representative shall be
continually present at all sites where Contract Work is being
performed.
9.1.3. The Contractor shall remove incompetent, careless, or
negligent employees immediately upon written request of WSF, and
the Contractor shall immediately provide a suitable replacement
at no added cost to WSF.
9.1.4. The Contractor agrees to assign to this Contract those
key persons whose resumes were submitted with the Bid Documents
necessary to fulfill the requirements of the Contract, and to
maintain its designated Contractor Representatives. No
substitution shall be made without prior notification to and
concurrence of the WSF Project Engineer in accordance with this
requirement.
9.1.5. All proposed substitutes shall have qualifications equal
to or higher than the qualifications of the person to be
replaced. The WSF Project Engineer shall be notified in writing
of any proposed substitution at least fifteen (15) days in
advance of the proposed substitution. Such notification shall
include: (i) an explanation of the circumstances necessitating
the substitution; (ii) a complete resume of the proposed
substitute; and (iii) any other information requested by the WSF
Project Engineer to enable him/her to judge whether or not the
Contractor is maintaining the same high quality of personnel as
previously identified to WSF.
9.2. Prior to commencement of the Contract Work, WSF shall
appoint in writing its WSF Representatives.
9.3. 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 the Vessel is in the Shipyard and/or Contract Work
is in progress. Any questions concerning responsibility or scope
of authority of WSF Representatives should be directed to the
Project Engineer.
9.4. Questions or comments which may arise during the
performance of the Contract Work concerning the content, intent,
or other interpretation of the Contract Documents, or other
circumstances which require a response by the WSF Representative,
shall be submitted in writing, in accordance with the provisions
of the Contract Problem Reports Article, to the appropriate WSF
Representative, with a copy to the WSF Project Engineer. 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.
9.5. The WSF Representative may utilize the same format and form
as the Contractor to initiate informal communication concerning
inspection observations, work performance, and other similar
items.
9.6. Subject to the Protests and Disputes and Claims Articles,
the WSF Project Engineers 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.
9.6.1. WSF and the Contractor may, during the course of the
Contract, choose to establish procedural agreements that may, by
mutual assent, last through the Contract performance period.
Such agreements may be formalized using a Memorandum of Agreement
(MOA).
9.7. WSF Personnel Facilities
WSF Personnel Facilities are described in Exhibit 5 attached
hereto and by this reference incorporated herein.
10. CONTRACT PROBLEM REPORTS
10.1. Contract Problem Reports (CPRs) shall be used by the
Contractor for the purpose of: (i) alerting WSF to actual or
potential Contract problems; and (ii) of establishing an early
dialogue between the Contractor and WSF with regard thereto.
10.2. A Contract problem is a fact or circumstance of which the
Contractor is aware that will or may: (i) have an impact on the
Delivery schedule, completion of Contract performance, or the
Total Contract Price (increase or decrease); or (ii) requires
modification to the Contract or Specifications.
10.3. When the Contractor identifies a Contract problem, it
shall: (i) orally report the Contract problem to WSF within
twenty-four (24) hours; and (ii) promptly provide a written CPR
within three (3) calendar days, if authorized by the WSF Project
Engineer to incurr added costs, or if the Contractor considers
CPR preparation to be at no added cost. The written CPR shall be
submitted to the assigned WSF Representative, with a copy to the
WSF Project Engineer. Each CPR shall be entitled Contract
Problem Report, shall be dated, numbered sequentially, and shall
set forth the following based on the best and most complete
information then known or available to the Contractor:
10.3.1. the nature of the Contract problem;
10.3.2. the date on which the Contract problem arose and the
date on which the Contract problem was identified as such;
10.3.3. the anticipated direct and consequential effects of the
Contract problem upon the Delivery schedule or completion of
Contract Work or the Total Contract Price;
10.3.4. identification of the supplies and/or services which are
or may be affected;
10.3.5. identification of the specific Specification, Drawing,
or other Contract Document relative to the Contract problem;
10.3.6. provide detail as to the specific physical location on
the Vessel, including specifics about equipment, name,
manufacturer, etc.; and
10.3.7. the Contractors recommended solution to the reported
Contract problem.
10.4. Follow-up status reports of each Contract problem,
identified by the original CPR number, shall be furnished monthly
or more frequently as required by the WSF Representative. A
final follow-up report shall be furnished immediately following
resolution of each Contract problem.
10.5. Failure of the Contractor to report known Contract
problems will preclude relief to the Contractor for the
consequences of the Contract problem.
10.6. CPRs shall not be submitted when notice of the same
Contract problem is required to be furnished to WSF pursuant to
any other requirement of this Contract. However, the submission
of a CPR does not relieve the Contractor of its obligations to
provide notice required under any other requirement of this
Contract.
11. WORKING AND AS-BUILT DRAWINGS
11.1. When submitting Working Drawings for approval, the
Contractor shall state the latest date on which it wishes to have
the Working Drawings returned with WSFs 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 three (3) working days after
such notice has been served, the Contractor may proceed with all
relative work as if the submitted Working Drawings were approved
without any comments. Except as agreed to by WSF, drawings
submitted before scheduled do not start the ten (10) working day
review clock nor does submittal with significant errors,
omissions, and or reservations constitute submittal for schedule
purposes .
11.2. The WSF Representative will review each Working Drawing
submitted. Any failure of the WSF Representative to find errors
or omissions in the Contractors calculations, specifications, or
drawings shall not relieve the Contractor of its responsibility
in relation thereto.
11.3. Approval by the WSF Representative of the Contractors
Working Drawings does not relieve the Contractor of
responsibility for the accuracy of dimensions and 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.
11.4. Any work undertaken by the Contractor prior to approval of
Working Drawings by the WSF Representative is at the Contractors
risk, including any and all costs of delays or disruptions
resulting from proceeding prior to approval.
11.5. Detail requirements for Working and As-Built Drawings are
specified in Section 100 of the Technical Specifications. As-
Built Drawings shall be acceptably completed without significant
errors, omissions, or reservations and submitted to WSF within
thirty (30) days of the Redelivery Date of each Vessel.
12. QUALITY ASSURANCE AND CONTROL PROGRAM
12.1. The Contractor will establish and maintain a Quality
Assurance (QA) and Quality Control (QC) program, and within
twenty (20) days after the date hereof, submit to the WSF
Representative for approval a QA/QC program which specifically
addresses the Contract Work.
12.2. The QA/QC program shall describe the QA and QC
organization, identify key personnel by name, provide contact
telephone numbers and contain those elements outlined in Section
100 of the Technical Specification.
12.3. QA and QC are solely 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 and control of Contract Work and the
material condition and readiness of the Vessel for service at
Delivery.
13. CONFIGURATION CONTROL AND MANAGEMENT
13.1. Standardization. Subject to the requirements of the
Technical Specifications, and unless specifically approved
otherwise by the WSF Representative, the Contractor shall
install: (i) like equipment from the least number of
manufacturers possible throughout each Vessel; and (ii) identical
equipment and components in the same locations on all Vessels.
This Article applies to all material and configurations that
are: (i) called out as directed procurement (no or equal
permitted) or a specific make and model, or equal; and (ii) all
configuration and arrangements to the level of detail shown on
the Contract Drawings and Contract Guidance Drawings. If any
substitutions are made or configurations are changed on a Vessel,
the change shall be made applicable throughout the Vessel and on
all following Vessels.
13.2. Equipment Baseline. The Contractor shall provide a
complete alphabetical listing of all electrical, electronics,
hull, kitchen, machinery, navigational, piping, heating, air-
conditioning, ventilation, etc. components, identifying each
component by: (i) name, (ii) manufacturer, (iii) model number,
(iv) size, (v) quantity, (vi) specific location on the Vessel,
(vii) system, (viii) technical documentation and (ix) comments.
Within thirty (30) days after Delivery of each Vessel, the
Contractor shall provide both a bound hard copy and a 3-1/2
floppy disc, using Microsoft Excel for the data base program.
14. INSPECTIONS AND APPROVALS
14.1. The Vessel is to be constructed and equipped under the
inspection of, and subject to the approval of WSF and the
Authoritative Agencies.
14.2. 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.
14.3. 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.
14.4. The Contractor is solely 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: (i) at least twenty-four (24) hours prior notice to
the appropriate WSF Representative; and (ii) as required by
mutual agreement between the Contractor and the Authoritative
Agencies.
14.5. 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.
14.6. Workmanship and materials not meeting the requirements of
the Contract Documents shall be made to satisfy such
requirements. Unsuitable work or material shall be reworked
and/or replaced at the Contractors sole expense notwithstanding
that the work or materials may have been previously inspected or
that payment may have been made incident to a progress billing.
14.7. Covered Work
14.7.1. Contractor shall remove or uncover such portions of the
completed Contract Work for inspection as directed by the WSF
Representative. The Contractor may initiate a Change Order
providing that the uncovering, removing, and replacing of the
covering will be paid for by WSF at labor and material markup
rates specified on the Bid Form only if: (i) there are no
defects found in the uncovered work, and (ii) WSF did not
originally reject the work after WSF was provided the opportunity
to inspect the uncovered work, before it was covered, by the
inspection notification process outlined in the Contract
Documents. 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.
14.7.2. Notwithstanding the foregoing, any Contract Work
requiring inspection that is closed or covered prior to proper
notification to WSF and/or Authoritative Agencies shall be at the
Contractors risk and shall be uncovered for WSF inspection and
approval, all at the Contractors expense whether or not the
Contract Work proves acceptable to WSF and the Authoritative
Agencies.
14.8. Subject to the Protests and Disputes and Claims Articles,
WSFs decision will be final on all questions in the course of
Contract Work inspection.
14.9. 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: (i) guarantee that
following the method or manner will result in compliance with the
Contract Documents; (ii) relieve the Contractor of any risk or
obligation under the Contract Documents; or (iii) give rise to
any liability of WSF.
15. HEALTH, SAFETY, SANITATION, SECURITY AND GENERAL SERVICES
15.1. The Contractor shall provide its 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.
15.2. During the period from the start of the Contract Work
until Delivery, 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.
15.3. 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. Disposal of Hazardous Material is covered under the
Dangerous Materials Article.
15.4. During the period from the start of Contract Work until
Delivery, 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 fire fighting
techniques and trained to cooperate with and assist local fire
fighting organizations, such personnel shall be assigned in
writing.
F. Provide sufficient shore fire lines to ensure an adequate
supply of fire fighting 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 watches as
may be required, to ensure that 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. Lock wire or otherwise lock in the fully closed position, all
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 (NFPA).
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).
L. 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 re-testing and certification at no
additional expense to WSF.
M. Provide and maintain readily accessible or have available de-
watering 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 de-
watering 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 floodable 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. De-watering
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.
N. Provide and maintain additional de-watering equipment and/or
services of sufficient quantity and capacity as to begin to de-
water 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 de-watering within one (1) hour of the
requirement to provide such equipment.
O. Provide and maintain a centralized, monitored fire and
flooding alarm system which provides a minimum of two clearly
marked pull stations at each deck, including one at each brow,
and audible alarms which can be heard at the alarm monitoring
station(s) and throughout the Vessel under working conditions.
15.5. Health, Safety and Security Plan: The Contractor shall be
responsible for preparing, and submitting for WSF approval no
later than the Pre-Construction Conference (see Section 100 of
the Technical Specification), a detailed, comprehensive, Health,
Safety and Security Plan (HSP) which shall provide a thorough
overview of the work procedures, methods, equipment and material,
and protective programs that will be used during construction of
the Vessel(s). The HSP shall address each of the hazards
discussed in the foregoing, and shall be subject to WSF approval
for compliance with the Contract Documents.
15.5.1. The HSP shall be based on the requirements of WAC 296-62-
077, 07517, and 07521 and shall contain detailed procedures which
include at least the following major sections:
A. a listing of all current applicable laws, rules, and
regulations whether local, State, or Federal;
B. details of work site preparation, personnel protective
equipment, decontamination procedures, spill containment plan,
and safety planning; and
C. a sequence of work, a stop work and re-start plan, safety
planning, and emergency procedures including vessel evacuation
and personnel accountability plans.
15.5.2. The HSP shall be prepared by a person certified and
qualified in health, safety and security procedures. WSF will
respond within fifteen (15) working days of receipt, with its
approval, approval-with-comment, or disapproval.
15.5.3. The Contractor shall include with the HSP, a description
of prior experience with work as defined herein, and the prior
experience of any Subcontractors to be used.
15.5.4. The HSP must be in sufficient detail to permit WSF to
make an informed judgment as to the Contractors understanding of
the serious nature of health, safety and security, and a
familiarity with the laws, rules, and regulations pertaining
thereto, and the Contractors ability to perform the task.
15.5.5. Prior to commencement of any work, WSF shall be provided
nine (9) copies of the approved HSP. The HSP shall be presented
in loose leaf book format on 8 1/2 x 11 inch heavy bond paper.
It shall be titled and indexed and all copies shall be serial-
numbered.
NOTE: No production work shall begin on the Vessel until the HSP
has been submitted and approved.
15.6. The Contractor shall provide protection from damage for
all affected storerooms, lockers, etc. and their contents in the
Vessel(s) during the work.
15.7. The Contractor shall erect at the site of construction,
and maintain during construction, signs satisfactory to WSF
identifying the project by Contract Name and indicating that
WSF is sponsoring the project.
15.8. Nothing in this Article is intended to relieve the
Contractor from any responsibility, or duty or obligation that
would otherwise be imposed upon the Contractor by the Contract,
law or equity.
15.9. There shall be no smoking aboard the Vessel while under
construction. This restriction applies to all personnel aboard
the Vessel, including but not limited to Contractor personnel,
subcontractors, other workers, and WSF personnel. The Contractor
shall be responsible for posting all appropriate or required No-
Smoking signage aboard the Vessel.
16. OWNER FURNISHED EQUIPMENT
16.1. Certain equipment listed and described in the
Specifications is OFE and will be furnished by WSF.
16.2. The Contractor, at its expense, shall off-load the OFE
from a WSF warehouse, or from WSF-provided conveyance. 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 more stringent of either
the manufacturers instructions or as if it were the Contractors
material. OFE shall be stowed in a lockable, properly
environment and temperature controlled, and dry warehouse. Main
Propulsion equipment for the Vessel, provided by the vendor, will
be delivered to the Shiopyard by the vendor on or before the
respective dates specified in the Technical Specification. The
Contractors requested date for possession and use of the OFE must
correlate with its Master Construction Schedule.
16.3. 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 vendor services through WSF. The Contractor shall be
responsible to WSF for all such additional costs.
16.4. If an OFE vendors field representative must perform work
beyond that required by WSFs original purchase specification, or
if the WSF-furnished 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 by deducting from Progress Payments.
The OFE vendors representation has been purchased by WSF on a
normal daytime, weekday work schedule. Should the Contractor
require the services of the vendors representative outside the
normal schedule, it shall be solely responsible for any and all
premium compensation that may be incurred.
16.5. 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 in accordance with
all of the manufacturers instructions and for assuring it is in
good working order upon Delivery.
17. DANGEROUS MATERIALS
17.1. No Asbestos containing materials (ACM) shall be installed
on the Vessel. All non-ACM substitutes shall meet current
criteria for safety and fire protection.
No lead containing paints (LCP) shall be applied to the Vessel.
No materials or components containing polycholorinated biphenyls
(PCBs) shall be installed on the Vessel.
17.2 Upon request, the Contractor shall provide information and
documentation pertaining to the use, removal or disposal of ACM,
LCP, PCBs or other toxic or hazardous waste. If at any time
during the Contract Work the Contractor fails to provide the
requested information or documentation, or submits erroneous
information or documentation, it shall be cause for WSF to
suspend all work until such time as the deficiencies have been
rectified at the Contractors expense.
17.3. Whether or not any toxic or hazardous materials
(including, but not limited to, ACM, LCP and PCBs) are identified
in the Contract Documents, Drawings or otherwise, the Contractor
shall be solely responsible for complying with, and enforcing,
all Regulations pertaining to the removal of ACM, LCP, PCBs 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 Award Price. The Contractor
shall protect and indemnify WSF from any and all damages
associated with or arising therefrom.
18. INDEFINITE QUANTITY WORK
18.1. Reference is made to Bid Item No.3, Miscellaneous Labor
Hour, Material, Engineering, Spare Parts, and Subcontractor Work
on the Bid Form. As used herein, the term Indefinite Quantity
Work shall mean all such Miscellaneous Labor Hour, Material,
Engineering, Spare Parts, and Subcontractor Work up to the
amounts specified in Bid Item No.3.
18.2. The Contractor shall perform Indefinite Quantity Work for
each Vessel at the respective rates and mark-ups set forth in Bid
Item No.3.
18.3. 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 the
Protests Article.
18.4. 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
Contractors risk and expense.
18.5. When the WSF Project Engineer 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
the Protests Article.
18.6. The State shall have the right to order from 0% to 100% of
the Indefinite Quantity Work without adjustment of the labor
rates or material mark-ups specified in Bid Item No.3..
Indefinite Quantity Work proposals shall include all direct
effects of the ordered work. The Contractor shall not be allowed
any compensation for cumulative disruption or any other indirect
effects of ordered Indefinite Quantity Work.
18.7 WSF will make every attempt to authorize Indefinite
Quantity Work in a manner that will not impact the Contract Time.
If the Contractor recognizes that Indefinite Quantity Work will
cause a schedule delay, the Contractor shall immediately inform
WSF that authorization of such work will have a schedule impact.
As a minimum, the Contractor shall give WSF written notice of
schedule impacts caused by Indefinite Quantity Work within three
(3) days of receipt of authorization for the work. Upon
receiving that notification, WSF will attempt to mitigate any
schedule impact by means which may include; discontinuing some or
all of the work, modifying the scope of some or all of the work
and/or accelerating some or all of the work by use of Bid Item
No. 3 overtime hours. If any schedule impacts cannot be
mitigated, then the Contractor may be allowed an adjustment for
delay by Change Order.
18.8. No additional compensation or other adjustments will be
made for Indefinite Quantity Work for delay, acceleration,
disruption or other impact except as is specified above.
18.9. 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. Deletions shall be priced
using the same basic principles set forth in Article 19.12.,
except that credits shall be returned to the Indefinite Quantity
Work resource pool. If the deletion was based on an Engineering
Change, WSF will compensate the Contractor for engineering effort
performed prior to the deletion.
18.10. Each Work Authorization Record shall be separately
progressed for labor, material and subcontractor costs and shall
be identified as a separate line item in the Progress Estimate.
Progress Payments for Indefinite Quantity Work shall be made in
the manner provided for in the Progress Payments Article.
18.11. Upon execution of a Work Authorization Record by WSF,
such Work Authorization Record shall be incorporated into and
become part of the Contract. After completion of the Contract
Work on each Vessel, or at such other time as WSF deems that all
Indefinite Quantity Work for a Vessel has been completed, WSF
will delete remaining unauthorized Indefinite Quantity Work
resources by a reduced price Change Order without any adjustment
in Bid Item No. 3 labor rates or material mark-ups.
19. CONTRACT CHANGES
19.1. WSF reserves the right to issue Change Orders, Interim
Change Orders, Maximum/Minimum Change Orders, Change Orders to
Follow, and Contract Modifications modifying the Contract Work
and language at any time during the Contract performance period.
While other Articles of this Contract may provide for the
issuance of Change Orders or Contract Modifications, they shall
be authorized based on the provisions of this Article only.
19.2. Contract Modifications
19.2.1. Contract Modifications may include but are not limited
to:
A. administrative changes; i.e., changes to wording or numbers,
spelling or other obvious errors that do not affect the Contract
Time and/or the Total Contract Price.
B. Work Authorization Records for work contemplated by Bid Item
No. 3, or to modify such authorizations; or
C. other changes that do not affect the Contract Time and/or
Total Contract Price.
19.3. Change Orders
19.3.1. Change Orders may include, but are not limited to:
A. deletion of any part of the Contract Work;
B. changes in the Contract Documents;
C. changes in specified method or manner of performance of the
Contract Work;
D. addition of new Contract Work;
E. changes in OFE or other WSF furnished facilities, equipment,
materials, or services;
F. directed acceleration or delay in the performance of the
Contract Work; or
G. any changes in Contract Time and/or Total Contract Price,
including WSFs exercise of its Contract Option.
19.4. Change Order Procedures. All Change Orders will be
implemented through one of the following procedures:
19.4.1. WSF Proposed. WSF may issue a proposed Change Order,
including a work scope statement, to the Contractor specifying a
Price/Time Proposal due date, and designating a Change Order
authorization date. The Contractors Price/Time Proposal shall
remain open for a minimum of thirty (30) days. WSF shall review
timely Contractor submittals and may: (i) reject; (ii) accept;
(iii) renegotiate; and/or (iv) seek revisions to those
submittals. If WSF chooses to issue a Change Order after review
of timely submittals and resubmittals, the Change Order may be:
(i) priced as a final, agreed bilateral Change Order; (ii)
Maximum or Minimum Priced; (iii) Interim Priced; or (iv)
unilaterally priced by WSF subject to the Protests Article.
Engineering, scoping and estimating work performed by the
Contractor in response to a WSF proposed Change Order prior to a
subsequent rejection is compensible, subject to negotiation.
19.4.2. WSF Requested. WSF may request that the Contractor
prepare a proposed Change Order, including a work scope
statement, and a Price/Time Proposal (including a separate price
for work scope statement and Price/Time Proposal preparation),
along with any other data as may have been specified in WSFs
request. The Contractors proposed Change Order shall remain open
for a minimum of thirty (30) days. Disposition of timely
submittals shall be as provided for in Article 19.4.1. The
proposal preparation price for timely submittals shall be either
accepted, negotiated, or unilaterally priced by WSF subject to
the Protests Article.
19.4.3. Contractor Proposed. The Contractor may propose a
Change Order to WSF, which shall include a work scope statement
and a Price/Time Proposal. The Contractors proposed Change Order
shall remain open for a minimum of thirty (30) days, during which
time WSF may make any disposition authorized by Article 19.4.1.
WSF shall not incur any costs for Contractor proposed Change
Orders which are not implemented, nor for any solution under
Article 19.4. that was necessitated due to the fault of the
Contractor.
19.5. Bilateral Change Order. With the exception of Maximum or
Minimum Priced Change Orders, Change Orders signed by both of the
contracting parties are based upon the mutual agreement of the
parties and constitute full and final accord and satisfaction on
all terms and conditions expressed therein and incidental
thereto.
19.6. WSF Unilateral Change Order. Unilateral Change Orders
will be based on a WSF Estimate priced in conformance with
Article 19.11.3. The Contractor is obligated to perform the work
identified in a unilateral Change Order, and WSF is obligated to
make Progress Payments pursuant to the Progress Payments Article.
If the Contractor disagrees with a unilateral Change Order, the
Contractor must satisfy the requirements of the Protests Article.
The Contractor shall keep records on protested work, and shall
proceed promptly with the work, all in accordance with such
Article.
19.7. Interim Priced Change Order. An Interim Priced Change
Order is a unilateral direction by WSF to the Contractor to
perform additional work subject to limitations upon price and
time. An Interim Priced Change Order will specify: (i) the date
by which the Contractor must submit a Price/Time Proposal: and
(ii) a date by which WSF shall issue a final Change Order for
that work described in the Interim Priced Change Order. Any work
performed by the Contractor beyond the price and time limits of
the Interim Priced Change Order shall be considered as
unauthorized and noncompensible. The WSF Representative may, in
his/her discretion , revise the price and or time limits
contained in the Interim Priced Change Order. Final resolution
of Interim Priced Change Orders shall be accomplished by a final
unilateral or bilateral Change Order establishing the price and
time for the work performed pursuant to an Interim Priced Change
Order.
19.8. Maximum or Minimum Priced Change Order. A Maximum or
Minimum Priced Change Order is an authorization for the addition
or deletion of work subject to specified limitations upon price
and time. A final Change Order shall ultimately be issued in an
amount no greater or lesser than the limitations set forth in the
Maximum or Minimum Priced Change Order. A Maximum or Minimum
Priced Change Order shall be issued and shall constitute an
accord and satisfaction regarding the Maximum and Minimum prices
for the changed work where:
19.8.1. A Maximum or Minimum Priced Change Order is unilaterally
issued by WSF at Maximum or Minimum prices equivalent to those
prices set forth in the Contractors Price/Time Proposals; or
19.8.2. As agreed by WSF and the Contractor.
19.9. Change Order to Follow. When the WSF Project Engineer
identifies work which qualifies as Change Order Work but which
the WSF Project Engineer believes must proceed immediately, the
WSF Project Engineer may 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 within which a Change Order, authorized by Article 19.5.
through 19.8 above, 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.
19.9.1. 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, in accordance with the Protests Article,
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.
19.9.2. If the parties cannot agree on the terms of a Change
Order within the COTF Period, the WSF Project Engineer may issue
a Change Order as authorized by Article 19.6., 19.7. or 19.8.
19.10. In the event of: (i) failure of the Contractor to submit
a Price/Time Proposal within the specified submittal time, or
such extended time as WSF may agree to; or (ii) failure to reach
mutual agreement for a Change Order under Article 19.4.1.,
19.4.2., 19.4.3., 19.7. or 19.8., WSF may:
19.10.1. issue a unilateral Change Order;
19.10.2. withdraw or reject the proposed Change Order; or
19.10.3. accomplish the work in accordance with the Employment
of Others Article.
19.11. Change Order Contents and Pricing. Other conditions
pertaining to the contents and pricing of Change Orders are as
follows:
19.11.1. All Contractor requests for time extensions shall be
accompanied with schedule and critical path support, in
sufficient detail to sustain the request.
19.11.2. Price/Time Proposals shall be complete in every
respect, containing all costs applicable, separately identified,
broken down, and priced in accordance with Article 19.11.3., and
shall include only those costs resulting from the change
including, but not limited to:
A. all direct costs associated with labor, material and
subcontract effort required to accomplish the Change Order;
B. acceleration costs necessary to maintain schedule; and
C. all other costs that are attributable to the Change Order.
19.11.3. Change Order costs for each Vessel shall be priced
based on the rates for labor (including all of the factors and
elements that make up the bid rate), material markup, and
subcontract markup as bid for each Vessel under Bid Item No.3.
19.11.4. Change Order proposals for $100,000 or more require the
documentation specified in the Claims Article except that the
Contractors Labor Costs and Material mark-ups shall be priced in
accordance with Bid Item No. 3, subject to the limitations of
Article 19.11.3.
19.12. Deletion of Contract Work. In any Change Order for
Deleted Work, the Total Contract Price and Contract Time will be
equitably adjusted taking into account the following factors:
19.12.1. 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, including but not
limited to, restocking charges, purchasing time and material
handling time;
19.12.2. 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 in Bid Item No. 3 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. In no case will
the Contractor be allowed to re-price non-deleted Contract Work
as the result of Deleted Work;
19.12.3. The Contractor shall not be entitled to anticipated
markups for overhead and profits with respect to the Deleted
Work; and
19.12.4. The Contract Time shall be adjusted as the parties
agree. If the parties cannot agree, WSF will determine the
equitable adjustment for Contract Time, subject to the Protests
Article. Such adjustment may be a reduction in Contract Time.
19.13. All final Change Orders signed by both parties shall:
A. be on a WSF furnished form only;
B. constitute full and final settlement of all non-reserved
issues pertaining to that Change Order including an accord and
satisfaction of all claims of the Contractor for additional costs
or time with regard to the implementation of that Change Order
and the performance of all work associated with that Change
Order, including any affect of that work on unchanged work;
C. not be subject to protest nor further modification; and
D. be incorporated into and become a part of the Contract.
19.14. Each Change Order shall be separately progressed for
labor, material, and Subcontractor costs, and shall be identified
as a separate line item in the Progress Estimate. Progress
payments for Change Order Work shall be made in the manner
provided for in the Progress Payments Article.
19.14.1. Extra work and materials furnished without a Change
Order, Work Authorization Record, or other authorization as
provided for 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.
19.14.2. Contract Security for Change Orders shall be in
accordance with the Contract Security Article. All Contract
security, whether a bond or any alternate form of security, shall
cover and apply to all Change Orders as if the Change Order were
in the original Contract; provided, in no event shall total
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 WSFs exposure
to performance and/or payment loss. WSF shall monitor the need
for additional security and shall notify the Contractor of any
requirement for an increase in the amount of security to be
provided by the Contractor. Such notice shall specify the
proposed form(s) and format of such additional security.
19.15 Notwithstanding the Coordination of Contract Documents
Article, no Change Orders will relieve the Contractor of any
obligations included in the Contract Documents unl;ess relief is
stated in the Change Order.
20. SHARED SAVINGS
20.1. The Contractor is encouraged to develop, prepare, and
submit Shared Savings Proposals (SSPs) voluntarily. For those
SSPs that originate with the Contractor, and accepted by WSF, the
Contractor shall share in any Contract savings for this Contract
only in accordance with Article 20.5. below.
20.2. SSPs, as a minimum shall include the information described
below:
20.2.1. A description of the difference between the existing
Contract requirement and that proposed, the comparative
advantages and disadvantages of each, a justification when an
items function or characteristics are being altered, and the
affect of the change on end performance.
20.2.2. A list and analysis of the Contract requirements,
including Specifications, that must be changed if the SSP is
accepted.
20.2.3. A separate detailed cost estimate in accordance with the
Contract Changes Article for the affected portions of the
existing Contract requirement, and the estimated savings
resulting from the incorporation of the SSP. The cost reduction
associated with the SSP shall take into account the Contractors
allowable development and implementation costs, including any
amount attributable to subcontractors.
20.2.4. A description and estimate of costs WSF may incur in
implementing the SSP, such as one time engineering and
development costs, test, evaluation, operating, and support
costs.
20.2.5. A statement of the time by which a SSP Change Order must
be issued in order to obtain the maximum cost reduction, noting
any effect on schedule or Delivery.
20.3. In order to maximize the potential for acceptance of SSPs,
the Contractor is encouraged to discuss ideas with the WSF
Representative prior to incurring costs, as SSPs not accepted by
WSF do not create any WSF cost liability.
20.4. WSF will notify the Contractor of the status of SSPs
within thirty (30) days after receipt, unless additional time is
required, in which case the Contractor will be provided a status
report on the reason for the delay and the expected date of a
decision. WSF is committed to processing SSPs expeditiously.
However, it shall not be liable for any delay in acting upon an
SSP.
20.4.1. If an SSP is not accepted, WSF will notify the
Contractor in writing, providing its rationale for rejection.
The Contractor may withdraw an SSP, in whole or in part, at any
time before acceptance by WSF.
20.4.2. WSF may accept any SSP, in whole or part, by issuance of
a Change Order, citing this Article. Even though an agreement on
the price reduction may not have been reached, WSF may issue a
unilateral Change Order directing the Contractor to proceed with
the work as modified by the SSP. WSFs decision to reject or
accept all or part of any SSP shall be final and is not subject
to the Protests and Disputes and Claims Articles.
20.5. Shared Savings rates shall be calculated as follows:
20.5.1. One time engineering, development, testing and support
costs and any other increase costs shall be subtracted from the
total Contract savings for the Vessel to which the savings will
apply. The resulting actual savings shall be divided by two (2)
and the Total Contract Price shall be reduced by that amount.
Future savings are not a consideration and will not be
entertained.
20.6. The Contractor may elect to pass the Shared Savings
provision on to its subcontractors. If a subcontractor chooses
to participate in the Shared Savings program, the above
provisions apply to it. Any subcontractor SSPs shall be
submitted via the Contractor.
20.7. If an SSP is accepted by WSF, the Contractor and its
subcontractors hereby grant WSF unlimited rights in the SSP and
the supporting data.
20.8. SSPs will not be considered for WSF initiated ideas or
Changes unless the Contractor is expressly requested by WSF to
develop such ideas or changes as an SSP. Decrease Changes
initiated by WSF will not be the subject of an SSP.
21. PROTESTS
21.1. If the Contractor disagrees with any unilateral Change
Order, Work Authorization Record or any written or oral order,
direction, instruction, interpretation or determination by the
WSF Project Engineer, the Contractor shall:
A. Give a signed written notice of protest to WSF at least one
(1) working day prior to performing the work;
B. Give a signed written notice of protest to WSF no later than
two (2) working days after: (i) an event of delay or suspension
in the case of work delay or suspension caused by WSF, as
described in the Extension of Time and Suspension of Work
Articles; and (ii) commencement of work, in the case of COTF
work which is to commence immediately, as described in the
Contract Changes Article;
C. Supplement the written notice of protest within five (5) days
with a written statement providing the following:
1. the date of the protested action,
2. the nature and circumstances which caused the protest,
3. the Contract Document provisions that support the protest,
4. the estimated dollar cost broken down by craft and material
and/or subcontractor, if any, of the protested work and how that
estimate was determined, and
5. an analysis of the progress schedule showing the schedule
change or disruption if the Contractor is asserting a schedule
change or disruption; and
D. Supplement the information required above upon request by the
WSF Project Engineer. In addition, the Contractor shall promptly
provide the WSF Project Engineer as soon as possible, and in no
event later than the date WSF executes 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 Project Engineer is unable to obtain accurate
information due to the Contractors delay in providing such
information, the WSF Project Engineer shall be entitled to make
any reasonable presumption with respect to such information.
21.2. Throughout any protested work, the Contractor shall keep
complete records of costs incurred and schedule impact in the
performance of the protested work. The Contractor shall permit
the WSF Representative access at any reasonable time to these and
any other records needed for evaluating the protest.
21.3. The WSF Project Engineer will evaluate the written protest
and make a decision on the basis of the pertinent Contract
provisions and the facts and circumstances involved in the
protest. WSF will furnish a written decision to the Contractor
within ten (10) days after receipt of all required and requested
information from the Contractor. If the WSF Project Engineer
determines that a protest is valid, WSF will make an adjustment
in the Total Contract Price and/or Contract Time. No adjustment
will be made for an invalid protest.
21.4 The WSF Project Engineers decision on a protest shall be
final and conclusive on the subject unless the Contractor files a
written appeal to the Disputes Review Board pursuant to the
Dispute Resolution procedures specified in Exhibit 6 attached
hereto and by this reference incorporated herein. The
Contractors appeal to the Disputes Review Board must be
instituted within fifteen (15) days after receipt of the WSF
Project Engineers written decision.
21.5. Notwithstanding any protest, the Contractor shall proceed
promptly with the work as directed by the WSF Project Engineer.
21.6. The failure of the Contractor to initiate, pursue and
evidence its protest of any 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
Contractors 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.
22. CLAIMS
22.1. 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 the Protests Article and the Disputes
Resolution procedures specified in Exhibit 6 to resolve a
dispute, the Contractor may file a claim as provided in this
Article.
22.2. All claims of the Contractor shall be in writing,
submitted to the WSF Representative as soon as possible, and in
no event later than the date WSF executes the Final Contract
Voucher Certificate (as specified in the Progress Payments
Article). All claims shall 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:
22.2.1. A detailed factual statement of the claim providing all
necessary dates, locations, and items of work affected by the
claim.
22.2.2. The date on which facts arose which gave rise to the
claim.
22.2.3. The name of each WSF individual, official, or employee
and each Contractor or Subcontractor employee or agent involved
in, or knowledgeable about, the claim.
22.2.4. The specific provision of the Contract Documents which
support the claim and a statement of the reasons why such
provisions support the claim.
22.2.5. A detailed statement setting forth all facts supporting
its position relating to the decision of the WSF Project Engineer
, if the claim relates to a decision of the WSF Project Engineer.
22.2.6. The identification of any documents and the substance of
any oral communications that support the claim.
22.2.7. Copies of any documents that support the claim.
22.2.8. 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.
22.2.9. 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 for Contractors claim detail); and
E. Other categories as specified by the Contractor or WSF.
22.2.10. In conjunction with the above, whenever the Contractor
requests an equitable adjustment in any amount with respect to
any act or omission to act (Event) on the part of WSF, the
proposal supporting such request shall contain the following
information for each individual item or element of the request:
A. A description of: (i) the work required by the Contract
before the Event, which has been deleted by the Event; and (ii)
the work deleted by the change which already has been completed.
The description is to include a list of components, equipment,
and other identifiable property involved. Also, the status of
manufacture, procurement, or installation of such property is to
be indicated. Separate description is to be furnished for design
and production work. Items of raw material, purchased parts,
components and other identifiable hardware, which are made excess
by the Event and which are not to be retained by the Contractor,
are to be listed for later disposition.
B. A description of work necessary to undo work already
completed which has been deleted by the Event.
C. A description of work not required by the terms hereof before
the Event, which is substituted or added by the Event. A list of
components and equipment (not bulk materials or items) involved
should be included. Separate descriptions are to be furnished
for design work and production work.
D. A description of interference and inefficiencies in
performing the work as a result of the Event.
E. A description of each element of disruption and exactly how
work has been, or will be disrupted, as a result of the Event.
That description shall include, but not be limited to the
following information:
1. the calendar period of time during which disruption occurred,
or will occur;
2. area(s) aboard the Vessel(s) where disruption occurred, or
will occur;
3. trade(s) disrupted, with a breakdown of manhours for each
trade;
4. scheduling of trades before, during, and after period of
disruption;
5. description of measures taken to lessen the disruptive effect
of the Event;
F. Delay in delivery attributable solely to the Event.
G. Other extra or additional work attributable to the Event.
H. Supplementing the foregoing, a narrative statement of the
direct causal relationship between any alleged Event and the
claimed consequences therefor, cross-referenced to the detailed
information provided as required above.
I. A statement setting forth a comparative enumeration of the
amounts budgeted for the cost elements, including the material
costs, labor hours and pertinent indirect costs, estimated by the
Contractor in preparing its initial and ultimate proposal(s) for
this contract, and the amounts claimed to have been incurred
and/or projected to be incurred as a result of any Event
corresponding to each such budgeted cost elements.
22.3. It is recognized that individual claims may not include
all of the factors listed in paragraph 22.2. above. Accordingly,
the Contractor is required to set forth in its claim only those
factors that are applicable to the individual claim. In any
event, the information furnished hereunder shall be in sufficient
detail to permit the WSF Representative to conduct a complete
analysis and assessment of the request.
22.4. A signed, dated and notarized statement to the WSF Project
Engineer containing the following language:
Under the penalty of law for perjury or falsification, the
undersigned,
______________________________________,
(name)
______________________________________ of
(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.
22.5. 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 in
accordance with the provisions of the Audit Article. All claims
filed against WSF shall be subject to audit in accordance with
the provisions of th Audit Article at any time following the
filing of the claim. Failure of the Contractor, Subcontractors,
or lower tier subcontractors to maintain and retain sufficient
records to allow the auditors to verify all or a portion of the
claim or to permit the auditor access to the books and records of
the Contractor, Subcontractors, or lower tier subcontractors
shall constitute a waiver of claim and shall bar any recovery
thereunder.
22.6. 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.
22.7. The Contractor shall pursue administration of any claim
solely with the WSF Representative until such time as WSF has
issued a decision.
22.8. 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.
22.9. The failure of the Contractor to initiate, pursue and
evidence its claim in accordance with all of the terms of this
Article (including the Contractors 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.
22.10. 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 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.
22.11. The Contractor shall pursue administration of any claim
solely with the WSF Representative until such time as WSF has
issued a decision.
23. AUDIT
23.1. The Contractors wage, payroll, and cost records on this
Contract, and all other records and data developed or used for
this Contract, shall be immediately open to inspection, review or
audit by WSF Representatives for the duration of the Contract and
for a period of not less than three (3) years after the date of
Final Acceptance of all Contract Work. The Contractor shall
retain these records and data for that period. The Contractor
shall also guarantee that the wage, payroll, and cost records,
and all other records and data developed or used for this
Contract, of all Subcontractors and all lower tier subcontractors
shall be retained and immediately open to similar inspection,
review or audit by WSF Representatives for the same period of
time. The inspection, review or audit may be performed by WSF
employees or by auditors under contract with WSF. The
Contractor, subcontractors, or lower tier subcontractors shall
provide adequate facilities, acceptable to the WSF Project
Engineer, for the audit during normal business hours. The
Contractor, Subcontractors, or lower tier subcontractors shall
cooperate in every way with the auditors. If an audit is to be
commenced more than sixty (60) calendar days after the final
acceptance date of the Contract, the Contractor will be given
five (5) calendar days notice of the time when the audit is to
begin. If any litigation, claim, or audit arising out of, in
connection with, or related to this Contract is initiated, all
applicable records shall be retained until such litigation,
claim, or audit involving the records is completed.
23.2. As a minimum, the auditors shall have available to them
the following documents:
A. Daily time sheets and supervisors daily reports.
B. Union agreements.
C. Insurance, welfare, and benefits records.
D. Payroll registers.
E. Earnings records.
F. Payroll tax forms.
G. Material invoices and requisitions.
H. Material cost distribution worksheet.
I. Equipment records (list of company equipment, rates, etc.).
J. Vendors, rental agencies, Subcontractors, and lower tier
subcontractors invoices.
K. Subcontractors and lower tier subcontractors payment
certificates.
L. Canceled checks (payroll and vendors).
M. Job cost report.
N. Job payroll ledger.
O. General ledger.
P. Cash disbursements journal.
Q. Financial statements for all years reflecting the operations
on this Contract. In addition, WSF may require, if it deems
appropriate, additional financial statements for three (3) years
preceding execution of the Contract and three (3) years following
final acceptance of the Contract.
R. Depreciation records on all company equipment whether these
records are maintained by the company involved, its accountant,
or others.
S. If a source other than depreciation records is used to
develop costs for the Contractors internal purposes in
establishing the actual cost of owning and operating equipment,
all such other source documents.
T. All documents which relate to each and every claim together
with all documents which support the amount of damages as to each
claim.
U. Worksheets used to prepare the claim establishing the cost
components for items of the claim including but nit limited to
labor, benefits and insurance, materials, equipment,
Subcontractors, all documents which establish the time periods,
individuals involved, the hours for the individuals, and the
rates for the individuals.
24. TESTS AND TRIALS
24.1. When the Contract Work is essentially complete and all
associated installation tests have been satisfactorily completed,
and the Ready for Trials Date is set, the Contractor shall
conduct dock trials in accordance with the Contract Documents.
24.2. 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, and WSF approval is obtained, the Contractor shall
conduct sea trials in accordance with the Contract Documents.
25. DELIVERY
25.1. TIME IS OF THE ESSENCE IN THIS CONTRACT. The Contractor
shall provide the attention and labor force necessary to
facilitate progress and completion of the Contract Work so that
Vessel Delivery to WSF shall occur alongside a pier at the
Contractors Shipyard between 8:00 a.m. and 2:00 p.m. on the
Delivery Date.
25.2 The Contract Work shall be scheduled such that the Vessel
will have the maximum possible USCG re-inspection interval when
it is Delivered. Work such as life raft certification, fire hose
testing, life jacket inspection, sea valve inspection, and the
like shall be accomplished as near to Delivery as possible, but
within sixty (60) days prior to Delivery in order to provide WSF
with the maximum time before required USCG re-inspections.
25.3 When the Vessel Contract Work has been completed by the
Contractor, and the Vessel has been made ready for service and
has satisfactorily completed all tests and trials and has
received a Certificate of Inspection from the U.S. Coast Guard in
accordance with the Contract Documents, it is to be Delivered, as
per Article 25.1 above, with all machinery operating and in first
class running order; with all painted surfaces clean and touched-
up; stores, equipment, inventory and spares provided under this
Contract properly stored; all tanks, bilges, ducts,
accommodations for passengers and crew and other spaces clean and
cleared of all dunnage, dirt and debris; and with all electric
light bulbs replaced with new bulbs and fluorescent tubes.
Upon Delivery, 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. All tankage, except sewage, waste oil , leak-
off, and main engine coolant, shall be filled to ninety-five
percent (95%) of capacity with designated fluids. The Vessel at
Delivery 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 Vessels usual service and is fully cognizant
of the details of such service.
25.4. To ensure that the Vessel is in proper condition for
Delivery, WSF, the Contractor and appropriate Authoritative
Agencies will complete a joint acceptance survey of the Vessel at
least three (3) working days prior to the scheduled Delivery.
The survey shall include a review of the status of acceptance
survey deficiencies and items developed thereto. It must be
recognized that under the Contract Documents, the Contractor is
required to Deliver a Vessel free of all known defects and
deficiencies. The Contractor must agree to the earliest
practical accomplishment of any remaining acceptance deficiencies
without interference with the scheduled use of the Vessel.
25.5. WSF and the Contractor will acknowledge Delivery by
executing a letter for each Delivery. This letter shall be
drafted by the WSF Representative and co-signed by an authorized
Contractors Representative indicating concurrence with its
contents. The Delivery letter shall contain, but is not limited
to the following information:
A. the date, time and place of Delivery;
B. the general condition of the Vessel at Delivery;
C. if WSF is willing to accept Delivery prior to completion of
all the Contract Work:
1. a description of any major discrepancies existing at time of
Delivery and the deadline for their correction;
2. as an enclosure, a listing of any minor discrepancies
existing at the time of Delivery with a schedule for their
correction; and
3. a description of any alleged discrepancy which is in dispute
at the time of Delivery.
25.6. The existence of any major uncorrected Contractor
deficiency item affecting the safe navigation or the immediate
use of the Vessel for its intended service will be sufficient
cause to reject Delivery of the Vessel. The correction of the
items or items concerned and the delay in Delivery resulting
therefrom shall be the responsibility of the Contractor. The
existence of a large number of uncorrected minor deficiencies may
likewise be a cause for rejection of Delivery until their number
has been reduced to an acceptable level. All major tests shall
be completed prior to sea trials and all tests shall be completed
prior to Delivery of the Vessel.
25.7. If the Contract Work is not finished on the Delivery 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 Delivery of the Vessel, and
treat all unfinished Contract Work (which may be work commonly
know as punch list work) as Warranty Deficiencies subject to
completion and/or repair under th Warranty Deficiencies and
Remedies Article, or on terms otherwise acceptable to WSF. The
return of the Vessel(s) under the terms of this paragraph shall
constitute Delivery subject to said Warranty Deficiencies. Any
Warranty Deficiencies which can be identified at such time will
be included in the letter delivered at Delivery provided that
failure to identify any Warranty Deficiency shall not prejudice
WSF rights with respect thereto. Delivery under the terms of
this paragraph may not occur before the Substantial Completion
Date.
25.8. In addition to its rights under Article 25.7. above, WSF
may take delivery 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: (i) fit for its intended service, and (ii) no
Contractor responsible deficiencies remain which would prevent
the obtaining of a Certificate of Inspection from the U.S. Coast
Guard. Such delivery shall not be deemed Delivery (provided,
however, that provisions in this Contract relating to towage in
anticipation of Delivery shall apply to such delivery), and the
Contractor will remain responsible for completion of the Contract
Work (which may be work commonly know as punch list work) within
the Contract Time, provided that to the extent the Contractors
Work is delayed or made more difficult as a result of this
Delivery, 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.
25.9. In no event shall Delivery be delayed or withheld because
of disputes between the Contractor and WSF.
26. FAILURE TO COMPLETE ON TIME
26.1. Each Vessel is an operating unit of the complete WSF
public mass transportation system. 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 on each Vessel 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 Delivery extends
past the Delivery Date for each Vessel. Such liquidated damages
shall not exceed the sum of $600,000 per Vessel.
26.2. 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.
26.3. The damages in this Article are in addition to any other
damages contained in any other Articles of this Contract.
27. EXTENSION OF TIME
27.1. At any time the Contractor anticipates difficulty for any
reason in completing the Contract Work and effecting Delivery on
or before the Delivery 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
verbally notify the Project Engineer. Such 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 Article 27.3 below. Receipt of
this notification is not to be construed as a waiver of any
rights which WSF may have under this Contract.
27.2. 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 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 WSFs 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 (above) provided that the request letter described in
Article 27.3 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.
27.3. 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.
27.4. If the amount of time requested combined with any prior
authorized time extensions (the Revised Contract Time) equals one
hundred twenty-five percent (125%) or more of the original
Contract Time, the Contractors 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, the requirement of additional Surety consent
shall be repeated whenever any request for a time extension again
exceeds by twenty-five percent (25%) the Revised Contract Time
last requiring Surety consent. In the case of alternate
security, the owner of alternate security 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.
27.5. 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 the
Protests Article.
27.6. The Contractor shall not be entitled to a time extension
for events including, but not limited to the following:
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;
E. delays by any Subcontractors or suppliers, or
F. implementation of any Indefinite Quantity Work; Provided, if
the Contractor considers any Indefinite Quantity Work as
impacting the scheduled Delivery, it shall immediately notify WSF
upon receipt of the Work Authorization Record. WSF will then
advise the Contractor regarding commencement of work, or some
other course of action.
27.7. Under no circumstances will the Contractor be entitled to
any extension of the Contract Time for any delay resulting from
causes that should have been known or reasonably discovered by
the Contractor.
27.8. WSF will not allow an extension in the Contract Time for
any cause if it resulted from the Contractors 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.
27.9. Extensions in the Contract Time pursuant to Change Orders
and Protests will be handled under the procedures set forth,
respectively, in the Contract Changes and Protests Articles.
28. EARLY DELIVERY BONUS
28.1. Each Vessel is an operating unit of the complete WSF mass
transportation system. Early Delivery of the Option Vessels
enhances system performance and may expedite planned vessel
renovations by WSF, providing benefits to the public and to
commerce. If the Contract Work for an Option Vessel can be
completed prior to the Delivery Date for that Vessel, the
Contractor shall be entitled to a bonus. The amount of the bonus
shall be Fifteen Thousand Dollars ($15,000.00) per calendar day
for each day that Delivery precedes the Delivery Date for each
Option Vessel. Such bonus shall not exceed thirty (30) calendar
days and the sum of Four Hundred and Fifty Thousand Dollars
($450,000.00) per Option Vessel. Notwithstanding the foregoing,
the Contractor shall not be entitled to a bonus to the extent
that such early Delivery is a result of an adjustment to the
Contract Time which is made after Delivery has occurred (as a
result of a protest, claim or otherwise).
29. DISPOSAL OF SCRAP
29.1. All scrap resulting from accomplishment of this Contract
is the property of the Contractor to be disposed as it sees fit.
Scrap is defined as property that has no reasonable prospect of
being sold except for the recovery value of its basic material
content. The determination as to which materials are scrap and
which materials are salvage, will be made, or concurred in, by
the WSF Representative.
29.2. As consideration for the value of scrap, the Contractors
Bid Price shall be a net price reflecting the estimated value of
the scrap.
29.3. This requirement is not intended to conflict in any way
with other Articles of this Contract, nor does it relieve the
Contractor of any other requirement under such Articles.
30. WARRANTY DEFICIENCIES AND REMEDIES
30.1. 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(s) with respect thereto, or the failure of Contractors
workmanship, materials or design to meet the terms of the
Contract Documents. Without limiting the foregoing, the term
Warranty Deficiencies shall include any unsatisfactory
vibrations, noise or temperature levels. Correction Period shall
mean a period of twelve (12) months from the Delivery 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.
30.2. 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 deficiency to the extent that such 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 Vessels home port unless impractical; or
B. with the concurrence of WSF, while the Vessel is underway; or
C. if neither of the foregoing options is available,
1. at the Shipyard of the Contractor; or
2. at another shipyard.
30.3. WSF shall notify the Contractor in writing of any Warranty
Deficiency for which the Contractor is liable pursuant to Article
30.2 above within twenty-one (21) 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 written notice thereof and whenever practicable
(taking into consideration the necessity of keeping the Vessel
performing its usual service) the Contractor shall be given an
opportunity to inspect and correct the Warranty Deficiency or
damage unless WSF determines that immediate correction by another
source is essential. 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.
30.4. Notwithstanding the foregoing, WSF may independently
arrange to have Warranty Deficiencies corrected at sea or by
another shipyard or ship repair yard at any port satisfactory to
WSF in cases where WSF has provided the Contractor with prior
written notice of its intent to so correct the Warranty
Deficiency and the Contractor has failed to repair the problem
within twenty-one (21) days of the date of that notice, or such
shorter time as is deemed appropriate by WSF when the Warranty
Deficiency is the cause of any emergency or non-emergent
inconvenience or difficulty to WSF or to the traveling public.
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.
30.5. 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, re-
float day and any lay days required to accomplish the Vessels
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(s) 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.
30.6. 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.
30.7. 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.
30.8. 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 suppliers
guarantee, the vendors obligations extend for a period beyond the
Correction Period.
30.9. The Contractors warranty with regard to all Owner
Furnished Equipment shall be limited to workmanlike installation
in accordance with the manufacturers specifications, approved
marine construction practices and the Contract Documents. This
provision is not intended to represent a limitation on damages
caused by unworkmanlike installation by the Contractor.
30.10. Subsequent to Delivery, the Contractor shall, at its sole
risk and expense, place a warranty engineer on board the Vessel
for a minimum period of 120 days (on each Vessel) consisting of
eight (8) hours per day, seven (7) days per week. The warranty
engineer shall remain on call during the remainder of each day,
subject to four (4) hours prior notice by WSF, to the maximum
extent possible. The warranty engineer shall represent the
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. The provision of a
warranty engineer aboard the Vessel shall not affect the length
of the Correction Period specified in this Article.
The operating route of each Vessel shall be at WSFs sole
discretion, but will normally be the Seattle/Bainbridge Island
and/or the Edmonds/Kingston ferry routes. The hours of operation
will vary, but will not begin before 5:00 a.m. nor end before
3:00 a.m. the following morning.
30.11. 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 (12) months from the date of repair of
such item was completed. In all events, the maximum Correction
Period will be twenty-four (24) months.
30.12. 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, the
Protests Article. If no WSF Representative has been appointed,
such protest will be made to the Project Engineer.
30.13. Notwithstanding the Disputes and Claims Article, WSF
shall have all remedies available to it under applicable law to
enforce its rights under this Article.
30.14. The rights and remedies provided in this Article are in
addition to, and not in substitution for any rights and remedies
which WSF might have as a matter of law or equity or otherwise
under the Contract Documents. 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.
31. RIGHTS IN DATA
31.1. Unless otherwise provided, data which originates from this
Contract shall be works for hire as defined by the U.S. Copyright
Act of 1976 and shall be owned by the State. Data shall include,
but not be limited to: plans, specifications, drawings,
calculations, reports, documents, magnetic media disks,
pamphlets, books, surveys, etc. Ownership includes the right to
copyright, patent, register and the ability to transfer these
rights.
Data which is delivered under the Contract, but which does not
originate therefrom, shall be transferred to the State with a non-
exclusive, royalty-free, irrevocable license to publish,
translate, reproduce, deliver, perform, dispose of, and to
authorize others to do so; Provided, that such license shall be
limited to the extent which the Contractor has a right to grant
such a license. The Contractor shall exert all reasonable
efforts to advise the State, at the time of delivery of the data
furnished under this Contract, of all known or potential
invasions of privacy or proprietary information contained therein
and of any portion of such document which was not produced in the
performance of this Contract. The State shall receive prompt
written notice of each notice or claim of infringement received
by the Contractor with respect to any data delivered under this
Contract. The State shall have the right to modify or remove any
restrictive markings placed upon the data by the Contractor.
32. PATENTED DEVICES, MATERIALS AND PROCESSES
32.1. The Contractor shall assume all costs arising from the use
of patented devices, materials or processes used on or
incorporated in the work, and agrees to indemnify, defend and
save harmless the State, Commission, Secretary, and their duly
authorized agents and employees from any nature for, or on
account of, the use of any patented devices, materials, or
processes; Provided, such indemnity shall not apply in the case
of any OFE or any brand name item specified by WSF to be used in
performance of the Contract Work.
33. TERMINATION FOR DEFAULT
33.1. Events of Default of the Contractor under this Contract
include, but are not limited to, the following:
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 Delivery Date and/or
Contractors failure to effect Delivery on the Delivery 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 incompetent,
unskilled or otherwise unsatisfactory workers upon WSFs
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. if the Contractor is adjudged bankrupt or insolvent, or makes
a general assignment for the benefit of creditors, or if the
Contractor or a third party files a petition to take advantage of
any debtors act or to reorganize under the bankruptcy or similar
laws concerning the Contractor, or if a trustee or receiver is
appointed for the Contractor or for any of the Contractors
property on account of the Contractors insolvency, and the
Contractor or its successor in interest does not provide adequate
assurance of future performance in accordance with the Contract
within fifteen (15) calendar days of receipt of a request for
assurance from WSF.
33.2. 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 WSFs 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, terminate the Contract. In such event, the Surety
may take any of the following actions within a reasonable period
of time upon notice to WSF and the Contractor:
A. Undertake the completion of the Contract Work by the Surety,
through its agents or independent contractors satisfactory to
WSF, in which event the Suretys obligation to complete the
Contract Work shall not be limited by the penal sum of the
Contract Security bond(s); or
B. Pay the full amount of the penal sum of the Contract Security
bond(s) in complete discharge and exoneration of such bond(s),
and all of the liabilities of the Surety relating thereto; or
C. Let WSF complete the Contract Work by an independent
contractor or otherwise, and reimburse WSF up to the penal sum of
the Contract Security bond(s).
If WSF completes the Contract Work by an independent contractor
pursuant to Article 33.2.C above, 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 WSFs 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 Contract Work.
33.3. 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 and attorney fees), 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 have the right to deduct the unsatisfied
portion of the WSF Expense from the Contract Security provided by
the Contractor. If the WSF Expense exceeds the amount of the
Contract Security: (i) the Contractor shall pay the difference
to WSF upon demand, and (ii) if the Surety has not fully and
faithfully complied with the alternatives in Article 33.2, the
Surety and the Contractor shall be jointly and severally liable
to WSF and shall pay the difference to WSF on demand.
33.4. 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 WSF will not release
the Contractor from liability.
33.5 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
the Termination For Public Convenience Article.
34. TERMINATION FOR PUBLIC CONVENIENCE
34.1. 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.
34.2. Whenever the Contract is terminated in accordance with
this Article, the Total Contract Price will be adjusted based on
the deletion principles set forth in the Progress Payments and
Contract Changes Articles.
34.3. 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
comparable to that required for a claim under the Disputes and
Claims Article sufficient 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.
35. SUSPENSION OF WORK
35.1. 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
Representatives 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 (i) the performance would have been suspended by
any other cause, including the fault or negligence of the
Contractor, or (ii) 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 the Protests Article. 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 adjustment in Total
Contract Price and/or Contract Time is due as provided in this
Article. The adjustment for increase in Total Contract Price, if
due, shall be subject to the limitations provided in the Disputes
and Claims Article, 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 the Extension of Time Article. WSFs
determination as to whether an adjustment should be made will be
final as provided in that Article. No claim by the Contractor
under this Article shall be allowed unless the Contractor has
followed the procedures provided in this Article and in the
Protests and Disputes and Claims and Extension of Time Articles.
36. SUBCONTRACTORS
36.1. WSF recognizes that the Contractor may desire to
subcontract part of the Contract Work. However, the Contractor
is obligated to obtain WSFs prior written approval as to each
such Subcontractor (See Article 36.10). WSF will approve a
Subcontractor only if satisfied with the proposed Subcontractors
record, equipment, experience, and ability. Work done by the
Contractor itself shall account for at least fifty percent (50%)
of the total Contract Work on each Vessel.
36.2. 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 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. In the event that WSF discovers
at any time that the subcontract does not comply with such
provisions, WSF shall have the right to require the Contractor 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.
36.3. 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.
36.4. 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 on each Vessel which was subcontracted
to it.
36.5. 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.
36.6. The Contractor shall certify to the amounts paid to any
MBE and/or WBE firms that were Subcontractors. This
certification shall be supplied with the Final Contract Voucher
Certification on the form provided by WSF.
36.7. WSF reserves the right to inspect ongoing work and
completed work at the Subcontractors plant at any time. 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. The
written request shall include a WSF statement that the
subcontract work does not comply with the requirements of the
Contract Documents.
36.8. All Subcontractors and suppliers must warrant their work
and/or materials at least to the same extent as provided in this
Contract and WSF shall be a third party beneficiary of all such
warranties entitled to enforce such rights directly against the
Subcontractor or supplier.
36.9. A Subcontractor will not be paid for performing any
Contract Work under the Contract until the following documents
have been completed and submitted to, and where required by WSF,
approved by the WSF Representative:
A. Request to Sublet Work (Form 421-012);
B. Statement of Intent to Pay Prevailing Wage (Form F700-029-000
rev. 11-89) (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
D. Such other documents as WSF may reasonably request, including
a Release of Claims Certification.
36.10. The Contractors records pertaining to the requirements of
this Article shall be open to inspection or audit by
representatives of WSF 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.
36.11. The Contractor shall be responsible for making certain
that 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 the No Arrests or
Attachments Article.
37. EMPLOYMENT OF OTHERS
37.1. 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(s), 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 required to pay to the Contractor
any penalty, premium or other sum for the exercise of this right.
37.2. In the event that WSF and the Contractor cannot reach
agreement on the terms of a Change Order, 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. The
Contractor warrants that those workers utilized based upon the
above provisions shall, along with their equipment, have free
access to the Shipyard and the Vessel at all times work is to be
accomplished.
37.3. 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 Delivery Date. Any
assistance over and above that called for in the Contract
Documents should be provided only as authorized by Change Order.
38. RESPONSIBILITIES AND INDEMNITIES
38.1. Contractors Responsibilities
38.1.1. 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. The
Contractor shall make good any damage, loss or injury 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 completion of the warranty period.
38.1.2. Where the Contractor removes, after installation, or
dismantles equipment on board the Vessel, 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.
38.1.3. 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 Contractors 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 Article to the extent
that said loss was or should have been covered by insurance which
the Contractor was required to maintain under the Insurance
Article, such liability to be reduced by any actual recovery
under an applicable insurance policy.
38.1.4. 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 during the performance of
the Contract Work.
38.1.5. 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
indemnify, 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, Vendors,
suppliers, materialmen, 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.
38.2. 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.
38.3. Nothing herein shall require the Contractor to indemnify,
defend and hold WSF harmless from claims, demands or suits based
solely upon the negligence of WSF, its agents, officers or
employees. Further, 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
(i) WSF or its agents, officers or employees and (ii) the
Contractor, the Subcontractors or the agents, officers 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
and the Subcontractors negligence.
39. CONTRACT SECURITY
39.1. The Contractor shall provide WSF Contract Security to
protect against performance and payment loss exposure, as set
forth in this Article. All Contract Security shall cover all of
the Contract Work, including the Option Vessels, all Change
Orders and all Work Authorization Records.
39.2. Performance Security
39.2.1. The Contractor shall provide WSF with Contract Security
for performance exposure in an amount equal to twenty-six percent
(26%) of the Total Bid Price for Evaluation, divided by three
(3). Contemporaneously with the execution of this Contract, the
Contractor shall provide evidence satisfactory to WSF of such
protection.
39.2.2. Performance Security may be in the form of:
A. A contract bond to protect WSF against performance and
payment loss exposure, in an amount equal to twenty-eight percent
(28%) of the Total Bid Price for Evaluation, divided by three
(3); or
B. A performance bond to protect WSF against performance loss
exposure only, in an amount equal to twenty-six percent (26%) of
the Total Bid Price for Evaluation, divided by three (3); or
C. Alternate form(s) of security to protect WSF against
performance loss only, if it provides protection in an amount at
least equal to WSFs exposure to performance loss, meet all legal
requirements for effectiveness and authenticity, is pre-approved
by the Assistant Secretary, and meets the requirements in WAC 468-
320-050. Acceptable forms of alternate security include:
(1) certified check;
(2) cashiers check;
(3) treasury bill(s);
(4) irrevocable bank letter of credit;
(5) assignment of a savings account; and/or
(6) assignment of other liquid assets specifically approved by
the Assistant Secretary or his designee.
39.2.3. The Contract Security for performance exposure shall
ensure that WSF receives warranty coverage for all losses
resulting from any defects in material and workmanship during the
warranty period after Delivery. With the written approval of
WSF, the Contractor may vary the form of Performance Security to
cover the warranty period after Delivery; Provided that the form
of any Contract Security shall comply with the relevant
provisions of this Article; and Further Provided, that warranty
coverage shall be at least as effective in protecting WSF as that
contained in the WSFs standard contract bond. Warranty coverage
for each Vessel under: (i) a contract or performance bond, and/or
(ii) alternate forms of Contract Security shall be equal to at
least ten percent (10%) of the combined performance and payment
security amount at the time of Delivery.
39.3. Payment Security
39.3.1. WSF requires protection against (i) the Contractors
failure to pay all laborers, mechanics, Subcontractors, agents,
suppliers, materialmen 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 be in an
amount equal to two percent (2%) of the Total Bid Price for
Evaluation, divided by three (3). Contemporaneously herewith,
the Contractor shall provide evidence satisfactory to WSF of such
protection.
39.3.2. Payment Security may be in the form of:
A. A contract bond to protect WSF against performance and
payment loss exposure, in an amount equal to twenty-eight (28%)
of the Total Bid Price for Evaluation, divided by three (3); or
B. A payment bond to protect WSF against payment loss exposure
only, in an amount equal to two percent (2%) of the Total Bid
Price for Evaluation, divided by three (3).
39.4. A contract bond, performance bond or payment bond shall be
upon the forms furnished by WSF in the Bid Package, and shall be
signed by a Surety approved by the Washington State Insurance
Commissioner pursuant to Title 48 RCW.
39.5. WSF reserves the right to require additional Contract
Security at any time the Contract Work increases WSFs 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 WSFs 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 may only be required during the
performance of certain Contract Work. At any time that the Total
Contract Price reaches one hundred twenty-five percent (125%) of
the Total Bid Price for Award, the Contractor shall obtain the
consent of all Sureties issuing contract, performance or payment
bonds on this Contract that such 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, reaches one-hundred twenty-five percent (125%) of
revised Total Contract Price previously consented to by the
Sureties. If alternate forms of Contract Security are provided
to WSF, the owner(s) of such alternate security will be deemed to
have agreed that all alternate securities shall remain bound
under the Contract, without additional consent, regardless of any
and all extensions of Contract Time and/or increases to the Total
Contract Price by Change Orders.
39.6. Duration of Contract Security
39.6.1. All Contract Security for performance exposure shall not
be exonerated by Final Acceptance of all Contract Work, so long
as WSF retains any unsatisfied performance or other warranty
claims against the Contractor.
39.6.2. All Contract Security for payment exposure shall remain
in effect until the latest of the following dates: (1) WSF
receipt of releases from other State of Washington agencies; (2)
the last day for filing of any lien, pursuant to RCW Chapter
60.28 or any other applicable lien law; and (3) settlement of any
liens filed under RCW Chapter 60.28 or any other applicable lien
law.
39.7. Except for warranty coverage, the Contractor shall not use
the same assets to secure more than one form of Contract
Security.
40. INSURANCE
40.1. The Contractor shall provide evidence of insurance
required under Types of Insurance in this Article. Such
insurance shall cover injury to persons and/or property suffered
by WSF or a third party, as a result of performance of the
Contract Work by the Contractor or by any Subcontractor. This
coverage shall also provide protection against injuries to all
employees of the Contractor and the employees of any
Subcontractor engaged in the Contract Work. The required
insurance shall be provided by companies or through sources
approved by the Washington State Insurance Commissioner pursuant
to Title 48 RCW.
40.2. Evidence of insurance shall be furnished to WSF
contemporaneously with execution of the Contract by WSF. Such
evidence, executed by the carriers 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 for each Vessel shall be kept in force
until the respective Completion Date for each Vessel. The
Contractor shall provide written notice to the Secretary of
Transportation, care of the WSF Representative, at least forty-
five (45) days before cancellation of any coverage or reduction
in any limits of liability.
40.3. Types of Insurance
40.3.1. The Contractor shall provide Marine Builders Risk
Insurance coverage for each Vessel while under construction, from
the start of Contract Work until the respective Completion Date
for each Vessel. The coverage shall include Vessel preparatory
trials and sea trials prior to Delivery.
The Marine Builders Risk Insurance Policy shall identify the name
insureds as the Contractor, WSF and all Subcontractors at any
tier. The Policy shall also include a waiver of subrogation for
WSF and Subcontractors at any tier.
The Marine Builders Risk Insurance Policy shall have a limit of
liability of at least One Hundred Million Dollars
($100,000,000.00) for any one Vessel, including Owner Furnished
Equipment (OFE); and a deductible not to exceed One Hundred
Thousand Dollars ($100,000.00) per occurrence. Uninsured and
underinsured losses shall be the Contractors sole responsibility
pursuant to the Responsibilities and Indemnities Article.
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, the Marine Builders Risk Insurance
Policy shall be written to specifically include, in part:
1. conversion risks;
2. preparatory trials and sea trials as often as necessary for
completion and testing of the Contract Work;
3. coverage for OFE from the time of delivery of OFE to the
Contractor (assume propulsion system from Siemens Energy and
Automation, Inc. valued at $13,000,000 per Vessel; and diesel
engine shipsets from Valley Detroit Diesel Allison valued at
$3,000,000 per Vessel);
4. a statement that the policy is primary to all other
collectible insurance;
5. underwriters waiver of subrogation against WSF and all
Subcontractors at any tier;
6. coverage for Earthquake and Volcanic Eruption;
7. coverage for renewal of faulty welds; and
8. coverage for Hull and Machinery, etc. while under
construction at the shipyard or other premises of the Contractor
or any Subcontractor.
40.3.2. The Contractor shall provide insurance covering
Comprehensive or Commercial General Liability, including Ship
Repairers Legal Liability. Such insurance shall cover all
operations by, or on behalf of, the Contractor including all
operations by a Subcontractor. Such insurance shall cover:
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 insurance coverage shall
be obtained as follows:
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:
1. $1,000,000 each occurrence; and
2. $2,000,000 aggregate.
B. If the Contractor carries a Commercial General Liability
policy, the limits of liability shall not be less than:
1. $1,000,000 each occurrence (combined single limit for bodily
injury and property damage);
2. $1,000,000 for Personal Injury Liability;
3. $2,000,000 Aggregate for Products-Completed Operations; and
4. $2,000,000 General Aggregate.
WSF and its officers and employees are to be named as
additional insured under this coverage.
40.3.3. 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.
40.3.4. The Contractor shall provide and maintain Workers
Compensation Insurance for all of its employees engaged in the
Contract Work, 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.
40.3.5. Any tower hired by the Contractor shall carry Towers
Legal Liability Insurance for any tow of the Vessel within Puget
Sound. Such insurance limits shall be not less than that portion
of the Total Contract Price allocable to such Vessel (and in no
event less than the Total Bid Price for such Vessel), to cover
loss, damage and/or expense to WSF arising out of such towage.
Such insurance shall be primary over any other WSF insurance.
WSF and its officers and employees are to be named as additional
insureds under this coverage.
40.5. 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 after the request.
40.6. WSF will make no payments to the Contractor at any time
when the Contractor has not fully complied with the insurance
requirements in this Article. 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.
40.7. The insurance coverage and other requirements in this
Article shall not limit the Contractors responsibilities under
this Contract including, but not limited to, duties of liability
and indemnity.
41. NO WAIVER OF LEGAL RIGHTS
41.1 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 Contractors
failure to comply with the terms of the Contract Documents.
42. ANTITRUST BREACH
42.1 The Contractor and WSF recognize that the impact of
overcharges to WSF by the Contractor resulting from antitrust law
violations by the Contractors 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.
43. ASSIGNMENT
43.1. 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.
43.2. 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.
44. COMPUTATION OF TIME
44.1. All periods of time set forth in this Contract shall be
computed by including Saturdays, Sundays and holidays, unless
expressly stated otherwise.
45. PERSONAL LIABILITY OF PUBLIC OFFICIALS
45.1. 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.
46. NO THIRD PARTY BENEFICIARIES
46.1. Each partys 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.
47. TITLE
47.1. All material and equipment purchased by the Contractor to
perform Contract Work shall become the property of WSF upon
installation or upon earlier payment by WSF, provided that the
Contractor shall bear the risk of loss for all such material and
equipment until Delivery. 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 attached hereto and by this reference
incorporated herein. Such affidavit is to document 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 Delivery and shall hold WSF
harmless from all losses, costs, damages or expenses incidental
thereto.
48. NO ARRESTS OR ATTACHMENTS
48.1. The parties agree that no lien or other in rem proceeding
may attach to or otherwise affect title to the Vessel(s) 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 rights survive this Contract,
the Contractor does waive to the fullest extent permitted by law
any in rem rights, lien rights or other rights 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 rights and shall not arrest
or attach 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.
48.2. The Contractor shall be responsible for making certain
that equivalent restrictions on the enforcement of lien and in
rem rights are included in all of its contracts with
Subcontractors and suppliers of materials or services.
49. NO WAIVER OF IMMUNITY
49.1. The provisions of this Contract, including but not limited
to the Contract Security and Insurance Articles, do not and are
not intended to in any manner waive or limit WSFs and the States
right of sovereign immunity or any statutory prohibition against
asserting liens or encumbrances against the property of WSF and
the State.
50. NOTICES
50.1. 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:
For Contractor:
Project Engineer, Jumbo Mark II
Project Manager, Jumbo Mark II
WASHINGTON STATE FERRIES TODD PACIFIC SHIPYARDS CORP.
Colman Building - Third Floor 1801 16th Ave. S.W.
811 First Avenue Seattle, Washington 98134
Seattle, Washington 98104
Telephone: (206) 464-7043 Telephone: (206) 623-1635 Ex. 271
Facsimile: (206) 587-5077 Facsimlie: (206) 442-8512
51. CHOICE OF LAW AND VENUE
51.1. 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.
52. ESCROW BID DOCUMENTATION
52.1. Scope and Purpose
The purpose of this Article is to preserve the Contractors bid
documents for use by WSF in any litigation between WSF and the
Contractor arising out of this Contract.
The Contractor shall submit a legible copy of all documentation
used to prepare the bid for this Contract to a banking
institution designated by WSF. Such documentation shall be
placed in escrow with the banking institution and preserved by
that institution as specified in the following paragraphs of this
Article.
52.2. Bid Documentation
The term bid documentation as used in this Article means any
writings, working papers, computer printouts, charts, and any
other data compilations which contain or reflect all information,
data, and calculations used by the Contractor to determine the
bid in bidding for this project. The term bid documentation
includes but is not limited to Contractor equipment rates,
Contractor overhead rates, labor rates, efficiency or
productivity factors, arithmetic extensions, and quotations from
Subcontractors and materialmen to the extent that such rates and
quotations were used by the Contractor in formulating and
determining the amount of the bid. The term bid documentation
also includes any manuals which are standard to the industry used
by the Contractor in determining the bid for this project. Such
manuals may be included in the bid documentation by reference.
The term does not include bid documents provided by WSF for use
by the Contractor in bidding on this project.
52.3 Submittal of Bid Documentation
The Contractor shall submit the bid documentation to the
banking institution. The bid documentation shall be submitted to
the banking institution within seven (7) calendar days after the
Contract for this project has been executed by WSF. The bid
documentation shall be submitted in a sealed container. The
container shall be clearly marked Bid Documentation and shall
also show on the container the Contractors name, the date of
submittal, the project title, and the Contract number.
52.4. Affidavit
The sealed container shall contain, in addition to the bid
documentation, an affidavit signed under oath by an individual
authorized by the Contractor to execute bidding proposals. The
affidavit shall list each bid document with sufficient
specificity so a comparison can be made between the list and the
bid documentation to ensure that all of the bid documentation
listed in the affidavit has been enclosed in the sealed
container. The affidavit shall show that the affiant has
personally examined the bid documentation and that the affidavit
lists all of the documents used by the Contractor to determine
the bid for this project and that all such bid documentation has
been enclosed in the sealed container.
52.5. Verification
The banking institution upon receipt of the sealed container
shall place the container in a safety deposit box, vault, or
other secure place, and immediately notify WSF in writing that
the container has been received. Upon receipt of such notice,
WSF will promptly notify the Contractor in writing that WSF will
open the sealed container to verify that the affidavit has been
enclosed and to compare the bid documents listed in the affidavit
with the bid documents in the container to ensure that all of the
bid documentation has been submitted and that the copies are
legible. The notification will advise the Contractor of the date
and time the container will be opened and the name of the WSF
Representative who will verify the contents of the container.
The WSF Representative verifying the contents of the escrow
container will not be involved or connected with the review,
evaluation, or resolution of any claim by the Contractor made to
WSF in connection with the Contract for which the verification
was made. The Contractor may have representatives present at the
opening.
52.6. Supplementation
Documents listed in the affidavit but not enclosed in the
sealed container through error or oversight shall be submitted in
a sealed container within five (5) calendar days after the
opening of the original container. Also, any bid documentation
that is illegible shall be replaced with legible copies and
furnished within five (5) calendar days of opening the original
container. The face of the container shall show the same
information as the original container except the container shall
be marked Supplemental Bid Documentation. The same procedure
used in verifying the contents of the original container shall be
used in verifying the contents of the supplemental submittal.
52.7. Duration and Use
The bid documentation and affidavit shall remain in escrow for
the duration of the Contract and will be returned to the
Contractor by the banking institution, provided the Contractor
has signed the Final Contract Voucher Certification (FCVC) and
has not reserved any claims on the FCVC against WSF arising out
of the Contract. In the event that claims against WSF are
reserved on the FCVC, the bid documentation and the affidavit
shall remain in escrow. If the claims are not resolved and
litigation ensues, WSF may serve a request upon the Contractor to
authorize the banking institution, in writing, to release the bid
documentation and affidavit in escrow to WSF. The Contractor
shall respond to the request within twenty (20) days after
service of the request. If the Contractor objects or does not
respond to the request within twenty (20) days after service of
the request, WSF may file a motion under the Civil Rules
requesting the court to enter an order directing the banking
institution to deliver the bid documentation and affidavit in
escrow to WSF. The Contractor shall respond to the request
within the time required by the then applicable Civil Court Rules
for the Superior Court of the State of Washington. If the
Contractor objects or does not respond to the request within the
time required by the then applicable Civil Rules, the State may
file a motion pursuant to such rules requesting the court to
enter an order directing the banking institution to deliver the
bid documentation and affidavit in escrow to WSF. The banking
institution shall release the bid documentation and affidavit as
follows:
A. To WSF upon receipt of a letter from the Contractor
authorizing release;
B. To WSF upon receipt of a certified copy of a court order
directing the release of the documents;
C. To the court for an in camera examination pursuant to a
certified copy of a court order;
D. To the Disputes Review Board, at the Contractors discretion;
E. To the Contractor if litigation is not commenced within the
time period prescribed by law.
The Contractor agrees that the sealed container placed in
escrow and any supplemental sealed container placed in escrow
contain all of the bid documentation used to determine the bid
and that no other bid documentation shall be utilized by the
Contractor arising out of this Contract unless otherwise ordered
by the court.
52.8. Remedies for Refusal or Failure to Provide Bid
Documentation
Failure or refusal to provide bid documentation shall be deemed
a material breach of Contract. WSF may, at its option, refuse to
make payment for progress estimates under the Progress Payments
Article until the Contractor has submitted the bid documentation
required by this Article. Additionally, WSF may, at its option,
terminate the Contract for default under the Termination For
Default Article. These remedies are not exclusive and the State
may take such other action as is available to it under the law.
52.9. Confidentiality of Bid Documentation
The bid documentation and affidavit in escrow are and will
remain the property of the Contractor. The State has no interest
in or right to the bid documentation and affidavit other than to
verify the contents and legibility of the bid documentation
unless litigation ensues between the WSF and the Contractor
arising out of this Contract. In the event of such litigation,
the bid documentation and affidavit will become the property of
WSF for use in the litigation as may be appropriate subject to
the provisions of any court order limiting or restricting the use
or dissemination of the bid documentation and affidavit as
provided in the preceding paragraph entitled Duration and Use.
52.10. Cost and Escrow Instructions
The cost of the escrow will be borne by WSF. WSF will provide
escrow instructions to the banking institution consistent with
this Article.
53. NOTICE OF LABOR DISPUTES
53.1 If the Contractor has knowledge that any actual or
potential labor dispute is delaying or threatens to delay the
timely performance of this Contract, the Contractor shall
immediately give verbal notice, following by written notice,
including all relevant information, to the WSF Project Engineer.
53.2 The Contractor agrees to insert the substance of this
Article, including this paragraph, in any subcontract to which a
labor dispute may delay the timely performance of this Contract;
except that each subcontract shall provide that in the event its
timely performance is delayed or threatened to be delayed by an
actual or potential labor dispute, the Subcontractor shall
imemdiately notify the next higher tier subcontractor or the
prime Contractor, as the case may be, of all relevant information
concerning the dispute.
53.3 The Contractor shall keep the WSF Project Engineer advised
of the results of all labor negotiations that may result in a
labor dispute, or which may in turn delay timely performance of
the Contract.
54. DESIGN AND CONSTRUCTION REVIEW BOARD MEETINGS
54.1 The Contractor agrees to sponsor progress meetings every
two (2) months, to be held at the Cotnractors Facility or such
other location as is approved by the WSF Project Engineer,
beginning two (2) months after the execution of this Contract.
The purpose of the meetings is to disuss, report and resolve
problems relative to progress, anticipated delays, cost
experience in relation to budget and projected end costs,
manning, schedules, receipt of Owner Furnished Equipment,
Cotnractor furnished material, production problems, including
subcontractor problems, and other related matters.
54.3 It is agreed and understood that the reports to be made by
the Contractor pursuant to this Article are additional to, and
not in substitution of, reports and notices required to be made
or given by the Contractor pursuant to other Articles of this
Contract. However, such reports and notices shall be consistence
with data/reports required pursuant to other Articles of this
Contract.
54.3 It is further agreed that both Contractor and WSF will
limit those attending and participating in these meetings to
those necessary for presentations and those with authority to
resolve major Contract problems.
55. MILESTONES
55.1 The Contractor shall comply with the dates established by
the Contractor in the Master Construction Schedule required by
Section 100 of the Technical Specification. In addition to the
milestones listed in Section 100, the Master Construction
Schedule shall include the following milestones (which are not
necessarily in sequential order):
1st Vessel 2nd Vessel 3rd
Vessel
Milestone Event Date Date Date
(See Master Construction Schedule)
Contract Award (WSF to establish)
Complete Structural Design
Complete Major Distributive Systems Design
Approval to Start Construction
WSF approval of Light Ship Weight,
Longitudinal Center of Gravity, and
Vertical Center of Gravity)
Compelte Long Lead Material
Delivery of Main Propulsion System
Start Steel, Pipe, Duct Lofting
Start Steel Fabrication
Start Block Outfitting
Lay Keel
Hull Completion
Installation of Main Propulsion System
Start Superstructure Fabrication
Start On-Ways Outfit
Start Superstructure Outfit
Launch Hull
Compelte Superstructure Loadout to Hull
Start Drydock
Start and Compeltion of Compartment Closeout
Start Machinery and Systems Testing
Dock Trials
Start and Completion of Builders Trials
Start and Compeltion of Sea Trials
Drydocking
Delivery
Delivery of As-Built Drawings
55.2 The initial submission of the Master Construction Schedule
shall serve as the Contract baseline for the purposes of this
Article. The Contractor
shall successfully accomplish the major milestones on, or prior
to, the dates listed in the Master Construction Schedule.
55.3 If any milestone event is not accomplished by the date
listed, and the failure to accomplish any such milestone event
does not arise from a cause beyond the control and without fault
or negligence of the Contractor, such failure may (if it is
considered to jeopardize the Delivery Date) be deemed to
constitute a failure to perform this Contract in accordance with
its terms within the meaning of the Termination for Default
Article.
56. INTEGRATION, MERGER AND SEVERANCE
56.1. 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. 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 otherwise specified herein. The failure
of either 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 had 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 FERRIES
Washington State Department of Transportation
BY: /s/ Paul Green
Paul Green
Director
TODD PACIFIC SHIPYARDS CORPORATION
BY: /s/ Roland H. Webb
Roland H. Webb
Vice President & General Manager
APPROVED AS TO FORM FOR WSF:
By: ______________________________________
Assistant Attorney General
Date: _______________________________________
<PAGE>
Exhibit 1
REGULATIONS AND MISCELLANEOUS ARTICLES
1. AFFIRMATIVE ACTION
1.1. GENERAL APPLICATION
1.1.1. Discrimination in all phases of employment is prohibited
by Title VII of the Civil Rights Act of 1964, Presidential
Executive Order 11246, as amended by Executive Order 11375, and
the Washington State Law Against Discrimination, Chapter 49.60
RCW, among other laws and regulations. These special
requirements establish minimum requirements for affirmative
action and are intended to define and implement the basic non-
discrimination provisions of these specifications. Section 1.3
is equally acceptable to the Washington State Department of
Transportation (WSDOT) as a method of complying with affirmative
action requirements. Alternate affirmative action programs will
not be responsive to these specifications. Failure to comply
with these requirements may constitute grounds for application of
contract sanction remedies as set forth in Section 1.5, herein.
1.1.2. For the purpose of this Contract, the following
definitions, as established by the Washington State Human Rights
Commission, shall apply:
A. Minority: Blacks, Asians, Hispanics, and Native American/
American Indian or Alaskan Native.
B. Asians: A person with origins in any of the original peoples
of the Far East, Southeast Asia, the Indian Subcontinent, or the
Pacific Islands. This area includes, for example, China, Japan,
Korea, the Philippine Republic, and Samoa.
C. Black: A person with origins in any of the Black racial
groups of Africa who is also not of Hispanic origin.
D. Hispanic: A person of Mexican, Puerto Rican, Cuban, South
American or other Spanish culture or origin, regardless of race.
E. Native American/American Indian or Alaskan Native: A person
with origins in any of the original peoples of North America and
who maintains cultural identification through tribal affiliation
or community recognitions.
1.2. CONTRACTORS AGREEMENTS
1.2.1. During the performance of this Contract, the Contractor
agrees as follows:
A. The Contractor will not discriminate against any employee or
applicant for employment because of race, creed, color, national
origin, sex, age, marital status, or the presence of any
physical, sensory or mental handicap, nor shall the Contractor
commit any of the other unfair practices defined in RCW 49.60,
the Washington State Law Against Discrimination.
B. The Contractor will, in all solicitations or advertisements
for employees placed by or on behalf of the Contractor, state
that all qualified applicants will be considered for employment,
without regard to race, creed, color, national origin, sex, age,
marital status, or the presence of any physical, sensory, or
mental disability.
C. The Contractor will send to each labor union, employment
agency, or representative of workers with which the Contractor
has a collective bargaining agreement or other contract or
understanding, a notice advising the labor union, employment
agency, or workers representative of the Contractors commitments
under this Contract and RCW 49.60, the Washington State Law
Against Discrimination.
D. The Contractor will permit access to its book, records and
accounts, and to its premises by the Washington State Department
of Transportation for the purpose of investigation to ascertain
compliance with these specifications.
E. The Contractor will include the provisions of clauses (a)
through (d) above in every subcontract or purchase order, so that
such provisions will be binding upon each subcontractor or
vendor.
1.3. GOALS COMPLIANCE
1.3.1 Contractor agrees, and will require his/her subcontractors
to agree, subject to the provisions of Section 3b, to maintain,
as a minimum goal, minority and female employee representation on
the project in accordance with goals established for the county
where the Washington State Department of Transportations project
is located.
1.3.2. The goals and timetables for minority and female
participation expressed in percentage terms for the Contractors
aggregate work force in each construction craft and in each trade
on all construction work in the covered area, are as follows:
Timetable Goal
Women - Statewide
Until further notice 6.9%
Minorities - by Standard Metropolitan Statistical Area (SMSA)
Spokane, WA:
SMSA Counties:
Spokane, WA 2.8%
WA Spokane.
Non-SMSA Counties: 3.0%
WA Adams; WA Asotin;
WA Columbia; WA Ferry;
WA Garfield; WA Lincoln,
WA Pend Oreille; WA Stevens;
WA Whitman.
Richland, WA:
SMSA Counties:
Richland Kennewick, WA 5.4%
WA Benton; WA Franklin.
Non-SMSA Counties: 3.6%
WA Walla Walla.
Yakima, WA:
SMSA Counties:
Yakima, WA 9.7%
WA Yakima.
Non-SMSA Counties 7.2%
WA Chelan; WA Douglas;
WA Grant; WA Kittitas;
WA Okanogan.
Seattle, WA:
SMSA Counties:
Seattle, Everett, WA 7.2%
WA King; WA Snohomish.
Tacoma, WA 6.2%
WA Pierce.
Non-SMSA Counties 6.1%
WA Clallam; WA Grays Harbor;
WA Island; WA Jefferson;
WA Kitsap; WA Lewis; WA Mason;
WA Pacific; WA San Juan;
WA Skagit; WA Thurston;
WA Whatcom.
Portland, OR:
SMSA Counties:
Portland, OR-WA 4.5%
WA Clark.
Non-SMSA Counties 3.8%
WA Cowlitz; WA Klickitat;
WA Skamania; WA Wahkiakum.
1.3.3. If the Contractor or subcontractor(s) has been
unsuccessful in complying with Subsection 3.a., he/she shall
broaden recruitment, training, and job referral opportunities for
minorities by undertaking each of the following:
A. Notifying State and community organizations of opportunities
for employment, and shall retain evidence of any notification and
responses thereto. Advertising in newspapers, newsletters, and
other publications which have a high minority readership.
B. Maintaining a file in which is recorded the name and address
of each minority worker referred to the Contractor, and
specifically what action was taken with respect to each such
referred worker. If such worker was not sent to the union hiring
hall for referral or if such worker was not employed by the
Contractor, the Contractors file shall document this and the
reasons therefor.
C. Notifying the Washington State Department of Transportation
and the Washington State Human Rights Commission whenever the
union with which the Contractor has a collective bargaining
agreement has not referred to the Contractor a minority worker
sent by the Contractor, or the Contractor has other information
that the union referral process has impeded him in his efforts to
effect minority work force utilization. The Contractor shall
show what relief he/she has sought under such collective
bargaining agreement on appropriate Federal and State agencies.
Appropriate steps can include but are not limited to: (a)
arbitration, or (b) administrative relief.
D. Participation in and use of Washington State Department of
Transportation and Washington State Human Rights Commission
approved program(s) in the area designed to train craft workers
for the construction trades.
E. Using apprentices or other appropriate entry classifications
up to limits allowed or required by the applicable collective
bargaining agreements to meet the criteria of Section 3.a. above.
1.4. MONTHLY REPORTS
1.4.1. On Federally funded contracts, each Contractor and
subcontractor shall report each month the total employment and
minority employment by craft (electricians, carpenters, etc.) and
by category (journey level, apprentices, trainee, etc.) for
his/her work force on this project utilizing the Department of
Labor form CC-257, Monthly Utilization Report.
1.4.2. The Contractor and subcontractor(s) shall use the total
employees and work hours on the project for reporting purposes,
and shall furnish such other information as may be required on
the forms.
1.4.3. Copies of the reports shall be forwarded monthly to the
Washington State Department of Transportation, Project Office
responsible for the project under construction.
1.5. SANCTIONS
1.5.1 Failure of the Contractor to comply with the requirements
set forth in these Special Requirements for Affirmative Action
may result in the application of one, or all, of the following
sanctions.
A. Progress payment requests will not be honored until steps,
agreed upon by the Washington State Department of Transportation
and Contractor have been taken.
B. The Contract may be canceled or terminated.
C. The Contract may be suspended, in whole or in part, until
such time as the Contractor is determined to be in compliance by
the Owner or the Owners designated compliance agent.
D. The Contractor may be declared ineligible for further State
funded contracts for construction projects.
2 EQUAL EMPLOYMENT OPPORTUNITY RESPONSIBILITIES - STATE
2.1. The Contractor shall comply with all State laws and
regulations which are in effect pertaining to nondiscrimination.
In addition, on contracts financed in whole of in part with
Federal funds, the Contractor shall comply with all Federal laws
and regulations which are in effect.
2.2. The equal employment opportunity requirements listed
require that the Contractor not discriminate. The requirements
also mandate that the Contractor take affirmative action to
ensure equal employment opportunity. The requirements set forth
in this Specification shall constitute the specific affirmative
action requirements for project activities under the contract.
The Contractor shall cooperate with the State, and the Federal
Government on Federal-aid projects, in carrying out equal
employment opportunity obligations and in reviews of the
Contractors activities under the contract.
2.3. GENERAL
2.3.1 The Contractor and all subcontractors or agents of
subcontractors (not including material suppliers) holding
subcontracts of $10,000 or more shall comply with the following
minimum specific requirement activities of equal employment
opportunity. The Contractor shall include these requirements in
every subcontract of $10,000 or more with such modification of
language as is necessary to make them binding on the
subcontractor or the agents of subcontractors.
2.4. EQUAL EMPLOYMENT OPPORTUNITY POLICY
2.4.1. The Contractor shall accept as an operating policy the
following statement which is designed to further the provision of
equal employment opportunity to all persons without regard to
their race, color, religion, sex, or national origin, and to
promote the full realization of equal employment opportunity
through a positive continuing program:
2.4.2. It is the policy of this Company to ensure that
applicants are employed, and that employees are treated during
employment, without regard to their race, religion, sex, color,
or national origin. Such action shall include: employment,
upgrading, demotion, or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms
of compensation; and selection for training, including
apprenticeship, pre-apprenticeship, and/or on-the-job training.
2.5. EQUAL EMPLOYMENT OPPORTUNITY OFFICER
2.5.1. The Contractor shall officially designate and make known
to the State at the pre-construction conference the firms Equal
Employment Opportunity Officer (hereinafter referred to as the
EEO Officer). The EEO Officer will also be responsible for
making him/herself known to each of the Contractors employees.
The EEO Officer must possess the responsibility, authority, and
capability for administering and promoting an active and
effective Contractor program of equal employment opportunity.
2.6. DISSEMINATION OF POLICY
2.6.1. Supervisory Personnel
All members of the Contractors staff who are authorized to
hire, supervise, promote, and discharge employees, or who
recommend such action, or who are substantially involved in such
action, shall be made fully cognizant of, and shall implement the
Contractors equal employment opportunity policy and contractual
responsibilities to provide equal employment opportunity in each
grade and classification of employment. To ensure that the above
agreement will be met, the following actions shall be taken as a
minimum:
A. EEO Meetings--Periodic meetings of supervisory and personnel
office employees shall be conducted before the start of work and
then not less often than once every 6 months, at which time the
Contractors equal employment opportunity policy and its
implementation shall be reviewed and explained. The meetings
shall be conducted by the EEO Officer or other knowledgeable
company official.
B. EEO Indoctrination--All new supervisory or personnel office
employees shall be given a thorough indoctrination by the EEO
Officer or other knowledgeable company official covering all
major aspects of the Contractors equal employment opportunity
obligations within 30 days following their reporting for duty
with the Contractor.
C. Internal EEO Procedures--All personnel who are engaged in
direct recruitment for the project shall be instructed by the EEO
Officer or appropriate company official in the Contractors
procedures for locating and hiring minority group employees.
2.6.2. Employees, Applicants, and Potential Employees
In order to make the Contractors equal employment opportunity
policy known to all employees, prospective employees, and
potential sources of employees, i.e., schools, employment
agencies, labor unions (where appropriate), college placement
officers, etc., the Contractor shall take the following actions:
A. Notices and Posters--Notices and posters setting forth the
Contractors equal employment opportunity policy shall be placed
in areas readily accessible to employees, applicants for
employment, and potential employees.
B. EEO Indoctrination--The Contractors equal employment
opportunity policy and the procedures to implement such policy
shall be brought to the attention of employees by means of
meetings, employee handbooks, or other appropriate means.
2.7. RECRUITMENT
2.7.1. The Contractor shall be responsible for directing
recruitment efforts, both oral and written to minority, female,
and community organizations and shall take the following actions:
2.7.2. Equal Opportunity Employer--When advertising for
employees, the Contractor shall include in all advertisements for
employees the notation: An Equal Opportunity Employer. All such
advertisements shall be published in newspapers or other
publications having a large circulation among minorities and
women in the area from which the project work force would
normally be derived.
2.7.3. Systematic and Direct Recruitment--The Contractor shall,
unless precluded by a valid bargaining agreement, conduct
systematic and direct recruitment through public and private
employee referral sources likely to yield qualified minority and
women applicants, including, but not limited to, State employment
agencies, schools, colleges, and minority and women
organizations. To meet this requirement, the Contractor shall,
through the designated EEO Officer, identify sources of potential
minority and women employees and establish with such identified
sources procedures whereby minority and women applicants may be
referred to the Contractor for employment consideration.
2.7.4. Exclusive Hiring--In the event the Contractor has a valid
bargaining agreement providing for exclusive hiring hall
referrals, the Contractor is expected to observe the provisions
of that agreement to the extent that the system permits the
Contractors compliance with equal employment opportunity contract
provisions. (The U.S. Department of Labor has held that where
implementation of such agreements has the effect of
discriminating against minorities or women, or obligates the
Contractor to do the same, such implementation violates the equal
employment opportunity requirements.)
2.7.5. Referrals and Notices (Existing Employees)--The
Contractor shall encourage present employees to refer minority
and women applicants for employment by posting appropriate
notices or bulletins in areas accessible to all employees. In
addition, information and procedures with regard to referring
minority and women applicants shall be discussed with all
employees.
2.8. PERSONNEL ACTIONS
2.8.1. Wages, working conditions, and employee benefits shall be
established and administered; and personnel actions of every
type, including hiring, upgrading, promotion, transfer, demotion,
layoff, and termination, shall be taken without regard to race,
color, religion, sex, or national origin. The following
procedures shall be followed:
2.8.2. Conditions of Employment--The Contractor shall conduct
periodic inspections of project sites to ensure that working
conditions and employee facilities do not indicate discriminatory
treatment of project site personnel.
2.8.3. Wages--The Contractor shall periodically evaluate the
spread of wages paid within each classification to determine any
evidence of discriminatory wage practices.
2.8.4. Review of Personnel Actions--The Contractor shall
periodically review selected personnel actions in depth to
determine whether there is evidence of discrimination. Where
evidence is found, the Contractor shall promptly take corrective
action. If the review indicates that the discrimination may
extend beyond the actions reviewed, such corrective action shall
include all affected persons.
2.8.5. Complaints--The Contractor shall promptly investigate all
complaints of alleged discrimination made to the Contractor in
connection with the obligations under this contract, shall
attempt to resolve such complaints, and shall take appropriate
corrective action within a reasonable time. If the investigation
indicates that the discrimination may affect persons other than
the complainant, such corrective action shall include such other
persons. Upon completion of each investigation the Contractor
shall inform every complainant of all of the avenues of appeal.
2.9. TRAINING AND PROMOTION - GENERAL
2.9.1. The Contractor shall assist in locating, qualifying, and
increasing the skills of minority and women employees and
applicants for employment.
2.9.2. Consistent with the Contractors work force requirements
and as permissible under Federal and State regulations, the
Contractor shall make full use of training programs; i.e.,
apprenticeship and on-the-job training programs for the specific
project and the geographical area of contract performance.
2.10. UNIONS
2.10.1. If the Contractor relies in whole or in part upon unions
as a source of employees, the Contractor shall use his/her best
efforts to obtain the cooperation of such unions to increase
opportunities for minorities and women within the unions, and to
effect referrals by such unions of minority and women employees.
Actions by the Contractor either directly or through a
contractors association acting as agent shall include the
procedures set forth below:
2.10.2. Joint Training Programs - The Contractor shall use
his/her best efforts to develop, in cooperation with the unions,
joint training programs aimed toward qualifying more minorities
and women for membership in the unions and increasing the skills
of minority and women employees so that they may qualify for
higher paying employment.
2.10.3. Equal Opportunity Clause - The Contractor shall use
his/her best efforts to incorporate an equal employment
opportunity clause into each union agreement to the end that such
union will be contractually bound to refer applicants without
regard to their race, color, religion, sex, or national origin.
2.10.4. Referral Practices and Policies - The Contractor is to
obtain information as to the referral practices and policies of
the labor union except that to the extent such information is
within the exclusive possession of the labor union and such labor
union refuses to furnish such information to the Contractor, the
Contractor shall so certify to the Department of Transportation
and shall set forth what efforts have been made to obtain such
information.
2.10.5. Non cooperation - In the event the union is unable to
provide the Contractor with a reasonable flow of minority and
women referrals within the time limit set forth in the collective
bargaining agreement, the Contractor shall, through independent
recruitment efforts, fill the employment vacancies without regard
to race, color, religion, sex, or national origin, making full
efforts to obtain qualified and/or qualifiable minorities and
women. (The U.S. Department of Labor has held that it shall be
no excuse that the union with which the Contractor has a
collective bargaining agreement providing for exclusive referral
failed to refer minority employees.) In the event the union
referral practice prevents the Contractor from meeting the
obligations pursuant to Executive Order 11246 and 23 CFR Part 230
as amended, and the Standard Specifications, such Contractor
shall immediately notify the State Department of Transportation.
2.11. SUBCONTRACTING
2.11.1. The Contractor shall use his/her best efforts to solicit
bids from and to utilize minority and women subcontractors or
subcontractors with meaningful minority and women representation
among their employees.
2.11.2. The Contractor shall use his/her best efforts to ensure
subcontractor compliance with their equal employment opportunity
obligations.
2.12. RECORDS AND REPORTS
2.12.1. General
The Contractor shall keep such records as are necessary to
determine compliance with the Contractors equal employment
opportunity obligations. The records kept by the Contractor
shall be designated to indicate:
A. Work Force Data - The number of minority and non-minority
group members and women employed in each work classification on
the project.
B. Good Faith Efforts - Unions - The progress and efforts being
made in cooperation with unions to increase employment
opportunities for minorities and women (applicable only to
contractors who rely in whole or in part on unions as a source of
their work force).
C. Good Faith Efforts - Recruitment - The progress and efforts
being made in locating, hiring, training, qualifying, and
upgrading minority and female employees.
D. Subcontracting - The progress and efforts being made in
securing the services of minority and women subcontractors or
subcontractors with meaningful minority and female representation
among their employees.
2.12.1. Required Records and Retention
A. All records must be retained for a period of three years
following completion of the Contract work and shall be available
at reasonable times and places for inspection by authorized
representatives of the State Department of Transportation, and on
Federal-aid projects, the Urban Mass Transit Administration.
B. On Federal-aid contracts only, the Contractor/Subcontractor
shall submit to the State an annual report for each month of July
for the duration of the project. The report must indicate the
number of minority, women, and non-minority group employees
currently engaged in each work classification required by the
Contract work. This information is to be reported on Form PR
1391 by August 25.
C. The Contractor and each Subcontractors having contracts of
$10,000 or more that are Federally funded shall submit a copy of
Office of Federal Contract Compliance (OFCCP) form CC 257 to the
State by the fifth of each month during the term of the contract.
D. Failure to submit the required reports by their due dates may
result in the withholding of progress estimate payments.
3. MINORITY AND WOMENS BUSINESS ENTERPRISE (MWBE)
PARTICIPATION
3.1. For the purpose of this section and under the authority of
Chapter 120, laws of 1983 enacted by the 48th Washington State
Legislature Regular Session, and title 326 WAC, the following
shall apply:
3.2. Policy It is the policy of WSF that minority and womens
businesses shall have the maximum opportunity to participate in
the performance of contracts under this agreement.
3.3. MWBE Obligation WSF and its Contractor agrees to ensure
MWBEs have the maximum opportunity to participate in the
performance of contracts and subcontracts financed by WSF funds
provided under this agreement. In this regard, all Contractors
shall take all necessary and reasonable steps to ensure MWBEs
have the maximum opportunity to compete for and perform
contracts. WSF and its Contractors shall not discriminate on the
basis of race, color, national origin, or sex in the award and
performance of this State contract.
3.4. The Minority Business Policy Statement and MWBE Obligation
cited above shall be made a part of all subcontracts and
agreements entered into as a result of this contract.
4. FOREIGN-MADE MATERIALS
4.1. After completing work that includes more than $2,500.00
worth of foreign-made materials, the Contractor shall prepare a
certified statement to comply with Chapter 39.25 RCW. This
statement must set forth the nature and source of the materials.
The Contractor shall deliver this statement to the Department of
General Administration, Division of Purchasing, Room 216, General
Administration Building, Olympia, Washington 98504. The
Contractor shall give a copy of the statement to the Engineer.
5. WAGES
5.1. GENERAL
5.1.1. This Contract is subject to the minimum wage requirements
of RCW 39.12 and to RCW 49.28 (as amended or supplemented). On
Federal-aid projects, Federal wage laws and rules also apply.
The Contract lists hourly minimum rates for wages, fringe
benefits, and overtime pay requirements.
5.1.2. The Contractor, any subcontractor, or other person doing
any work under the Contract shall not pay any worker less than
the minimum hourly wage rates and fringe benefits shown in the
Contract. Higher wages and benefits may be paid.
5.1.3. By including wage, fringe benefit, and overtime rates in
this Contract, the State does not imply that the Contractor will
find labor available at those rates. The Contractor shall
calculate and be responsible for any amounts above the minimums
that will actually have to be paid. The wage rates which must be
paid for the duration of the Contract are those which are in
effect at the time of bid opening.
5.1.4. When the project is subject to both State and Federal
wage rates and when the two rates differ for similar kinds of
labor, the Contractor shall not pay less than the higher rate.
5.1.5. If employing labor in a class not listed in the special
provisions, the Contractor shall request a determination of the
correct wage rate for the class and locality from the Industrial
Statistician, State Department of Labor and Industries, and/or
from the U.S. Secretary of Labor on Federal-aid projects. The
Contractor shall provide a copy of these determinations to the
State.
5.2. POSTING NOTICES
5.2.1. In a location acceptable to the Department of Labor and
Industries, the Contractor shall post:
A. One copy of the approved Statement of Intent to Pay
Prevailing Wages;
B. One copy of the prevailing wage rates for the project;
C. The address and telephone number of the Industrial
Statistician for the Department of Labor of Industries (along
with notice that complaints or questions about wage rates may be
directed there); and
D. FHWA 1495/1495A Wage Rate Information poster if the project
is funded with Federal aid.
5.3. APPRENTICES
5.3.1. If employing apprentices, the Contractor shall submit to
the State written evidence showing:
A.. Each apprentice is enrolled in a program approved by the
Washington State Apprenticeship and Training Council,
B. The progression schedule for each apprentice, and
C. The established apprentice-journeyman ratios and wage rates
in the project locality upon which the Contractor will base such
ratios and rates under the Contract. Any worker for whom an
apprenticeship agreement has not been registered and approved by
the Washington State Apprenticeship and Training Council shall be
paid at the prevailing hourly rate for journeymen as provided in
RCW 39.12.021.
5.4. DISPUTES
5.4.1. If labor and management cannot agree in a dispute over
the proper prevailing wage rates, the Contractor shall refer the
matter to the Director of the Department of Labor and Industries
(or to the U.S. Secretary of Labor when that agency sets the
rates). The Directors (or Secretarys) decision will be final,
conclusive, and binding on all parties.
5.5. REQUIRED DOCUMENTS
5.5.1. On forms the Industrial Statistician, State Department of
Labor and Industries (State L&I) provides, the Contractor shall
submit to the State the following for itself and for each
subcontractor that performs Contract Work:
A. A Statement of Intent to Pay Prevailing Wages (State L&I form
number F700-029-000). The State will make no payment under the
Contract for the work performed until this Statement has been
completed, approved, and submitted.
B. An Affidavit of Wages Paid, (State L&I form number F700-007-
000), with the Final Contract Voucher Certification. The State
will not release to the Contractor any funds retained under RCW
60.28.010 until all the Affidavits for Wages Paid forms have been
completed, approved, and submitted.
5.5.2. The Contractor shall be responsible for requesting these
forms from State L&I and for paying any approval fees required by
State L&I.
5.5.3. In addition, the Contractor shall submit a Request for
Release to State L&I on a form provided by that agency.
5.5.4. Certified payrolls are required to be submitted by the
Contractor to the State, for the Contractor and all
subcontractors or agents on (i) all Federal-aid projects, and
(ii) when requested in writing by the State, on projects funded
with only State funds. If these payrolls are not supplied within
10 calendar days of the end of the preceding weekly payroll
period for Federal aid projects or within ten calendar days for
the date of the written request on projects with only State
funds, any or all payments may be withheld until compliance is
achieved. Also, failure to provide these payrolls could result
in other sanctions as provided by State law (RCW 39.12.050 )
and/or Federal regulations (29 CFR 5.12). All certified payrolls
shall be complete and explicit. Employee work classification
codes used on certified payrolls shall coincide exactly with the
occupational codes listed on the minimum wage schedule in the
Specifications Exhibit. When an apprentice is shown on the
certified payroll at a rate less than the minimum prevailing
journey wage rate, the apprenticeship registration number for
that employee from the State Apprenticeship and Training Council
shall be shown along with the correct employee classification
code.
5.6. AUDITS
5.6.1. The State may inspect or audit the Contractors wage and
payroll records at any time during the Contract and up to three
(3) years after State acceptance of the Contract Work. The
Contractor shall maintain such records for that period. The
Contractor shall also guarantee that wage and payroll records of
all his subcontractors and agents shall be open to similar
inspection and auditing for the same period of time. The State
will give the Contractor reasonable notice of the starting date
if an audit will begin more than sixty (60) days after the State
acceptance of the Contract Work.
6. WORKMENS BENEFITS
6.1. The Contractor shall make all payments required for
unemployment compensation under Title 50 RCW and for industrial
insurance and medical aid required under Title 51 RCW. If any
payment required by Title 50 or Title 51 is not made when due,
the State may retain such payments from any money due the
Contractor and pay the same into the appropriate fund.
6.2. The Public Works Contract Division of State L&I will
provide the Contractor with applicable industrial insurance and
medical aid classification and premium rates. The Request for
Release form of State L&I is also for the purpose of obtaining a
release with respect to the payments of industrial insurance and
medical aid premiums.
6.3. For work on or adjacent to water, the Contractor shall make
its own determinations as to whether workers will be covered
under the Longshoremans and Harbor Workers Compensation Act
administered by the U.S. Department of Labor, or State Industrial
Insurance administered by State L&I, or by both. The Contractor
shall include all costs of providing either or both of the
aforementioned insurance coverages in its bid. The Contractor
will not be entitled to any additional payments for (1) failure
to include such costs, or (2) determinations made by the U.S.
Department of Labor or State L&I regarding the insurance
coverage.
<PAGE>
Exhibit 2
WAGE RATES
The prevailing rate of wages to be paid to all workmen, laborers,
or mechanics employed in the performance of any part of this
Contract shall be in accordance with the provisions of Revised
Code of Washington (RCW) 39.12. The rules and regulations of the
Washington State Department of Labor and Industries (L & I) and
the schedule of prevailing wage rates for the locality or
localities where this Contract will be performed, as determined
by the L & I Industrial Statistician, are by reference made a
part of this Contract as though fully set forth herein.
If employing labor in a class not listed in the Contract, the
Contractor shall request a determination of the correct wage rate
for that class and locality from the L & I Industrial
Statistician. The Contractor shall provide a copy of these
determinations to Washington State Ferries.
Since the Contractor will be held responsible for paying the
prevailing wages, not less than the hourly minimum wage, it is
imperative that all bidders familiarize themselves with the
current wage rates before submitting bids based on these
specifications.
In case any dispute arises as to the prevailing wage rates for
work of a similar nature and such dispute cannot be adjusted by
the parties in interest, including labor and management
representatives, the matter shall be referred for arbitration to
the Director of the Department of Labor and Industries of the
State of Washington and his decision therein shall be final and
binding on all parties involved in the dispute as provided by RCW
39.12.060 as amended.
<PAGE>
Exhibit 3
AFFIDAVIT RE: LIENS, ENCUMBRANCES
STATE OF ____________________ )
) ss.
COUNTY OF ____________________ )
__________________________________________, being duly sworn
deposes and states:
I am the
________________________________________________________________
of TODD PACIFIC SHIPYARDS CORPORATION (the Contractor) and am
authorized by the Contractor to issue this Affidavit.
I refer to that certain Contract titled JUMBO MARK II CLASS
VESSELS CONSTRUCTION CONTRACT NO. 00-4464 dated January 30, 1995,
[as amended], (the Contract). All capitalized terms not defined
are used as defined therein.
Pursuant to Article 39 of the Contract, I hereby certify that as
of todays date the Contractor has paid all indebtedness for
labor, materials, tools, equipment and other items used by the
Contractor in the performance of the Contract Work and that there
are no liens or encumbrances for any such indebtedness on the
Vessel.
Dated ___________________________________, 199___.
Sworn to before me this _____ day of __________, 199___.
_______________________________________________
Notary Public
My Appointment Expires: _______________________
<PAGE>
Exhibit 4
DELIVERY SCHEDULE
VESSEL 1: Delivery Date for Vessel 1 shall be 26 months after
Contract execution.
VESSEL 2: Delivery Date for Vessel 2 shall be 37 months after
Contract execution.
VESSEL 3: Delivery Date for Vessel 3 shall be 49 months after
Contract execution.
<PAGE>
Exhibit 5
WSF PERSONNEL FACILITIES
1.GENERAL
The Contractor shall provide an administrative facility for the
resident Project Engineer, Inspection Staff and Support
Personnel. This facility shall be provided convenient to the
work-site for the exclusive 24 hour a day use by the WSF Project
Engineer, Inspection Staff, Support Personnel, Vendors and
Visitors from at least thirty (30) days prior to the start of
physical work at the Shipyard until thirty (30) days after the
last Vessel of this Contract is delivered to WSF. The facility
shall consist of secure office areas, a kitchen area, conference
room and male and female restrooms with a uni-sex shower. The
Contractor shall supply janitorial services twice a week, as a
minimum, and all facility paper products, such as hand towels,
toilet paper, toilet seat covers, etc.
WSF administrative facility areas shall be designed and provided,
as a minimum, in accordance with general human engineering design
criteria as set forth in ASTM F1166 and this Article. All desk
chair space shall be a minimum of 48 deep. These dimensions and
human engineering requirements shall be used by the Contractor in
calculating area square footage when designing the administrative
facility. If a conflict arises between ASTM F1166 and this
Article, this Article shall prevail.
WSF has included, as part of this Article, the following
descriptions to show minimal size and arrangement requirements of
the administrative facility. Where items are generically called
out in the following areas, it is to be understood by the
Contractor that those items shall be provided as set forth in
TABLE 1.1 below.
The office facility shall have a separate enclosed, confidential
Project Engineers Office; a separate enclosed Contract
Administrators Office; a separate enclosed, confidential Deputy
Project Engineer/Senior Engineers Office; a separate enclosed,
confidential Estimator/Negotiator Office; a separate enclosed,
confidential Conference Room; a space for eighteen (18)
additional personnel: a Senior Vessel Inspector; five (5) Vessel
Inspectors; three (3) Designers; three (3) Vessel Staff
Engineers, two (2) Captains, and two (2) Support Personnel; a
Propulsion Plant Coordinator; a Propulsion Plant Installation
Manager (provided by the Main Propulsion Vendor); and, male and
female restrooms, an unisex shower, and a kitchen area.
The Contractor shall provide the facilities as detailed in this
Article at the primary Shipyard or construction site. If work is
performed at more than one (1) Shipyard or construction site, the
Contractor shall provide the following facilities at each of the
locations other than the primary Shipyard: (i) one (1) Project
Engineers office, as detailed in Article 1.1; (ii) an Inspectors
area for five (5) additional people, as detailed in Article 1.5.;
(iii) a bathroom/shower area, as detailed in Article 1.11; (iv)
communication service, as detailed in Article 1.13; and (v)
parking spaces, as detailed in Article 1.14
1.1. Project Engineer, Deputy Project Engineer/Senior Engineers
Area (Contractor to provide two such areas).
These areas shall be provided for the exclusive use of the
Project Engineer and the Deputy Project Engineer/Senior Engineer.
Spaces shall be separate, dedicated, enclosed, confidential,
lockable offices and each include the following
furniture/equipment:
1--Desk with locks
2--Rolling Desk Chairs, with Arms
6--Side Chairs with one table (30 x 72)
1--Computer Table (30 x 60 with printer stand)
1--Folding Table (30 inches x 72 inches plus long)
1--Four Shelf Bookcase
1--Four Drawer File Cabinet (locking)
1--Office Trash Receptacle
1--Bulletin Board
1--Marking Board
1--Desk Lamp
Project Engineer Approximate area size 230 sq. ft.
Deputy Project Engineer/Sr. Engineer Approximate area size 200
sq. ft.
NOTE: Project Engineers Office shall have a communicating door
with the Contract Administrators Office.
1.2. Contract Administrator Office Area.
This area shall be provided for the exclusive use of the Project
Contract Administrator and Clerk. Space shall be a separate,
dedicated, enclosed, confidential, lockable office, and shall
include the following furniture/equipment:
2--Desks with locks
2--Rolling Desk Chairs, with Arms
1--Rolling Desk Chair, without Arms
1--Side Chair
2--Computer Tables (30 x 60 with printer stand)
1--Folding Table (30 inches x 72 inches plus long)
1--Four Shelf Bookcase
1--Four Shelf, Locker (72 high x 48 wide x 18 deep)
1--Table to hold WSFs Facsimile Machine (36 x 28)
1--Space to locate WSFs floor mounted Photocopy Machine (60 x 30)
2--Space for 30 x 18, 2 Drawer File Cabinets (WSF furnished)
Room dividers to separate personnel and equipment
2--Office Trash Receptacles
1--Bulletin Board
1--Marking Board
2--Desk Lamps
Approximate area size 250 sq. ft.
1.3. Estimator/Negotiators Area.
This area shall be provided for the exclusive use of the
Estimator-Negotiator. Space shall be a dedicated, enclosed,
confidential, lockable office and include the following
furniture/equipment:
1--Desk with locks
1--Rolling Desk Chair, with Arms
2--Side Chairs
1--Computer Table (30 x 60 with printer stand)
1--Folding Table (30 inches x 60 inches long)
1--Four Shelf Bookcase
1--Four Drawer File Cabinet (locking)
1--Office Trash Receptacle
1--Marking Board
1--Desk Lamp
Approximate area size 200 sq. ft.
1.4. Senior Inspectors Area.
This area shall be provided for the exclusive use of the Senior
Inspector. Area shall include the following furniture/equipment:
1--Desk with locks
2--Rolling Desk Chairs, with Arms
2--Side Chairs
1--Computer Table (30 x 60 with printer stand)
1--Folding Table (30 inches x 72 inches plus long)
2--Four Shelf Bookcases
1--Four Drawer File Cabinet (locking)
2--Space for 30 x 18, 2 Drawer File Cabinets (WSF furnished)
1--Office Trash Receptacle
1--Marking Board
1--Desk Lamp
Approximate area size 200 sq. ft.
1.5. Inspectors Area (Contractor to supply five such areas).
This area shall be provided for the exclusive use of each
Inspector. Each area shall include the following
furniture/equipment:
1--Desk with locks
1--Rolling Desk Chair, with Arms
1 Computer Table (30 x 60 with printer stand)
1--Folding Table (30 inches x 72 inches plus long)
1--Four Shelf Bookcase
1--Four Drawer File Cabinet
Space for a 30 x 18, 2 Drawer File Cabinet (WSF furnished)
1--Office Trash Receptacle
1--Marking Board
1--Desk Lamp
Approximate area size 120 sq. ft.
1.6. Vessel Staff Area (Contractor to supply seven such areas).
This area shall be provided for the exclusive use of the Vessel
Staff personnel. Space shall be a dedicated, lockable office and
include the following furniture/equipment:
7--Desks with locks
7--Rolling Desk Chairs, with Arms
7--Computer Tables (30 x 60 with printer stand)
4--Folding Tables (30 inches x 72 inches plus long)
4--Four Shelf Bookcases
7--Four Drawer File Cabinets (locking)
7--Office Trash Receptacles
7--Desk Lamps
2--Marking Boards
Approximate area size 120 sq. ft. (each)
1.7. Propulsion Plant Coordinator And Propulsion Plant
Installation Coordinator (Contractor to supply two such areas).
This area shall be provided for the exclusive use of the
Propulsion Plant Coordinator and the Propulsion Plant
Installation Coordinator. Each space shall be a dedicated,
lockable office and include the following furniture/equipment:
1--Desk with locks
1--Rolling Desk Chair, with Arms
1--Folding Table (30 inches x 72 inches plus long)
1 Computer Table (30 x 60 with printer stand)
1--Four Shelf Bookcase
1--Four Drawer File Cabinet (locking)
1--Office Trash Receptacle
1--Desk Lamp
1--Marking Board
Approximate area size 120 sq. ft.
1.8. Liaison Engineers Area (Contractor to supply three such
areas).
This area shall be provided for the exclusive use of the Liaison
Engineers. Area shall include the following furniture/equipment:
3--Desks with locks
3--Rolling Desk Chairs, with Arms
3--Folding Tables (30 inches x 72 inches plus long)
3 Computer Tables (30 x 60 with printer stand)
3--Four Shelf Bookcases
3--Four Drawer File Cabinets (locking)
3--72 long Drafting Tables with Stools
3--Office Trash Receptacles
3--Desk Lamps
1--Marking Board
Approximate area size 120 sq. ft. (each)
1.9. Conference Room
This area shall be provided for the exclusive use of WSF. Space
shall be a dedicated, enclosed, confidential, lockable room and
include the following furniture/equipment:
1--Folding Table (30 inches x 72 inches plus long)
8--Side Chairs
1--Bulletin Board
1--Marking board
Approximate area size 140 sq. ft.
1.10. Kitchen Area
This area shall be provided for the exclusive use of WSF.
Electrical outlets adequate to support equipment below shall be
provided. Area shall be in the Inspectors area and include the
following furniture/equipment and space:
1--Counter Top with Drawers and Cabinets with shelves below (10-0
long or the equivalent)
1--Sink with hot and cold running water
1--Four cubic foot refrigerator
1--Microwave oven
1--Coffee maker
1--Towel Rack
1--Paper Towel Dispenser
Approximate area size 140 sq. ft.
1.11. Bathroom/Shower Area (Contractor shall provide one unisex
shower)
This area shall be provided for the exclusive use of WSF. Each
Restroom and unisex shower shall be lockable, in the Inspectors
area and include the following furniture/equipment and space:
1--Toilet
1--Sink in vanity
1--Mirror with shelf
1--Shower with door or curtain (a total of one only)
1--Waste Receptacle
1--Towel Rack
1--Toilet Paper Holder
1--Toilet Seat Cover Dispenser
1--Paper Towel Dispenser
2--Robe Hooks
1--Ventilation Fan with timer
Approximate area size 75 sq. ft.
The aforementioned areas shall be provided as a contiguous
facility and shall be convenient to the work site.
Lighting levels throughout the facility shall be in accordance
with ASTM F1166, Table 42, Office Work, General.
The above area requirements are provided to demonstrate habitat
needs, by discipline and to assist the Contractor in providing
the required WSF administrative facility under this Contract.
Dimensional data and floor square footage is supplied to show the
minimum space required under this Contract. WSF will be
available to assist the Contractor with final arrangement of the
administrative facility.
1.12. Communication Service Requirements
The administrative facility shall be provided with ten (10)
dedicated telephone lines and capability for one (1) WSF
furnished SCAN line as follows:
1.12.1 Four (4) outside lines, toll free to Seattle, WA., direct
connected electronic data transmission lines.
A. One (1) connected to a WSF furnished Versa-Link, Model ATX-
300, Computerized Call Processor and split from the processor to
the Project Engineers computer and phone instrument.
B. One (1) connected to a WSF furnished Versa-Link, Model ATX-
300, Computerized Call Processor and split from the processor to
the Contract Administrators computer and all phone system
switching unit.
C. Two (2) connected to the State facility phone system switching
unit.
1.12.2. Two (2) local outside lines connected at all times.
Connected to State facility phone system switching unit.
1.12.3. Two (2) local electronic data transmission lines
connected at all times (these phone lines shall not go through
the State facility phone system switching unit):
A. One (1) connected to the computer in the Liaison Engineers
Office.
B. One (1) connected to the WSFs Fax Machine in the Contract
Administrators Office area.
1.12.4. Two (2) lines connected at all times to the Contractors
internal system, or to the local system if the Contractor does
not have an internal system.
1.12.5. WSF will be bringing an outside phone line from the
Washington State SCAN System. The Contractor shall provide all
necessary service and direction to the local telephone company
representative as to where to bring the above mentioned SCAN line
into the Contractors facility and where it shall be routed and
ultimately connected to the new State facility switching system.
1.12.6 .A modern phone instrument, with capabilities for touch
tone dialing, speaker/talk/listen, intercom and conference calls
shall be provided at each desk in the WSF administrative
facility, including the Conference Room with all of the above
required phone lines installed, except for the two (2) dedicated
local electronic data transmission lines as spoken to above.
1.12.7. The Clerks phone instrument in the WSF Contract
Administrators office shall be provided so that all incoming
calls, except for the dedicated local electronic data
transmission lines, ring at the clerks phone first and can be
then transferred to the applicable facility phone by the clerk.
There shall be an all ring switch installed on this phone which
will allow for switching from day to night operation.
1.12.8. The administrative office area dedicated local electronic
data transmission line outlet shall be compatible with WSFs FAX
machine and shall be located as directed by WSF.
1.12.9. The Liaison Engineers Office dedicated local electronic
data transmission line outlet shall be located as directed by
WSF.
1.12.10. The Contractor shall provide access and support as
needed for WSF Contractors to perform interconnection wiring for
a Local Area Network (LAN) within the facilities provided, and
for connection of the LAN to the local phone system.
1.13. If work is performed at more than one (1) Shipyard, or
construction site, provide for FAX phone service at each office
and toll-free calling between offices and WSFs Seattle Offices.
1.14. WSF administrative facility shall have, as a minimum, the
following furnishings, whether specifically spoken to above or
not:
TABLE 1.1
23 ea. Office desk with locks.
26 ea. Roller type desk chair with arm.
1 ea. Roller type desk chair without arm.
22 ea. Computer table, 60 inches x 30 inches, with printer stand.
1 ea. Drafting table, 72 inches long, with stool.
27 ea. File Cabinet, 4 drawer, legal size, lockable .
15 ea. Bookcase, 4 shelf (with 12 inch deep x 12 inch high
shelves, suitable for storing catalogs).
20 ea. Folding table, 30 inches x at least 72 inches long.
2 ea. Folding table, 30 inches x 60 inches long.
25 ea. Side Chair.
1 ea. Locker, lockable (for stationary materials), 72 inches tall
x 48 inches wide x 18 inches deep.
16 ea. Marking board, felt pen type, wall mount, at least 36
inches x 72 inches, with four (4) different colored pens and
eraser.
4 ea. Bulletin board, corked-faced, wall mount, at least 36
inches x 72 inches.
23 ea. Office trash receptacles, (approximately 13 inches dia. x
14 inches tall).
3 ea. Pencil sharpeners
1 ea. 28 inches x 36 inches table for WSF FAX machine
23 ea. Desk Lamp
At least thirty-five (35) three-wire grounded 120 volt AC
outlets, to suit the administrative facility arrangement,
suitable for Personal Computers, printers, calculators, photocopy
machine, adding machines, refrigerator, battery chargers, coffee
maker, microwave and other similar equipment and devices shall be
provided. WSF will assist in the location of these outlets.
The administrative facility shall be heated and air conditioned.
This equipment shall be at least comparable to that provided for
the Contractors staff and/or to support the WSF facility to
current industry standards for such installations. All equipment
shall be maintained in good working order by the Contractor
throughout the life of the Contract.
The Contractor shall provide WSF at least nineteen (19)
permanent, clearly marked with users name and title (names,
titles and parking assignments will be provided to the Contractor
by WSF), lighted, 24 hour a day parking spaces convenient to the
administrative facility and well clear of abrasive blasting and
painting areas. In addition, six (6) parking spaces shall be
available within reasonable walking distance to the work site for
WSF use on an as-needed basis. Additionally, if the work is
performed at more than one (1) Shipyard or construction site, the
Contractor shall provide six (6) parking spaces at each Shipyard
or construction site other than the primary Shipyard. All
parking spaces shall be dedicated for the exclusive use of the
WSFs Representatives, Inspection Staff, Vendors and Visitors.
The Contractor shall provide all shipyard/facility access, camera
permits and parking permits, as directed by WSF Project Engineer,
during the life of the Contract.
The Contractors personnel shall not use WSF administrative
facility or the Vessels restroom and/or crew accommodations
without written authorization of the WSF Project Engineer.
<PAGE>
Exhibit 6
DISPUTES RESOLUTION
In order to assist in the resolution of disputes or claims
arising out of the work of this project, WSF has provided for the
establishment of a Disputes Review Board, hereinafter called the
BOARD. The BOARD has been added to the disputes resolution
process to be brought into play when normal WSF-Contractor
dispute resolution is unsuccessful and prior to a formal adoption
of position or filing of litigation by either party.
A.DISPUTES
Disputes, as used in this Section, will include disagreements,
claims, counterclaims, matters in question, and differences of
opinion between WSF and the Contractor:
1.On matters related to the work and to change order work,
including:
a.Interpretation of the Contract.
b.Costs.
c.Time for performance.
2.And on other subjects mutually agreed by WSF and Contractor to
be of concern of the BOARD.
B.RESOLUTION PROCEDURE
The following procedure shall be used for dispute resolution:
1. The Contractor may appeal the WSF Project Engineers decision
regarding a protest. Such appeal shall be submitted to the
Disputes Review Board in accordance with the procedures specified
in the Protests Article.
2. The Contractor and WSF shall each be afforded an opportunity
to be heard by the BOARD and to offer evidence. Either party
furnishing any written evidence or documentation to the BOARD
must furnish copies of such information to the other party a
minimum of fifteen (15) calendar days prior to the date the BOARD
sets to convene the hearing for the dispute. Either party shall
produce such additional evidence as the BOARD may deem necessary
to an understanding and determination of the dispute and furnish
copies to the other party.
3. The BOARDS recommendations toward resolution of a dispute will
be given in writing to both WSF and the Contractor. The
recommendations will be based on the Contract provisions and the
estimated or actual costs and/or time reasonably incurred.
4. Within fifteen (15) calendar days of receiving the BOARDS
recommendations, both WSF and the Contractor shall respond to the
other in writing signifying that the dispute is either resolved
or remains unresolved.
5. Although both parties should place weight upon the BOARDS
recommendations, the recommendations are not binding. Either
party may appeal a recommendation of the BOARD to them for
reconsideration. However, reconsiderations shall only be allowed
when there is new evidence to present.
6. If WSF and the Contractor are able to resolve their dispute
with the aid of the BOARDS recommendations, WSF will promptly
process any contract changes.
7. In the event the BOARDS recommendations do not resolve the
dispute, the Contractor may initiate a Claim in accordance with
the Claims Article. All BOARD records, and written
recommendations, including any minority reports, will be
admissible as evidence in any subsequent litigation.
C. LITIGATION
1. Submittal of dispute to the BOARD shall be a condition
precedent to filing for litigation in a court of law.
2. Claims, counterclaims, disputes, and other matters in question
between WSF and Contractor that are not resolved will be decided
in the Superior Court of Thurston County, Washington, which shall
have exclusive jurisdiction and venue over all matters in
questions between WSF and the Contractor.
3. The Contract shall be interpreted and construed in accordance
with the laws of the State of Washington.
D. PURPOSE AND FUNCTION OF THE BOARD
The BOARD will be an advisory body created to assist in the
resolution of claims, disputes, or controversy between the
Contractor and WSF in order to prevent construction delay and
possible court litigation.
The BOARD will consider disputes referred to it, and furnish
recommendations to WSF and Contractor to assist in the resolution
of the differences between them. The BOARD will essentially be
making non-binding findings and recommendations and provide
special expertise to assist and facilitate the resolution of
disputes.
E. BOARD MEMBERS
The BOARD shall consist of one member selected by WSF and one
member selected by the Contractor, with these two members to
select the third member. The first two members shall be mutually
acceptable to both WSF and the Contractor. If one or both of the
two members selected are not acceptable to WSF or Contractor,
another selection shall be made. All previous and current
relationships between each BOARD member and: (i) WSF, (ii) the
Contractor, and/or (iii) a major Subcontractor shall be fully
disclosed to all members of the BOARD, WSF and the Contractor
prior to execution of the Three Party Agreement.
WSF and Contractor shall each select their member and negotiate
an agreement with their respective BOARD members within the first
60 calendar days after award of the contract. These negotiated
agreements shall include a clause that requires the respective
selected members to immediately pursue selection of the third
member in accordance with Section II. A. of the DISPUTES REVIEW
BOARD THREE PARTY AGREEMENT in the Appendix of this Exhibit (6).
In the event of an impasse in selection of the third member,
either WSF or the Contractor or both may appeal to the Thurston
County Superior Court for selection of a third member by the
court from a list or lists submitted to the court by WSF and/or
the Contractor. An impasse shall be considered to have been
reached if the two members appointed by WSF and the Contractor
for the BOARD have been unable to appoint the third member in a
period of sixty (60) calendar days after the approval of the last
of such two members.
In case a member of the BOARD needs to be replaced, the
replacement member will be appointed in the same manner as the
replaced member was appointed. The appointment of a replacement
BOARD member will begin promptly upon determination of the need
for replacement and shall be completed within thirty (30)
calendar days. The Three Party Agreement will be amended to
reflect the change of a BOARD member.
Service of a BOARD member may be terminated at any time with not
less than thirty (30) calendar days notice as follows:
1. WSF may terminate service of the WSF appointed member.
2. The Contractor may terminate service of the Contractor
appointed member.
3. The third members services may be terminated only by agreement
of the other two members.
4. By resignation of the member.
5. Termination of a member will be followed by appointment of a
substitute as specified above.
No member shall have a financial interest in the Contract, except
for payments for services on the BOARD. Within a period of two
years prior to award of the Contract, no member shall have: (i)
owned shares of the Contractors or any Subcontractors
corporation; (ii) been employed by either party; (iii) served on
the Board of Directors of either party; (iv) served on a
Commission having oversight of either party; or (v) served as
legal counsel to either party. Service as a member of other
Disputes Review Boards on other contracts will not preclude a
member from serving on the BOARD for this Contract.
The BOARD members will be especially knowledgeable in the field
of construction of the type covered by the Contract and shall
discharge their responsibilities impartially and independently
considering the facts and conditions related to the matters under
consideration and the provisions of the Contract .
F. BOARD OPERATION
The BOARD will formulate its own rules of operation. In order to
keep abreast of the Construction progress, the members shall
regularly visit the project, keep a current file, and regularly
meet with the other members of the BOARD and with representatives
of WSF and the Contractor.
The frequency of these visits shall be as agreed between WSF, the
Contractor, and the BOARD.
For further description of work, responsibilities and duties of
the BOARD, and WSFs and Contractors obligations and
responsibilities with respect to each other and to the BOARD, see
the DISPUTES REVIEW BOARD THREE PARTY AGREEMENT in the Appendix
of this Exhibit (6).
G. SERVICE AGREEMENTS AND COMPENSATION
Service agreements with BOARD members appointed by WSF and
Contractor shall be negotiated by WSF and Contractor,
respectively. The service agreement with the third member shall
be negotiated with the other two members.
All the service agreements, shall be executed in forms mutually
acceptable to WSF and Contractor.
Compensation for the BOARD members, and the expenses of operation
of the BOARD, shall be shared by WSF and Contractor in accordance
with the following:
1. WSF will compensate directly the wages and travel expense for
their selected member.
2. The Contractor shall compensate directly the wages and travel
expense for their selected member.
3. WSF and Contractor shall share equally in the third members
wages and travel, and all of the expenses of the BOARD. These
equally shared expenses shall be billed to and paid by WSF. The
Contractors share will be deducted from monies due the
Contractor. As the equally shared expenses of the third BOARD
member is anticipated to be equal to or similar to the expenses
of the other two (2) BOARD members, WSF will not reimburse the
Contractor for the third BOARD member costs in excess of those
rates estimated in the Contractors bid.
4. WSF, through the WSF Project Engineer, will provide
administrative services, such as conference facilities and
secretarial services, to the BOARD and WSF will bear the costs
for this service.
H. THREE PARTY AGREEMENT
The Contractor, WSF, and all three members of the BOARD shall
execute the DISPUTES REVIEW BOARD THREE PARTY AGREEMENT within 30
calendar days of the final selection of the third member. The
form of the Three Party Agreement is included in the Appendix of
this Exhibit (6).
I. GUIDELINES
DISPUTES REVIEW BOARD GUIDELINES for the BOARDS operation are
included in the Appendix of this Exhibit (6).
These guidelines express in general terms the policy for the
creation and operation of the BOARD and are intended to
supplement the Three Party Agreement, the Contract, and the
Specifications to the extent that no conflict with such
provisions is created.
The WSF Project Engineer will evaluate all protests provided the
procedures in this section are followed. If the WSF Project
Engineer determines that a protest is valid, the WSF Project
Engineer will adjust payment for work or time by an equitable
adjustment in accordance with. Extension of time will be
evaluated in accordance with the Contract Changes provisions of
the Contract. No adjustment will be made for an invalid protest.
By failing to follow the procedures of this Exhibit and the
Contract, the Contractor completely waives any claim for
protested work.
APPENDIX
DISPUTES REVIEW BOARD
THREE PARTY AGREEMENT
THIS THREE PARTY AGREEMENT, hereinafter called AGREEMENT, made
and entered into this _____ day of ___________________, 19___,
between WASHINGTON STATE FERRIES, a division of the Washington
State Department of Transportation, hereinafter called WSF; TODD
PACIFIC SHIPYARDS CORPORATION, hereinafter called the CONTRACTOR;
and the Disputes Review Board, hereinafter called the BOARD, and
consisting of three members: ____________________,
____________________, and ____________________,
WITNESS, that
WHEREAS, WSF is now engaged in the Construction of Jumbo Mark II
Ferry(s), hereinafter called the Project; and
WHEREAS, the Jumbo Mark II Class Vessel Construction Contract No.
00-4464 provides for the establishment and operation of the BOARD
to assist in resolving disputes and claims; and
WHEREAS, the BOARD is composed of three members, one selected by
WSF, one selected by the CONTRACTOR, and the third member
selected by the first two BOARD members;
NOW THEREFORE, in consideration of the terms, conditions,
covenants, and performance contained herein, or attached and
incorporated and made a part hereof, the parties hereto agree as
follows:
I.
DESCRIPTION OF WORK
In order to assist in the resolution of disputes and claims
between the CONTRACTOR and WSF, WSF has provided, in the Jumbo
Mark II Ferry Construction Contract, for the establishment of the
BOARD. The intent of the BOARD is to fairly and impartially
consider disputes placed before it and provide written
recommendations for resolution of these disputes to both WSF and
the CONTRACTOR. The members of this BOARD, shall perform the
engineering services necessary to participate in the BOARDS
actions as designated in Section II, Scope of Work.
II.
SCOPE OF WORK
The Scope of Work of the BOARD includes, but is not limited to,
the following items of work:
A. THIRD BOARD MEMBER SELECTION
The first duty of WSF and CONTRACTOR selected members of the
BOARD is to select the third member. The third member shall not
have had any previous financial or employment ties with either
the CONTRACTOR or WSF. The goal is to obtain a third BOARD
member who will compliment the first two by furnishing a needed
expertise which will facilitate the BOARDS operations. The first
two BOARD members shall proceed with the selection of the third
BOARD member upon receiving their notices to proceed. Should the
first two members be unable to select a third member within 60
calendar days of the latest notice to proceed, either WSF or the
CONTRACTOR or both may appeal to the Thurston County Superior
Court for selection of a third member by the court from a list or
lists submitted to the court by WSF and/or the CONTRACTOR.
B.PROCEDURES
After selection of the third BOARD member and prior to
consideration of an appeal, the BOARD shall establish rules that
will govern the conduct of its business and reporting procedures
based on the Guidelines, attached as an Appendix to this
AGREEMENT. The BOARD recommendations, resulting from their
consideration of a dispute or claim, shall be furnished in
writing to WSF and the CONTRACTOR. The recommendations shall be
based on the pertinent contract provisions, and the facts and
circumstances involved in the dispute.
C.FURNISHING DOCUMENTS
WSF shall furnish to the BOARD three copies of the Contract and
other documents which are or may become pertinent to the
activities of the BOARD. The CONTRACTOR shall furnish to the
BOARD three sets of documents which are or may become pertinent
to the activities of the BOARD, except documents furnished by
STATE. A party furnishing any written documentation to the BOARD
must furnish copies of such information to the other party before
the hearing begins.
D.CONSTRUCTION SITE VISITS
The BOARD members shall visit the project site to keep abreast of
construction activities and to develop a familiarity of the work
in progress. The frequency, exact time, and duration of these
visits shall be as mutually agreed between WSF, the CONTRACTOR,
and the BOARD.
E.BOARD CONSIDERATION OF DISPUTES OR CLAIMS
Upon receipt by the BOARD of a written appeal of a dispute, from
either the CONTRACTOR or WSF, the BOARD shall convene to review
and consider the appeal. The time and location of BOARD meetings
shall be determined by WSF, the CONTRACTOR, and the BOARD. Both
WSF and CONTRACTOR shall be given the opportunity to present
their evidence at these meetings. It is expressly understood
that the BOARD members are to act impartially and independently
in the consideration of the contract provisions, and the facts
and conditions surrounding any written appeal presented by WSF or
the CONTRACTOR, and that the recommendations concerning any such
appeal are advisory.
Either WSF or the CONTRACTOR may appeal a recommendation to the
BOARD for reconsideration. However, reconsideration will only be
allowed when there is new evidence to present.
F.BOARD MEMBER REPLACEMENT
Should the need arise to appoint a replacement BOARD member, the
replacement BOARD member shall be appointed in the same manner as
the original BOARD members were appointed. The selection of
replacement BOARD member shall begin promptly upon notification
of the necessity for a replacement and shall be completed within
30 calendar days. The AGREEMENT will be supplemented to indicate
change in BOARD membership.
III.
CONTRACTOR RESPONSIBILITY
The CONTRACTOR shall furnish to each BOARD member and to WSF one
copy of all pertinent documents which are or may become necessary
for the BOARD to perform their function. Pertinent documents are
any drawings or sketches, calculations, procedures, schedules,
estimates, or other documents which are used in the performance
of the work or in justifying or substantiating the CONTRACTORs
position.
IV.
WSF RESPONSIBILITIES
WSF shall furnish the following services and items:
A. CONTRACT RELATED DOCUMENTS
WSF shall furnish the BOARD three copies of the Jumbo Mark II
Ferry Construction Contract, Change Orders, written instructions
issued by WSF to the CONTRACTOR, or other documents pertinent to
the performance of the Contract and therefore, necessary for the
BOARD to perform their function.
B.COORDINATION AND SERVICES
WSFS Project Engineer for the Project will, in cooperation with
the CONTRACTOR, coordinate the operations of the BOARD. WSF,
through the Project Engineer, will arrange or provide conference
facilities at or near the Contract site and provide secretarial
and copying services.
C.BOARD COST RECORDS
WSF will maintain complete cost records for WSF and CONTRACTOR
shared expenses of the BOARD and these records will be available
for inspection by the CONTRACTOR. These expenses include the
third members wages and travel expense, local lodging and
subsistence for all BOARD members, and direct costs associated
with BOARD operations. Excluded from these records are the wages
and travel expenses of WSF and CONTRACTOR selected members of the
BOARD.
V.
TIME FOR BEGINNING AND COMPLETION
The BOARD is to be in operation throughout the life of the
Project. To establish a firm completion date,
____________________ is the date for completion of all work of
this AGREEMENT. Should the construction Contract end earlier,
this AGREEMENT may be terminated under terms of Section VIII,
Termination of Agreement, elsewhere herein. Should the
construction Contract continue beyond ____________________ or the
work anticipated for the BOARD by this AGREEMENT not be completed
by that date, a Supplemental Agreement will be negotiated and
executed to extend the completion date.
The BOARD members shall not begin any work under the terms of
this AGREEMENT until authorized in writing by WSF.
VI.
PAYMENT
The BOARD members shall be paid by WSF and the CONTRACTOR for
services rendered under this AGREEMENT as provided hereinafter.
Such payments shall be full compensation for work performed or
services rendered, and for all labor, materials, supplies,
equipment, and incidentals necessary to the operation of the
BOARD. The BOARD members shall comply with all applicable
portions of 48 CFR 31.
A.ALL INCLUSIVE RATE PAYMENT
1.Fee - WSF and CONTRACTOR Appointed Members
Payment for services rendered as WSF and CONTRACTOR members of
the BOARD will be at the respective rates agreed to between the
WSF and CONTRACTOR and their respective BOARD members. Payment
shall be made under separate agreement between the respective
parties and shall include all pertinent expenses, as defined in
their separate AGREEMENTS.
WSF and the CONTRACTOR shall share equally in the third members
wages, travel and direct non-salary costs. These equally shared
expenses shall be billed to and paid by WSF. The CONTRACTORs
share will be reimbursed to WSF.
2.Fee - Third Appointed Member
Payment for services rendered as a member of the BOARD shall be
at the daily billing rate of $_________, with a maximum daily
billing rate of $__________, including travel time. This daily
rate includes all direct labor costs, overhead, and profit.
Subsequent changes in the billing rate are subject to agreement
between WSF and the BOARD and must be authorized by a
Supplemental Agreement.
3.Direct Non-Salary Costs - Third Appointed Member
Direct non-salary costs will be reimbursed at the actual cost to
the BOARD member, except for the non-local travel by WSF and
CONTRACTOR appointed members, which is separately compensated.
Direct non-salary charges may include, but are not limited to:
travel, subsistence, lodging, printing, long distance telephone,
supplies, etc. Air or train travel will only be reimbursed to
economy class levels unless otherwise approved by WSF.
Automobile mileage will be reimbursed at the rate in effect for
STATE employees at the time the trip is taken and shall be
supported by the date and time of each trip with origin and
destination of such trips. The current rate is 28 cents per
mile, which will remain in effect until changed in writing by
WSF. Subsistence and lodging expenses will be reimbursed at the
same rate as for WSF employees, which is the actual cost but not
to exceed $66.00 per day except that subsistence and lodging
expenses for high cost areas will be reimbursed to a higher
maximum rate as specified in the latest edition of WSDOT
Directive D 13-50 and revisions thereto. All of King County is a
high-cost area in the State of Washington and will be reimbursed
for subsistence ($34.00) and lodging expenses ($79.00) to a
current maximum of $113.00 per day.
The billing for non-salary cost, directly identifiable with the
project, shall be an itemized listing of the charges supported by
the original bills, invoices, expense accounts, and miscellaneous
supporting data retained by the BOARD member.
Copies of the original supporting documents shall be supplied to
WSF upon request.
4.Maximum Total Amount Payable
The maximum total amount payable under this AGREEMENT, for the
third members fee and travel costs and the BOARDS direct non
salary costs shall not exceed One Hundred Fifty Thousand Dollars
($150,000.00), unless a prior Supplemental Agreement has been
negotiated and executed by WSF.
B.PAYMENTS
The BOARD members may submit invoices to WSF for partial payment
for work completed not more often than once per month during the
progress of the work. Such invoices shall be in a format
approved by WSF and accompanied by a general description of
activities performed during that billing period. The value of
the work accomplished for partial payment shall be established by
the billing from the BOARD member, itemizing direct payroll for
the third BOARD member, and direct non-salary costs for all three
BOARD members.
C.INSPECTION OF COSTS RECORDS
The BOARD members shall keep available for inspection by
representatives of WSF, for a period of three years after final
payment, the cost records and accounts pertaining to this
AGREEMENT. If any litigation, claim, or audit arising out of, in
connection with, or related to this Contract is initiated before
the expiration of the three-year period, the cost records and
accounts shall be retained until such litigation, claim, or audit
involving the records is completed.
VII.
ASSIGNMENT OF TASKS OF WORK
The BOARD members shall not assign any of the work of this
AGREEMENT.
VIII.
TERMINATION OF AGREEMENT
The parties to this AGREEMENT mutually agree that this AGREEMENT
may be terminated at any time upon not less than 30 calendar days
written notice to the other parties. BOARD members may withdraw
from the BOARD by providing such notice. BOARD members may be
terminated for cause only by their original appointor, therefore,
WSF may only terminate WSF appointed member, the CONTRACTOR may
only terminate the CONTRACTOR appointed member, and the first two
members must agree to terminate the third member.
IX.
LEGAL RELATIONS
The parties hereto mutually understand and agree that the BOARD
member in the performance of duties on the BOARD, is acting in
the capacity of an independent agent and not as an employee of
either WSF or the CONTRACTOR.
No party to this AGREEMENT shall bear a greater responsibility
for damages or personal injury than is normally provided by
Federal and/or State of Washington Law.
WSF and CONTRACTOR shall indemnify and hold harmless the BOARD
members from and against all claims, damages, losses, and
expenses, including but not limited to attorneys fees arising out
of and resulting from the recommendations of the BOARD; Provided,
however, that this indemnification provision shall be subject to
the limitations on indemnification imposed by RCW 4.24.115; and
Provided further that WSF and the CONTRACTOR share equally any
damages, losses and expenses arising out of this
indemnification..
X.
DISPUTES
Any dispute between the parties hereto, arising out of the work
or other terms of this AGREEMENT, which cannot be resolved by
negotiation and mutual concurrence between the parties, shall be
referred to the Superior Court of WSF of Washington in Thurston
County as provided in Section XI, Venue, Applicable Law, and
Personal Jurisdiction.
XI.
VENUE, APPLICABLE LAW, AND PERSONAL JURISDICTION
In the event that any party deems it necessary to institute legal
action or proceedings to enforce any right or obligation under
this AGREEMENT, the parties hereto agree that any such action
shall be initiated in the Superior Court of WSF of Washington,
situated in Thurston County. The parties hereto agree that all
questions shall be resolved by application of Washington law and
that the parties to such action shall have the right of appeal
from such decisions of the Superior Court in accordance with the
laws of WSF of Washington. The BOARD member hereby consents to
the personal jurisdiction of the Superior Court of WSF of
Washington, situated in Thurston County.
XII.
CERTIFICATION
Attached hereto as Exhibit A, Pages 1 through 3, is the
CERTIFICATION OF THE THIRD BOARD MEMBER, the CERTIFICATION OF
WASHINGTON STATE FERRIES, and the CERTIFICATION REGARDING
DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS PRIMARY
COVERED TRANSACTIONS.
IN WITNESS WHEREOF, the parties hereto have executed this
AGREEMENT as of the day and year first above written.
THIRD PARTY MEMBER WSF MEMBER
By: ______________________________ By:
______________________________
Title: ______________________________ Title:
______________________________
CONTRACTOR MEMBER
By: ______________________________
Title: ______________________________
TODD PACIFIC SHIPYARDS WASHINGTON STATE FERRIES
CORPORATION
By: ______________________________By:
______________________________
Title: ______________________________Title:
______________________________
Approved as to Form Only this
_____ day of ____________________, 19___
_____________________________________
Assistant Attorney General
Exhibit A
CERTIFICATION OF THIRD BOARD MEMBER
I hereby certify that I am the ___________________________ and
duly authorized representative of the firm of
___________________________________________, whose address is
_________________________________________________, and that
neither I nor the above firm I here represent has:
A.Employed or retained for a commission, percentage, brokerage,
contingent fee, or other consideration, any firm or person (other
than a bona fide employee working solely for me or the above
consultant) to solicit or secure this AGREEMENT; or
B.Agreed, as an express or implied condition for obtaining this
contract, to employ or retain the services of any firm or person
in connection with carrying out the AGREEMENT; or
C.Paid, or agreed to pay, to any firm, organization or person
(other than a bona fide employee working solely for me or the
above consultant) any fee, contribution, donation, or
consideration of any kind for, or in connection with, procuring
or carrying out the AGREEMENT;
except as here expressly stated (if any):
I acknowledge that this certificate is to be furnished to
Washington State Ferries, and is subject to applicable State and
Federal laws, both criminal and civil.
____________________________________________
(Signature)
_____________________________________________
(Date)
EXHIBIT A
Page 1
Exhibit
CERTIFICATION OF WASHINGTON STATE FERRIES
I hereby certify that I am the Director and CEO of Washington
State Ferries, a division of the Washington State Department of
Transportation, and that the above consulting firm or his/her
representative has not been required, directly or indirectly as
an express or implied condition in connection with obtaining or
carrying out this AGREEMENT, to:
A.Employ or retain, or agree to employ or retain, any firm or
person; or
B.Pay, or agree to pay, to any firm, person, or organization, any
fee, contribution donation, or consideration of any kind;
except as here expressly stated (if any):
I acknowledge that this certificate is subject to applicable
State and Federal laws, both criminal and civil.
____________________________________________
Paul Green
Director / CEO
____________________________________________
(Date)
EXHIBIT A
Page 2
Exhibit A
CERTIFICATION REGARDING DEBARMENT,
SUSPENSION AND OTHER RESPONSIBILITY MATTERS -- PRIMARY
COVERED TRANSACTIONS
1.The prospective primary participant certifies to the best of
its knowledge and belief, that it and its principals:
A. Are not presently debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded from covered
transactions by any Federal department or agency;
B. Have not within a three-year period preceding this proposal
been convicted of or had a civil judgment rendered against them
for commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a public (federal,
state or local) transaction or contract under a public
transaction; violation of federal or state anti-trust statutes or
commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
or receiving stolen property;
C. Are not presently indicted for or otherwise criminally or
civilly charged by a governmental entity (federal, state or
local) with commission of any of the offenses enumerated in
paragraph 1.b of this certification; and
D. Have not within a three-year period preceding this
application/proposal had one or more public transactions
(federal, state or local) terminated for cause or default.
2. Where the prospective primary participant is unable to certify
to any of the statements in this certification, such prospective
participant shall attach an explanation to this proposal.
Consultant: ________________________________________________
Firm Name
________________________________________________
President/Authorized Official of Consultant (Signature)
Date:________________________________________________
EXHIBIT A
DISPUTES REVIEW BOARD
GUIDELINES
OBJECTIVE
The principal objective of the BOARD is to assist in the
resolution of disputes which would otherwise be likely submitted
to litigation processes. If this objective is achieved, such
disputes can be resolved promptly; with minimum expense, and with
minimum disruption to the administration and performance of the
work. It is not intended for WSF or the CONTRACTOR to default on
their normal responsibility to amicably and fairly settle their
differences by indiscriminately assigning them to the BOARD. It
is intended that the mere existence of the BOARD will encourage
WSF and the CONTRACTOR to resolve potential disputes without
resorting to this appeal procedure. But when a dispute which is
serious enough to warrant the BOARDS review does develop, the
machinery for prompt and efficient action will already be in
place.
RESPONSIBILITY OF THE BOARD
Render findings and recommendations on protests or disputes
between the CONTRACTOR and WSF arising from the construction
contract. Primarily, the BOARD will consider protests and
disputes involving interpretation of the Plans and
Specifications, delays, acceleration of the work, scheduling,
classification of extra work, changed conditions, design changes,
and the like. During its regular visits to the job site, the
BOARD will encourage the settlement of differences at the job
level.
The BOARD will refrain from officially giving any advice or
consultative services to either party. The individual members
will act in a completely independent manner and will have no
consultative or business connections with either party.
During routine meetings of the BOARD as well as during formal
hearings, BOARD members should refrain from expressing opinions
on the merits of statements on matters under dispute or potential
dispute. Opinions of BOARD members expressed in private sessions
should be kept strictly confidential.
Normally, the BOARD member selected by the first two will act as
Chairperson for all activities, however, this post may be
delegated to another member from time to time.
REGULAR CONSTRUCTION PROGRESS MEETINGS
All regular meetings will be held at or near the job site. The
frequency of regular meetings will be set by the BOARD from time
to time, consistent with the construction activities and the
matters under consideration and dispute. Each meeting will
consist of a round table discussion and a field inspection of the
work being performed on that contract. The round table
discussion will be jointly conducted by a member of WSFs staff
and a member of the CONTRACTORs staff, and will be attended by
selected personnel from WSF and the CONTRACTOR. The agenda will
generally be as follows:
A. Meeting opened by the Chairperson of the BOARD.
B. Remarks by WSFs field representative.
C. A description by the CONTRACTORs field representative of work
accomplished since the last meeting; the current status of the
work, schedule-wise; and a forecast for the coming period.
D. An outline by the CONTRACTORs field representative of
potential problems and a description of proposed solutions.
E. An outline by WSFs Project Engineer of the status of the work
as the Project Engineer views it.
F. A brief description by the CONTRACTOR or WSF of potential
protests or disputes which have surfaced since the last meeting.
G. A summary by WSF, the CONTRACTOR, or the BOARD of the status
of past disputes and protests.
WSF will prepare minutes of all regular meetings and circulate
them for revision and approval by all concerned.
The field inspection will cover all active segments of the work,
the BOARD being accompanied by both WSF and CONTRACTOR personnel.
HANDLING OF WRITTEN APPEALS
When a written appeal is referred to the BOARD, it shall, first,
decide when to conduct the hearings. The decision shall be
tempered by the desires and needs of WSF and the CONTRACTOR. If
the matter is not urgent, it may be scheduled for the time of the
next regular visitation to the project. For an urgent matter,
the BOARD should meet at its earliest convenience.
The BOARD may also request that written documentation and
arguments from both parties be sent to each individual member for
study before the hearing begins. A party furnishing any written
documentation to the BOARD must furnish copies of such
information to the other party before the hearing begins.
Normally, the hearings would be conducted at the job site.
However, any location which would be more convenient and still
provide all required facilities and access to necessary
documentation would be satisfactory. Private sessions of the
BOARD may also be held at a location other than the job site.
For hearing on disputes, the third member or one of the other
members designated by the third member of the BOARD will act as
Chairperson. WSF and the CONTRACTOR shall have a representative
at all hearings. The protestant will discuss the dispute
followed by the other party. Each party will then be allowed one
or more rebuttals until all aspects are thoroughly covered. Each
time a person testifies, the BOARD members may ask questions,
seek clarification, or request further data. The BOARD may
request from either party documents or information that would
assist the BOARD in making its findings and recommendations
including, but not limited to, documents used by the CONTRACTOR
in preparing the bid for this project. A refusal by a party to
provide information requested by the BOARD may be considered by
the BOARD in making it findings and recommendations. In large or
complex cases, one or more additional hearings may be necessary
in order to consider all the evidence presented by both parties.
During open hearings, no BOARD member should express an opinion
concerning the merit of any facet of the case. By the same
token, all BOARD deliberations should be conducted in private,
with all interim individual views kept strictly confidential.
After the hearings are concluded, the BOARD shall meet in private
and reach a conclusion supported by two or more members. Its
findings and recommendations, together with its reasons shall
then be submitted as a written report to both parties. The
recommendations shall be based on the pertinent contract
provisions and facts and circumstances involved in the dispute.
The BOARD should make every effort to reach a unanimous decision.
If this proves impossible, the dissenting member may prepare a
minority report.
Although both parties should place weight upon the BOARDS
recommendations, they are not binding. Either party may appeal a
recommendation to the BOARD for reconsideration. However,
reconsiderations should only be allowed when there is new
evidence to present. If the BOARDS recommendations do not
resolve the dispute, all records, and written recommendations,
including any minority reports, may be admissible as evidence in
any subsequent litigation.
MISCELLANEOUS
It is not desirable to adopt hard and fast rules for the
functioning of the BOARD. The entire procedure should be kept
flexible so that it can adapt to changing situations. The BOARD
should initiate, with the other parties concurrence, new rules or
modifications to old ones whenever this is deemed necessary.
<PAGE>
JUMBO MARK II CONSTRUCTION
CONTRACT NO. 00-4464
LIST OF CONTRACT EXHIBITS
EXHIBIT TITLE
1. REGULATIONS
- Miscellaneous Articles
2. WAGE RATES
3. AFFIDAVIT RE: LIENS, ENCUMBRANCES
4. DELIVERY SCHEDULE
5. WSF PERSONNEL FACILITIES
6. DISPUTES RESOLUTION
DEPARTMENT OF THE NAVY
NAVAL SEA SYSTEMS COMMAND
2531 JEFFERSON DAVIS HIGHWAY
ARLINGTON, VA 22242-5160
4330
OPR: 0285/MAL
Ser: 0285/1012
Todd Pacific Shipyards Corp.
Seattle Division (King County)
1801 16th Avenue S. W.
Seattle, Washington 98124
Attn: J. T. Gilbride, Jr.
Subj: MODIFICATION NO. P00002 TO CONTRACT NO. N000024-91-C-8503
Dear Mr. Gilbride:
1. Enclosed is an original and two (2) copies of subject
modification. Please sign and return two (2) copies (the original and
one duplicate original) to Naval Sea Systems Command, Arlington, VA.,
22242-5160, Attn: LCDR M.S. Furforo, Code 0285 for final execution.
The third copy should be retained for your information until a fully
executed copy is received.
2. Questions concerning this modification may be addressed to SEA
0285/M. Lacy at (703) 602-7714.
Sincerely,
/s/ M.S. Fuforo
M. S. Furforo
LCDR, SC, USN
Contracting Officer
Encls:
(1) One Original of Modification P00002
(2) Two copies of Modification P00002
<PAGE>
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE J
PAGE 1 OF PAGES
2. AMENDMENT/MODIFICATION NO. P00002
3. EFFECTIVE DATE SEE GLK 16C
4. REQUISITION/PURCHASE REG. NO. 95-MR-20857
5. PROJ. NO.
6. ISSUED BY: CODE N000024 7. ADMINISTERED BY:
NAVAL SEA SYSTEMS COMMAND SUPSHIP Puget Sound
BUYER/SYMBOL: Michele Lacy 2802 Wetmore Avenue
8. NAME AND ADDRESS OF CONTRACTOR (No. street, State and ZIP Code)
CEC NO:
Todd Pacific Shipyards Corporation
Seattle Division
1801 16th Avenue SW
Seattle, WA 98124
TIN NO.
9A: AMENDMENT OF SOLICITATION NO.
9B: DATED (SEE ITEM 11)
10A: MODIFICATION OF CONTRACT/ORDER NO.
N000024-91-C-8503
10B: DATED (SEE ITEM 13)
23 Nov 1990
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
The above numbered solicitation is amended as set forth in Item
14 The hour and date specified for receipt of Offers ___ is extended,
__ is not extended.
Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation as amended, by one of the
following methods:
(a) By completing Items 8 and 15, and returning __ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy
of the offer submitted; or (c) By separate letter or telegram which
includes a reference to the solicitation and amendment numbers.
FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED
FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY
RESULT OM REJECTION OF YOUR OFFER. If by virtue of this amendment you
desire to change an offer already submitted, such change may be made
by telegram or letter; provided each telegram or letter makes
reference to the solicitation and this amendment, and is receipt prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (If required)
NA
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS AND CONTRACT/ORDERS, IT
MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
(X) A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify
Authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE
IN THE CONTRACT ORDER NO. IN ITEM 10A.
X B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO
REFLECT THE ADMINISTRATIVE CHANGES (such changes in
paying office, appropriation data, etc.) SET FORTH
IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b)
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF:
X D. OTHER (Specify type of modification and authority)
Bilateral Change
E. IMPORTANT: Contractor ( ) is not (X) is required to
sign this document and return 2 copies to the issuing
office.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section
headings, including solicitation/contract subject matter where
feasible.)
The purpose of this modification is to modify the contract to change
the fiscal year identified for CLINs 0014 and 0016. Note revisions to
Sections B, C, F and Clause H-25 attached.
Except as provided herein, all terms and conditions of the document
referred to in Item 9A or 10A, as heretofore changes, remains
unchanged and in full force and effect.
15A. NAME AND TITLE OF SIGNER (Type or print)
16A. NAME AND TITLE OR CONTRACTING OFFICER (Type or print)
15B. CONTRACTOR/OFFEROR
(Signature of person authorized to sign)
15C. DATE SIGNED
16B. UNITED STATES OF AMERICA
BY
Signature of Contracting Officer)
16C. DATE SIGNED
NSN 7540-01-152-8070 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE Prescribed by GSA
FAR (48 CFR) 53.243
SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS
Delete:
FY 94 OPTIONS Accomplish FY94 Advance Planning for
USS SACRAMENTO (AOE-1) FY95 PMA
And Substitute:
FY 95 OPTIONS Accomplish FY94 Advance Planning for
USS SACRAMENTO (AOE-1) FY96 PMA
Delete:
FY 95 OPTIONS Accomplish Repair and Alternation of
USS SACRAMENTO (AOE-1) FY95 PMA
And Substitute:
FY 96 OPTIONS Accomplish Repair and Alternation of
USS SACRAMENTO (AOE-1) FY96 PMA
SECTION C - DESCRIPTION/SPECIFICATION
Delete:
FY94 OPTIONS
ITEM 0014 (OPTION) ACCOMPLISH FY94 ADVANCE PLANNING FOR
USS SACRAMENTO (AOE-1) FY95 PMA
And Substitute:
FY95 OPTIONS
ITEM 0014 (OPTION) ACCOMPLISH FY94 ADVANCE PLANNING FOR
USS SACRAMENTO (AOE-1) FY96 PMA
Delete:
FY95 OPTIONS
ITEM 0016 (OPTION) ACCOMPLISH REPAIR AND ALTERNATION OF
USS SACRAMENTO (AOE-1) FY95 PMA
And Substitute:
FY95 OPTIONS
ITEM 0016 (OPTION) ACCOMPLISH REPAIR AND ALTERNATION OF
USS SACRAMENTO (AOE-1) FY96 PMA
SECTION F - DELIVERIES OR PERFORMANCE
F-2 PERIOD OF PERFORMANCE
ITEM PERIOD OF PERFORMANCE
====== =====================
Delete:
FY94 OPTIONS
0014 Effective date of option exercise through
30 September 1994.
And Substitute:
FY95 OPTIONS
0014 Effective date of option exercise through
31 January 1996.
Delete:
FY95 OPTIONS
0016 Effective date of option exercise through
completion of PMA requirement.
And Substitute:
FY96 OPTIONS
0016 Effective date of option exercise through
completion of PMA requirement.
SECTION F - DELIVERIES OR PERFORMANCE
F-3 DELIVERY/REDELIVERY SCHEDULE FOR THE VESSELS
PRODUCTION PRODUCTION
PERIOD PERIOD
COMMENCEMENT COMPLETION
ITEM VESSEL DATE DATE FY
==== =============== =========== ========== ====
Delete:
0016 USS SACRAMENTO 10/17/94 01/20/95 95
(AOE-1)
And Substitute
0016 USS SACRAMENTO 01/26/96 End of FY96 95
(AOE-1) PMA Requirement
H-25 EXERCISE OF OPTIONS
ITEM FROM TO
==== ==== ====
Delete:
FY94 0014 1 OCT 93 30 SEP 94
And Substitute:
FY95 0014 1 OCT 94 30 SEP 95
Delete:
FY95 0016 1 OCT 94 17 OCT 94
And Substitute:
FY96 0016 1 OCT 95 30 SEP 96
DEPARTMENT OF THE NAVY
NAVAL SEA SYSTEMS COMMAND
WASHINGTON D.C. 20352-5101
IN REPLY REFER TO:
4330
OPR: 0285/RAA
Ser: 0285/861
NOV 23 1990
Todd Pacific Shipyards
1801 16th Avenue, S.W.
Seattle, WA 98124
Dear Mr. Smith:
A copy of contract N000024-91-C-8503 for the award of the advance
planning work for the FY91 Drydocking Phased Maintenance availability
of the USS SACRAMENTO (AOE-1), is enclosed for your review and
retention.
If there are any questions or comments pertaining to this action,
please contact Ms. Rochelle Allen, NAVSEA Code 0285, telephone No.
(703) 602-7714.
Sincerely,
/s/ James M. Baker
James M. Baker
LCDR, SC, USN
Contracting Officer
SOLICITATION, OFFER AND AWARD 1. CERTIFIED FOR NATIONAL
DEFENSE UNDER BOSA REG 2
AND/OR DMS REG 1.
2. CONTRACT NO. 3. SOLICIATION NO. 4. TYPE OF SOLICITATION
N-000024-91-C-8503 N-000024-90-R-8503 ( ) ADVERTISED
(X) NEGOTIATED
5. DATE ISSUED 6. REQUISITION/PURCHASE NO.
20 FEB 90 N000024-90-PR-31001
7. ISSUED BY CODE N000024 8. ADDRESS OF FER TO
NAVAL SEA SYSTEMS COMMAND
SEA 0285 ROCHELLE ALLEN
DEPARTMENT OF THE NAVY
WASHINGTON, DC 20352-5101
NOTE: In advertised solicitations offer and offeror mean bid and
bidder
SOLICITATION
9. Sealed offers in original and __ copies for furnishing the
supplies or services in the Schedule will be received at the place
specified in Item 8 or, if handcarried, in the depository in ______
until 2:00 p.m. local time 2 NOV 1990 (Amend. #1)
CAUTION - LATE Submissions, Modifications or Withdrawal: See Section
I, Provision No. 52.214-7 or 52.215-10. All Offers are subject to all
terms and conditions contained in this solicitation.
10. FOR INFORMATION NAME TELEPHONE NUMBER
CALL: ROCHELLE ALLEN (703) 602-7714
11. TABLE OF CONTENTS
X SEC DESCRIPTION PAGES
= ==== ============================== =====
PART I - THE SCHEDULE
X A SOLICITATION/CONTRACT FORM
X B SUPPLIES OR SERVICES AND PRICES/COSTS
X C DESCRIPTION/SPECS/WORK STATEMENT
X D PACKAGING AND MARKING
X E INSPECTION AND ACCEPTANCE
X F DELIVERIES OR PERFORMANCE
X G CONTRACT ADMINISTRATION DATA
H SPECIAL CONTRACT REQUIREMENTS
PART II - CONTRACT CLAUSES
X I CONTRACT CLAUSES
PART III LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.
X J LIST OF ATTACHMENTS
PART IV - REPRESENTATIONS AND INSTRUCTIONS
K REPRESENTATIONS, CERTIFICATIONS AND OTHER
STATEMENTS OF OFFERORS
L INSTRS. CONDS., AND NOTICES TO OFFER
M EVALUATION FACTORS FOR AWARD
OFFER (Must be fully completed by offeror)
NOTE: Item 12 does not apply if the SOLICIATION includes the
provisions at 52.214.16. Minimum Bid Acceptance Period.
12. In compliance with the above, the undersigned agrees, if this
offer is accepted within __ calendar days (60 calendar days unless a
different period is inserted by offeror) from the date for receipt of
offers specified above, to furnish any or all items upon which prices
are offered at the prices set opposite each item, delivered at the
designed point(s), within the time specified in the schedule.
13.DISCOUNT FOR PROMPT PAYMENT(See Section I Clause No. 52.232-8)
10 CALENDAR DAYS 20 CALENDAR DAYS 30 CALENDAR DAYS CALENDAR DAYS
% % % %
14. ACKNOWLEDGMENT OF AMENDMENTS
(The offeror acknowledges receipt of amendments in the
SOLICITATION for offerors and related documents numbered and dated)
AMENDMENT NO DATE AMENDMENT NO DATE
0001 3/21/90 0003 4/23/90
0002 4/12/90 0004 10/23/90
15A. NAME AND Todd Pacific Shipyards Corporation
ADDRESS OF Seattle Division
OFFEROR 1801 16th Avenue S.W. (P.O. Box 3806)
Seattle, WA 98134 (98124)
16. NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER (Type or print)
H.K. Schaefer, President & General Manager
15B. TELEPHONE NUMBER 15C. CHECK IF REMITTANCE ADDRESS IS
(206) 623-1635 DIFFERENT FROM ABOVE - ENTER SUCH
ADDRESS IN SCHEDULE
17. SIGNATURE 18. OFFER DATE
/s/ H.K. Schaefer 11/2/90
19. ACCEPTED AS TO ITEMS NUMBERED 20. AMOUNT
ITEM 0001 thru 0006 $123,527.00
21. ACCOUNTING AND APPROPRIATION
SECTION J-4
22. SUBMIT INVOICES TO ADDRESS SHOWN IN ITEM 24
23. NEGOTIATION PURSUANT TO
( ) 10 U.S.C. 2304(a)
( ) 41 U.S.C. 252(c)
24. ADMINISTERED BY
SUPERVISOR OF SHIPBUILDING
CONVERSION AND REPAIR, USN
SEATTLE, WA 98115-5003, CODE 40013
25. PAYMENT WILL BE MADE BY
FLEET ACCOUNTING & DISBURSING
CODE FS, 937 N. HARBOR DRIVE
SAN DIEGO, CA 92132-5111
NAME OF CONTRACTING OFFICER UNITED STATES OF AMERICA AWARD DATE
LCDR JAMES M. BAKER /S/ JAMES M. BAKER 23 NOV 1990
CONTRACTING OFFICER
IMPORTANT - Award will be made on this Form or on Standard Form 28, or
by authorized official written notice
STANDARD FORM 33
N000024-91-C-8503
Page 2 of 93
SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS
ITEM AMOUNT
===== ========
0001 Accomplish FY91 Advance Fee Bearing Est Cost $118,275
Planning for USS Facilities Capital
SACRAMENTO Cost of Money (FCOM) $ 2,887
(AOE 1) Total CLIN Est Cost
FY91 DPMA (Exclusive of Fee) $121,162
Base Fee (Max 3% of
Fee-Bearing Est Cost)$ 2,365
CLIN Total $123,527
Award Fee Pool (7%) $ 8,279
0001AB Title D and F SHIPALTS
and Repairs
Fee Bearing Est Cost $108,188
FCOM $ 2,641
Total Est. Cost $110,829
Base Fee $ 2,164
Sub-CLIN Total $112,993
Award Fee Pool $ 7,573
0001AC FY90 OPN K SHIPALTS (see note 1 below)
Fee Bearing Est Cost $ 4,842
FCOM $ 118
Total Est. Cost $ 4,960
Base Fee $ 96
Sub-CLIN Total $ 5,056
Award Fee Pool $ 339
0001AD FY91 OPN K SHIPALTS (see note 2 below)
Fee Bearing Est Cost $ 5,245
FCOM $ 128
Total Est. Cost $ 5,373
Base Fee $ 105
Sub-CLIN Total $ 5,478
Award Fee Pool $ 367
0002 Accomplish Non Scheduled Repair and See Section C
Alteration Requirements between
Availabilities
0003 Provisioned Item Order (PIO) for See Section C
Item 0001, and, if options are
exercised, for Item 0007 through 0017
0004 Data for Items 0001, and, if options NSP
are exercised, for Items 0007 through 0017
(See CDRL Exhibit A attached)
NOTE: Subclins 0001AC and 0001 AD are to be prorated for funding
purposes. Subclin 0001AC shall be priced at 48 percent of K Shipalt
package and Subclin 0001AD shall be priced at 52 percent of K Shipalt
package.
FAR Federal Acquisition regulation
52.232-20 Limitation of Cost. (APR 1984)
As prescribed in 32.705-2(a), insert the following clause in
solicitations and contracts if a fully funded cost-reimbursement
contract is contemplated, except those for consolidated facilities,
facilities acquisition, or facilities use, whether or not the contract
provides for payment of a fee. the by-day period may be varied from
30 to 90 days and the 75 percent from to 75 to 85 percent. Task Order
or other appropriate designation may be subsisted for Schedule:
wherever that word appears in the clause.
LIMITATION OF COST (APR 1984)
(A) The parties estimate that performance of this contract,
exclusive of any fee, will not cost the Government more than (1) the
estimated cost specified in the Schedule or, (2) if this is a cost-
sharing contract, the Governments share of the estimated cost
specified in the Schedule. The Contractor agrees to use its best
efforts to perform the work specified in the Schedule and all
obligations under this contract within the estimated cost, which, if
this is a cost-sharing contract, includes both the Governments and the
Contractors share of the cost.
(b) The contractor shall notify the Contracting Officer in writing
whenever it has reason to believe that -
(1) The costs the contractor expects to incur under this contract
in the next 60 days, when added to all costs previously incurred, will
exceed 75 percent of the estimated cost specified in the Schedule; or
(2) The total cost for the performance of this contract, exclusive
of any fee, will be either greater or substantially less than had been
previously estimated.
(c) As part of the notification, the contractor shall provide the
contracting Officer a revised estimate of the total cost of performing
this contract.
(d) Except as required by other provisions of this contract,
specifically citing and stated to be an exception to this clause -
(1) The Government is not obligated to reimburse the contractor
for costs incurred in excess of (I) the estimated cost specified in
the Schedule or, (ii) if this is a cost-sharing contract, the
estimated cost to the Government specified in the Schedule; and
(2) the Contractor is not obligated to continue performance under
this contract (including actions under the Termination clause of this
contract or otherwise incur costs in excess of the estimated cost
specified in the Schedule, until the Contracting Officer (I) notifies
the Contractor in writing that the estimated cost has been increased
and (ii) provides a revised estimated total cost of performing this
contract. If this is a cost-sharing contract, the increase shall be
allocated in accordance with the formula specified in the Schedule.
(e) No notice, communication, or representation in any form other
than that specified in subparagraph (d)(2) above, or from any person
other than the contracting Officer, shall affect this contracts
estimated cost to the Government. In the absence of the specified
notice, the Government is not obligated to reimburse the Contractor
for any costs in excess of the estimated cost or, if this is a cost-
sharing contract, for any costs in excess of the estimated cost to the
Government specified in the Schedule, whether those excess costs were
incurred during the course of the contract or as a result of
termination.
(f) If the estimated cost specified in the Schedule is increased,
any costs the Contractor incurs before the increase that are in excess
of the previously estimated cost shall be allowable to the same extent
as if incurred afterward, unless the Contracting Officer issues a
termination or other notice directing that the increase is solely to
cover termination or other specified expenses.
(g) Change orders shall not be considered an authorization to
exceed the estimated cost to the government specified in the Schedule,
unless they contain a statement increasing the estimated cost.
(h) If this contract is terminated or the estimated cost is not
increased, the Government and the contractor shall negotiate an
equitable distribution of all property produced or purchased under the
contract, based upon the share of costs incurred by each.
(End of clause)
SECTION B - SUPPLIES OR SERVICES AND PRICE/COST
ITEM
AMOUNT
FY91
0001 Accomplish FY91 Advance Planning Fee-Bearing Est Cost $
118,275
for USS SACRAMENTO (AOE 1) Facilities Capitol
FY91 DPMA Cost of Money (FCOM) $
2,887
TOTAL CLIN Est Cost
(Exclusive of Fee) $
121,162
Base Fee (Max. 3% of
Fee-Bearing Est Cost) $
2,365
CLIN Total $
123,527
Award Fee Pool (7%) $
8,279
001AB Title D and F SHIPLATS
and Repairs
Fee-Bearing Est Cost $
108,188
FCOM $
2,614
TOTAL EST COST $
110,829
Base Fee $
2,164
Sub-CLIN Total $
5,056
Award Fee Pool $
7,573
001AC FY90 OPN K SHIPLATS (see note 1 below
Fee-Bearing Est Cost $
4,842
FCOM $
118
TOTAL EST COST $
4,960
Base Fee $
96
Sub-CLIN Total $
5,056
Award Fee Pool $
339
001AD FY90 OPN K SHIPLATS (see note 1 below
Fee-Bearing Est Cost $
5,245
FCOM $
128
TOTAL EST COST $
5,373
Base Fee $
105
Sub-CLIN Total $
5,478
Award Fee Pool $
367
0002 Accomplish Non Scheduled See Section C
repair and Alteration
Requirements between Availabilities
0003 Provisioned Item Order (PIO) See Section C
for Item 0001, and if options are
exercised for Item 0007 through 0017
0004 Data for Items 0001, and, if NSP
options are exercised for Items 0007
through 0017 (See CDRL Exhibit A attached)
NOTE: Subclins 0001AC and 0001AD are to be prorated for funding
purposes. Subclin 0001AC shall be priced at 48 Percent of K
Shipalt package and Subclin 001AD shall be priced at 52 percent
of K Shipalt package..
0005 Provisioning Technical NSP
Documentation for Items 0001, 0002,
and, if options are exercised, for
Items 0007 through 0017 (See CDRL
Exhibit B attached)
0006 Data for Items 0002 (See CDRL NSP
Exhibit C Attached:
FY 91 OPTIONS
0007 Accomplish Repair and Fee-Bearing Est Cost
$15,229,816
Alterations of USS SACRAMENTO Facilities Capital
(AOE 1) FY91 DPMA Cost of Money (FCOM)$
_207,978
Total CLIN Est Cost
(Exclusive of Fee)
$15,437,794
Base Fee (Max. 3% of
Fee-Bearing Est Cost)$
304,596
CLIN Total
$15,742,390
Award Fee Pool (7%)
$_1.006.087
0007AA Messing and Berthing $___476,258
Fee-Bearing Est Cost $_____1,206
FCOM $___477,464
Base Fee $_____9,525
Sub CLIN Total $___486,989
Award Fee Pool $____33,338
0007AB Title D and F SHIPALTS
and Repairs
Fee-Bearing Est Cost $14,245,574
FCOM $___199,314
Total Est Cost $14,444,888
Base Fee $___284,911
Sub-CLIN Total $14,729,799
Award Fee Pool $___997,190
0007AC Title K SHIPALTS
Fee-Bearing Est Cost $___477,784
FCOM $_____7,379
Total Est Cost $___485,163
Base Fee $_____9,556
Sub-CLIN $ 494,719
Award Fee Pool $____33,445
0007AE Updated Ship Selected Records
Fee-Bearing Est Cost $____30,200
FCOM $________79
Total Est Cost $ 30,279
Base Fee $_______604
Sub-CLIN Total $____30,883
Award Fee Pool $_____2,114
0008 Accomplish FY91 Advanced Planning Fee-Bearing Est Cost $
110,549
For USS CAMDEN Facilities Capitol
( AOE 2) FY92 PMA Cost of Money (FCOM) $
2,649
Total CLIN Est Cost
(exclusive of Fee) $
113,198
Base Fee (Max. 3% of
Fee-Bearing Est Cost $
2,211
CLIN Total $
115,409
Award Fee Pool (7%) $
7,738
0008AB Title D and F SHIPLALTS
and repairs
Fee Bering Est Cost $ 101,136
FCOM $ 2,424
Total Est Cost $ 103,560
Base Fee $ 2,023
Sub CLIN Total $ 105,583
Award Fee Pool $ 7,080
0008AC Title K SHIPLALTS
Fee Bering Est Cost $ 9,413
FCOM $ 225
Total Est Cost $ 9,638
Base Fee $ 188
Sub CLIN Total $ 9,826
Award Fee Pool $ 658
FY 92 OPTIONS
Accomplish repairs and Fee-Bearing Est Cost $
6,843,481
Alteration of USS CAMDEN Facilities Capital
(AOE 2) FY92 PMA Cost of Money (FCOM) $
69,426
Total CLIN Est Cost
(exclusive of Fee)
$6,912,907
Base Fee (Max. 3% of
Fee-Bearing Est Cost) $
136,870
CLIN Total
$7,049,777
Award Fee Pool (7%) $
479,044
009AB Title D and F SHIPALTS $
and repair $
Fee-Bearing Est Cost $6,341,887
FCOM $62,361
Total Est Cost $6,404,248
Base Fee $126,838
Sub-CLIN total $6,531,086
Award Fee Pool $443,932
009AC Title K SHIPALTS
and repair
Fee-Bearing Est Cost $ 471,670
FCOM $ 6,993
Total Est Cost $478,633
Base Fee $ 9,433
Sub-CLIN total $ 488,066
Award Fee Pool $ 33,015
009AE Updated Ships Selected Records $
Fee-Bearing Est Cost $ 29,954
FCOM $ 72
Total Est Cost $ 30,026
Base Fee $ 599
Sub-CLIN total $ 30,625
Award Fee Pool $ 2,097
0010 FY92 Advance Fee-Bearing Est Cost
Planning for USS SACRAMENTO Facilities Capitol
(AOE 1) FY93 PMA Cost of Money (FMOC)
Total CLIN Est Cost
(Exclusive of Fee)
Base Fee (Max 3% of
Fee-Bearing Est Cost
CLIN Total
Award Fee Pool (7%)
0010AB Title D and F SHIPALTS
Fee-Bearing Est Cost $ 101,465
FCOM $ 2,537
Total Est Cost $ 104,002
Base Fee $ 2,029
Sub-CLIN Total $ 106,031
Award Fee Pool $ 7,102
0010AC Title K SHIPALTS
Fee-Bearing Est Cost $ 9,456
FCOM $ 236
Total Est Cost $ 9,692
Base Fee $ 189
Sub-CLIN Total $ 9,881
Award Fee Pool $ 662
0011 Accomplish FY92 Advance Fee-Bearing Est Cost $107,636
Planning for USS CAMDEN Facilities Capital
(AOE 2) FY93 PMA Cost of Money (FCOM) $ 2,691
Total CLIN Est Cost
(Exclusive of Fee) $110,327
Base Fee (Max 3% of
Fee-Bearing Est Cost)$ 2,153
CLIN Total $112,480
Award Fee Pool (7%) $ 7,534
0011AB Title D and F CHAPLETS
and Repairs
Fee-Bearing EST Cost $ 98,478
FCOM $ 2,462
Total EST Cost $100.940
Base Fee $ 1,970
Sub-CLINE Total $102,910
Award Fee Pool $ 6,893
0011AC Title K SHIPALTS
and Repairs
Fee-Bearing Est Cost $ 9,158
FCOM $ 229
Total Est Cost $ 9,387
Base Fee $ 183
Sub-CLIN Total $ 9,570
Award Fee Pool $ 641
FY 93 OPTIONS
0012 Accomplish Repair and. Fee-Bearing Est Cost
$6,750,523
Alteration of USS SACRAMENTO Facilities Capital
(AOE 1) FY93 PMA Cost of Money (FCOM)$
72,873
Total CLIN Est Cost
(Exclusive of Fee)
$6,823,396
Base Fee (Max. 3% of
Fee-Bearing Est Cost)$
135.010
CLIN Total
$6,958,406
Award Fee Pool (7%) $
472,536
0012AB Title D and F SHIPALTS
and Repairs
Fee-Bearing Est Cost $ 6,251,731
FCOM $ 65,457
Total Est Cost $ 6,317,188
Base Fee $ 125,035
Sub-CLIN Total $ 6,442,223
Award Fee Pool $ 437,621
0012AC Title K SHIPALTS
Fee-Bearing Est Cost $ 469,160
FCOM $ 7,341
Total Est Cost $ 476,501
Base Fee $ 9,382
Sub-Clin Total $ 485,883
Award Fee Pool $ 32,841
0012AE Update Ship Selected Records
Fee-Bearing Est Cost $ 29,632
FCOM $ 75
Total Est Cost $ 29,707
Base Fee $ 593
Sub-CLIN Total $ 30,300
Award Fee Pool $ 2,074
0013 Accomplish Repair and Fee-Bearing Est Cost
$6,694,298
Alteration of USS CAMDEN Facilities Capital
(AOE 2) FY93 PMA Cost of Money (FCOM) $
71,144
Total CLIN Est Cost
(Exclusive of Fee)
$6,765,442
Base Fee (Max. 3% of
Fee-Bearing Est Cost)$
133,886
CLIN Total
$6,899,328
Award Fee Pool (7%) $
468,600
0013AB Title D and F SHIPALTS
and Repair $ 6,203,568
Fee-Bearing Est Cost $ 63,930
FCOM $ 6,267,498
Total Est Cost $ 124,071
Base Fee $ 6,391,569
Sub-CLIN Total $ 434,250
0013AC Title K SHIPALTS
and Repairs
Fee-Bearing Est Cost $ 461,196
FCOM $ 7,141
Total Est Cost $ 468,337
Base Fee $ 9,224
Sub-Clin Total $ 477,561
Award Fee Pool $ 32,283
0013AE Update Ship Selected Records
Fee-Bearing Est Cost $ 29,534
FCOM $ 73
Total Est Cost $ 29,607
Base Fee $ 591
Sub-CLIN Total $ 30,198
Award Fee Pool $ 2,067
FY 94 OPTIONS
0014 Accomplish FY94 Advance Fee-Bearing Est Cost $
105,071
Planning for USS SACRAMENTO Facilities Capital
(AOE 1) FY95 PMA Cost of Money (FCOM) $
2,218
Total CLIN Est Cost
(Exclusive of Fee) $
107,289
Base Fee (Max. 3% of
Fee-Bearing Est Cost) $
2,101
CLIN Total
109,390
Award Fee Pool (7%)
7,355
0014AB Title D and F SHIPALTS
and Repairs
Fee-Bearing Est Cost $ 96,122
FCOM $ 2,029
Total Est Cost $ 98,151
Base Fee $ 1,922
Sub-CLIN Total $ 100,073
Award Fee Pool $ 6,729
0014AC Title K SHIPALTS
Fee-Bearing Est Cost $ 8,949
FCOM $ 189
Total Est Cost $ 9,138
Base Fee $ 179
Sub-CLIN Total $ 9,312
Award Fee Pool $ 626
0015 Accomplish FY94 Advance Fee-Bearing Est Cost $
103,176
Planning for USS CAMDEN Facilities Capital
(AOE 2) FY95 DPMA Cost of Money (FCOM) $
2,175
Total CLIN Est Cost
(Exclusive of Fee) $
105,351
Base Fee (Max. 3% of
Fee-Bearing Est Cost) $
107,415
CLIN Total $
107,222
Award Fee Pool (7%) $
7,222
0015AB Title D and F SHIPALTS
and Repairs
Fee-Bearing Est Cost $ 94,384
FCOM $ 1,990
Total Est Cost $ 96,374
Base Fee $ 1,888
Sub-CLIN Total $ 98,262
Award Fee Pool $ 6,607
0015AC Title K SHIPALTS
Fee-Bearing Est Cost $ 8,792
FCOM $ 185
Total Est Cost $ 8,977
Base Fee $ 176
Sub-CLIN Total $ 9,153
Award Fee Pool $ 615
FY 95 OPTIONS
0016 Accomplish Repair and Fee-Bearing Est Cost
$6,647,058
Alteration of USS SACRAMENTO Facilities Capital
(AOE 1) FY95 PMA Cost of Money (FCOM) $
58,979
Total CLIN Est Cost
(Exclusive of Fee)
$6,706,037
Base Fee (Max. 3% of
(Fee-Bearing Est Cost)$
132,941
CLIN Total
$6,838,978
Award Fee Pool (7%) $
465,294
00016AB Title D and F SHIPALTS
and Repairs
Fee-Bearing Est Cost $6,162,445
FCOM $ 53,023
Total Est Cost $6,215,468
Base Fee $ 123,249
Sub-CLIN Total $6,338,717
Award Fee Pool $ 431,371
0016AC Title K SHIPALTS
and Repairs
Fee-Bearing Est Cost $ 455,128
FCOM $ 5,896
Total Est Cost $ 461,024
Base Fee $ 9,103
Sub-CLIN Total $ 470,127
Award Fee Pool $ 31,859
0016AE Update Ship Selected Records
Fee-Bearing Est Cost $ 29,485
FCOM $ 60
Total Est Cost $ 29,545
Base Fee $ 590
Sub-CLIN Total $ 30,135
Award Fee Pool $ 2,064
0017 Accomplish Repair and Fee-Bearing Est Cost
$14,710,652
Alteration of USS CAMDEN Facilities Capital
(AOE 2) FY95 DPMA Cost of Money (FCOM) $
156,490
Total CLIN Est Cost
(Exclusive of Fee)
$14,867,142
Base Fee (Max. 3% of
Fee-Bearing Est Cost)$
294,231
CLIN Total
$15,161,355
Award Fee Pool (7%) $
1,029,746
0017AA Messing and Berthing
Fee-Bearing Est Cost $ 470,075
FCOM $ 1,019
Total Est Cost $ 471,094
Base Fee $ 9,402
Sub-CLIN Total $ 480,496
Award Fee Pool (7%) $ 32,905
0017AB Title D and F SHIPALTS
and Repairs
Fee-Bearing Est Cost $ 13,772,584
FCOM $ 149,818
Total Est Cost $ 139,922,402
Base Fee $ 275,452
Sub CLIN Total $ 14,197,854
Award Fee Pool (7%) $ $964,081
0017AC TitleK SHIPALTS $
Fee bearing Est Cost $438,532
FCOM $ 5,594
Total Est Cost $444,176
Base Fee
Sub-CLIN Total $ 8,772
Award Fee Pool (7%) $452,948
0017AC Updated ships Selected Records
Fee bearing Est Cost $ 29,411
FCOM $ 59
Total Est Cost $ 29,470
Base Fee $ 588
Sub-CLIN Total $ 30,058
Award Fee Pool (7%) $ 2,059
TOTAL FOR ALL CLINS
Fee bearing Est Cost $57,531,456
Cost of Money for
Facilities Capitol
* (FCOM) $ 652,283
Total CLIN Est Cost
(Exclusive of Fee) $ 58,183,739
* Base Fee (Max 3% of
Fee bearing Est Cost) $ 1,150,628
CLIN $ 59,334,367
Award Fee Pool (7%)
$4,027,199
CLIN Totals shall be equal to the sum of all SUB-CLIN totals
The maximum Base Fee of 3% is to be reduced by the Cost of Money
for Facilities Capitol (FCOM), if proposed, up to 1% in accordance
with DOD FAR SUPPLEMENT 215.973. The maximum amount of the AWARD FEE
POOL shall equal 10% minus the amount of the BASE FEE POOL after
application of the OFFSET.
The Proposed AWARD FEE POOL shall equal 7% for all offers. The
Government will evaluate each offers proposed based on an AWARD FEE
POOL of 7%. The Government will not consider a proposed AWARD FEE
POOL amount more or less than &%, either for contract award evaluation
purposes, or as a proposed separate limitation of AWARD FEE during the
performance of the contract under Clause H-33, Determination of Fee
DOD FAR SUPPLEMENT 16.404-2(b) (71) requires that the amount of
base fee shall not exceed three percent (3%) of the Total Fee Bearing
Estimated Cost of the contract.
Pursuant to FAR.15.903, the maximum fee (base fee plus award fee)
shall not exceed ten percent (10%) of the Total Fee Bearing Estimated
Cost of the contract . The fee payable shall be the base fee
increased by an award fee determined by the fee determination Official
pursuant to Clauses H-33 of the Special Contract entitled
DETERMINATION OF FEE.
The Government will make payments on account for the base fee equal to
three percent(3%) of the amount invoiced by the contractor and
payable for works performed in accordance with the clauses of the
special Provisions entitled DETERMINATION OF FEE and with the clause
in section I entitled ALLOWABLE COST AND PAYMENT.
In event of discontinuance of work, the base fee shall be
redetermined by mutual agreement in accordance with the clauses of the
General Provisions entitled TERMINATION, and the redetermination base
shall equitably reflected the diminution of work performed. The
amounts by which such redetermination base fee is less than, or
exceeds, payments previously made on account of the base fee, shall be
paid to or repaid by the contractor as the case may be. In the event
of discontinuance of the work, the award fee otherwise payable shall
be determined in accordance with, the clauses of the Special Contract
Requirements entitled AWARD FEE DETERMINATION IN EVENT OF TERMINATION
OR DISCONTINUANCE.
The cost of Money for Facilities Capitol is not a fee-bearing cost
under this contract. However, such amount is included in the Total
Estimated Cost for Purpose of the LIMITATION OF COST clause of this
contract.
The clauses of the General Provisions entitled LIMITATION OF COST
applies to each contract sub-line item independently.
SECTION C - DESCRIPTION/SPECIFICATION
The Contractor, under the direction of the Supervisor of Shipbuilding,
Conversion and Repair, USN, Seattle (hereinafter referred to as the
Supervisor), and as an independent Contractor and not as an agent of
the Government, shall furnish the materials, services, and facilities
(except those furnished by the government under express provisions of
this contract) necessary for the accomplishment of the following work:
1.0 GENERAL
a. The requirements of this contract (including option items
exercised by the Government, provisioned items and non-scheduled
repairs and alterations ordered by the government) are for the
Contractor to:
1. Accomplish advance planning for the repair and alteration of
Phased Maintenance Availability (PMA) and Docking Availability (DPMA)
items of USS SACRAMENTO (AOE 1) and USS CAMDEN (AOE 2).
2. Prepare for and accomplish the repair and alteration of USS
SACRAMENTO and USS CAMDEN during Scheduled Phased Maintenance
Availabilitys (PMAs), making certified dry-docking facilities
available for accomplishment of work items below the ships waterline
for Docking Availabilities (DPMAs).
3. Accomplish emergent repairs and prefabrication/installation of
alterations ordered between PMAs and DPMAs by the Administrative
Contracting Officer.
4. Accomplish provisioning action related 1.0.a.1 through 1.0.a.3 of
this section.
5. Furnish supplies ordered by the Administrative Contracting
Officer.
b. The contract contains items and option items for advance planning
services, including identification and procurement of Long Lead Time
Material (LLTM), development of work item specification, and design
review of alteration drawings.
c. The Contract includes items and option items for the preparation
for and accomplishment of PMAs and DPMAs, including the cost of LLTM
and the update of Ship Selected Records (SSRs).
d. The Contract contains items whereby the Government may order the
procurement of provisioning material or may order services for the
accomplishment of necessary repairs which arise between availabilities
or the accomplishment of alteration work, such as material ordering
and prefabrication, between availabilities. The items are not funded
unless or until the Government places an order with the Contractor.
e. The Contractor shall provide for staging and storage of
LLTM for use in the availabilities.
f. The Contractor shall prepare for and shall accomplish the
repair and alteration of vessels listed in Section F in accordance
with the work item specification, drawings, test procedures and other
detailed data provided by the Government under Section J. The
Contractor will also be required to accomplish advance planning
functions (including shipchecks, Ship Alteration Installation Drawing
(SID) design review, work item specification preparation, and LLTM
identification and procurement), planning functions, and other work
necessary to prepare for repair and alteration of the vessels. The
detailed data provided by the government under Section J. shall be
used by the contractor as the notional specifications work package for
the repair and alteration of vessels for solicitation purpose.
1. The schedule for advanced planning, for proposal
development and the selected records update relative to availability
start (A) or completion (C) is shown in Table C-1. The proposal for
each availability shall be developed for the actual work package
developed and/or authorized by the government .
2.Negotiation/approval of the basic work specification
package should occur by approximately A-15. Upon exercise of the
option item(s) with in the time frame (s) identified in section H,
Special Provisions, Clause H-25, Exercise of options, dollar
adjustments to the option estimated cost pulse base fee and award fee
pool which arise out of the work specifications package
negotiation/approval will be made if required.
3. PMA emergent work is defined as work identified after
provision of the authorized SARP(A-165). All emergent work will be
classified as either Growth work or New Work. Growth work will be
related to a previously identified work specification item. New work
will not be related to a previously authorized work specification
item, and the work will be assigned a new specification item number.
(a) GROWTH WORK
the anticipated amount of growth work will be
estimated and approved by the Contractor at A-80 along with the
proposal for the work package. Through the end of each availability,
the Contractor shall prepare all growth work specifications in the
form of Work Packages. Each package shall include work operations,
trade skills involved, material requirements, estimated man-hours by
trades and schedule of which work is
SUPSHIP representative and the Port engineer will review each work
package when submitted, and authorization to proceed with the work
will be provided by the SUPSHIP project manager.
(b) NEW WORK
All new work specifications shall be written and/or approved by
SUPSHIP representative and the Port Engineer. Upon receipt or
approval of a new specification, the Contractor shall propose a change
in the estimated cost and fee to be incorporated into section B.
authorization to proceed with new work will be granted only by the
contracting officer, only after the work has been priced, and will be
subject to the LIMITATION OF FUNDS CLAUSE.
Table-C
Advanced Planning Schedule
SACRAMENTO
FY91 SUBSEQUENT
ACTIONS AVAIL
AVAILABILITIES
Government initial provided A-210 A-360
advanced planning funding
increment.
Government provided PERA A-210 A-360
milestone planning letter
Government provide Title K A-210 A-360
ship alteration authorization
letter and Title D, F
and K LLTM list(FMPMIS
TP-05 report or equivalent)
Government Provided SIDs. A-210 A-
360
Contractor Complete SID A-190 A-
315
design review and submit
results. (Government may
authorize shipcheck.)
Contractor provided A-180 A-
315
recommendations for non
government-furnished
alterations LLTM
Contractor commence A-170 A-
300
procurement of authorized
non-Government furnished
alterations LLTM.
Contractor assist in If Authorized
conduct of work package
determination.
Government provided resolution A-170 A-270
of Contractor SID design review
problems.
Contractor recommend changes A-170 A-
270
to alteration LLTM list, if any
Contractor supplement A-165 A-
255
alteration LLTM procurement,
as authorized.
Contractor submit preliminary A-165 A-
230
K Alteration and D/F
alteration cost Estimates.
Government Provided preliminary A-165 A-
230
SARP to Contractor. A-160 A-
220
Contractor submit cost
proposal for advance planning.
Contractor provide repair A-160 A-
210
item LLTM recommendation
Contractor Commence procurement
of authorized repair item LLTM. A-150 A-
200
Contractor provide preliminary A-150 A-
200
SARP time and cost estimates
Contractor conduct shipchecks If
Authorized
for specifications preparation
Government provide authorized A-150 A-
165
SARP to contractor
Contractor provide complete A-120 A-
120
NAVSEA Title K alteration
work item specifications for
basic work package
Contractor provide complete A-90 A-
90
repair and Title D/F alterations
work item specifications for
basic work package.
Contractor submit complete A-80 A-
80
proposal for basic work package.
(to include SRR update, if tasked,
and growth and/or overtime estimates).
Contractor provide Updated C+60 C+60
ship selected Records
( if tasked).
Item 0001 ACCOMPLISH FY91 ADVANCED PLANNING FUNCTIONS
FOR USS SACRAMENTO (AOE 1) FY91 DPMA
1.1 SCOPE
The contractor is required to accomplish advanced
planning for SACRAMENTO in accordance with the schedule of Table C-1,
including the development of work specifications, design review of
Government alterations drawings, shipchecks to validate work
specification] and drawing, LLTM procurement, and other necessary to
prepare for the alterations and repairs of SACRAMENTO. THE CONTRACTOR
SHALL NOT INCUR ANY COST ASSOCIATED WITH THE FOLLOWING WORK UNTIL
AUTHORIZATION BY THE CONTRACTING OFFICER. The requirements include,
but are not limited to , the following:
a. Accomplish advance planning for the repair and alteration
of SACRAMENTO in accordance with work specifications, drawing, test
procedures and other detailed data provided by the Government. The
Contractor will be required to accomplish advance planning functions,
including development of specifications , design review of Government
alteration drawings, procurement of materials, shipchecks, and other
work necessary to prepare for repair and alteration of the vessel.
This work will be based on SHIPALT authorization letters and on SARP
and WDC work authorized by the Port Engineer via the Supervisor. The
specifications cost proposals, and other data developed by the
Contractor in support of the basic work package, as well as work
specification references obtained from the Planning Yard or other
sources, shall be submitted to the Supervisor not later than shown in
Table C-1 for each availability being planned.
b. Develop specifications for emergent work items identified
prior to A-90. These specifications shall be written in format
similar to the basic specifications, describing the additional work to
be accomplished as defined by the Supervisor supported by OPNAV Form
4790/2Ks, 2L drawings, SARP line item specifications and other
commonly used documentation.
c. Prepare material ordering lists, develop engineering data
forms, submit Liaison Action Records, and correct engineering drawings
as authorized
d. identify, procure, receive and store authorized LLTM. When
authorized, the Contractor shall, where particle and economical,
procure, or arrange options for multiship quantities where material
requirements are identical.
e. provide an integrated milestone plan for the advanced
planning and procurement phases of the availability. These milestones
will include a schedule of key events necessary to meet the contract
delivery dates.
f. Develop and utilize a progress measurement system to
determine the physical progress of the advance planning, and
procurement phases. The progressing system shall permit a direct
comparison of the physical progress of completed work to the
integrated milestone plane that is to be developed in subparagraph
1.1.e. Above.
g. apply stringent changes control procedures to ensure timely
identification and incorporation of emergent work.
h. Apply approved quality assurance procedures as required by
this contract and the associated specifications. Ensure the procured
material and performed work will achieve and maintain the required
quality standards.
i. the Contractor cannot modify the basic design features of
the engineering data provided by the Government. The modifications
are deemed necessary by the contractor, the Contractor shall follow
the engineering change proposals and request for deviations and
waivers procedures of NAVSEA Technical Specification 9090-100
j. work specification shall be based on the SARP, WDC results,
and other data derived from shipcheck and or provided by the
supervisor, in accordance with appendix 2 - I of NAVESA 0900-LP0795010
and using Standard work items (WI) which are in effect on the date of
specification submission to the Supervisor for acceptance.
Specifications, created by the contractor or reapplied from previous
program efforts, shall be examined prior to submission to ensure
applicability and compliance with requirements specified herein In
preparing the specifications and in accomplishing the work, it is
mandatory that repairs be based on actual material condition to the
maximum extent possible. The use of Class B repairs is to be
minimized. Work specifications shall be prepared and stored using ADP
or word processing techniques in order to minimize preparation or
revision of specifications for the same or similar work required for
other availabilities..
k. All required engineering and drafting modifications to
drawings and illustrative material shall be prepared to interpret and
define the repair and alterations to the ship. New drawings, if
necessary, shall be prepared in accordance with DOD-D-01000b. If
tasked, the contractor shall update ship Selected Record Drawings
(SSRDs) in accordance with NAVSEAINST 4790.1A and the Fleet
Modernization Program (FMP) Management and Operations Manual (SL720-AA-
MAN-010.
1. Drawings, data and other work products shall be completely
and thoroughly checked and reviewed by the Contractor for technical
accuracy and compliance with the provisions of specifications and
assignments to such an extent that checking and detailed review by the
technical personnel of SUPSHIP will not be necessary. Any corrections
to drawings or other work products found necessary due to error or
omission of the contractor shall be promptly accomplished by the
Contractor.
m. All drawings and other data to be furnished shall be
reviewed and approved by the Contractors Chief Design Engineer prior
to delivery to the Supervisor.
n. All drawing and other data developed by the contractor shall
represent a practical engineering solution based on the best trade-off
between total cost, reliability, maintainability, availability of
material, labor skill and industrial capability, state of art , and
timely accomplishment of the task. The design will meet the
requirement of the General Specifications for Ships and be presented
on a format consistent with the requirements of the references and
instructions in force on the start date of the work assignment.
Maximum utilization of existing Class drawings and Navy Standard
drawings will be made. Redrawing or tracing in whole or in part of
the existing class or standard drawings will not be permitted unless
specifically authorized in writing.
o. The Contractor shall be responsible for producing
interference-free, technically accurate drawings and shall be
responsible for calling to the attention of the Supervisor, orally and
in writing, any interface and interference problems.
p. The following documents or their subsequent revisions in
effect at time of contract award and/or option exercise, as well as
applicable current instructions, general specifications, type plans,
naval ship technical manuals and directives from the Naval Sea Systems
Command shall be used in the technical requirements of work under the
contract:
MILITARY STANDARDS
DOD-STD-100C Engineering Drawing Practices
DOD-STD-480A Configuration Control;
Engineering
Changed, Deviations and Waivers
MIL-STD-481A Configuration Control;
Engineering
Changes, Deviations and Waivers
(Short Forms)
MIL-STD-784B Damage Control Books for Surface
Ships, Revision of
MIL-STD-881A Work Breakdown Structures for
Defense Material Items
MIL-STD-1561B Provisioning Procedures, Uniform
Department of Defense
MIL-STD-1625B Dry-docking and Launching
Facilities
Safety Certification Criteria for
U.S.Navy Ships
MIL-I-45208A Inspection System Requirements
DOD-D-1000B(2) Drawings, Engineering and
Associated Lists
MIL-5480E Data, Engineering and Technical,
Reproduction Requirements for
MIL-M-9851/1 (1) Microfilming of Engineering
Documents 35MM, Ship Systems
MIL-M-9868D Microfilming of Engineering
Documents, 35MM Requirements for
MIL-M-15071H Manuals, Technical, Equipment and
Systems
MIL-M-38784A Manuals, Technical; General Style
and Format Requirements
NAVEL INSTRUCTIONS
S9086-7G-STM-0000 NAVSHIPS Technical Manual Chapter
997, Dry-docking Instructions and
Routine Work in dry-docking
NAVSEA 0900-LP-079-5010 Ship Repair Contracting Manual,
Appendix 2-I
NAVSEA Fleet Modernization Program (FMP)
SL720-AA-MAN-010 Management and Operation Manual
NAVSEAINST 4790.1A Expanded Ship Work Breakdown
Structure (ESWBS) for Ships, Ship
Systems and Combat Systems
S9040-AA-IDX-010/SWBS Expanded Ship Work Breakdown
5d VOl.1 Structure for Ships, Ships System
and Combat Systems
S9040-AA-IDX-020/SWBS User Guide for the expanded Ship
SWBS 5d VOL. 2 Work Breakdown Structure for
Ships
Ship System and Combat Systems.
q. Submit a preliminary time and cost estimate for
accomplishment of the work listed in the preliminary SARP. This
information is for Government use during the Work Definition
conference. The estimates shall be as accurate as practicable and
shall be provided within 30 days of receipt of the preliminary SARP in
the following format:
ESTIMATE
ITEM TIME REQUIRED ESTIMATED ESTIMATED TOTAL COST
NO. CALENDAR DAYS MANDAYS MATERIAL COST
(PRELIMINARY)
ITEM 0002 NON-SCHEDULED REPAIR AND ALTERATION REQUIREMENTS BETWEEN
SCHEDULED AVAILABILITIES
1.2 SCOPE
a. GENERAL The Contractor shall furnish such supplies or services
related to emergent type work which cannot be accommodated in
scheduled availabilities, repair or alteration work as may be ordered
by the Government in accordance with the procedure specified herein.
Notwithstanding any contrary provision in any document refereed to in
subparagraph (d) below, the Contractor shall not begin work on these
supplies or services prior to the placement of orders therefore by the
Administrative Contracting Officer (ACO) The Government reserves the
right to order these supplies and services elsewhere at its
discretion.
b. ORDERS.
(i) Orders ( or revisions thereto) for supplies or services
hereunder will be placed by the ACO ( on the basis of funded
requisitions to be supplied by the cognizant Requiring Activity ) in
the form of modifications (unilateral or bilateral ) to this contract.
The Contractor shall comply with orders only when so made. ( To
maximum extent possible, such orders will be made by bilateral
modifications to the contract which are fully priced and contain
definitive delivery schedules.)
(ii) In the event the ACO determines that time does not
permit negotiation of a bilateral modification, a unilateral
modification will be issued by the ACO which will specify a dollar
limitation ( see paragraph (c) below) and a desired delivery schedule
for the supplies or services ordered together with a detailed
description of the supplies or services to be furnished and a
statement of the cost and [pricing data required to be furnished .
Price( estimated cost and fee) and delivery schedule will later be the
subject of a bilateral modification to be executed on behalf of the
Government by the ACO. To this end, the Contractor shall submit a
price (estimated coat fee ) proposal, in the number of copies
requested by the ACO, within forty (40) percent of the production
effort but no later then ten (10) days after receipt of each
unilateral modification or as soon as practicable thereafter, but in
any event before cost equal to twenty (20) percent of the dollar
limitation have been incurred. (The unilateral modification shall not
be used for end item billing purpose for delivered items under this
contract.) Failure to agree on the bilateral modification for any
unilateral order shall be considered a dispute within the meaning of
the Disputes clause.
c. Limitation of Obligation With Respect to Orders Not Finally
Priced.
The Contractor shall commence work upon receipt of any unilateral
modification to this contract. If at any time the contractor has
reason to believe that the price (estimated cost fee) of any order
placed hereunder will exceed the dollar limitation (ceiling Price)
established by the ACO in a unilateral modification, the contractor
shall so notify the ACO in writing and propose an appropriate increase
within 10 days of such notice, the ACO will either(i) notify the
contractor in writing of such appropriate increases, or (ii)instruct
the Contractor how and to what extent the work shall be continued;
provided, however, that in no event shall the contractor be obligated
to proceed with work in a unilateral modification beyond the point
where his cost plus a reasonable (fee) hereon exceed the dollar
limitation, and provide also that in no event shall the Government be
obligated to pay the Contractor any amount in excess of the dollar
limitation specified in any unilateral modification placed pursuant to
paragraph (b) above.
d. The Support Document applicable to ordering the supplies or
services hereunder is as follows:
MIL-STD-1561B
e. Terminal Date for Placement of Orders. The Contractor shall
not be obligated to accept any orders placed hereunder beyond 180 days
after delivery of the last end item.
ITEM 0003 PROVISIONED ITEMS ORDER (PIO) FOR ITEMS 0001,0002 AND, IF
OPTIONS ARE EXERCISED, FOR ITEMS 0007 THROUGH 0017.
1.3 SCOPE
a. GENERAL The Contractor shall furnish such supplies or
services as may be ordered by the Government in accordance with the
procedures specified herein. Notwithstanding any contrary provision
in any document referred to in subparagraph (d) below, the Contractor
shall not begin any work on these supplies or services prior to the
placement of orders therefore by the Administrative Contracting
Officer (ACO).
b. ORDERS.
(i) Orders (or revisions thereto) for supplies or services
hereunder will be placed by the ACO (on the basis of funded
requisitions to be supplied by the cognizant Provisioning Activity) in
the form modifications (unilateral or bilateral) to this contract.
The Contractor shall comply with orders only when so made. (To
maximum extent possible such orders will be made by bilateral
modifications to the contract which are fully priced and contain
definitive delivery schedules.)
(ii) In the event the ACO determines that time does not
permit negotiation of a bilateral modification, a unilateral
modification will be issued by the ACO which will specify a dollar
limitation (see services ordered together with a detailed description
of the supplies to be furnished. Price (estimated cost and fee) and
delivery schedule will later be the subject of a bilateral
modification to be executed on behalf of the Government by the ACO.
To this end, the Contractor shall submit a price (estimated cost and
fee) proposal, in receipt of each unilateral modification or as soon
as practical thereafter, but in any event before cost equal to twenty
(20) percent of the dollar limitation have been incurred. (The
unilateral modification shall not be used for end item billing
purposes for delivered items under the contract
c. Limitation of Obligations with Respect to Orders not Finally
Priced. The Contractor shall commence work upon receipt of any
unilateral modification to this contract. If at any time the
Contractor has reason to believe that the price (estimated cost and
fee) of an order placed hereunder will exceed the dollar limitation
established by the ACO in a unilateral modification, the contractor
shall so notify the ACO in writing and propose an appropriate
increase. Within Thirty (30) days of such notice, the ACO will either
(i) notify the Contractor in writing of such appropriate increase, or
(ii) instruct the Contractor how and to what extent the work shall be
continued; provided, however, that in no event shall the Contractor be
obligated to proceed with work in a unilateral modification beyond the
point where his costs, plus a reasonable profit (fee), thereon exceed
the dollar limitation, and provided however that in no event shall the
Contractor be obligated to proceed with work on a unilateral
modification beyond the point where his costs, plus a reasonable
profit (fee), hereon exceed the dollar limitation, and provided also
that in no event shall the Government be obligated to pay the
Contractor any amount in excess of the dollar limitation specified in
any unilateral modification placed pursuant to paragraph (b) above.
d. The Support Document applicable to ordering the supplies or
services hereunder is as follows:
MIL-STD-1561B
e. Terminal Date for Placement of Orders. The Contractor shall
not be obligated to accept any orders placed hereunder beyond 180 days
after delivery of the last end item.
ITEM 0004 DATA FOR ITEMS 001 AND, IF OPTIONS ARE
EXERCISED, OPTION ITEMS 0007 THROUGH 0017
1.4 SCOPE
The Contractor shall provide data in accordance with the
following:
a. The data to be furnished hereunder shall be prepared in
accordance with the CDRL, Form 1423, Exhibit A attached hereto. The
Contractor shall prepare and submit the data as specified in the CDRL.
Throughout the Contract
Data Requirements List and associated Data Item Descriptions, various
data submissions require the use of 8x10 1/2 paper. In all such
cases, 8 1/2 x 11 standard commercial size paper may be substituted.
b. The CDRL lists those major data items required by the
contract work specifications. The Contractor shall notify the
Supervisor in writing if data items required by the contract work
specifications are not listed on the CDRL
ITEM 0005 PROVISIONING TECHNICAL DOCUMENTATION FOR ITEMS 0001 AND
0002
AND IF OPTIONS ARE EXERCISED, OPTION ITEMS 0007 THROUGH
0017
1.5 SCOPE
The Contractor shall provide data in accordance with following:
a. The data to be furnished hereunder shall be prepared in
accordance with the CDRL, DD Form 1423, Exhibit B attached hereto.
The Contractor shall prepare and submit the data as specified in the
CDRL. Throughout the Contract Data Requirements List and associated
Data Item Descriptions, various data submissions require the use of 8
x
10 1/2 paper. In all such cases, 8 1/2 x 11 standard commercial size
paper may be substituted.
b. The CDRL lists those major data items required by the
contract work specifications. The Contractor shall notify the
Supervisor in writing if data items required by the contract work
orders are not listed on the CDRL.
c. For configuration changes associated with any Line Item of
this contract, the Contractor shall accomplish (for Contractor
furnished material), or assist the Supervisor (for Government
furnished material), with Provisioning Technical Documentation (PTD)
updating in accordance with MIL-STD-1561B and NAVSEA SL720-AA-MAN-010.
The Contractor shall have a system to manage the procurement of
Contractor furnished material and the identification of supply support
requirements for both Contractor and Government Furnished Materials.
d. Provisioning Technical Documentation shall be in accordance
with Exhibit B and the Provisioning requirements Statement of Section
J.
ITEM 0006 DATA FOR ITEM 0002
1.6 SCOPE
The Contractor shall provide data in accordance with the
following:
a. The data to be furnished hereunder shall be prepared in
accordance with the CDRL, DD Form 1423, Exhibit C attached hereto.
The Contractor shall prepare and submit the data as specified in the
CDRL. Throughout the Contract Data Requirements List and associated
Data Item Description, various data submissions require the use of 8 x
10 1/2 paper. In all such cases, 8 1/2 x 11 standard commercial size
paper may be substituted.
b. The CDRL lists those major data items required by the
contract work specifications. The Contractor shall notify the
Supervisor in writing if data items required by the contract work
orders are not listed on the CDRL.
FY 91 OPTIONS
ITEM 0007 (OPTION) ACCOMPLISH REPAIR AND ALTERATION OF USS SACRAMENTO
(AOE 1) FY DPMA
1.7 SCOPE
The Contractor shall accomplish the FY91 PMA Repair and
Alteration of CAMDEN as specified herein and in accordance with the
work item specifications, drawings, test procedures and other detailed
data provided by the Government in accordance with Section J and
paragraph 1.0.f of this Section.
The Contractor shall accomplish planning, document preparation,
engineering, procurement, prefabrication and shipyard production work,
and any work necessary to prepare for and accomplish the alterations,
repairs maintenance and routine work as specified herein. These
requirements include, but are not limited to, the following;
a. Provide the management, technical, procurement production test
quality assurance and facility resources necessary to prepare for and
accomplish the repair and alteration of the SACRAMENTO in accordance
with the requirements stated in this section, the work item
specifications (Section j ), the delivery schedule specified in
Section F, and all other terms and conditions set forth in this
contract.
b. Accomplish planning and scheduling to ensure a rational,
integrated and timely plan for receipt, storage and installation of
Government Furnished Material as identified in work item
specifications, and for accomplishment of production work, tests and
trials in order to meet the required contract delivery dates. A
critical path analysis (if required by the Supervisor for particular
work items) and a milestone schedule shall be used to measure schedule
accomplishment of the functions and elements required to successfully
complete the repair and alteration of SACRAMENTO within the
availability dates specified in Section F.
c. Develop progress Measurement Systems to permit the determination
of the physical progress of completed work for each of the elements in
the scheduling plan, including material, manpower, engineering,
production, tests and trials. The progress measurement system shall
permit a direct comparison of the physical progress of completed work
to the planned performance measurement baseline for each of the
elements in the scheduling system.
d. Establish management procedures and systems to identify behind
schedule conditions an unfavorable schedule variances, using the
scheduling systems performance measurement baseline and the progress
measurement systems. The applied systems and procedures shall provide
timely identification of scheduling problem areas to permit prompt
management action to correct unsatisfactory conditions.
e. Apply stringent change control procedures to ensure timely
identifications and incorporation of emergent work..
f. Prepare and submit in definitive forms a proposal for
accomplishment of emergent work. This proposal shall be submitted
within five working days after work identification in accordance with
the detailed requirements for emergent work proposals and emergent
work specifications detailed in DD Form 1423, CDRL, herein.
g. The Navy intends that all basic and emergent work authorized for
the repair and alteration of the vessel be compatible with the
duration of the scheduled production accomplishment periods. The
Contractor agrees, therefore to inform the Supervisor as soon as
practicable, but no later than as specified in paragraph 1.7.f. of
this section, if it appears that any work items will require a longer
period.
h. Adjustments to the work package will be incorporated by the
Supervisor after a receipt/negotiation of the contractors proposal for
such adjustments. The time periods stated in paragraph 1.7.f. shall
apply to all work proposals submitted by the Contractor.
i. The Contractor cannot modify the basic design features of the
engineering data provided in Section J. If modifications are deemed
necessary by the Contractor, the Contractor shall follow the
Engineering Change Proposals and Request for Deviations and Waivers
procedures of NAVSEA Technical Specification 9090-100.
j. All required engineering and drafting modifications to drawings
and illustrative material shall be prepared to interpret and define
the repair and alterations to the ship. New drawings, if necessary,
shall be prepared in accordance with DOD-D-1000B. If required, Ship
Selected Record Drawings (SSRDs) shall be updated in accordance with
NAVSEAINST 4790.1A and the Fleet Modernization Program (FMP)
Management and Operations Manual (SL720-AA-MAN-010).
k. Drawings, data and other work products shall be completely and
thoroughly checked and reviewed by the Contractor for technical
accuracy and compliance with the provisions of specifications and
assignments to such an extent that checking and detailed review by the
technical personnel of SUPSHIP will not be necessary. Any corrections
to drawings or other work products found necessary due to error or
omission of the contractor shall be promptly accomplished by the
Contractor.
l. All drawings and other data to be furnished shall be reviewed and
approved by the Contractors Chief Design Engineer prior to delivery to
the Supervisor.
m. All drawing and other data developed by the Contractor shall
represent a practical engineering solution based on the best trade-off
between total cost, reliability, maintainability, availability of
material, labor skill and industrial capability, state-of the-art, and
timely accomplishment of the task. The design will meet the
requirement of the General Specifications for Ships and be presented
on a format consistent with the requirement of the reference and
instruction in force on the start date of the work assignment.
Maximum utilization of existing Class drawings and Navy Standard
Drawings will be made. Redrawing or tracing in whole or in-part of
the existing class or standard drawings will not be permitted unless
specifically authorized in writing by the Supervisor.
n. The Contractor shall be responsible for producing interference
free, technically accurate drawings and shall be responsible for
called to the attention of the Supervisor, orally and in writing, any
interface and interference problems.
o. Apply approved quality assurance procedures as required by this
contract and the associated specifications to ensure that procured
material and performed production work will achieve and maintain the
required quality standards.
p. The documents identified in 1.1.p., or their subsequent revisions
in effect at time of contract award or option exercise, as well as
applicable current instruction, general specification, type plans,
naval ship technical manuals and directives from Naval Sea Systems
Command, shall be used in the technical requirements of work under the
contract.
ITEM 0008 (OPTION) ACCOMPLISH ADVANCE PLANNING FOR USS CAMDEN (AOE 2)
FY92 PMA
1.8 SCOPE
The Contractor shall accomplish advance planning functions for
CAMDEN in accordance with the statement of work for Line Item 0001,
except for dry-docking requirements.
FY 92 OPTIONS
ITEM 0009 (OPTION) ACCOMPLISH, REPAIR AND ALTERATION OF USS CAMDEN
(AOE
2) FY92 PMA
1.9 SCOPE
The Contractor shall accomplish the repair and alteration of
CAMDEN in accordance with the statement of work for Line Item 0007,
except for drydocking requirements.
ITEM 0010 (OPTION) ACCOMPLISH FY92 ADVANCE PLANNING FOR USS
SACRAMENTO (AOE 1) FY93 PMA
1.10 SCOPE
The Contractor shall accomplish advance planning functions for
CAMDEN in accordance with the statement of work for Line Item 0001,
except for dry-docking requirements.
ITEM 0011 (OPTION) ACCOMPLISH FY92 ADVANCE PLANNING FOR USS CAMDEN
(AOE 2) FY 93 PMA.
1.11 SCOPE
The Contractor shall accomplish the advanced planning for
Sacramento in accordance with the statement of work for Line Item
0001, except for dry-docking requirements.
FY 93 OPTIONS
ITEM 0012 (OPTION) ACCOMPLISH REPAIR AND ALTERATION OF USS SACRAMENTO
(A0E 2) FY93 PMA
1.12 SCOPE
The Contractor shall accomplish the FY93 DPMA Repair and
Alteration of SACRAMENTO as specified herein and in accordance with
the statement of work for Line Item 0007, except for dry-docking
requirements.
ITEM 0013 (OPTION) ACCOMPLISH REPAIR AND ALTERATION OF USS CAMDEN
(AOE
2) FY93 PMA
1.13 SCOPE
The Contractor shall accomplish the repair and alteration of
CAMDEN in accordance with the statement of work for line Item 0007,
except for drydocking requirements.
FY 94 OPTIONS
ITEM 94 0014 (OPTION) ACCOMPLISH FY94 ADVANCE PLANNING FOR USS
SACRAMENTO ( AOE1) FY95 PMA
1.14 SCOPE
The Contractor shall accomplish the advance planning functions for
SACRAMENTO in accordance with statement of work for Line Item 0001,
Except for dry-docking requirements.
ITEM 0015 (OPTIONS) ACCOMPLISH FY94 ADVANCE PLANNING FOR USS CAMDEN
USS CAMDEN (AOE 2) FY95 DPMA
1.15 SCOPE
The contractor shall accomplish advance planning functions for CAMDEN
in accordance with the statement of works for Line Item 0001,
including dry-docking requirements.
FY95 OPTIONS
ITEM 0016 (OPTIONS) ACCOMPLISH REPAIR AND ALTERATIONS OF
USS SACRAMENTO (AOE 1) FY 95 PMA
1.16 SCOPE
The Contractor shall accomplish the FY95 PMA repair and alteration of
SACRAMENTO as specified herein and in accordance with the statement of
work for Line Item 0007, except for dry-docking requirements.
ITEM 0017 SCOPE
The Contractor shall accomplish the FY95 DPMA Repair and Alterations
of CAMDEN as specified herein and in accordance with the statement of
work for Line Item 0007. In addition to the requirements of Line
0007, the contractor shall make certified dry-docking facilities
available for accomplishment of work item below the ships waterline.
Also, the contractor shall make messing and berthing facilities for
ships crew available for ships force use.
SECTION D-PACKING AND MARKETING
SECTION E-INSPECTION AND ACCEPTANCE
1. FAR 52.246-3 Inspection of Supplies- Cost Reimbursement, (Apr
1984), is incorporated by reference in this contract.
(a) the Inspection system which the contractor is required to
maintain, as provided in paragraph (b) of this clause shall be in
accordance with military specification MIL-I-45208 and NAVSEA standard
Item 009-04 in effect on the date of this contract unless otherwise
specified.
(b) Inspection facilities. The Facilities to be provided
pursuant to this clause shall be equal to those provided by the
Contractor for his use for generally similar purpose, and shall
include offices, drafting rooms, convenient parking facilities,
reproduction equipment or services, and telephones connected to the
Contractors and local telephone systems. Toll charges for calls
placed by the government shall be paid by the Government.
(c) In accordance with paragraph (b) of this clause, the
contractor shall make his records of all inspection work available to
the Government for a period of six (6) months after completion of all
work called for in the contract.
2. The performance by the contractor and the quality of the work
completed, including services rendered shall be subject to inspection,
review and final; acceptance by the SUPSHIP or his duly authorized
representative
3. Failure of any contractually required document to conform to any
of the applicable requirements of this contract will result in the
rejection of the non-conforming document. Non-conforming engineering
drawings documents shall be re-examined after correction of all
discrepancies. The contractor shall identify the deficiencies
corrected and the action taken to prevent recurrence .
4. Data: Inspection and acceptance of deliverable items under this
contract shall be destination(s) as shown on DD from 1423, Exhibits A,
Band C of Section J.
5. , Provisioned Items Ordering: Inspection and acceptance is to be
determined at time of Provisioning Orders.
SECTION-F DELIVERIES OR PERFORMANCE
F-1 PLACE OF PERFORMANCE
Work on all vessels under this contract shall be performed at the :
TODD PACIFIC SHIPYARDS CORPORATION
(Name of Facility)
1801 16TH AVENUE S.W.
(Street Address)
SEATTLE, WA 98134
(City, State, Zip Code)
F-2 PERIOD OF PERFORMANCE
ITEM PERIOD OF PERFORMANCE
FY 91
0001 Effective date of
contract
through 07 July 1991
0002 See Section C.
0003 Section C.
0004 In accordance with CDRL.
0005 Effective date of
contract through
completion and delivery
of
data items specified in
applicable CDRLs for Item
0001, and if exercised,
for
Option Item 0007 through
0017, in accordance with
Clause H-30,
Provisionsing
Technical Documentation.
0006 In accordance with CDRL.
FY-91 OPTIONS
0007 Effective date of option
exercise through
completion of DPMA
requirements
0008 Effective date of
option
exercise through 30-
Sept.
1991.
FY 92 OPTIONS
0009 Effective date of option exercise
through completion of PMA requirements
0010 Effective date of option exercise
through 30 September 1992
0011 Effective date of option exercise
though 30 September 1992
FY 93 OPTIONS
0012 Effective date of option exercise
through completion of PMA requirements
0013 Effective date of option exercise
through completion of PMA requirements
FY 94 OPTIONS
0014 Effective date of option exercise
through 30 September 1994
0015 Effective date of option exercise
through 30 September 1994
FY 95 OPTIONS
0016 Effective date of option exercise
through completion of PMA requirements
0017 Effective date of option exercise
through completion of DPMA requirements
F-3 DELIVERY/REDELIVERY SCHEDULE FOR THE VESSELS
The Government agrees to deliver the vessels to the
Contractor at the Contractors plant on or about the following
Commencement Dates. The Contractor agrees to receiver the vessels no
later than the following Completion Dates.
PRODUCTION
PERIOD PERIOD
COMMENCEMENT COMPLETION
ITEM VESSEL DATE DATE
FY
0007 *USS SACRAMENTO (AOE 1) 07/08/91 11/11/91
91
0009 USS CAMDEN (AOE 2) 01/13/92 04/10/92
92
0012 USS SACRAMENTO (AOE 1) 04/19/93 07/16/93
93
0013 USS CAMDEN (AOE 2) 06/28/93 09/24/93
93
0016 USS SACRAMENTO (AOE 1) 10/17/94 01/20/95 95
0017 *USS CAMDEN (AOE 2) 01/16/95 05/19/95
95
* Indicates Drydocking Phased Maintenance Availability
(DPMA)
The dates specified above represent the availability dates for
the vessels.
F-4 DELIVERY SCHEDULE FOR DATA ( ITEM 0004)
The data provided by the Contractor under Item 0004 shall be
delivered as specified on the Contract Data requirements List, DD Form
1423, Exhibit A hereto.
F-5 DELIVERY SCHEDULE FOR PROVISIONING TECHNICAL DOCUMENTATION
(ITEM 0005)
The Provisioning Technical Documentation provided by the
Contractor under Item 0005 shall be delivered as specified in the
Contract Data Requirements List, DD For 1423, Exhibit B hereto.
F-6 DELIVERY SCHEDULE FOR PROVISIONED ITEM ORDERING (ITEM 0003)
In cases where orders are placed by bilateral modification,
delivery shall be effected in accordance with the delivery schedule
established in the bilateral modification.
In cases where orders are placed by unilateral modification,
deliveries shall be affected in accordance with delivery schedule
proposed by the Administrative Contracting Officer (ACO) in each
unilateral modification, unless the Contractor, within thirty (30)
days of the receipt of the unilateral modification, notifies the ACO
that the proposed delivery schedule is not acceptable. In the latter
case, the Contractor shall propose an alternate delivery schedule,
which shall be the subject of negotiation prior to its inclusion in
the bilateral modification expressing the order for the supplies.
Unless otherwise expressed in the unilateral or bilateral
modification, the supplies shall be delivered F.O.B. carriers freight
station or at near the Contractors plant, and shipment shall be on
Government bills of lading.
F-7 DELIVERY SCHEDULE FOR EMERGENT NONSCHEDULED REPAIRS AND
ALTERATIONS REQUIREMENTS BETWEEN SCHEDULED AVAILABILITIES (ITEM 0002)
In cases where orders are placed by unilateral modification,
deliveries shall be effected in accordance with the delivery schedule
proposed by the Administrative Contracting Officer (ACO) in each
unilateral modification, unless the Contractor, within (30) days of
the receipt of the unilateral modification, notifies the ACO that the
proposed delivery schedule is not acceptable. In the latter case, the
Contractor shall propose an alternate delivery schedule, which shall
be the subject of negotiation prior to its inclusion in the bilateral
modification expressing the order for the supplies.
F-8 DELIVERY SCHEDULE FOR DATA (ITEM 0006)
The data provided by the Contractor under Item 0006 shall be
delivered as specified on the Contract Data Requirements List, DD Form
1423, Exhibit C hereto.
F-9 STOP WORK ORDER
FAR 52.212-13, Stop Work Order - ALTERNATE I (AUG 1989) is
incorporated by reference into this contract.
(a) Work under this
SECTION G- CONTRACT ADMINISTRATION DATA
G-1 CONTRACT ADMINISTRATION DATA
a. Work under this contract shall be under the cognizance of the
Supervisor of Shipbuilding, Conversion and Repair, USN designated at
the time of contract award.
b. The Contract Administration Officer is the designated
Supervisor of Shipbuilding, Conversion and Repair, USN.
G-2 CONTRACT ADMINISTRATION/PURCHASING OFFICE REPRESENTATIVE
a. Contract Administration Office Representative
NAME:
TELEPHONE:
ADDRESS:
b. Purchasing Office Representative
NAME:
TELEPHONE:
ADDRESS:
ATTN:
G-3 PAYMENT ADDRESS
Offerors shall indicate below the address to which payment should
be mailed.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
G-4 ACCOUNTING/APPROPRIATION DATA
For appropriate accounting and appropriation data see Section J of
this contract.
SECTION H: SPECIAL CONTRACT REQUIREMENTS
H-1: Deleted
H-2: Complete and Final Equitable Adjustments
H-3: Plant Protection
H-4: Government Surplus Property
H-5: Access to Vessel (s)
H-6: Duplication of Data
H-7: Qualification of contractor Non-Destructive Testing (NDT)
Personnel
H-8: Department of Labor Occupational Safety and Health Standards
for
Ship Repairing
H-9: Discharge of Liens
H-10: Deleted
H-11: Additional Provisions Relating to Government Property
H-12: Additional Provisions Relating to Correction of Defects
H-13: Deleted
H-14: Tests and Trials
H-15: Change Proposal
H-16: Documentation of Request for Equitable Adjustment
H-17: Award Fee Determination in Event of Termination or
Discontinuance
H-18: tug and Pilot Services
H-19: Cost/Schedule Control Systems
H-20: COSAL Configuration Change Documentation
H-21: Disclosure of the Successful Technical/ Management and Pricing
Proposal
H-22: Substitution of Personnel
H-23: Command Inspections of Berthing Facilities
H-24: Facility Security Clearance
H-25: Exercise of Options
H-26: Segregation of Cost
H-27: Milestone
H-28: Deleted
H-29: Standardization
H-30: Provisioning Technical Documentation
H-31: Technical Manuals and drawings
H-32: DOD FAR Supplement
H-33: Determination of Fee
H-34: Order of Precedence of Contractors Proposal
H-35: Invoice Submittal
H-36: Limitations on Indirect cost Rates
H-37: Indemnification for Access to Vessels
H-38: Travel Costs
H-39: Disposal of Hazardous Waste
H-40: Access to Naval Supply Systems for Fasteners
H-1 Deleted
H-2 COMPLETE AND FINAL EQUITABLE ADJUSTMENTS (NAVSEA 1975)
Whenever the contractor submit any claims for an equitable
adjustment to any fact or circumstance regarded as a change order,
weather formal or constructive under the change or any other clause of
contract, such claim shall include all adjustments ( including but not
limited to adjustment arising out of delays or disruptions or both
caused by such change order) of which the contractor is entitled
under the provisions of this contract
the foregoing requirements shall not preclude the contractor from
revising or resubmitting the aforesaid claims prior to agreement upon
the equitable adjustments for the change order. However, upon the
execution of the supplemental agreement setting forth the equitable
adjustment for such change order, then, except as parties may
otherwise expressly agree in the aforesaid supplemental agreement
attributable to such facts or circumstances giving rise to the
aforesaid claim, and, in any event, such right shall be deemed to have
been so waived.
H-3 PLANT PROTECTION (1953 SEP) NAVSEA)
(a) The Contractor shall provide for its plant and the work in
process under this contract such safeguards, including personnel
devices and equipment, as would constitute reasonable protection under
peacetime conditions (in the light of the size of the plant and the
scope of its operations)against all hazards, including unauthorized
entry, malicious mischief, theft, vandalism, and fire.
(b) In addition to the foregoing precautions, the contractor shall
provide such additional safeguards as may be required or approved by
the Contracting Officer for the protection of its plant and the work
in process under this contract against espionage, sabotage, and enemy
action. The cost to the Contractor of all safeguards so required or
approved shall, to the extent allocable to this contract be
reimbursed to the same manner as if the Contractor had furnished such
safeguards pursuant to a change order issued under the clauses of
this contract entitled Changes. Such cost shall not include any
allowance on account of overhead expense, except shop overhead charges
incident to the construction or installation of such devices or
equipment.
(c) Upon Payment by the Government of the cost to the contractor
of any device or equipment required or approved under paragraph (b) of
this clause, title therefore shall vest in the government, , and the
Contractor shall comply with the instructions of the Department
respecting the identification and disposition thereof. No part or
item of any such device or equipment shall be or become a fixture by
reason or affixation to any realty not owned by the Government
H-4 GOVERNMENT SURPLUS PROPERTY (1966 JULY) (NAVSEA
No former Government surplus property or residual inventory
resulting from terminated Government contracts shall be furnished
under this contract unless (I) such property is identified in the
Special Contract Requirements or (ii) is approved in writing by the
Contracting Officer. Notwithstanding any such identification in the
Special Contract r approved by the Contracting Officer, the contractor
agrees all items or components described in this clause shall comply
in all respects with specifications contained herein.
H-5 ACCESS TO THE VESSEL(S)
Officers, employees, and associates of the Government, or other
prime contractors with the Government, and their subcontractors, shall
as authorized by the Supervisor, have at all reasonable times,
admission to the Plant, access to the vessel(s) to perform and fulfill
their respective obligations to the Government on a non-interference
basis. The Contractor shall make reasonable arrangements with the
Government or Contractors of the Government, as shall have been
identified and authorized by the Supervisor, to be given admission to
the Contractors facilities and access to the vessel and to the vessel
and to office space, work areas, storage or shop areas, or other
facilities and services, necessary for the performance of their
respective responsibilities involved, and reasonable to their
performance. All such above personnel shall be required to comply
with all Contractor rules and regulations governing personnel at its
shipyard, including those relative to safety and security.
H-6 DUPLICATION OF DATA
The Contractor, without increase in fee, shall furnish to the
Government and/or any third party or parties designated by the
Government, copies of data which has been or is required to be
furnished under this contract with unlimited rights.
H-7 QUALIFICATIONS OF CONTRACTORS NON-DESTRUCTIVE TESTING (NDT)
PERSONNEL
The Contractor and any NDT subcontractor (as hereinafter defined)
shall utilize for the performance of required non-destructive testing
(which includes, but is not limited to, radiographic, magnetic
particles, liquid penetrate, and ultrasonic inspections) only
personnel who have been previously qualified and certified in
accordance with MIL-STD-271E. The term NDT subcontractor is defined
to be a first tier subcontractor performing NDT in conjunction with
the production of materials, components, or equipment for the vessel.
H-8 DEPARTMENT OF LABOR OCCUPATIONAL SAFETY AND HEALTH STANDARDS FOR
SHIP REPAIR
attention of the contractor is directed to the Occupational Safety and
health Act of 1970 ( 29 USC651-678), and to the Safety and Health
Regulations for Ship Repairing (29 CFR 1915), promulgated under Public
Law 85-742, amending Section 41 of the Longshoremens and Harbor
workers compensation Act (33 USC 941), and adopted by the Department
of Labor as occupational safety or health standards under Section 5(a)
of the Occupational Safety and Health Act 1970 (See 29 CFR 1910.13).
these regulations apply to all ship repair and related work, as
defined in the regulations performed under this contract on the
navigable waters of the United states including any dry dock or marine
railway, Nothing contained in those contract shall be construed as
relieving the Contractor from any obligations which it may have for
compliance with the aforesaid regulations.
H-9 DISCHARGE OF LIENS
The contractor shall immediately discharge or cause to be discharged
any lien or right in rem of any kind, other then in favor of the
Government, which at any time exists or arises in connection with work
done or materials furnished under this contract with respect to the
machinery, fittings equipment, or materials for any such vessel. If
any such lien or right in rem is not immediately discharged, the
government may discharge or cause to be discharged such lien or right
shall be repaid by the contractor to the Government and shall not be
considered an allowable cost under this contract.
H-10 Deleted
H-11 ADDITIONAL PROVISIONS RELATING TO GOVERNMENT PROPERTY
(A) The Contracting Officer may increase the amount of materials
to be furnished under this contract and the contract shall be
equitably adjusted in accordance with the procedure provided for in
the clause entitled CHANGES.
(b) For purposes of paragraph (g) of the clauses entitled
Government Property (Cost-Reimbursement) in addition to those items of
property defined in that clause as Government Property:
(1) the vessel;
(2) the equipment on the vessel; and
(3) movable stores;
(4) cargo;
(5) other material on the vessel
(c) For purpose of paragraph (e) of the clauses entitled
Government Property (Cost-Reimbursement) of the General Provisions,
notwithstanding any other provisions of this contract, the following
shall not be considered Government Property:
(1) the vessel;
(2) the equipment on the vessel; and
(3) movable stores;
(4) other material on the vessel
H-12 ADDITIONAL PROVISIONS RELATING TO CORRECTION OF DEFECTS
In case any work done or materials or supplies furnished by the
Contractor, under this contract for any vessel, or the equipment
thereof, shall within sixty (60) days of delivery of the vessel to the
Government, or the date of final acceptance, whichever occurs first,
prove defective or deficient, such defects or deficiencies shall, as
required by the Government, be corrected or repaired by the Contractor
to the satisfaction of the Contracting Officer; provided, however,
that with respect to any individual work item which is incomplete or
deficient at the time of delivery or acceptance, the contractors
obligation under this clause to correct or repair such deficiency
shall extend sixty (60) days from the date of such corrections or
repair, whichever comes first. the contractor shall be entitled to
allowable cost for corrections or repairs performed in accordance with
the clause but shall not be entitled to any additional fee for such
work.
H-13 DELETED
H-14 TEST AND TRIALS
During the conduct of required test and trials, the vessel shall be
under the control of the vessels commander and crew with
representatives of the Contractor and Government on board to determine
whether or not the work done by the contractor has been satisfactorily
performed. The Contractor shall provide and install all fittings and
appliances which may be necessary for dock and sea trials, to enable
the representatives of the government to determine whether the
requirements of the contract have been met, and the Contractor shall
install and remove instruments and apparatus furnished by the
Government for such trials, as required by the specification.
H-15 CHANGE PROPOSALS
(a) The Contracting Officer, in addition to issuing changes under
the clause of Section I entitled Changes, may propose changes within
the general scope of this contract, as set forth below. Within ten
days of the date of receipt of any such proposed change, or within
such further time as the Contracting Officer may allow, the Contractor
shall submit a scope of work, and plans and sketches for the proposed
change, and his estimate of: (I) the cost, (ii) the weight and moment
effect, (iii) the effect on delivery date of the vessel, and (iv) the
status of work on the ship affected by the proposed change. The
proposed scope of and estimate of the cost shall be in such form and
supported by such reasonably detailed information as the Contracting
Officer may require. The Contractors estimate referred to in this sub-
paragraph shall be a firm offer for 30 days from and after the receipt
thereof by the Contracting Officer having cognizance thereof; unless
such period of time is extended by mutual consent. Within 30 days or
such extended period of time from the date of receipt of the
Contractors estimate, the Contractor agrees to either (I) enter into a
supplemental agreement covering the estimate as submitted or, (ii) if
the estimate as submitted is not satisfactory to the Contracting
Officer, begin negotiation at the request of the Contracting Officer
in good faith leading to the execution of a bilateral supplemental
agreement.
In either case, the supplemental agreement shall include an equitable
adjustment for the preparatory work set forth above and shall cover
estimated cost and fixed fee, scope, and all other necessary equitable
adjustments.
(b) In the event that a change proposed by the Contracting Officer
is not incorporated into the contract, the work done by the Contractor
in preparing the estimate in accordance with paragraph (a) above shall
be considered an allowable cost in accordance with the Allowable Cost
and Payment clause of this contract.
(c) Pending execution of a bilateral agreement of the direction of
the Contracting Officer pursuant to the Changes clause, the Contractor
shall proceed diligently with contract performance without regard to
the effect of any such proposed change.
H-16 DOCUMENTATION OF REQUESTS FOR EQUITABLE ADJUSTMENT
(a) For the purpose of this clause, the term change includes not
only a change that is made pursuant to a written order that is
designated as a change order, but also (I) an engineering change
proposed by the Government or by the Contractor and (ii) any act or
omission to act on the part of the Government in respect of which a
request is made for equitable adjustment.
(b) Whenever the Contractor requests or proposes an equitable
adjustment of $100,000 or more per vessel in respect to a change made
pursuant to a written order designated as a change order or in respect
of a proposed engineering change and whenever the Contractor requests
and equitable adjustment in any amount in respect of any other act or
omission to act on the part of the Government, the proposal supporting
such a request shall contain the following information for each
individual item or element of the request:
(1) A description (I) of the work required by the contract
before the change, which has been deleted by the change, and (ii) of
the work deleted by the change which already has been completed. The
description is to include a list of components, equipments, and other
identifiable property involved. Also, the status of manufacture,
procurement, or installation of such property is to be indicated.
Separate description is to be furnished for design and production
work. Items of raw material, purchase parts, components, and other
identifiable hardware, which are made excess by the change and which
are not to be retained by the Contractor, are to be listed for later
disposition;
(2) Description of work necessary to undo work already
completed which has been deleted by the change;
(3) Description of work nor required by the terms hereof
before the change, which is substituted or added by the change. A
list of components and equipment (not bulk materials or items)
involved, should be included. Separate descriptions are to be
furnished for design work and production work;
(4) Description of interferences and inefficiencies in
performing the change;
(5) Description of disruption attributable solely to the
change, which description shall include the following information:
(A) Description of each element of disruption and exactly
how work has been or will be, disrupted;
(B) The calendar period of time during which disruption
occurred, or will occur;
(C) Area(s) aboard ship where disruption occurred, or
will
occur;
(D) Trade(s) disrupted, with a breakdown of man-hours for
each trade;
(E) Scheduling of trades before, during, and after the
period of disruption ;
(F) Description of measures taken to lessen the
disruptive
effect of the change
(6) Delay in delivery attributable solely to change;
(7) Other work attributable to change.
(8) supplementing the foregoing, a narrative statement of the
direct casual relationship between any alleged Government act or
omission and the claimed consequences thereof, cross-referenced to the
detailed information provided as required above.
(9) A statement setting forth a comparative enumeration of
amounts budgeted for the cost elements, including the material cost,
labor hours, and pertinent indirect cost, estimated by the contractor
in preparing his initial and ultimate proposal (s) for this contract,
and the amounts claimed to have been incurred and/or projected to be
incurred corresponding to each such budget cost element.
(c) Each proposal in excess of $100,000 submitted in support of a
claim for equitable adjustment under any provision of this contract
shall, in addition to the information required by paragraph (b)
hereof, contain a duly executed SF-14111 with respect to each
individual claim item.
(d) It is recognized that individual claims for equitable
adjustments may not comprehend all of the factors listed in paragraph
(B) above. Accordingly, the Contractor is required to set forth in
this proposal information only with respect to those factors which are
comprehended in the individual claim for equitable adjustment. In any
event, the information furnished hereunder shall be sufficient
detailed to permit the contracting Officer to allocate the claimed
increased cost, or delay in delivery, or both, as appropriate, as set
forth in the SF-1411, submitted pursuant to paragraph (b) hereof.
(e) Each proposal submitted pursuant to this clause shall contain
the following certification executed by the Contractors general
manager oar other responsible senior official authorized to commit the
company.
The undersigned, being aware of the provisions of 18
U.S.C. Section 1001, hereby represents and certifies that to the best
of his knowledge and beliefs:
(1) The contents of the foregoing proposal and its
attachments have been thoroughly investigated by responsible company
employees and officials for completeness and accuracy as to the
facts, and that, judgmental statements and conclusions in the proposal
and its attachments are clearly identified as such.
(2) The proposal either directly or by specific
reference sets forth the information to be furnished pursuant to the
Documentation of Request for Equitable Adjustment clause of the
contract to the full extent that such information is within custody of
or available to Contractor.
(3) On the basis of the foregoing review, he is
satisfied with respect to each item that the adjustment claimed
therefore reasonable and accurately represents the additional costs
and/or time incurred or to be incurred by reason of the asserted
Government act or omission.
H-17 AWARD FEE DETERMINATION IN EVENT OF TERMINATION OR DISCONTINUANCE
In the event that this contract is terminated in whole pursuant to
the contract clause entitled TERMINATION or in the event this
contract is discontinued pursuant to the contract clause entitled
LIMITATION OF COST, the last award fee period shall end with the
effective date of such termination or discontinuance. In either of
such events, the amount of award fee, if any determined to be other
wise payable shall be adjusted or prorated to reflect the difference,
if any, in award fee periods resulting from termination or
discontinuance.
H-18 TUG AND PILOT SERVICE
The Contractor shall be required to provide necessary tugs and pilot
services to move ship to pier or dock, and upon completion of all work
from the pier or dock, to the fairway of the plant.
H-19 COST/SCHEDULE CONTROL SYSTEM
The Contractor is required to apply Cost/Schedule Control System
procedures in accordance with the requirements stated in the Contract
Data Requirement List (CDRL), Exhibit A. The system shall be based
upon time phased budgets(budget cost of work schedule) that are based
upon and reconciled with the Scheduling System Performance
Measurements Baseline required herein. The Work Breakdown Structure
required by this contract shall be in accordance with MIL-STD 331.
The system shall provide at the ship, major ship work breakdown and
specification work item levels:
(1) The time phased budget costs of work scheduled,
(2) The budget cost of work performed determined from
applying the Progress Measurement Accounting system.
The comparison of the budget cost of work scheduled, budget cost of
work performed and actual cost of work performed that will be used for
variance labor dollars at the ship, major ship work breakdowns and
specification work item levels. The system shall include the ability
to identify in a timely manner unfavorable variances and management
action planned to correct the problem areas. The system shall also
include procedures for presenting the estimated cost at completion (
latest revised estimates) at the ship, major ship work breakdown and
specifications work item levels. The Cost/Schedule control System
shall be used in conjunction with other management systems to as
required by the Contract Data Requirements list, Exhibit A. This
system shall also be used as a data base to prepare the Departure
Report required by the Contract Data Requirements list.
H-20 COSAL CONFIGURATION CHANGE DOCUMENTATION
The Contractor shall document all changes to the ships configuration
and prepare all documentation required to bring the ships COSAL and
SPCC Weapons system files (WSF) into agreement with the actual end
availability configuration. Perform COSAL/WSF maintenance actions on
all planned and actual equipment/components/ equipage, whether
furnished by government or the contractor. specific requirements for
COSAL/WSF updating are contained in Work Item Specifications No. 853-
21-001
H-21 DISCLOSURE OF THE SUCCESSFUL TECHNICAL/MANAGEMENT AND PRICING
PROPOSAL
(a) Notwithstanding any restrictive disclosure markings
contained on an offerors Technical/Management proposal submitted in
response to this solicitation, the offer hereby agrees that if awarded
a contract based on this solicitation, the offers Technical/Management
proposal may be incorporated into the contract by reference and or
may be provided to the cognizant contract Administration supervisor of
shipbuilding, Conversions, and repair.
(b) Notwithstanding any restrictive disclosure markings
contained on an offerors Pricing Proposal submitted in response to
this solicitation, the offeror hereby agrees that if awarded a
contract based on this solicitation, the offerors pricing Proposal may
be incorporated into the contract by reference and or may be provided
to the cognizant Contract Administration Supervisor of Shipbuilding,
Conversions, and repair.
(c) Notwithstanding paragraphs (a) and (b) above, the public
release of data received in response to this solicitation shall be
governed by the freedom of information act, 5 U.S.C. 552 as amended,
and DOD FAR SUPP 224.202.
H-22 SUBSTITUTION OF PERSONNEL
(A) The Contractor agrees to assign to the work
under this contract those persons whose resumes were submitted with
his proposal and who have been identified in the Contractors proposal
as key personnel. No substitutions shall be made except in accordance
with this clause.
(b) the Contractor agrees that during the first ninety (90) days
of the contract performance period, no key personnel substitution will
be permitted unless such substitutions are necessitated by an
individuals illness, death, or termination of employment. In any of
these events, the Contractor shall promptly notify the contracting
Officer and provide the information required by paragraph (c0 below.
After the initial ninety (90) day period all proposed substitution
must be submitted, in writing, at least ten (10) days(thirty (30) days
if security clearance is to be obtained) in advance of the proposed
substitution to the Contracting Officer, and provide information
required by paragraph (c) below.
(c) All request for substitutions must provide detailed
explanations of the circumstances necessitating the proposed
substitutions, a complete resume for the proposed substitute, and any
other information requested by the Contracting officer or his
authorized representative will evaluate such request and promptly
notify the contractor of his approval or disapproval thereof
H-23 COMMAND INSPECTIONS OF BERTHING FACILITIES
(a) Once the ships force takes occupancy of a berthing facility,
it is recognized that the premises will be under the control of the
Department of the Navy and subject to inspection by the Commanding
Officer or his duly authorized representative (s). In recognition of
(1) the Navys need to ensure security, military fitness, and good
order and discipline and (2) the Navys policy to conduct regularly
scheduled periodic inspections, the contractor hereby agrees that
while its berthing facilities are occupied by ships force, the
Commanding Officer or his duly authorized representative (s) has
(have) the right to conduct command inspections of the berthing
facilities occupied by ships force, the Commanding Officer or his duly
authorized representative(s) has (have) the right to conduct command
inspections of the berthing facilities occupied by ships force.
(b) In instances where the contractor is using commercial
facilities to satisfy the berthing requirement, the contractor hereby
agrees to insert the following clause in any subcontract for berthing
facilities to be provided under this contract:
In recognition of (1) the Navys need to ensure security,
military fitness, and good order and discipline and (2) the
Navys policy to conduct regularly scheduled periodic
inspections, _________________ (insert names of
subcontractor)
hereby agrees that while its facilities are occupied by
ships force the Commanding Officer or his duly authorized
representative(s) has (have) the right to conduct command
inspections of the facilities occupied by ships force.
H-24 FACILITY SECURITY CLEARANCE
Award will be made to an offeror who has been granted, prior to
date of award a SECRET facility security clearance by a Military
Department. The Naval Sea Systems Command will initiate appropriate
security clearance action for any offeror who has not been granted
such clearance and may otherwise be entitled to award. However, the
naval Sea Systems Command does not represent that such action can be
completed and security granted before the expiration of offers.
H-25 EXERCISE OF OPTIONS
(a) By written notice to the Contractor, the Contracting Officer
may exercise, if at all, any of the Option Items identified in Section
B and require the Contractor to provide, within the performance period
specified in Section F, the work described in Section C for such
Option(s) Item(s) at the estimated cost and base fee set forth in
Section B. The option(s) may be exercised after the Contractors
receipt of the Specification Work Package prepared by the Planning
Supervisor in accordance with the procedures stated in Section C, but
in any event, the Option(s) shall be exercised, if at all, within the
following time frames.
ITEM FROM TO
FY 91: 0007 1 OCT 90 07 JUL 91
0008 1 OCT 90 30 SEP 91
FY 92: 0009 1 OCT 91 12 JAN 92
0010 1 OCT 91 30 SEP 92
0011 1 OCT 91 30 SEP 92
FY 93: 0012 1 OCT 92 18 APR 93
0013 1 OCT 92 27 JUN 93
FY 94: 0014 1 OCT 93 30 SEP 94
0015 1 OCT 93 30 SEP 94
FY 95: 0016 1 OCT 94 17 OCT 94
0017 1 OCT 94 16 JAN 95
(B) The exercise of any item identified under Section B as an
option Item shall also extend the period of performance for the
Contract Data Requirements List, DD 1423 Exhibit A and the
provisioning Technical Documentation, Exhibit B
H-26 SEGREGATION OF COST
In the performance of this contract, the contractor shall
segregate the costs of performance allocable to the contract at the
work item level to the extent any cost (s) of performances cannot be
identified to a work item (s) the cost shall be deemed to be
unallowable.
H-27 MILESTONES (1982 MAR)
(a) The Contractor shall submit with his offer dates for the
successful accomplishment of the following major milestones for the
USS SACRAMENTO (AOE 1) FY 91 DPMA:
Milestone Event Date
System check-out 09/20/91
Propulsion System Light-Off 10/30/91
Dock Trials 11/05/91
Sea Trials 11/07/91
(b) If any milestone event is not accomplished by the date
listed; and the failure to accomplish any such milestone event does
not arise from a cause beyond the control and without the fault or
negligence of the contractor or a subcontractor, such failure may be
deemed to constitute a failure to perform this contract in accordance
with its terms within the meaning of subparagraph (a) (I) of clause of
this contract entitled TERMINATION.
H-28 Deleted
H-29 STANDARDIZATION
Subject to meeting the requirements of the specifications, the
Contractor shall utilize equipments and components identical to those
of the AOE-1 class ships. where equipment s or components are not
available, the Contractor shall select hull, mechanical, and
electrical equipment/components in the following order or precedence:
a. Equipment and components which meet the requirements of the
specifications, and are identical to those of the AOE-1 class ships
(standard equipments.)
b. Equipment and components which meet the requirements of the
specifications, and which appear in NAVSEA Standard components List
for Hull, Mechanical and Electrical equipment, NAVSEA S 0300-A-PLL-00-
0,
(Standard equipment).
c. Equipment and components which meet the requirements of the
specifications(non-standard equipment). For this category,
provisioning Technical Documentation shall be submitted in accordance
with Clause H-30 below and the requirements of the Contract Data
Requirements List, DD form 1423, Exhibit B.
H-30 PROVISIONING TECHNICAL DOCUMENTATION
For contractor furnished equipment that meet standardization
requirements of paragraph a or b of clause H-29 above, only a
Statement of prior submission (SPS) (IAW MIL-STD-1561B para. 5.4) is
required. For non-standard equipment cited paragraph H-29C above,
Provisioning Technical Documentation (PDT) shall be developed in
accordance with the provisioning Requirements Statement (PRS) in
attachment 2. PDT is required early in order to support
provisioning. Therefore, material should be ordered and received
prior to or soon after commencement of availability.
For items requiring PTD, The contractor shall document items by
Provisioning Parts List (PPL) (IAW MIL-STD-1561B para, 5..3.1) and
shall structure the PPL at the components level unless otherwise
directed by the Administrative Contracting Officer.
For those items that the contractors consider difficult or
impractical for documentation by a PPL at the component level, the
contractors shall recommend items to be documented by other listed
defined by MIL-STD-1561B, paragraphs 5.3.1 ( for PPLs at the end item
or assembly levels),5.3.2 and 5.3.3. The contractors recommendation
shall include proposed Contract Data Requirements List (CDRLs - DD
form 1423) Delineating use of the alternative lists and proposed LSAR
data
. Upon approval of the recommended items, the contractor shall
document the items in accordance with the approved CDRL requirement in
lieu of the component level PPL structure requirements
For each item listed in a PPL, or other approved list,
additional supplementary list or documents defined in MIL-STD-1561B
paragraph 5.3.4 through 5.3.16 (inclusive) shall be prepared and
submitted in accordance with the CDRL requirements.
Specific data elements to be included in each list shall be as
specified by LSAR Data Selection sheet, Part II, DD From 1949-1,
Attachment 5.
H-31 TECHNICAL MANUALS AND DRAWING
A. Technical Manuals: for Non-Standard Equipment, paragraph H-29
(c), above, new/revised Technical manuals shall be prepared in
accordance with Technical Manual Contract Requirements (TMCRS), Serial
Numbers NDMS-840001-000,840002-000,840003-000 and 840005-000, and in
accordance with NAVSEA Standard Items 009-39,009-41, and 009-42
B. Drawings: for Non-Standard Equipment, paragraph H-29 (c), above,
new/revised level 3 drawings per MIL-SPEC-DOD-D-1000B shall be
developed for new/modified contractor furnished equipment. In
addition, Contractor shall update applicable level 3 contractor ship
construction drawings.
H-32 DOD FAR SUPPLEMENT (NAVSEA - APR 1984)
All references to the Federal Acquisition Regulation (FAR) in this
contract shall be deemed also to include the DOD FAR Supplement (DOD
FAR SUPP.), unless otherwise clearly indicated. In the event of
conflict between the FAR and the DOD FAR SUPP, such conflict shall be
resolved by giving preference to the DOD FAR SUPP.
h-33 Determination of Fee
(a) Minimum Fee
The base fee, as set forth in Section B of this contract,
shall constitute a minimum fee to be paid for the performance of this
contract. The Base Fee shall be paid in accordance with Clause I-I-
22, Fixed Fee (FAR 52.216-8).
(b) Award Fee
In addition to the minimum (or based fee) to be paid
hereunder, the Contractor may earn an award fee, as determined by the
fee Determining Official. The Governments purpose in granting an
award fee is to encourage and reward superior contracting effort
directed toward performance of this contract. The specifics for
evaluation are set forth in paragraphs that follow.
(c) Award Fee Board
The Contractors performance evaluation for each period will be
conducted by an Award Fee Board (AFB) consisting of not more than
seven members consisting of:
(1) The Chairperson (SUPSHIP Code 100 or designated
representative)
(2) Administrative Contracting Officer (SUPSHIP Code 400 or
designated representative
(3) TYCOM Representative
(4) NAVSEA Representative
(5) SUPSHIP Code ( To be determined)
(6) SUPSHIP Code ( To be determined)
(7) SUPSHIP Code ( To be determined)
(d) The Fee Determining Official (FDO), who will be PMS-331, the
Director Amphibious and Combat Support Ship Logistic Division, shall
make determinations of the awards fee sue to the Contractor based upon
the performance evaluation conducted by the Award Fee Board
established pursuant to paragraph (c) above.
(e) Award Fee Determination and Reclaim Procedure
(1) Within fifteen (15) working days after the end of each
evaluation period under the contract, the contractor shall furnished
to the AFB such information as may be reasonable required, including a
statement of cost incurred, to assist the AFB in evaluating the
Contractors performance during that evaluation period.
(2) With in three (3) working days after the Award Fee
Meeting, the AFB shall prepare the performance evaluation letter and
present it to the fee Determining Official a copy will be provided to
the Contractor upon transmittal to the FDO.
(3) Within six (6) working days from receipt of the copy of
the performance evaluation , the Contractor may submit to the FDO any
comment with respect thereto. In support of his comments, the
Contractor may furnish a written description of his performance during
the period under consideration. This description shall clearly
identify specific evaluation categories, factors and elements, and the
Contractors own rating thereof.
(4) Within six (6) working days from receipt of the Contractor
evaluation comments, the FDO shall provide the contracting officer a
final performance evaluation and determination of the award fee.
(5) Within three (3) working days from receipt of the final
determination, the SUPSHIP contracting Officer shall notify the
contractor in writing of that final determination.
(6) Within three (3) working days from the receipt of this
written notification, the Contracting Officer shall issue a
unilateral modification to the contract to provide for the award fee.
(f) Finality of Fee Determination Officials Determination
Determination of the fee Determining Official with respect to the
amount of the award of the award fee to be paid to the contractor are
final and shall not be subject to the Disputes clauses of this
contract.
(g) Evaluation Categories and factors
The contractors performances during each evaluation period will be
judged in three categories, as listed below. Roe advance Planning
CLINS, (1) Management and Schedule Performance; (2) Technical
Performance; and (3)Cost Performance. For Production CLINs,
(1)schedule and Production; (2) Technical/Management Performance; and
(3) Cost Performance. For the first evaluation period, the category
weighting factors will be 33 percent, 33 percent and 34 percent,
respectively. The Contractor will be notified of changes in the
evaluation categories and factors as well as any adjustment to the
weighting of categories, if any, prior to commencement of each
evaluation period. Unsatisfactory performance under an award fee
criteria may result in an increased weighing for that factor in
subsequent evaluation Period
ADVANCE PLANNING:
(1) Management and scheduling performance
(i) Report knowledge of technical requirements, such as Ship
Alterations records (SAR), Basic Alterations Class Drawing (BACD), TP-
05 material supplements, various NAVSEA/PERA planning letters, SARP,
identity materials requirements, etc., in support of performing
shipchecks, preparing reports, developing drawings/test memorandum an
specifications, and procurement of material.
(ii) Report shipcheck results, document SHIPALT technical
deviations and configurations changes via Liaison Action Record (LAR
format, and perform engineering calculations, such that technical
characteristics and changes can be evaluated.
(iii) Maintain and provide an advance planning progress
measurement system, such that periodic progress reports and an
effective recovery schedule for missed milestone dates is submitted.
(iv) Delivery of technical and advance planning
documents/progress reports and cost proposals/estimates are provided
in accordance with table C-1 milestone.
Technical Performance
(i) Apply the following basic technical specification to control
the quality of drawings/ test memoranda, work specifications, support
material recommendation list, and other advance planning deliverables:
(1) Fleet Modernization Program (FMP) Management and
Operation Manual (SL720-AA-MAN_010/FMP).
(2) Technical specification 9090-600 for Ship Alteration
Drawing Preparation.
(3) General Specifications for Overhaul of Surface Ships
(SOAAO-AB-GOS-010/GSO).
(4) Various Military Standards
(5) Technical Specification 9090-100 SHIPALT Technical
Liaison Service, Waivers and Deviations
(6) NAVSEA Technical Manuals
(7) Control Specifications for updating of ships selected
Records(SSR) documents
(8) Other design guidance, such as: instructions;
publications; engineering principles; engineering calculations, etc.
(9) NAVSEA Standard specifications in the preparation of
work specifications.
(ii) Development and quality of drawings, test memoranda, work
item specifications, and technical instructions to identify, document,
and accomplish alterations and repairs will be evaluated.
(iii) Evaluate problems and provide corrective actions
demonstrating a complete knowledge of engineering principles, such
that Supervisors can evaluate methods and solutions for job
accomplishment.
(iv) Respond and control technical details, such that required
ship configuration/systems compatibility is maintained within the ship
class.
(v) Effectiveness in problem anticipation and/or problem
avoidance with be evaluated
(vi) Responsiveness is issuing drawings, sketches, work Items
specifications, technical instructions and similar documents required
by the Supervisor, and by the waterfront organization in performing
repairs and alteration will be evaluated Use of simple solutions and
economic work methods for job accomplishment will be considered. The
number of milestones missed because of deficient engineering and
planning information will be considered. The degree (cost) of
rework caused by inadequate contractor technical
/documentation/solutions to work requirements will be considered.
(vii) Effectiveness in controlling all Government property
(GFM/CFM) provided to or acquired by contractor, from initial receipt
through final disposition, will be evaluated.
(viii) Ability to select and effectively manage subcontractors
(i.e., material vendors, and both off and on site subcontractors) will
be evaluated. Control over the quality of their work, their adherence
to schedule, and their timely and reasonable response to the pricing
of contract change will be considered.
(ix) Effectiveness in fulfilling the in-progress quality
assurance and test program will be evaluated. Also, completeness in
identifying and correcting quality deficiencies and their causes in a
timely manner will be considered.
(3) Cost Performance
(i) Effectiveness in providing complete cost estimates and cost
proposals as established in Table C-1.
(ii) Effectiveness in providing reasonable cost estimates and
proposal for negotiating a fair and reasonable price for work to be
accomplished.
(iii) Effectiveness in early identification of cost problems and
in dealing with identified problems will be evaluated. Emphasis will
be placed on the contractors ability to maintain the initial budget by
making appropriate cost effective decisions.
PRODUCTION:
(1) Schedule and Production ( Manpower Utilization Performance)
(I) Effectiveness in establishing and maintaining a timely and
efficient scheduling system will be evaluated. Particular emphasis
will be placed on establishments and timely updating of a scheduling
system that properly integrates contractor material, Government
furnished material, planning and production labor, including
subcontractors efforts, into cost effective planning and
accomplishment of availabilities.
(ii) Effectiveness in measuring schedule progress, using
preplanned milestones and critical paths, will be evaluated.
communications with the supervisor, regarding appraisal of performance
related to critical paths, will be considered.
(iii) Effectiveness in meeting preplanned milestone will be
evaluated. Particular consideration will be given to the contractors
ability to maintain adequate progress in anticipation of completion
of milestones.
(iv) Effectiveness in the recovery from and in the correction of
causes leading to missed events will be evaluated.
(v) Effectiveness of manpower utilization, to meet planning and
production schedules, will be evaluated. This may include such items
as methods and procedures to reduce the amount of premium time used,
to minimize time lost on the job and between personnel. The
Contractors effectiveness in stabilization of overhead rates, will be
considered.
(vi) Effectiveness in integrating ships force work items into
Contractor schedules will be evaluated. Particular emphasis will be
placed on the coordination with ships force of milestones with joint
responsibility especially during the testing phase.
(vii) In addition to the above, any special or innovative cost
control avoidance initiatives will be considered.
(2) Technical/Management Performance
(I) effectiveness of the management organization in problem
anticipation and/or problem avoidance of, as well as implementation of
timely corrective action in problem areas which could impact good
quality of on time completion of availabilities assigned will be
evaluated. The ability to schedule, monitor, and produce
specifications, drawings, data and other engineering products which
represent practical engineering solutions based upon tradeoffs between
total cost, reliability, maintainability and productability will be
considered.
(iii) Responsiveness of the engineering and planning
organization in issuing drawings, sketches, work item specifications,
technical instructions and similar documents required by the
Supervisor and by the waterfront organization in performing repairs
and alterations, will be evaluated.
(iv) Responsiveness of the purchasing organization in obtaining
an providing parts, material and equipment necessary to maintain
waterfront schedules, will be evaluated. Factors such as: the number
of jobs held up because of lack of material; cost saving obtained
through the use of economic purchasing techniques(i.e.), procurement
options or multi-unit purchases, where appropriate); and avoidance of
expenditures on such things as premium transportation costs will be
considered. The selections of cost effective materials, when several
approved options exist, will be considered
(v) Effectiveness of the material control organization in
controlling all Government property (GFM/CFM) provide to our acquired
by the contractor, from initial receipt, through final disposition,
will be evaluated. Factors such as acquisition, receipt inspection,
storage, safeguarding, handling, preventative maintenance,
subcontractor control, record keeping, utilization, disposition and
inventory control of all Government property, including salvage,
interference, scrap and excess property, will be considered.
(vi) Ability of the contractor to select and effectively manage
his subcontractors (i.e., material vendors and both off - and on site
subcontractors) will be evaluated. Control over the quality of their
work, their adherence to schedule, and their timely and reasonable
response to the pricing of contract changes will be considered. The
number of jobs held up for the vendor provided material and delays
caused by off-or on site subcontractors will also be considered.
(vii) Effectiveness of Contractors utilization of Government-
Furnished Information (GFI ) will be evaluated. The Contractor will
be judged on his effectiveness in detecting consequential technical
errors in GFI prior to production , and on his effectiveness in
working with the Supervisor to resolve such problems before they have
any adverse cost impact. The Contractor will be judged on his ability
to apply GFI to his engineering of work, and his use of GFI in
installation, test, and checkout of completed work.
(viii) Effectiveness of the quality assurance and test
organization in fulfilling the in-process as well as the at-completion
quality requirements of the contract will be evaluated. Effectiveness
of the quality assurance and test organization in identifying and
correcting quality deficiencies and their causes in a timely manner
will be considered. The contractors management approach to fulfilling
the quality requirements of the contract and as-found testing
requirements will be also considered.
(ix) The timely submission of condition reports by the
contractor, his cooperation in negotiation of changes, and his
willingness to provide information needed by the Government for timely
negotiations will be evaluated.
(x) Effectiveness of repairs and alterations, as indicated by
completeness of the work, minimum number of post-repair deficiencies
and satisfactory completion of post-repair deficiencies and
satisfactory completion of post-repair test with little or no rework
and retest in the period during which sea trials occur, will be
evaluated. Quality of work will also be indicated by the number of
and extent of the sea trial deficiencies to be corrected. Particular
attention will be given to control of metal joining processes
(aluminum welding, silver brazing, and high strength steel welding)
and Contractors ability to maximize use of equipment and parts
standard to the class
(xi) Effectiveness of the Contractors care and preservation of
installed, removed, and new equipment and material will be evaluated.
particular emphasis will be placed on the effectiveness of the
Contractors effort to exclude foreign substances from open equipment,
hydraulic system cleanliness, and the like.
(xii) Effectiveness of Contractors effort to prevent excessive
build up and keep compartments, passageways, docks, etc., clear of
trash debris,. extraneous material and the like, in compliance with
Navy and OSHA regulation, will be evaluated
(xiii) Responsiveness, timeliness and effectiveness of the
contractors accomplishment of non-scheduled emergent work, outside of
scheduled availability periods, will be evaluated.
(xiv) In addition to the above, any special or innovative cost
control and cost avoidance, will be considered.
(3) Cost Performance
(I) Effectiveness in meeting the cost performance plan with a
target represented by the negotiated estimated, cost, assuming that
the negotiated cost embodies the ideal of a fair days work for a fair
days pay, will be evaluated.
(ii) Effectiveness in early identification of cost or schedule
problems, including timely variance analysis, and Effectiveness in
dealing with identified problems will be evaluated. The timely and
accurate submission of cost performance and status of funds will be
strongly considered.
(iii) Effectiveness of the contractors ability to control
costs, and to avoid unnecessary cost increases, will be evaluated.
Particular emphasis will be placed on the contractors ability to
estimate correctly the first time, to maintain the initial budget, and
to make cost effective decisions with respect to technical
requirements, schedule and quality control.
(iv) The contractors cost saving use of Facilities Cost of
Money for productivity-enhancing capitol investments will be
evaluated.
(1) Evaluation Period/award Fee Pool
(1) The evaluation Board will evaluate the Contractors
performance on each availability accomplishment contract line item in
conjunction with the Contractors performance on the advance planning
line item(s) associated with that availability. the award fee
evaluation on this related set of line items will take place
approximately seventy five (75) days after completion of the
availability. Prior to this formal evaluation , the supervisor may
make interim awards fee payments for advance planning contract line
items only,
provided that the sum of such interim payments for each advance
planning line item. shall not exceed 75 percent of the award fee pool
for that line item. The actual award fee amount will be determined by
the formal award fee process, and payment will be adjusted to account
for interim
advance planning award fee payments made. Interim advance planning
award fee payments may be made at the same time as award fee payments
for other completed availabilities or following the end of the fiscal
year. The evaluation period or interim award fee payment for first
year of the contract shall be:
Period 1: Contract award through September 1990
MAXIMUM AWARD FEE POOL FOR EACH EVALUATION PERIOD
LOT 001
Evaluated line items FIRST PERIOD
Item 0001 80%
Item 0002 100% of the award fee pool of
orders negotiated during the
evaluation period.
Item 0003 100% of the award fee pool of
orders negotiated during the
evaluation period.
The Government reserves the right to adjust the above evaluation
period.
(2) Specific Award Fee Pool values will be made available by the
ACO after award and/or exercise of option(s).
(3) The basis for award fee, subsequent evaluation periods, and
award fee pools will be provided by contract modification at the time
of exercise of the line item option for that fiscal year.
(I) Performance Ratings
(1) In evaluating contractor performance, the following
numerical rating will be used:
NUMERICAL RATING
CRITERIA
91-100 The Contractors performance exceeds
requirements by a substantial margin. The evaluation cannot cite
relevant areas for improvements.
83-90 The Contractors performance exceeds
overall performance requirements. the evaluator may cite one or more
areas for improvement, but they are relatively minor in terms of
potential program impact, and they are substantially offset by better
performance in other areas
75-82 The Contractors performance meets all
requirements. the performance is neither significantly superior nor
significantly inferior. Areas of risk are of no greater degree then
would ordinarily be expected in the performance of a typical
availability of this size and complexity.
67-74 The contractors performance is adequate.
though the evaluator may cite areas for improvement, these are offset
by better performance in other areas being evaluated and deficiencies
are of a minor nature This level of achievement would be the norm for
contractors completing jobs and the availability on schedule with
reasonable quality and cost.
50-66 The Contractors performance meets most, but not all
requirements. there are areas of good or better
performance,
but these offset by lower-rated performance in other
areas.
31-49 The content and quality of contract performance are close
to being adequate, although there are many areas for
improvement. No major deficiencies are cited.
0-30 The content and quality of Contractor performance in at
least one area are deemed by the evaluator to need substantial
improvements. contractor performance in the area being evaluated is
considered to be such that a potentially adverse program impact is
foreseen. The need for improvement is such that Government action may
be required.
(2) The relationship of the percent of award fee pool to
be paid for each contract line item evaluated (subject to the
determination of the fee Determining Official) to the performance
rating will be as follows:
Performance Rating Percent of Award Fee Pool
0-30 0
31-100 (Rating - 30)x 100
70
(3) a performance rating of 30 or below is deemed
unsatisfactory. the contractor is not entitled to any award fee for a
rating of 30 or below
(j) Maximum Fee
In no event shall the total fee (base fee plus award fee)
under this contract exceed 10 percent of the total estimated cost.
(1) Payment of Award Fee
The contractor shall be paid award fee, if any upon
submittal of a proper invoice or voucher to the cognizant Payment
Office, together with a copy of the unilateral modification
to the contract authorizing payment of award fee for the applicable
Evaluation period. The Contractors invoice shall show the amount of
award fee payable to each sub-line item, which shall be directly
proportionate to the amount or allowable Estimated Cost ( exclusive of
base fee and FCOm) incurred by the Contractor during the evaluation
Period. The contractors invoice must cite the appropriate accounting
data in order for payment to be affected.
H-34 ORDER OF PRECEDENCE OF CONTRACTORS PROPOSAL
For the purpose of Clause I-1-60, ORDER OF PRECEDENCE (JAN
1986), FAR. 52.215-33, The contractors proposal if incorporated by
reference, will be last in order of precedence after the
specifications.
H-35 INVOICE SUBMITTAL
It is the governments requirement that invoices submitted by the
contractor reflect the specific accounting classifications cited in
this contract The contractor shall submit vouchers for payment by
ACRN level as identified on the Financial Accounting Data Sheet
(NAVMAT form 7300/10 (7-75) attached to this contract To the extent
reasonably feasible, cost associated with the performance of this
contract shall be segregated, accumulated and invoiced to the
appropriate ACRN categories listed on the Financial Accounting Data
Sheet. In the instances in which this is not feasible, an allocation
ratio shall be established by the ACO and the contractor so that
invoices submitted will allocate cost to the ACRN level on a
proportionate basis. vouchers that do not identify billing amounts by
the ACRN level or in accordance with the allocation ratio established
by the ACO will be returned to the contractor for proper
identification.
H-36 LIMITATIONS ON INDIRECT COST RATES
1. Pursuant to FAR 42.707, an indirect cost rate ceiling is
incorporated into the contract. indirect Cost is defined as set
forth at FAR 31.001 and 31.203. Indirect cost rate is defined as set
forth at 42.701.
2. Notwithstanding the allowable cost and payment clause of this
contract, the allowable indirect cost under this contract shall be
obtained by applying limitations on indirect cost rates to bases
agreed upon by the parties, as specified below.
3. allowability of cost and acceptability of cost allocation methods
shall be determined in accordance with FAR subpart 31.2 in effect on
the date of this contract, as limited by the indirect cost rates
established by this provision.
4. For the first three contractor fiscal years, the indirect cost
rates contained in the contractors accepted contract proposal shall be
incorporated into the contract schedule as limitations on indirect
cost rates for each contractor fiscal year of contract performance.
The bases to which the indirect cost rates apply shall be those
contained in the contractors accepted contract proposal and hereby,
incorporated into the contract schedule, in accordance with the
contractors accounting system upon which its proposal was based.
5. After the first three contractor fiscal years, the Contracting
Officer and Contractor shall negotiate the limitations on indirect
cost rates for subsequent contractor fiscal years (unless the parties
agree to a different period) and execute a written indirect cost rate
limitation agreement setting forth the results. The agreement shall
specify (1) the agreed upon indirect cost rates, (2) the bases to
which the rates apply, (3) the fiscal year(unless the parties agree to
a different period) for which the rate applies, and (40 the specific
items treated as direct cost or any change in the items previously
agreed to be direct cost. The agreement is incorporated into this
contract upon execution.
6. Pending establishment of indirect cost rates for subsequent
contractor fiscal year (or other period agreed to by the parties), the
Contractor shall be reimbursed either at the rates fixed for the
previous fiscal year or at billing rates acceptable to the Contracting
Officer, subject to appropriate adjustment when the final indirect
cost rates for that period are established.
7. The Government will not be obligated to pay any additional amount
should any final indirect cost rates for any contractor fiscal year (
or for any different period agreed to by the parties after the first
three fiscal year ) of contract performance exceed the indirect rates
incorporated into the contract schedule. In the event any of the
Contractors final indirect cost rates are less than the indirect cost
rates incorporated into the contract schedule, the incorporated rates
shall be reduced to conform with the lower rates.
8. The limitations on indirect cost rate shall not change any
monetary ceiling, contract obligation, or specific cost allowance or
disallowance provided for in this contract. If facilities capitol
cost of money is proposed as an allowable cost, the rates proposed
shall be subject to the limitations imposed by this provision.
9. The limitations on the indirect cost rate shall apply to all work
performed under the contract, and to all change orders and
supplemental agreements, including changes due to growth,
supplemental, emergent and new work
10. Notwithstanding any of the terms of this special contract
requirement, should the contractor initiate a change to its
accounting systems which would alter the composition of any overhead
base or pool effected by this clause, the Contracting Officer and
Contractor shall negotiate to determine the rate ceiling to be applied
to the new overhead pools, provided that no agreement shall be made
which would increase the cost paid by the United States under this
contract
11. The limitation on indirect cost rates specified in the
contractors cost proposal shall be the rates used to compute the cost
in the contractors cost proposal upon which the award is based.
H-37 INDEMNIFICATION FOR ACCESS TO VESSELS
Notwithstanding any provision in the Access to Vessels clause (DOD FAR
SUPP 252.217-7113), or any other clause of the contract, the
Contractor agrees to allow officers, employees, and associates of the
government, or other prim contractors with the Government and their
subcontractors, and officers, employees and associates of offerors on
other contemplated work, admission to the contractors facilities and
access to the vessel without any further request for indemnification
from any party, which has not been previously included in the contract
price.
H-38 TRAVEL COST
The Contractor shall not charge, and the Government shall not pay
as an allowable cost under this contract, any man-hour costs ( weather
straight-time or overtime) for contractor personnel or subcontract
personnel traveling to or from worksite, including travel to worksite
other than the contractors facility for performance of contract work.
Workers being paid under this contract, as prime contractor
personnel or subcontractor personnel, will complete a full shift at
the worksite, and no compensation will be paid for travel time before
or after the shift.
This provision pertains only to payments for travel time before or
after these workers regular shifts, and dose not apply to legitimate
travel cost incurred during normal working hours, provided that those
costs are otherwise reasonable, allocable and allowable. This
provision does not apply to manufacturers representative or OEMs
representative when specifically required by the government work
specifications.
Additionally, the contractor shall not charge, and the government
shall not pay, any transportation costs under this contract associated
with transporting contractor or subcontractor personnel between the
contractors facility ( or subcontractors facility), and any other work
site to perform PMAs/DPMAs. Transportation costs includes, but is not
limited to bus fare, car fare, train fare, or boat fare, paid by the
work force, or paid by the contractor on behalf of the work force
H-39 DISPOSAL OF HAZARDOUS WASTE (JAN 1990)
1. The contractor shall comply with the Natural Resources
Conservation and Recovery Act (RCRA) and all other applicable Federal,
State and local laws, codes, ordinance and regulations for management
and disposal of hazardous waste.
2. In accordance with RCRA and 10 U.S.C. 7311, for purpose of this
contract the following definitions apply:
a) Navy generated hazardous waste is hazardous waste, as defined
by RCRA, that is generated solely by the actions of the ships force
or Navy employees on board a ship Hazardous materials or substances
within a ships system or on the ship structure are not considered
hazardous waste prior to removal; the act of removing hazardous
materials or substances shall be considered hazardous waste generation
within the meaning of RCRA.
b) Contractor generated hazardous waste is hazardous waste as
defined by RCRA, that is generated by the performance of the work
specified in this contract. Contractor generated hazardous waste
includes but is not limited to, hazardous waste that contains
materials from the ships systems, operation and structure that is
first subjected to regulations as a hazardous waste by the actions of
the contractor in performing the work specified in this contract.
c) Cogenerated hazardous waste is hazardous waste, as defined by
RCRA, that is a combination of hazardous waste generated solely by
the actions of the Navy personnel and hazardous waste generated solely
by the actions of contractor personnel, where combination of hazardous
waste cannot be avoided by reasonable hazardous waste management or
work practices Cogenerated hazardous waste does not include
hazardous waste that contains materials from the ships systems,
operations and structure that is first subjected to regulations as a
hazardous waste by the actions of the contractor in performing the
work specified in this contract.
3) Disposal of Navy generated hazardous waste. When the
disposal of Navy generated hazardous waste is the responsibility of
the contractor under the terms of this contract the Navy shall furnish
an EPA identification number issued to the Navy for use on any
required manifests or other documents for disposal of the hazardous
waste.
4) disposal of contractors generated hazardous waste. the
contractor shall be responsible for the proper management and disposal
of all contractor generated hazardous waste and shall use an EPA
identification number issued to the contractor for the disposal of the
hazardous waste. No EPA identification number issued to the Navy
shall be used on required manifests or other documents or contractor
generated hazardous waste
5) Disposal of congenerated hazardous waste. The contractor
shall be responsible for the proper management and disposal of all
congenerated hazardous waste. Any required manifests or other
documents prepared for the disposal of the hazardous .
6)Copies of all manifests prepared under this contract shall be
provided to the contracting officer within 48 hours of receipt of the
manifest from the disposal site
H-40 ACCESS TO THE NAVY SUPPLY SYSTEM FOR FASTENERS
(a) The award of this contract is authorized access to the Navy supply
system for the acquisition of fasteners identified below which will be
used for the purpose of performing this contract. Use by private
shipyards is permissive not mandatory, in accordance with the
technical specification Access to the Navy Supply system By Contractor
for Contractor Furnished fastener With National Stock Numbers in
section J: LIST OF ATTACHMENTS, incorporated into the contract, for
the following items:
a. silicon Bronze hex nuts and capscrews up to 3/4-10
b. Monel hex nuts and capscrews up to 7/8-9
c. Stainless steel hex nuts up to 3/4-10
d. Steel grade 7 hex nuts up to 7/8-9
e. steel grade B16 studs and all thread rods up to 1-1/4-8
f. steel grade 5, zinc plated, hex nuts and capscrews up to 7/8-9
g. steel grade 2H hex nuts up to 5/8-11
h. Steel grade 8 hex nuts and capscrews up to 3/4-10
(b) pursuant to FAR Clause 52.251-1 entitled Government Supply
Sources (APR 1984) the contracting Officer hereby authorizes the
contractor to place orders with the Navy Supply System* for materials
listed above the perform the work required by this contract. The
Naval Supply system shall such orders in the same manner as it would
for any other Naval Supply user, and the contractor shall make
payments on account of materials and equipment and other supplies
ordered and/or received in accordance with the normal requirements of
the Naval Supply systems command, but in no event shall payment in
full be made any later than 30 days after receipt by the Contractor of
each order. The Contractor shall pay the naval supply system any cost
for materials, obtained including any surcharges normally charged to
any other Navy supply System user. Contractor shall place orders in
accordance with the technical specification identified in paragraph
(a) above.
(c) This contract has been priced on the basis that, except as
specifically provided elsewhere in this contract with regards to
Government Furnished Property, the contractor shall provide all
necessary materials, equipments and supplies for performance of this
contract It is understood by all parties that the contractor has
elected to use the Naval Supply system for its own convenience to meet
its contractual obligations to perform the work under this Contract.
The Naval supply System is considered to be an alternate source or
vendor of Contractor furnished Material; therefore materials,
equipments, or other supplies ordered and/or obtained from the Naval
Supply System are specifically not considered to be Government
Furnished material, but are considered to be Contractor furnished.
(d) The government makes no representation as to the availability of
materials for the performance of work required under this contract,
nor shall unavailability, late delivery, delivery of non-conforming
supplies, higher costs of the Naval supply Systems (if any), or any
failure of the Naval Supply System to meet the expectation or
requirements of any of the contractor constitute excusable delay or
grounds for equitable
any other adjustment to the contract or relief from the requirements
to perform in accordance with the terms of the contract,
* The Defense Industrial supply Center (DISC) will serve as the
Inventory control Point
<PAGE>
SECTION I-CONTRACT CLAUSES
SECTION I-1
CLAUSES INCORPORATED BY REFERENCE (APR 1984) (FAR 52.252-2)
This contract incorporates the following clauses by reference, with
the same force and effect as if they were given in full text. Upon
request, the Contracting Officer will make their full text available.
I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES
CLAUSE NO. FAR CITE TITLE AND DATE
I-1-1 52.202-1 Definitions (APR 1984)
I-1-2 52.203-1 Officials Not to Benefit (APR 1984
I-1-3 52.203-3 Gratuities (APR 1984)
I-1-4 52.203-5 Covenant Against Contingent Fees
(Apr.
1984)
I-1-5 52.203-6 Restrictions on Subcontractor Sales
to the Government (Jul. 1985)
I-1-6 52.203.7 Anti-Kickback Procedures (Oct.
1988)
I-1-7 52.204-2 Security Requirements Apr. 1984)
I-1-8 52.208-1 Required Sources for Jewel Bearings
and Related Items (Apr. 1984)
I-1-9 52.210-5 New Material (Apr. 1984)
I-1-10 52.210-7 Used or Reconditioned Material,
Residual Inventory, and Former
Government Surplus Property
(Apr. 1984)
I-1-11 52.212-8 Defense Priority and Allocation
Requirements (May 1986)
I-1-12 52.212-1 Examination of Records by
Comptroller
General (Apr. 1986)
I-1-13 52.215-2 Audit - Negotiation (Apr. 1988)
I-1-14 52.215-22 Price Reduction for Defective Cost
or Pricing Data (Apr. 1988)
I-1-15 52.215-24 Subcontractor Cost or Pricing Data
(Apr. 1985)
I-1-16 52,215-25 Subcontractor Cost or Pricing Data-
Modifications (Apr. 1985)
I-1-17 52.215-26 Integrity of Unit Prices (Apr.
1987)
I-1-18 52.215-30 Facilities Capital Cost of Money
(Sep. 1987)
I-1-19 52.215-31 Waiver of Facilities Capital Cost
of
Money (Sep. 1987)
I-1-20 52.215-33 Order of Precedence (Jan 1986)
I-1-21 52.216-7 Allowable Cost and Payment (Apr.
1984)
I-1-22 52.217-8 Fixed Fee (Apr. 1984)
I-1-23 52.217-5 Evaluation of Options (Jun. 1988)
I-1-24 52.219.8 Utilization of Small Business
Concerns and Small Disadvantaged
Business Concerns (Jun. 1985)
I-1-25 52.219-9 Small Business and Small
Disadvantaged Business
Subcontracting Plan (Aug. 1989)
I-1-26 52.219-13 Utilization of Women-Owned Small
Businesses (Aug. 1986)
I-1-27 52.220-1 Preference for Labor Surplus Area
Concerns (Apr. 1984)
I-1-28 52.220-3 Utilization of Labor Surplus Area
Concerns (Apr. 1984)
I-1-29 52.220-4 Labor Surplus Area Subcontracting
Program (Apr. 1984)
I-1-30 52.222-1 Notice to the Government of Labor
Disputes (Apr. 1984)
I-1-31 52.222-3 Convict Labor (Apr. 1984)
I-1-32 52.222-4 Contract Work Hours and Safety
Standards Act - Overtime
Compensation
(Mar 1986)
I-1-33 52.222-20 Walsh-Healey Public Contracts Act
(Apr. 1984)
I-1-34 52.222-26 Equal Opportunity (Apr. 1984)
I-1-35 52.222-28 Equal opportunity Pre-Award
Clearance of Subcontracts (Apr.
1984
I-1-36 52.222-35 Affirmative Action for Special
Disabled and Vietnam Era Veterans
(Apr. 1984)
I-1-37 52.222-36 Affirmative Action for Handicapped
Workers (Apr. 1984)
I-1-38 52.223-2 Clean Air and Water (Apr. 1984)
I-1-39 52.223-3 Hazardous Material Identification
and Material Safety Data
I-1-40 52.227-1 Authorization and Consent (Apr.
1984)
I-1-41 52.227.3 Notice and assistance regarding
Patent and copyright Infringements
(Apr. 1984
I-1-42 52.227-10 Filing of Patent Application-
Classified subject Matter (Apr.
1984)
I-1-43 52.227-11 Patent Rights - Retention by the
Contractor ( Short Form) (Jun.
1989)
(Applicable to other than small
Business Firms)
I-1-44 52.227-12 Patent Rights - Retention by the
Contractor (Long form) (Jun. 1989)
(Applicable to other than small
Business Firms)
I-1-45 52.228-7 Insurance - Liability to Third
Persons (Apr. 1984)
I-1-46 52.230-3 Cost Accounting Standards (Sep.
1987)
I-1-47 52.230-4 Administration of Cost Accounting
Standards (Sep. 1987)
I-1-48 52.230-9 Limitations on withholding of
Payments (Apr. 1984)
I-1-49 52.230-17 Interest (Apr. 1984)
I-1-50 52.232-18 Availability of funds (Apr. 1984)
I-1-51 52.232-20 Limitation of Cost (Apr. 1984)
I-1-52 52.232-23 Prompt Payment (Apr. 1989)
I-1-53 52.232-25 Prompt Payment (Apr. 1989)
I-1-54 52.233-1 Disputes (Apr. 1984) (ALTERNATE I)
I-1-55 52.233-2 Service of Protest (Nov. 1988)
I-1-56 52.233-3 Protest After Award (Aug. 1989)
I-1-57 52.242-1 Notice of Intent to Disallow Costs
(Apr. 1984)
I-1-58 52.242-2 Production Progress Reports
(Apr. 1984)
I-1-59 52.242-10 F.O.B. Origin - Government Bills of
Lading or Prepaid Postage (Apr.
1984)
(Applicable to CLIN 0003)
I-1-60 52.243-2 Changes - Cost Reimbursement (Aug.
1994)
I-1-61 52.243-6 Change Order Accounting ( Apr.
1984)
(The requirement for change order
accounting may be unilaterally
established at the time a change
order is issued by the AOC).
I-1-62 52.243-7 Notification of Change (Apr. 1984)
I-1-63 52.244-2 Subcontracts under Cost-
reimbursement and Letter contract
( Jul. 1995)
I-1-64 52.244-5 Competition in Subcontracting
(Apr. 1984)
I 1 65 52.245-5 Government Property (cost-
reimbursement, Time and Material
Labor
Hour contracts) (Jan 1986
I-1-66 52.245-18 Special Test Equipment (Aug. 1988)
I-1-67 52.245-19 Government Property furnished AS IS
(Apr 1984)
I-1-68 52.246-3 Inspection of supplies - Cost
Reimbursement (Apr. 1984)
I-1-69 52.246-24 Limitation of Liability - High
Value
Items (Apr. 1994)
I-1-70 52.248-1 Value Engineering (Mar 1989)
I-1-71 52.249.6 Termination (Cost -Reimbursement)
(May 1986)
I-1-72 52.249-14 Excusable Delays (Apr. 1984)
I-1-73 52.251-1 Government supply Sources (Apr.
1984)
I-1-74 52.252-6 Authorized Deviations in Provisions
(Apr. 1084)
I-1-75 52.219-16 Liquidated Damages - Small Business
Subcontracting plan (Aug. 1989)
I-1-76 52.247-6409 Preference For Privately Owned US
Flag Commercial Vessels (Apr. 1984)
I-1-77 52.223-6 Drug Free Workplace (Mar 1989)
SECTION I-2
DOD FAR SUPPLEMENT (48 CFR CHAPTER 2) CLAUSES:
This Contract incorporates the following clauses from the DOD FAR
Supplement by reference, with the same force and effect as if given in
full text.
I-2-1 252.203-7001 Special Prohibition on Employment (Mar
1989)
I-2-2 252.203-7002 Statutory Compensation prohibitions and
Reporting Requirements relating to Certain
Former DOD Employees (Apr. 1988)
I-2-3 252.203-7003 Display of DOD Hotline Poster (Oct. 1987)
I-2-4 252.204-7005 Overseas Distribution of Defense
Subcontracts
( Aug. 1988)
I-2-5 252.205-7000 Release of Information to Cooperative
agreement Holders (Feb. 1989
I-2-6 252.208-7000 Required source For Miniature and
Instrument
Ball Bearing (Jul. 1971)
I-2-7 252.208-7001 Required Source for Precision components
and
Mechanical time Devices (Aug. 1971)
I-2-8 252.208-7002 Required Source for High Purity Silicon
(Jun. 1983)
I-2-9 252.208-7003 Required source for High Carbon Ferrochrom
(Aug. 1984)
I-2-10 252.208-7005 Required Source for foregoing and Welded
Anchor Chain Item (Aug. 1985)
I-2-11 252.215-7000 Aggregate Pricing Adjustment (Apr. 1985)
I-2-12 252.217-7270...Identification of sources of Supply
(Feb. 1987)
I-2-13 252.219.7000 Small Business and Small Disadvantaged
Business subcontracting Plan (DoD Contract
Jun. 1988)
I-2-14 252.219.7009 Incentive Program for subcontracting
with Small and Small Disadvantaged
Business Concerns, Historically Black
Colleges and Universities and
Minority
Institutions (Jun. 1988)
I-2-15 252.223-7001 Safety Precautions for Ammunition and
Explosive (Mar 1988)
I-2-16 252.225-7006 Buy American Act and Balance of
Payments Program (May 1986)
I-2-17 252.225-7002 Qualifying Country Sources as
Subcontractors (Oct. 1980)
I-2-18 252.225-7008 Duty-Free Entry - Qualifying Country
End Products and Supplies (Aug. 1984)
I-2-19 252.225-7011 Preference for Domestic Specialty
Metals (Major Programs) (Oct. 1980)
I-2-20 252.227-7013 Rights in Technical Data and Computer
Software (Oct. 1988) Alternate I
I-2-21 252.227-7018 Restrictive Markings on Technical
Data
(Oct. 1988)
I-2-22 252.227-7029 Identification of Technical Data
(Apr. 1988)
I-2-23 252.227-7030 Technical Data - Withholding of
Payment
(Oct. 1988)
I-2-24 252.227-7031 Data Requirements (Oct. 1988)
I-2-25 252.227-7034 Patents - Subcontracts (Apr. 1984)
Applicable if FAR 52.227-11 applies
to
this procurement)
I-2-26 252.227-7036 Certification of Technical Data
Conformity (May 1987)
I-2-27 272.227-7037 Validation of Restrictive Markings on
Technical Data (Apr. 1988)
I-2-28 252.231-7000 Supplemental Cost Principles (Apr.
1984)
I-2-29 252.233-7000 Certification of Requests for
Adjustment or Relief Exceeding
$100,000
I-2-30 252.235-7002 Recovery for Nonrecurring Costs on
Commercial Sales (Feb. 1980)
I-2-31 252.242-7003 Certification of Indirect Costs
(Apr. 1986)
I-2-32 252.246-7000 Material Inspection and Receiving
Report (DEC 1969)
I-2-33 252.246-7001 Warranty of Data (Nov. 1974)
I-2-34 DELETED
I-2-35 252.209-7006 Required sources for Antifriction
Bearing (Apr. 1989
I-2-36 252.209-7001 Acquisitions from defense Contractors
Subject to on-site Inspection under
the
Intermediate-Range Necular Forces
(NIF)
Treaty (Jan 1988)
I-2-37 252.223-7500 Drug Free Work Force (Sep. 1988)
I-2-38 252.227-7019 Identification of restricted rights
Computer Software (Apr. 1988)
Additional contract Clauses
The following clauses are additional contract clauses of this
contract.
I-2-39 ADDITIONAL DEFINITIONS
(a) The term Secretary means the secretary ,the under Secretary,
or any Assistant Secretary of the Department and the term his duly
authorized representative means any person on board ( other than the
Contracting Officer; authorized to act for the secretary.
(b) The term Contracting Officer means the person executing this
contract on behalf of the Government, and another officer or civilian
employee of the Department who is a properly designated Contracting
Officer; and the term includes, except as otherwise provided in this
contract, the authorized representative of a Contracting Officer
acting within the limits of his authority.
(c) Except as otherwise provided in this contract, the term
subcontracts includes purchase orders.
(d) As used throughout this contract, the term Department means
the Department of the Navy
(e) as used throughout this contract, the term Commander, Navel
Sea Systems Command means the Commander of the Navel Sea Systems
Command of the Department of the Navy or his duly authorized
successor or duly authorized representative.
(f) As used through this contract the term Supervisor means the
cognizant Supervisor of Shipbuilding, Conversion and Repair,
Department of the Navy.
I-2-40 NAVY REORGANIZATION
Pursuant to a reorganization within the Department of the Navy,
effective 1/July 1974, The Naval Sea System Command has become the
successor to the Naval Ship Systems Command and the Naval Ordnance
systems Command. The Naval Ships Systems Command was the successor to
the Bureau of Ships. The Naval ordnance Systems Command and the Naval
Air systems Command Were the successors to the Bureau of Naval
Weapons, which was the successor to the Bureau of Ordnance and the
Bureau of Aeronautics. Accordingly, as appropriate, in view of the
foregoing, reference in the contract and in documents referenced
therein to the Naval Ship System Command, the Bureau of Ordnance or
the Bureau of Aeronautics shall be deemed to refer to the Naval Sea
systems Command
1-1-41 FACILITIES NOT TO BE GOVERNMENT-FURNISHED
The Contractors obligation to perform this contract is in no way
conditioned upon the providing by the Government of any Facilities,
except as may otherwise expressly provided herein. accordingly, no
such shall either acquired by the Contractor for the account of the
Government or furnished to the Contractor by the Government hereunder.
For the purpose of this Clause, facilities means industrial property
(other than material, special tooling, military property, and special
test equipment for production, maintenance, research, development or
test, including real property and rights therein, building,
structures, improvements, and plant equipment.
I-2-42 PAYMENT FOR OVERTIME PREMIUMS (APR 1984)
(a) The use of overtime is authorized under this contract if the
overtime premium cost dose not exceed*__________. In addition to this
dollar ceiling, overtime is permitted only for work___
(1) Necessary to cope with emergencies such as those
resulting from accidents, natural disasters, breakdowns of production
equipment, or occasional production bottlenecks of sporadic nature
(2) By indirect-labor employees such as those performing duties
in connection with administration, protection, transportation,
maintenance, standby plant protection, operation of utilities, or
accounting;
(3) To perform tests, industrial process , laboratory procedures,
loading or unloading of transportation conveyance, and operations in
flight or afloat that are continuos in nature and cannot reasonably
be interrupted or completed otherwise; or
(b) Any request for estimated overtime premiums that exceeds the
amount specified above shall include all estimated overtime for
contract completion and shall---
(1) identify the work unit; e.g., department or section in which
the required overtime will be used, together with present workload,
staffing and other data of the affected unit sufficient to permit the
Contracting officer to evaluate the necessity for overtime;
(2) Demonstrate the effect that denial of the request will have
on performance schedule;
(3) Identify the extent to which approval of overtime would
affect the performance or payment in connection with other Government
contracts together with identification of each affected contract; and
(4) Provide reasons why the required work cannot be performed by
using multishift operations or by employing additional personnel.
I-2-43 ACCESS TO VESSELS BY NON-U.S. CITIZENS
(a) No person not known to be a U.S. citizen shall be eligible
for access to naval vessels, work sites and adjacent areas when said
vessels are under construction, conversion, overhaul, or repair,
except upon a finding by NAVSEA or his designated representative that
such access should establish procedures to comply with the
requirements of this clause and the NAVSEAINST 5500.3A I in effect on
the date of this contract or agreement.
(b) If the contractor desires to employ non-U.S. citizens in the
performance of work under this contract/agreement that requires
access, as specified in paragraph (a) to this clause, approval must be
obtained prior to award for each contract/agreement where such access
is required. To request such approval, the contractor shall submit to
COMNAVSEA via the cognizant Contract Administration Office (CAO), an
Access Control Plan (ACP) which shall contain, as a minimum, the
following information:
(1) Badge or Pass oriented identification, access and
movement control system for non-U.S. citizen employees with the
badge/pass to be worn or displayed on outer garments at all times
while on the contractors facilities and when performing work aboard
ship.
(i) Badges must be of such design and appearance that
permit easy recognition to facilitate quick and positive
identification.
(ii) Access authorization and limitations for the
bearer must be clearly established and in accordance with applicable
security regulations and instructions.
(iii) A control system, which provides rigid
accountability procedures for handling lost, damaged, forgotten and no
longer required badges, must be established.
(iv) A badge or pass check must be performed at all
points of entry to the contractors facility or by a site supervisor
for work performed on ships outside of the contractors plant.
(2) Contractors plan for ascertaining citizenship and
screening employees for security risk.
(3) Data reflecting the number, nationality and
positions held by non-U.S. citizen employees, including procedures to
update data as non-U.S. citizen employee data change, and pass to
cognizant CAO.
(4) Contractors Plan for ensuring subcontractor
compliance with provisions of the contractors ACP
(5) these conditions and controls are intended to serve
as guidelines representing the minimum requirements of an acceptable
ACP. they are not meant to restrict the contractor in any way from
imposing additional controls necessary to tailor these requirements to
a specific facility.
(c) to request approval for non-U.S citizens of hostile
and/or communist-controlled countries (listed in Department of Defense
Manuals, DOD 5220.22M or available from cognizant) contractor shall
include in ACP the following employee data: place of birth ,
citizenship ( if different from place of birth) date of entry to U.S.,
extenuating circumstances (if any) concerning immigration to U.S.
number of years employed by contractor, position , and stated intent
concerning U.S. citizenship. COMNAVSEA will make individual
determinations of desirability of access for above group. Approval of
ACPs for access of non-U.S. citizens of friendly countries will not be
delayed for approval of non-U.S. citizens of hostile communist-
controlled countries. But until COMNAVSEA approval is received,
contractor must delay access to vessels for employees who are non-U.S.
citizens of hostile and/ or communist-controlled countries
(d) An ACP which has been approved for specific Master Ship
Repair Agreement (MSRA) or Agreement for Boat Repair (ABR) or Basic
Ordering Agreemnt (BOA), is valid and applicable to all job orders
awarded under that agreement
(e) The Contractor shall fully comply with approved ACPs.
Noncompliance by the Contractor or subcontractor serves to cancel the
authorization previously granted, in which case the contractor shall
be precluded from continued use of non-U.S.. citizens on this contract
or agreement until such time as compliance with an approved ACP is
demonstrated and upon determination by the CAO that the Governments
interest are protected. further, the government reserves the right to
cancel previously granted authority when such cancellation is
determined to be in the Governments best interest. Use of non-U.S.
Citizens, without an approval ACP or when a previous authorization has
been canceled, will be considered a violation of security regulations.
Upon confirmation by the CAO of such violations, this contract,
agreement or any job order issued under this agreement may be
terminated for default.
(f) Prime contractors have full responsibility for the
proper administration of the approved ACP for all work performed under
this contract or agreement regardless of the location of the vessel
and must ensure compliance by all subcontractors, technical
representative and other persons granted access to naval vessels,
adjacent areas and work site.
(g) In the event the contractors does not intend to employ
non-U.S citizens in the performance of work under this contract, but
has U.S. citizens employees, such employees must preclude from access
to the vessel and its work site and those ships where work on ships
equipment is being performed. The APC must spell out how non U.S.
citizens are excluded from access to contract work areas.
(h) The same restriction as in paragraph (g) above applies
to other non-U.S. citizen who have access to the contractors
facilities (e.g., for accomplishing facility improvements, from
foreign crewed vessels within its facility, etc).
(End of Clause)
I-2-44 COST ESTIMATING SYSTEM REQUIREMENTS (FEB 1988
(a) Definition. Estimating System is a term used to describe a
contractors policies, procedures and Practice for generating cost
estimates which forecast costs based on information that is available
at the time. It includes the organizational structure; established
lines of authority, duties, and responsibilities; Internal controls
and managerial reviews; flow of work, coordination, and communication;
and estimating methods, techniques, accumulation of historical cost,
and analyses used by a contractor to generate estimates of cost and
other data included in proposal submitted in the expectation of
receiving contract awards.
(b) General. The Contractor Shall have an estimating system that
consistently produces well supported proposal that are an acceptable
basis for negotiation of fair and reasonable prices. The estimating
system should be consistent with the integrated with the contractors
related management systems and subject to applicable financial control
systems.
(c) Applicability. Paragraphs (d) and (e)are also applicable if
the Contractor is a large business and, in its fiscal year preceding
award of this contract, received Department of Defense (DoD) prime
contract or subcontract thereunder totaling $50 million or more for
which certified cost or pricing data were required. This clause is
also applicable if the contractor is a large business which, in its
fiscal year preceding award of this contract. received Department of
Defense DOD prime contract or subcontracts thereunder totaling $10
million or more for which certified cost or pricing data were
required, and during performance of this contract the Contracting
Officer notifies the Contractor in writing that paragraph (d) and (e)
of this clause apply.
(d) System Requirement. The contractor shall establish and
maintain an estimating system in compliance with subsection 15.811-74
of the Dod FAR Supplement.
(1) the Contractor shall disclose its estimating system to the
Contracting Officer responsible for contract administration (ACO) in
writing. If the /contractor wishes the Government to protect such
information as privileged or confidential, an appropriate legend
should be placed on the face of the document(s) at the time of
submission. an estimating system disclosure is adequate when the
Contractor has provided the ACO with documentation which (I)
accurately described these policies, procedures and practice that the
Contractor currently uses in preparing cost proposal; and (ii)
provides sufficient detail for the government to reasonably make an
informal judgment regarding the adequacy of the Contractors estimating
practices.
(2) Significant changes to the cost estimating system must be
disclosed to the ACE on a timely basis.
(3) the Contractor shall comply with its disclosed estimating
system.
(e) Estimating System Deficiencies.
(1) If during the period of performance of this contract, the
Contractor receives a report of the review of its estimating system
which identifies deficiencies in the system, the contractor agrees to
respond as follows
(i) If the contractor agrees with the report findings and
recommendations, the Contractor shall, within Thirty (30) days of
receipt of such report, indicate its agreement in writing; and within
sixty (60) days of receipt of such report, correct any deficiencies or
submit a corrective action plan showing proposed milestones and
actions leading to elimination of the deficiencies.
(ii) If the Contractor disagrees with the report findings and
recommendations, the Contractor shall respond in writing within thirty
(30) days of receipt of the report, indicating its rational for each
area of disagreement
(2) The ACO shall evaluate the Contractors response to the report
and notify the Contractor of his/her determination concerning any
remaining deficiencies and/or the adequacy of any proposed or
completed corrective action(s).
(End of Clause)
I-2-45 RESTRICTION ON CONTRACTING WITH SANCTIONED PERSONS (DOD FAR
52.225-13) (MAY 1989)
(a) Definitions. (1)
Component Part means any article which is not usable for its intended
functions without being imbedded in, or integrated into, any other
product and which, if used in production of a finished product, would
be substantially transformed in the process.
(2) Finished Product means any article which is useable for
its intended function without being imbedded in, or integrated into,
any other product. It dose not include an article produced by a
person, other than a sanctioned person, that contains parts or
components of the sanctioned person it the parts or components have
been substantially transformed during production of the finished
product.
(3) Sanctioned person means a company or other foreign person
upon whom prohibitions have been imposed.
(4) Substantially transformed, when referring to a
component part or finished product, means that the part or product has
been subjected to substantial manufacturing or processing operation by
which the part or product is converted or combined into a new and
different article of commerce having a new name, character, and use.
(b) General. Section 2443 of the Multilateral Export Control
Enhancement Amendments Act (Pub. L. 100-418) and Executive Order
12661, effective December 28, 1988, impose, for a period of three
years, with certain exceptions, a prohibition on contracting with, or
procuring (including rental exceptions, a lease/purchase) directly or
indirectly the products or services of (1) Toshiba Machine Company,
(2) Kongsberg Trading Company, (3) Toshiba Corporation, or (4)
Kongsberg Vaapenfabrikk. The Act and Executive Order also prohibit,
for the same three-year period, the importation into the United States
of all products produced by Toshiba Machine Company and Kongsberg
Trading Company. These prohibitions also apply to subsidiaries,
successor entities or joint ventures of Toshiba Machine Company or
Kongsberg Trading Company.
(c) Restriction. Unless listed by the Contractor in its offer, in
the solicitation provision at FAR 52.225-12, Notice of Restrictions on
Contracting with Sanctioned Persons, or unless one of the exceptions
in paragraph (d) of this clause applies, the Contractor agrees that no
products or services delivered to the Government under this contract
will be products or services of a sanctioned person.
Exceptions. The restrictions do not apply-
(1) To finished products of nonsanctioned persons containing
components of a sanctioned person if these components have
been
substantially transformed during the manufacture of the
finished product.
(2) To products or services of a sanctioned person provided -
(i The products are designated to the specifications of a
nonsanctioned person marked under the trademark, brand or
name of the nonsanctioned person;
(ii) The business relationship between the nonsanctioned
person and the sanctioned person clearly existed prior to
June 30, 1987;
(iii) The nonsanctioned person is not directly or
indirectly owned by a sanctioned person.
(3) If a determination has been made in accordance with FAR
25.1003 (a) or (b).
(e) Award. Award of any contract resulting from this solicitation
will not effect the Contractors obligation to comply with importation
regulations of the Secretary of the Treasury.
(End of Clause)
I-2-46 RESTRICTION ON ACQUISITION OF FOREIGN MACHINE TOOLS
(DOD FAR SUP 252.225-7023) (Jan 1989)
(a) The Contractor agrees that those machine tools within the
Federal Supply Clarifications (FSCs) listed in (c) below, to be
delivered as end items under this contract, or to be acquired by the
Contractor on behalf of the Government, and to which title will vest
in the Government, shall be of United States or Canadian origin.
(b) For the purpose of this clause a machine tool shall be
considered to be of United States or Canadian origin if (1) it is
manufactured in the United States or Canada; and (2) the cost of its
components manufactured in the United States manufactured in the
United States or Canada exceeds fifty percent(50%) of the cost of all
its components. The cost of components shall include transportation
costs to the place of incorporation into the end item and duty
(whether or not a duty-free entry certificate may be issued).
(c)
FEDERAL SUPPLY
CLASSIFICATION (FSC) NAME
FSC 3405 Saw and filing Machine
FSC 3408 Machinery Center and Way Type Machines
FSC 3410 Electrical and Ultrasonic Erosion Machines
FSC 3411 Boring Machines
FCS 3412 Broaching Machines
FSC 3413 Drilling and Tapping Machines
FSC 3414 Gear cutting and finishing Machines
FSC 3415 Grinding machines
FSC 3416 Lathes
FSC 3417 Milling Machines
FSC 3418 Planner and Shapers
FSC 3419 Miscellaneous Machine Tools
FSC 3426 Metal Finishing Equipment
FSC 3433 Gas Welding, Heating Cutting, and Metalizing
Equipment
FSC 3438 Miscellaneous Welding Equipment
FSC 3441 Bending and Forming Machines
FSC 3442 Hydraulic and Penumatic Pressure, Power driven
FSC 3443 Mechanical Presses, Power driven
FSC 3445 Punching and Shearing Machines
FSC 3446 Forging Machinery, and Hammers
FSC 3448 Riveting Machines
FSC 3449 Miscellaneous Secondary Metal Forming and Cutting
Machines
FSC 3460 Machine Tool Accessories
FSC 3461 Accessories for Secondary Metal-working Machinery
(End of Clause)
I-2-47 RESTRICTION ON ACQUISITION OF FOREIGN VALVES
(DOD FAR 252.225-7024 (JAN 1989)
(a) the contractor agrees that those valves used in piping for naval
surface ships and submarines within Federal supply Classifications
4810 (valves, powered) and 4820 (valves non-powered) to be delivered
as end items under this contract shall be of United States or Canadian
origin.
(b) For the purpose of this clause, a valve shall be considered to be
of United States or Canadian origin, If, (1) it is manufactured in the
United states or Canada and (2) the cost of its components
manufactured in the United states or Canada exceeds (50%) of the cost
of all its components. The cost of components shall include
transportation cost to the place of incorporation into the end item
and duty (whether or not a duty-free entry certificate may be issued).
(End of Clause)
I-2-48 MATERIAL MANAGEMENT AND ACCOUNTING SYSTEM REQUIREMENTS AND
STANDARDS (DOD FAR SUPP 252.242-7001) (MAY 1989)
(a) Definition.
Contractor; for purpose of this clause, means a business
unit as defined in FAR 31.001, i.e., any segment of an organization,
or an
entire business organization which is not divided into segments.
Material Management and Accounting System (MMSA), as used
in this clause, means the contractors system (s) for planning,
controlling, and accounting for the acquisition, use, and disposition
of material. MMASs may be manual or automated and they may be
integrated with planning, engineering, estimating, purchasing,
inventory, and/or accounting systems, etc., or they may be
essentially stand-alone systems.
Valid time-Phased Requirements means material which is (1)
needed to fulfill the production plan, including reasonable quantities
for scrap, shrinkage, yield, etc. and (2) is charged/billed to
contracts or other cost objective in a manner consistent with there
need to fulfill the production plan.
(B) General
The Contractor agrees to maintain a material management and
accounting system (MMSA) that reasonably forecasts material
requirements, assures that cost of purchased and fabricated material
charged or allocated to a contract are based on valid time-phased
requirements, and maintains a consistent, equitable, and unbiased
logic for costing of materials transactions.
(c) Applicability.
The contractor will assess its MMAS and take reasonable actions to
comply with standards set forth in section 242.7206 of the DoD FAR
supplement. Paragraph (d) and (e) below are also applicable if the
contractor is a large business and, in its fiscal year preceding award
of this contract, received Department of Defense (DoD) prime contract
or subcontracts totaling fifty million dollars ($ 50 million) or more.
Paragraph (D) and (e)below are also applicable if the contractor is a
large business which, in its fiscal year preceding award of this
contract, received DoD prime contracts or subcontracts totaling ten
million dollars ($10 million) or more and, during performance of this
contract, the contracting Officer notifies the Contractor in writing
that paragraphs (d) and (e) of this clause apply.
(d) System Disclosure, Demonstration and Maintenance
Requirements
(1) The Contractor shall disclose its MMAS to the cognizant ACO
and shall, upon request of the ACO, demonstrate the degree to which
its MMAS conforms to the standards set forth in section 242.7206 of
the DoD
FAR Supplement. If the contractor desires the Government to protect
such information as privileged or confidential, the Contractor shall
notify the Government representative to whom the information is
submitted, i.e., the ACO, or the auditor, and the Contractor shall
ensure an appropriate legend is on the face of the document(s) at the
time of submission.
(i) A MMAS disclosure is adequate when the Contractor has
provided the cognizant ACO documentation which accurately describes
those policies, procedures, and practices that the Contractor
currently uses in its MMAS in sufficient detail for the Government to
reasonably make an informed judgement regarding the adequacy of the
Contractors MMAS.
(ii) A MMAS demonstration is adequate when the Contractor has
provided the cognizant ACO sufficient evidence to demonstrate the
degree of compliance of its MMAS with the standards at 242.7206 of the
DoD FAR Supplement, including an estimate of the cost impact to the
Government of any significant deficiencies.
(2) Significant changes to the MMAS must be disclosed to the
ACO within 30 days of their implementation.
(e) MMAS Deficiencies
(1) If during the period of performance of this contract, the
Contractor receives a report of the evaluation of its MMAS, the
Contractor agrees to respond as follows:
(i) If the Contractor agrees with the report findings and
recommendations, the Contractor shall, within thirty(30) days of
receipt of such report, indicate its agreement in writing and shall
proceed to execute the corrective action plan, if any, agreed-to by
the ACO.
(ii) If the Contractor disagrees with the report findings and
recommendations, the Contractor shall respond in writing within thirty
(30) days of receipt of the report, indicating its rationale for each
area of disagreement.
(2) The ACO shall evaluate the Contractors response to the
report and notify the Contractor of his/her determination concerning
any remaining deficiencies and/or adequacy of any proposed or
completed corrective action(s).
(End of Clause)
I-2-49 PROTECTING THE GOVERNMENTS INTEREST WHEN SUBCONTRACTING WITH
CONTRACTORS DEBARRED, SUSPENDED, OR PROPOSED FOR DEBARMENT.
(FAR 52.209.6) (MAY 1989)
(a) the Government suspends or debars contractor to protect the
Governments interest. Contractors shall not enter into any
subcontract equal to or in excess of $25,000 with a Contractor that
has been debarred, suspended, or proposed for debarment unless there
is a compelling reason to do so. If a contractor intends to
subcontract with a party that is debarred suspended, or proposed for
desbarment (see FAR9. 404 for information on the list of parties
Excluded from Procurement Program), a cooperate officer or designee of
the contractor shall notify the contracting officer, in writing,
before entering into such subcontract. the notice must include the
following
(1) The Name of the subcontractor;
(2) The contractors knowledge of the reason for the
subcontractor being on the list of Parties Excluded from Procurement
Program;
(3) The compelling reason (s) for doing business with the
subcontractor notwithstanding its inclusion on the list of Parties
Excluded from Procurement Program; and
(4) The system and procedures the contractor has
established to ensure that it is fully protecting the Governments
interest when dealing with such subcontractor in view of the specific
basis for the partys debarment, suspension, or proposed debarment.
(b) The contractors compliance with the requirements of
52.209-6 will be reviewed during contractor Purchasing system review
(see FAR subpart 44.3).
(End of Clause)
I-2-50 New Restrictions on Lobbying (DEC 1989)
(a) Definitions. As used in this clause,
Agency, as defined in 5 U.S.C.552(f), includes Federal executive
departments and agencies as well as independent regulatory commissions
and Government corporations, as defined in 31 U.S.C. 9101(1)
Covered Federal actions means any of the following Federal actions:
(1) the awarding of any federal contract;
(2) The making of any Federal grant;
(3) The making of any federal loan;
(4) The entering into of any cooperative agreement; and,
(5) The extension, continuation, renewal, amendment, or
modification of any Federal contract, grant, loan, or cooperative
agreement.
Covered Federal actions dose not include receiving from an agency a
commitment providing for United states to insure or guarantee a loan.
Indian tribe and tribal organization have the meaning provided
in section 4 of the Indian Self-determination and Education Assistance
Act (25 U.S.C. 450B). Alaskan Natives are included under the
definition of Indian tribes in that Act.
Influencing or attempting to influence means making, with the
intent to influence, any communications to or appearance before an
office or employee of any agency, a member of congress, an officer or
employee of Congress, or an employee of an member of congress in
connection with any covered federal action.
Local government means a unit of government in a state and, if
chartered, established, or otherwise recognized by a State for the
performance of a governmental duty, including a local public
authority, a special district, an intrastate district, a council of
government, a sponsor group representative organization, and any other
instrumentality of local government.
Officer or employee of an agency includes the following
individuals who are employed by an agency:
(1) an individual who is appointed to a position in the
Government under title 5, U.S. code, including a position under a
temporary appointment;
(2) A member of the uninformed services as defined in section
101(3), title 37, U.S. code;
(3) A special Government employee as defined in section 202,
title 18, U.S. code; and
(4) an individual who is a member of a Federal Advisory
committee, as defined by the Federal Advisory committee Act, title 5,
U.S. Code appendix 2
Person means an individual, cooperation, company, association,
authority, firm, Partnership, Society, State, and Local government,
regardless of whether such entity is operated for profit or not for
profit. this term excludes and Indian tribe, tribal organization, or
any other Indian organization with respect to expenditures
specifically permitted by other Federal law.
Responsible compensation means, with respect to a regularly
employed officer or employee of any person, compensation that is
consistent with the normal compensation for such officers or employee
for work that is not furnished to, not funded by, or not furnished in
cooperation with the federal Government
Reasonable Payment means, with respect to professional and other
technical services, a payment in an amount that is consistent with the
amount normally paid for such services in the private sector.
Recipient includes all contractors and subcontractors at any
tier in connection with Federal contract. the term excludes an Indian
Tribes, tribal organization, or any other Indian organization with
respect to expenditures specifically permitted by other Federal law.
Regularly employed means, with respect to an officer or
employee of a person requesting or receiving a Federal contract, an
officer or employee who is employed by such person for at least 130
working days within one year immediately preceding the date of the
submission that initiates agency consideration of such person for
receipt of such contract. an officer or employee who is employed by
such person shall for less then 130 working days within one year
immediately preceding the date of the submission that initiates agency
consideration of such person shall be considered to be regularly
employed as soon as he or she is employed by such person for 130
working days.
State means a state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, a territory or possession
of the United states, and agency or instrumentality of a state, and a
multi-state, regional, or interstate entity having governmental duties
and powers.
(b) Prohibition.
(1) Section 1352 of title 31, U.S. code provides in part
that no appropriate funds may be expanded by the recipient of a
Federal contract, grant, loan, or cooperative agreement to pay any
person for influencing or attempting to influence an officer or
employee of any agency, a member, a member of congress , an officer or
employee of congress, or an employee of a member of Congress in
connection with any of the following covered Federal actions; The
awarding of any federal contract, the making of any Federal grant, the
making of any Federal loan, the entering into of any cooperative
agreement, and the extension, continuation, renewal, amendment, or
modifications of any Federal contract, grant, loan, or cooperative
agreement.
(2) The prohibition does not apply as follows:
(I) Agency and Legislative liaison by own Employees.
(a) The prohibition on the use of appropriated funds, in
paragraph (1) of this section, dose not apply in the cases of a
payment of reasonable compensation made to an officer or employee of a
person requesting or receiving a federal Contract if the payment is
for agency and legislative liaison activities not directly related to
a covered Federal action.
(b) for Purpose of paragraph (a) of this section, providing
any information specifically requested by an agency or congress is
allowable at any time
(c) for Purpose of paragraph (a) of this section, the
following agency and legislative liaison activities are allowable at
any time only where they are not related to a specific solicitation
for any covered Federal action/
(i) Discussing with an agency (including individual
demonstrations) the qualities and characteristics of the persons
products or services, conditions or terms of sale, and services
capabilities; and,
(ii) Technical discussions and other activities regarding
the application or adaptation of the persons products or services for
an
agencys use.
(D) For purposes of paragraph (a) of this section, the
following agency and legislative liaison activities are allowable only
where they are prior to formal solicitation of any covered Federal
action:
(i) Providing any information not specifically requested
but necessary for an agency to make an informed decision about
initiation of a covered Federal action;
(ii) Technical discussions regarding the preparation of
an unsolicited proposal prior to its official submission; and,
(iii) Capability presentations by persons seeking awards
from an agency pursuant to the provisions of the Small Business Act,
as amended by Public Law 95-507 and other subsequent amendments.
(E) Only those activities expressly authorized by paragraph
(1)
of this section are allowable under paragraph (I).
(ii) Professional and technical services by Own
Employees.
(a) The prohibition on the use of appropriated funds, in
paragraph (1) of this section, does not apply in the case of a payment
of reasonable compensation made to an officer or employee of a person
requesting or receiving a Federal Contract or an extension,
continuation, renewal, amendment, or modification of a Federal
contract if payment is for professional or technical services rendered
directly in the preparation, submission, or negotiation of any bid,
proposal, or application for that Federal contract or meeting
requirements imposed by or pursuant to law as a condition for
receiving that Federal contract.
(b) For purposes of paragraph (a) of this section, professional and
technical services shall be limited to advise and analysis directly
applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a
lawyer is allowable. Similarly, technical advice provided by an
engineer on the performance or operational capability of a piece of
equipment rendered directly in the negotiation of a contract is
allowable. However, communications with the intent to influence made
by a professional (such as a licensed lawyer) or a technical person
(such as a licensed accountant) are not allowable under this section
unless they provide advice and analysis directly applying their
professional or technical expertise and unless the advice or analysis
is rendered directly and solely in the preparation, submission or
negotiation of a covered Federal action. Thus, for example,
communications with the intent to influence made by a lawyer that do
no provide legal advice or analysis directly and solely related to the
legal aspects of his or her clients proposal, but generally advocate
one proposal over another are not allowable under this section because
the lawyer is not providing professional legal services. Similarly,
communications with the intent to influence made by an engineer
providing an engineering analysis prior to the preparation or
submission of a bid or proposal are not allowable under this section
since the engineer is providing technical services but not directly in
the preparation, submission or negotiation of a covered Federal
action.
(c) Requirements imposed by or pursuant to law as a condition
for receiving a covered Federal award include those required by law of
regulation, or reasonably expected to be required by law or
regulation, and any other requirements in the actual award documents.
(d) Only those services expressly authorized by paragraph
(ii)
of this section are allowable under paragraph (ii).
(iii) Reporting for Own Employees.
No reporting is required with respect to payments of reasonable
compensation made to regularly employed officers of employees of a
person.
(iv) Professional and technical services by Other than
Own
Employees.
(a) The prohibition on the use of appropriated funds, in
paragraph (1) of this section, does not apply in the case of any
reasonable payment to a person, other than an officer or employee of a
person requesting or receiving a covered Federal action, if the
payment is for professional or technical services rendered directly in
the preparation, submission, or negotiation of any bid proposal, or
application for the Federal contract or for meeting requirements
imposed by or pursuant to law as a condition for receiving that
federal contract.
(b) For purposes of paragraph (a) of this section,
professional and technical services shall be limited to advise and
analysis directly applying any professional or technical discipline.
For example, drafting of a legal document accompanying a bid or
proposal by a lawyer is allowable. Similarly, technical advice
provided by an engineer on the performance or operational capability
of a piece of equipment rendered directly in the negotiation of a
contract is allowable. However, communications with the intent to
influence made by a professional (such as a licensed lawyer) or a
technical person (such as a licensed accountant) are not allowable
under this section unless they provide advice and analysis directly
applying their professional or technical expertise and unless the
advice or analysis is rendered directly and solely in the preparation,
submission or negotiation of a covered Federal action. Thus, for
example, communications with the intent to influence made by a lawyer
that do no provide legal advice or analysis directly and solely
related to the legal aspects of his or her clients proposal, but
generally advocate one proposal over another are not allowable under
this section because the lawyer is not providing professional legal
services. Similarly, communications with the intent to influence made
by an engineer providing an engineering analysis prior to the
preparation or submission of a bid or proposal are not allowable under
this section since the engineer is providing technical services but
not directly in the preparation, submission or negotiation of a
covered Federal action.
(c) Requirements imposed by or pursuant to law as a
condition for receiving a covered Federal regulation, or reasonably
expected to be required by law or regulation, and any other
requirements in the actual award documents.
(d) Persons other than officers or employees of a person requesting or
receiving a covered Federal action include consultants and trade
associations.
(e) Only those services expressly authorized by paragraph
(iv) of this section are allowable under paragraph(iv)
c) Disclosure
(1) Each person who request or receives from an agency a
federal contract shall file with that agency a certification, set
forth in________, that the person has not made, and will not make, any
payment prohibited by paragraph (b) of this clause.
(2) Each person who request or receives from an agency a
Federal contract shall file with that agency a disclosure form,
Standard Form-LLL, Disclosure of Lobbying Activities, if such person
has made or has agreed to make any payment using nonappropriated funds
(to include profits from any covered Federal action), which would be
prohibited under paragraph (b) of this clause if paid for with
appropriated funds.
(3) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraph (2) of this section. Any event that materially affects the
accuracy of the information reported includes:
(i) A cumulative increase of ?$25,000 or more in
the amount paid or expected to be paid for influencing or attempting
to influence a covered Federal action; or
(ii) A change in the person(s) or individual(s)
influencing or attempting to influence a covered Federal action; or,
(iii) A change in the officer(s), employee(s), or
Member(s) contacted to influence or attempt to influence a covered
Federal action.
(4) Any person who requests or receives from a person referred
to in paragraph (1) of this section a subcontract exceeding (100,000
at any tier under a Federal contract shall file a certification, and a
disclosure form, if required, to the next tier above.
(5) All disclosure forms, but not certifications, shall be
forwarded from tier to tier until received by the person referred to
in paragraph (1) of this section. That person shall forward all
disclosure forms to the agency.
(d) Agreement. In accepting any contract resulting from this
solicitation, the person submitting the offer agrees not to make any
payment prohibited by this clause.
(e) Penalties.
(1) Any person who makes an expenditure prohibited under
paragraph (b) of this clause shall be subject to a civil penalty of
not less than $10,000 and not more than $100,000 for each such
expenditure.
(2) Any person who fails to file or amend the disclosure form
to be filed or amended if required by this clause, shall be subject to
a civil penalty of not less than $10,000 and not more than $100,000
for such failure.
(3) Contractors may rely without liability on the
representations made by their subcontractors in the certification and
disclosure form.
(f) Cost Allowability. Nothing in this clause is to be interpreted to
make allowable or reasonable any cost which would be allowable or
unreasonable in accordance with part 31 of the Federal Acquisition
Regulation. Conversely, cost made specifically unallowable by the
requirements in this clause will not be made allowable under any of
the provisions of part 31 of the federal acquisition Regulation.
(End of Clauses)
<PAGE>
PART III
LIST OF DOCUMENTS, EXHIBITS, AND OTHER ATTACHMENTS
SECTION J
LIST OF ATTACHMENTS
(a) Any contract awarded as a result of this solicitation will
consist of the following sections of this solicitation, and the
documents, exhibits, and attachments described in paragraph B below:
I. Part I - The Schedule (Sections A through H)
II. Part II - Contract Clauses (Section I)
III. Part III - List of Documents, Exhibits, and Other
Attachments (Section J)
IV. Any other material and/or documents specifically
incorporated by reference into the Contract.
(b) Part IV of the solicitation shall not be incorporated
physically into the contract. However, Section K. Representations,
Certifications and Other Statements of Offerors or Quoters shall be
retained in the contract file, and acceptance of a proposal under this
contract shall incorporate Section K by reference in the resultant
contract. (FAR 15.406-1 (b)).
(c) Documents, exhibits, and other attachments that will form a
part of this contract are as follows:
* 1. Exhibit A - Contract Data Requirements List (DD Form
1423).
* 2. Exhibit B - Contract Data Requirements List (DD Form
1423).
* 3. Exhibit C - Contract Data Requirements List (DD Form
1423).
* 4. Attachment J-1 - Work Item Specification Index for AOE 1
Phased Maintenance Package.
* 5. Attachment J-2 - Provisioning Requirements Statement (DD
Form 1949-1/2).
6. Attachment J-3 - Contract Security Classification
Specification (DD Form 254).
7. Attachment J-4 - Accounting and Appropriation Data Sheet
* 8. Attachment J-5 - LSAR Data Selection Sheet.
* 9. Attachment J-6 - Technical Specification; Access to Naval
Supply System for Fasteners.
10. Attachment J-7 - Todd Pacific Shipyards Corporations
Subcontracting Plan is hereby incorporated.
* These documents were previously provided under solicitation N00024-
90-R-8503.
<PAGE>
CONTRACT SECURITY CLASSIFICATION SPECIFICATION
(DD Form 254)
Department of Defense 1. The Requirements of the DOD
Contract Security Classification Industrial Security Manual
Specification Apply to all Security Aspects
of this Effort the Facility
Clearance Required is
SECRET
Prime Contract Prime Contract Number N00024-91-C-8503 X 90-Nov.-15
2. This Specification 3. Contract Number or 4. Date To Be 5. This
is for other Identification Completed Specification
__________________________Number__________________________is__________
_
a. Prime Contract a. Prime Contract a. a. Original Date
_______________________Number_________________________________________
_
b. Subcontract b. First Tier Subcon- b. b. revised Revision Date
_____________________tract No.
_________No._________
c. Request for Bid c. Identification c. Due Date c. Final Date
________________________N00024-90-pr-31001
6. Is this a follow-on Yes No
Contract? If YES, complete the
following
a______________b.______________c. Accountability for classified
material
Preceding Date Completed on preceding contract
Contract No.
________Is______________Is not, transferred to this follow-on
contract___
7a. Name, Address & Zip b. Number c. Name, Address & Zip Code of
Code of Prime Cognizant Security Office
___Contractor_________________________________________________________
__
8a. Name, Address & Zip b. FSC Number c. Name, Address & Zip Code of
of First Tier Cognizant Security Officer
___Contractor_________________________________________________________
__
9a. Name, Address & Zip b. FSC Number c. Name, Address & Zip Code of
Code of Second Tier Cognizant Security Officer
Subcontractor, or
Facility associated with
______???????????____________________________________________________
* When actual performance is at a location other than that specified,
identify such other location in Item 15.
10a. General identification of the b. DoDAAD Number of Procuring
Procurement for which this Activity identified in Item
specification applies 16d.
FINANCIAL ACCOUNTING DATA SHEET PAGE 1 OF
2
CONTRACT NO. SUPPLEMENT DATE EFFECTIVE TYPE OF MODIFICATION
N0002491C8530 19-NOV-90 CPAF
ACT CODE DOCUMENT NUMBER PD NUMBER SERIAL TOTAL THIS
DOCUMENT
A N0002491PR93361 N0002491PD38 594 $ 5,478.00
CLIN 0001AD
FY 91 FMP MOD SUPPORT FUNDS TO ACCOMPLISH OPN S/AS
593K,614K548K,609K,ON AOE-1 91 DPMA.
APPROPN SYMBOL OBJ BUREAU TRANS
ABD SUBHEAD CLASS CNTL NO AAA TYPE PAA COST
CODE $
AB 1711810 81FP 000 SM934 0 068342 2D 000000
FPINS000BO31 547800
CONTRACT-NBR
NAVSEA-934 FINANCIAL POINT OF CONTACT FOR THIS ADMENDMENT IS:
JOYCE ABNEY
AUTOVON:332-9151/4/5 COMMERCIAL: (703)602-9151/4/5
======================================================================
==
PREPARED BY DATE:
- ----------------------------------------------------------------------
- --
OBLIGATION OF FUNDS IS AUTHORIZED IN AMOUNTS SHOWN AS TOTAL OF THIS
DOC.
SIGNATURE M.A. CALOGERO
BY DIRECTION OF
CAPT. DONALD f. BERKEBILE
DEPUTY COMMANDER/COMPTROLLER
DATE 11/20/90
FINANCIAL ACCOUNTING DATA SHEET PAGE 2 OF 3
CONTRACT NO. SUPPLEMENT DATE EFFECTIVE TYPE OF MODIFICATION
N0002491C8530 19-NOV-90 CPAF
ACT CODE DOCUMENT NUMBER PD NUMBER SERIAL TOTAL THIS
DOCUMENT
A N0002491PR93361 N0002491PD38 593 $ 5,056.00
CLIN 0001AC
FY 90 FMP INST OF PR YR EQUIP FUNDS TO ACCOMPLISH OPN S/AS 134K, AND
271K ON AOE-1 91 DPMA.
APPROPN SYMBOL OBJ BUREAU TRANS
ABD SUBHEAD CLASS CNTL NO AAA TYPE PAA COST
CODE $
AB 17O1810 81DW 000 SMS18 0 068342 2D 000000
DWINS000B031 505600
CONTRACT-NBR
NAVSEA-934 FINANCIAL POINT OF CONTACT FOR THIS ADMENDMENT IS:
JOYCE ABNEY
AUTOVON:332-9151/4/5 COMMERCIAL: (703)602-9151/4/5
======================================================================
==
PREPARED BY DATE:
- ----------------------------------------------------------------------
- --
OBLIGATION OF FUNDS IS AUTHORIZED IN AMOUNTS SHOWN AS TOTAL OF THIS
DOC.
SIGNATURE M.A. CALOGERO
BY DIRECTION OF
CAPT. DONALD f. BERKEBILE
DEPUTY COMMANDER/COMPTROLLER
<PAGE>
27 APRIL 1990
TODD PACIFIC SHIPYARDS CORPORATION
SEATTLE DIVISION
SUBCONTRACTING PLAN FOR SMALL BUSINESS
AND SMALL DISADVANTAGED BUSINESS CONCERNS
<PAGE>
SUBCONTRACTING PLAN FOR
PHASED MAINTENANCE PROGRAM FOR SEATTLE BASED
AOE-1 CLASS SHIPS, USS CAMDEN ( AOE-2) AND
USS SACRAMENTO (AOE-1): FIRST USS SACRAMENTO AVAILABILITY
<PAGE>
SUBCONTRACTING PLAN FOR SMALL BUSINESS AND
SMALL DISADVANTAGED BUSINESS CONCERNS
MASTER FORMAT REVISION A 11 JANUARY 1984
Solicitation Number
N0-00024-90-R-8503
27 APRIL 1990
I. Goals
1. the following percentage goals (expressed in terms of
percentage
of total subcontracting dollars) and dollar goals apply to
subcontracting opportunities anticipated under this contract:
Percent
I. Small Business Concerns 75%
ii. Small Disadvantaged Business Concerns 6.5%
2. Description of principal supply and service areas to be
subcontracted and planned use of Small and Small Disadvantaged
Business Concerns:
a. Principal subcontracted Supply and service areas -
1) Services - Engine Overhaul, Hydraulic Pump Repair, Deck
Covering, Diver, Duct Cleaning, Gas Turbine Repair,
Electric Motor Repair, Gyro Compass Repair, Factory
Service Rep., HP/LP Air Systems, Engineering,
Machining,
Microfiche & Software, Meter & Gauge Repair, Propulsion
System Repairs, Painting, Pilot Service, Refrigeration
Repair, Tank Cleaning, Tug Service, Valve Overhaul.
2) Material - Antenna Systems, Wire Rope, Batteries, DP
Equipment, Indicating Devices, Consoles, Power Supplies,
Steel Tubing, Staging, Exhaust Systems, Strainers,
Flanges,
Hose Assemblies, Hydraulic Fluid, Propeller Parts, Servo
Parts, Seals, Aluminum Tubing and Plate, Gages and
Meters,
Fan Coil Units, Copper Pipe, Gas Cylinders, Fire
Extinguishers, Halon Systems, Plumbing Fixtures, Steel
Grating, Electric Heaters, Bearings, Diesel Fuel, Deck
Box
Hardware, Expansion Joints, Electrical Cable, Electronic
Cable, Electrical Fixtures, Electrical Hardware,
Electrical
Heaters, Electric Motors, Filters, Gaskets, Hoses &
Fittings, Hydraulic Motors, Hydraulic Propeller Parts,
Labels, Life Nets, Life Rails, Doors, Lubricating Oils,
Misc. Small Hardware, Paint, Pipe, Pipe Fittings and
Couplings, Pumps, Plywood, Rigging Hardware, Sandblast
Grit, Staging, Steel Plate, Steel Rod & Bar, Safety
Equipment, Tubing Transformers, Valves, Weld Rod and
Supplies, Zinc Anodes, Dehumidifiers.
b. Planned use of Small Business concerns:
1) Services - Deck Covering, Diver, Duct Cleaning Engineering,
Electric Motor Repairs, Machining, Meter & Gauge Repair,
Painting, Pilot Service, Refrigeration Repair, Tank
Cleaning,
. Office Spaces, Tug Service.
2) Material - Steel Grating, Plumbing Fixtures, Gas Cylinders,
Copper Pipe, Fan Coil Units, Electric Heaters, Gages and
Meters, Seals, Servo Parts, Propellers/Parts, Hydraulic
Fluid, Hose Assemblies, Flanges, Strainers, Exhaust
Systems,
Staging Power Supplies, Consoles, Indicating Devices,
Batteries, Wire Rope, Bearings, Diesel Fuel, Deck Box
Hardware, Electrical Cable, Electronic Cable, Electrical
Fixtures, Electrical Hardware, Filters, Gaskets, Hoses &
Fittings, Hydraulic Motors, Life Nets, Life Rails,
Lubricating Oils, Misc. Small Hardware, Paint, Pipe, Pipe
Fittings & Couplings, Plywood, Rigging Hardware, Sandblast
Grit, Scuttles, Hatches & Doors, Staging, Safety Equipment,
Tubing, Temporary Enclosures, Transformers, Weld Rod &
Supplies, Zinc Anodes.
c. Planned Use of Small Disadvantaged Business Concerns:
1) Services - Machining, Tank Cleaning, Fire Extinguisher
Repairs.
2) Material - Electrical Cable, Electronic Cable, Filters,
Labels, Staging, Misc., Hardware, Lubricating Oil, Safety
Equipment, Fire Fighting Equipment, Canvas Products,
Valves,
Pipe, Pipe Fittings, Electronic Components.
3. Method used in developing proposed subcontracting goals for
small Business and mall Disadvantaged Business concerns: Goals
indicated above were developed through a detailed analysis of the
material and service price estimate prepared in support of our Price
Proposal. This price estimate was examined to Identify those material
items and services which may be candidates for Sand/or Small
Disadvantaged Business solicitation and possible purchase order
placement. Vendor source files were also checked to cross reference
material and services to the respective potential venders. Estimated
dollar value of material and services identified as being potential
Small and/or Small Disadvantaged Business candidates were then totaled
and computed as a percentage of the aggregate material and service
price estimate.
4. Method used for solicitation purpose: Todd utilized company source
lists and other areas such as the Small Business Administration
Procurement Automated Source Systems, the National Minority purchasing
Council Vendors Information Service, Minority Carriers of America,
Try US Minority Vendor directory, to identify companies to solicit.
II Name and duties of Purchasing Individual Who Will Administer This
Plane
The Plan will be Administered by Mr. Dennis L. Morgan who is the Small
Business Representative in the Purchasing Department. He:
1. Oversees compliance with the contents of this plan.
2. insures that all applicable contract placed contain the latest
provisions regarding Small and Small Disadvantaged business
Subcontracting
3. perform periodic audits of subcontracts to measure progress against
the plan.
4. Participates in procurement planning an selections of potential
sources to provide, within contract restraints, that Small Business
and Small Disadvantaged Business concerns are offered equal
opportunities to participate in the program.
5. prepare and submit standard form 294 and 295 in accordance with FAR
19-704 (A) (5).
6. provides records and reports and fully cooperates in all studies
and surveys as may be required by the ACO, and the Small
Business Administration Representative.
7. within contract constraints and participates with the Small
Business Administration and the 13th Coast Guard District Small
and Disadvantaged concerns have an equitable opportunity to
compete for subcontracts.
III. Efforts - Todd Shipyards Corporation - Seattle Division
Todd will make every effort to assure Small Business and Small
Disadvantaged concerns have an equitable opportunity to compete
for
subcontracts.
This effort will include but not be limited to:
1. Issuance and promulgation of company policies and procedures
which implement the requirements of FAR Part 19.
2. Assignment, by name, of specific individuals to carry out the
requirements of the policies and procedures.
3. Periodic review by management of progress made against the
goals
established by the plan.
4. Training and motivation of personnel to insure their complete
support of the plan.
5. Within contract constraints provide technical and management
assistance to Small and Small disadvantaged concerns to assure
complete understanding of requirements.
6. Within contract constraints, provide clear-cut and realistic
technical specifications and delivery schedules.
7. within contract constraints, consider items of all available
Small
Business and Small Disadvantaged Business concerns during the
Make or Buy process.
8. We will assist Small Business and Small Disadvantaged Business
concerns by arranging solicitation, time for preparation of
bids, quantities, specifications and delivery schedules so as
to
facilitate the participation by such concerns, within the
limits
of the prime contract schedule.
IV. Todd Shipyards Corporation - Seattle Division will include the
clause entitled Utilization of Small Business and Small
Disadvantaged Business Concerns in all subcontracts which offer
further subcontracting opportunities and require all
subcontractors
(except Small Business concerns) who receive subcontracts in
excess
of $500,000 to adopt a plan in consonance with this clause.
V. Todd Shipyards Corporation - Seattle Division will submit such
periodic reports and cooperate in any studies or surveys as may be
required by the U.S. Navy and the Small Business Administration in
order to determine the extent of compliance by Todd with this
Subcontracting Plan.
VI. Todd Shipyards Corporation - Seattle Division will maintain the
following types of records which demonstrate procedures that have
been adopted to comply with requirements and goals set forth in
this
plan.
1. Copies of all purchase orders issued against this contract.
2. List of all purchase orders to include (I) purchase order
number
(ii) Purchase order date (iii) Vendor name and address (iv)
vendor classification - Large, Small, Small Disadvantaged (v)
dollar value of purchase order.
3. Small and Small Disadvantaged Business source lists, guides and
other data identifying Small and Small Disadvantaged Business
vendors.
4. Organizations contacted for Small and Small Disadvantaged
Business sources.
5. On a contract-by-contract basis, records on all subcontract
solicitations over $10,000, indicating on each solicitation
(i) whether Small Business was solicited and if not, why not;
(ii) whether Small Disadvantaged Business was solicited and if
not, why not; and (iii) reasons for the failure of responding
Small Business to receive the subcontract award.
6. Records to support such efforts as: (I) contacts with
Disadvantaged Small Business trade associations; (ii) contacts
with business development organizations; and (iii) attendance
at
Small and Disadvantaged business procurement conferences and
trade fairs.
7. Record to support internal activities to guide and encourage
buyers such as:(i) workshops, seminars, training programs,
etc.;
and(ii) monitoring activities to evaluate compliance.
8. On a contract-by-contract basis, records to support award data
submitted to the Government to include name, address, and size status
of subcontractors.
RELIANCE INSURANCE COMPANIES
UNDERWRITING AND CONTINUING
INDEMNITY AGREEMENT
THIS AGREEMENT, made and entered into this 22nd day of December,
1994, is among Todd Shipyards Corporation, a Delaware
corporation, Todd Pacific Shipyards Corporation, a Delaware
corporation, TSI Management, Inc., a Nevada corporation, and
Reliance Surety Company, a Delaware corporation, Reliance
Insurance Company, a Pennsylvania corporation, United Pacific
Insurance Company, a Pennsylvania corporation, and Reliance
National Indemnity Company, a Wisconsin corporation.
R E C I T A L S
WHEREAS, PRINCIPAL is engaged in the business, among other
things, of Ship Building in the United States, and PRINCIPAL,
individually, jointly with others or on behalf of any of its
subsidiaries, affiliates, or divisions or their subsidiaries,
affiliates or divisions now in existence or hereafter formed or
acquired, or on behalf of third-party individuals, partnerships,
or corporations, may desire or be required from time to time in
connection with this business to deliver certain BOND(s) to
OBLIGEES; and
WHEREAS, upon the express condition that this Agreement and the
other UNDERWRITING DOCUMENTS be executed, RELIANCE has executed
or procured or will execute or procure the execution of such
BOND(s), and RELIANCE may continue previously executed BOND(s)
and may forbear cancellation of such BOND(s); and
WHEREAS, each of the INDEMNITORS recognizes that BONDS are a
necessary and desirable adjunct to the business done and to be
done by the PRINCIPAL and desires to accommodate the financial,
security, indemnity, exoneration and other requirements of
RELIANCE as an inducement to RELIANCE to become surety upon
obligations of the PRINCIPAL and has therefore agreed to be bound
by this Agreement and the other UNDERWRITING DOCUMENTS to which
it is a party and has agreed to exercise its best efforts to
permit and require the PRINCIPAL to honor and perform all of the
terms of this Agreement; and
WHEREAS, subject to the terms and conditions of this Agreement,
RELIANCE has agreed to act as surety or procure surety BONDS for
the PRINCIPAL in connection with the PRINCIPALS CONTRACTS with
the State of Washington for construction of the Jumbo class
ferries, provided, however, that RELIANCE is under no obligation
to act as surety for any other bond requested by the PRINCIPAL.
RELIANCE shall have the right to refuse to execute BONDS upon
CONTRACTS which in its reasonable judgment present risks not
contemplated by this Agreement and that the PRINCIPAL is under no
obligation to obtain BONDS from RELIANCE.
NOW, THEREFORE, in consideration of the mutual agreements set
forth herein, the execution or procurement of the BOND(s) by
RELIANCE, we, the undersigned PRINCIPAL and INDEMNITORS, agree
and bind ourselves, our successors and assigns, jointly and
severally, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS. For the purposes of this Agreement,
the following terms shall have the meanings listed below:
AFFILIATE means, with respect to any PERSON, any other PERSON or
group acting in concert with such PERSON that, directly or
indirectly, through one or more intermediaries, controls, or is
controlled by, or is under the common control with such PERSON.
For purposes of this definition, control (including, with
correlative meanings, the terms controlled by and under common
control with), as used with respect to any PERSON or group of
PERSONS, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of management and
policies of such PERSON, whether through the ownership of voting
securities or by contract or otherwise.
BOND(s) means any surety agreements, undertakings, or instruments
of guarantee signed by RELIANCE on behalf of PRINCIPAL, whether
executed before or after the execution of this Agreement.
CONTRACT(s) means any contract referred to or described in any
BOND(s) issued on behalf of PRINCIPAL.
DEBT means, as of any applicable date of determination and as to
any PERSON, all items of indebtedness, obligation or liability of
such PERSON whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, joint
or several, that should be classified on such Persons balance
sheet as a liability in accordance with GAAP.
ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and published
interpretations thereof.
EVENT OF DEFAULT means any one or more of the following:
(a) INDEMNITORS, or any of them, within ten (10) days after
receipt of written notice by RELIANCE to INDEMNITORS have failed
or refused to perform any material obligation under this
Agreement or any other UNDERWRITING DOCUMENT, as determined by
RELIANCE; or
(b) Any representation or warranty made by any INDEMNITOR in
this Agreement, any other UNDERWRITING DOCUMENT to which
INDEMNITOR is a party shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) an OBLIGEE has declared PRINCIPAL to be in default under the
respective CONTRACT(s) between PRINCIPAL and such OBLIGEE and
PRINCIPAL has failed to cure such default within that period of
time provided to cure said default within such CONTRACT(s) in
which PRINCIPAL is alleged to be in default; provided, however,
that Reliance shall, upon investigation, reasonably determine
that PRINCIPAL is in default under the CONTRACT(s) (which
determination by RELIANCE shall not be binding upon such
PRINCIPAL in any dispute PRINCIPAL may have with such OBLIGEE or
a claimant under the related BOND(s)) or PRINCIPAL shall have
acknowledged to RELIANCE in writing its default under the
CONTRACT(s) irrespective of whether or not PRINCIPAL is actually
in default of the CONTRACT(s); or
(d) RELIANCE has received notice or knowledge of facts giving
rise to a reasonable belief that it has incurred or is about to
incur a LOSS and PRINCIPAL and the INDEMNITORS have failed to
cure such LOSS or to take reasonable steps to avoid the incidence
by RELIANCE of such LOSS within ten (10) days after receipt of
written notice sent by RELIANCE to PRINCIPAL and the INDEMNITORS;
or
(e) PRINCIPAL, within ten (10) days after receipt of notice
sent by RELIANCE to PRINCIPAL has failed, refused or delayed to
pay or is unable to pay any claims, bills or other indebtedness
incurred in, or in connection with, the performance of the
CONTRACT(s) which claims, bills or other indebtedness RELIANCE,
upon investigation, shall have reasonably determined to be valid;
or
(f) Any INDEMNITOR becomes insolvent or generally fails to
pay, or admits in writing its inability to pay debts as they
become due; or any INDEMNITOR applies for, consents to, or
acquiesces in the appointment of, a trustee, receiver or other
custodian for such INDEMNITOR or any property thereof, or makes a
general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee,
receiver or other custodian is appointed for any INDEMNITOR or
for a substantial part of the property of any thereof and is not
discharged within 30 days; or any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation
proceeding, is commenced in respect of any INDEMNITOR and if such
case or proceeding is not commenced by such INDEMNITOR, it is
consented to or acquiesced in by such INDEMNITOR or remains for
30 days undismissed; or any INDEMNITOR takes any corporate action
to authorize, or in furtherance of, any of the foregoing.
FACILITIES AND EQUIPMENT UTILIZATION AGREEMENT means the
Agreement between RELIANCE and PRINCIPAL attached as Exhibit II,
the purpose of which is to authorize RELIANCE to use PRINCIPALS
fixed assets to complete the CONTRACT(S) in the event of an EVENT
OF DEFAULT.
FINANCIAL STATEMENTS means the balance sheet, income statement
and other financial data which is furnished to RELIANCE for the
purpose of or in connection with this Agreement and the
transactions contemplated hereby.
GAAP is defined as those generally accepted accounting principles
which are consistently applied and followed in the PRINCIPALS
industry and which are set forth in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board.
INDEMNITOR means the PRINCIPAL or Todd Shipyards Corporation or
TSI Management, Inc.; and INDEMNITORS means collectively the
PRINCIPAL and Todd Shipyards Corporation and TSI Management, Inc.
LEASE DEBT means, as of the applicable date of determination and
as to PRINCIPAL, an amount equal to the net present value (as
determined by the PRINCIPALS independent certified public
accountants utilizing an assumed interest rate of eleven percent
(11%) per annum) of all lease, rent and other payments or
indebtedness of any character whatsoever required to be paid
under all leases or other contracts or arrangements, whether or
not in writing, relating to the use of personal property in
respect of which PRINCIPAL is a lessee, sublessee, user or
obligor and which should not be capitalized in accordance with
GAAP.
LIEN means any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment, deposit arrangement to
assure payment of a Debt, encumbrance, lien (statutory or other),
or preference, priority, or other security agreement, or
preferential arrangement to assure payment of Debt, charge, or
encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any
financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction to evidence any of the
foregoing).
LOSS means:
(a) All damages, reasonable costs, reasonable attorney fees
and liabilities (including all reasonable expenses accrued in
connection therewith) which RELIANCE may reasonably sustain or
incur by reason of executing or procuring the execution of the
BOND(s), or any other BOND(s) which may be already or hereafter
executed by RELIANCE on behalf of PRINCIPAL, or any renewal or
continuation thereof; or which may be reasonably sustained or
incurred by reason of making any investigation on account
thereof, prosecuting or defending any action in connection
therewith, obtaining a release, recovering or attempting to
recover any salvage in connection therewith or enforcing by
litigation or otherwise any of the provisions of this Agreement,
including, but not limited to:
(1)money judgments, amounts paid in settlement or compromise,
the full amount of reasonable attorney and other professional
fees incurred or paid by RELIANCE, court costs and fees, and
interest at the lesser of 12% per annum or the maximum legal rate
allowable on all sums due it from the date of RELIANCES demand
for said sums, whether or not interest has been awarded by a
court; and
(2) any LOSS which RELIANCE may reasonably sustain or incur in
connection with the CONTRACT(s) or BOND(s), whether that LOSS
results from the activity of any PRINCIPAL individually or as
part of a joint venture, partnership or other entity which has
been or may be formed; and
(3) any LOSS which RELIANCE may reasonably sustain or incur
as a result of any reasonable actions taken by RELIANCE upon
information provided by any INDEMNITOR.
(b) After having obtained PRINCIPALS consent, all reasonable
legal and consulting fees and related expenses incurred in
connection with any application or submission by PRINCIPAL for a
proposal, bid or other BOND, whether or not RELIANCE decides to
issue said BOND; and
(c) All premiums, fees, interest and other charges due
RELIANCE in connection with this Agreement or the BOND(S).
MATERIAL ADVERSE CHANGE means with respect to any PERSON a
material adverse change in the condition (financial or
otherwise), business, operations or prospects of such PERSON and
its subsidiaries, taken as a whole; provided that such adverse
change materially harms or prejudices RELIANCE with respect to
the BOND(S).
NET CURRENT ASSETS means, as of any applicable date of
determination and as to the PRINCIPAL, the aggregate current
portion of assets (excluding indebtedness, obligations and
liabilities due from Affiliates) of the PRINCIPAL less the
aggregate current portion of DEBT as determined in accordance
with GAAP.
OBLIGEE means any named party or parties appearing on the
BOND(s) in whose favor the BOND(s) are issued.
PERMITTED LIENS means:
(a) LIENS for taxes, assessments, or governmental charges of a
PRINCIPAL that are either not yet past due or that are being
contested in good faith by appropriate proceedings and for which
adequate reserves have been established;
(b) maritime, mechanics, workmens and repairmens LIENS or
other like LIENS arising by operation of law in the ordinary
course of business and securing sums which are not past due, or
that are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established
(c) any LIEN described on Schedule 1.1 P(c) to this Agreement;
(d) any LIEN on assets existing on the effective date of this
Agreement and listed on Schedule 1.1 P(d) to this Agreement
(provided that the property subject to that LIEN is limited to
the property to which that LIEN is attached prior to the
effective date of this Agreement) and the continuation of any
such LIEN upon a refinancing, renewal or extension of the DEBT
secured by such existing LIEN (provided that the principal amount
of the debt as of the effective date of this Agreement is not
increased);
(e) any LIEN on assets granted to secure the purchase price
thereof;
(f) any LIEN on assets granted in connection with third party
(including capitalized leases) leases or sales in the ordinary
course of business;
(g) any LIEN granted on its assets by PRINCIPAL to RELIANCE to
secure a LOSS;
(h) LIENS on PRINCIPALS insurance policies in connection with
the deferred payment or financing thereof in the ordinary course
of business;
(I) LIENS consisting of cash collateral deposits made by
PRINCIPAL in the ordinary course of business in connection with
insurance program consistent with past practice;
(j) pledges or deposits by PRINCIPAL under workmens
compensation laws, unemployment insurance laws, or similar
legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for borrowed money) or leases to
which PRINCIPAL is a party or deposits to secure public or
statutory obligations of PRINCIPAL or deposits of cash or United
States Government bonds to secure surety or appeal bonds to which
PRINCIPAL is a party, or deposits as security for contested taxes
or for the payment of rent;
(k) survey exceptions, encumbrances, easements or reservations
of, or rights of others for, rights-of-way, sewers, electric
lines, telegraph or telephone lines and other similar purposes,
or zoning or other restrictions as to the use of real property
or liens incidental to the conduct of such PRINCIPAL or to the
ownership its properties;
(l) LIENS consisting of restrictions regarding the
disbursement or withdrawal of funds deposited by PRINCIPAL in
its bank accounts in the ordinary course of business consistent
with past practice which accounts are (A) maintained in
connection with specific construction projects or contracts from
which payment and disbursements with respect to such projects or
contracts are to be made or (B) required by customers of such
PRINCIPAL to be excluded from PRINCIPALS cash management system.
PERSON means any entity, whether an individual, trustee,
corporation, partner, joint stock company, unincorporated
organization, business association or firm, joint venture, a
government or any agent or instrumentality or political
subdivision thereof.
PLAN means any plan established, maintained or to which
contributions have been made by any PRINCIPAL.
PLEDGE means a Pledge Agreement in substantially the form of
Exhibit IV executed by PRINCIPAL in favor of RELIANCE with regard
to the Galveston Bonds.
PREFERRED SHIP MORTGAGE means a Ship Mortgage in substantially
the form of Exhibit III executed by PRINCIPAL in favor of
RELIANCE.
PRINCIPAL means Todd Pacific Shipyards Corporation.
RELIANCE means: Reliance Surety Company, Reliance Insurance
Company, United Pacific Insurance Company, and Reliance National
Indemnity Company; or their AFFILIATES, subsidiaries, or
divisions or any co-sureties, reinsurers or other companies
directly or indirectly writing bonds for which this Agreement is
consideration.
SECURITY AGREEMENT means a Security Agreement in substantially
the form of Exhibit I executed by PRINCIPAL in favor of RELIANCE.
TANGIBLE NET WORTH means, as of any applicable date of
determination and as to the PRINCIPAL, the excess of (i) the net
book value of all assets (other than all items of indebtedness,
obligation or liability due from AFFILIATES and intangible
assets) of the PRINCIPAL after all appropriate deductions
(including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation, amortization), all as
determined in accordance with GAAP, over (ii) DEBT of the
PRINCIPAL.
UNDERWRITING DOCUMENT means this Agreement, the SECURITY
AGREEMENT, PREFERRED SHIP MORTGAGE, PLEDGE AGREEMENT, the
FACILITIES AND EQUIPMENT UTILIZATION AGREEMENT, each BOND and any
other instrument, document or agreement delivered by any
INDEMNITOR in connection herewith.
WORKING CAPITAL FACILITY means a revolving credit facility in a
form acceptable to RELIANCE entered into between the PRINCIPAL
and a lender(s) satisfactory to RELIANCE.
SECTION 1.2 USE OF DEFINED TERMS. Any collective defined term
and any defined term used in the plural shall be taken to
encompass all members of the relevant class. Any defined term
used in the singular preceded by any shall be taken to indicate
any number of the members of the relevant class. Any defined
term used in the singular and preceded by the word each shall
indicate all members of the relevant class, individually.
ARTICLE II
BOND FACILITY
SECTION 2.1 BONDS. Subject to the terms of this Agreement,
RELIANCE agrees to provide or procure for the PRINCIPAL the Jumbo
Mark II Ferry surety bonds more particularly identified on
Schedule 2.1 to this Agreement. RELIANCE has represented to
PRINCIPAL that RELIANCE is willing and able to provide or procure
for PRINCIPAL such additional Bonds as PRINCIPAL shall require
for other projects, but RELIANCE reserves the right to decline to
provide or procure such other BOND(S). Except for the Jumbo Mark
II Ferry, if RELIANCE executes any proposal or bid bond and if
the PRINCIPAL is awarded the CONTRACT(s), RELIANCE shall not be
obligated to execute any BOND(s) required to perform the awarded
contract. No claim shall be made, nor any cause of action
asserted against RELIANCE as a consequence of its failure to
execute any BOND(s) other than as provided above.
SECTION 2.2 PREMIUM PAYMENT. PRINCIPAL agrees to pay all
premiums on the Jumbo Mark II Ferry BOND(s) in accordance with
the rate structure set forth in Schedule 2.2 below, and as to all
other BOND(S), at rates computed in accordance with the regular
manual of rates in effect on the date such BOND(s) are executed.
The failure of the PRINCIPAL to pay the bond premiums or the
failure of RELIANCE to receive premiums shall not provide
INDEMNITORS with any defense to an action under this Agreement.
PRINCIPAL also agrees to pay all premiums due RELIANCE on any
insurance policy(ies) issued at the request of PRINCIPAL, an
INDEMNITOR or any authorized agent thereof by RELIANCE for the
benefit of the PRINCIPAL or INDEMNITORS.
ARTICLE III
INDEMNIFICATION
SECTION 3.1 INDEMNITY. INDEMNITORS agree to indemnify, and keep
indemnified, and hold and save harmless RELIANCE against all
LOSS. The duty of INDEMNITORS to indemnify RELIANCE is a
continuing duty, separate from the duty to exonerate, and
survives any payments made in exoneration of RELIANCE. Amounts
due RELIANCE pursuant to this Section shall be payable within ten
(10) days following PRINCIPALS receipt of written demand.
SECTION 3.2 EXONERATION. INDEMNITORS recognize and acknowledge
the common law right of RELIANCE to be exonerated by PRINCIPAL
upon the occurrence and during the continuation of an EVENT OF
DEFAULT. In the event PRINCIPAL fails or refuses to exonerate
RELIANCE within ten (10) days of PRINCIPALS receipt of written
demand and while an EVENT OF DEFAULT is continuing, all
INDEMNITORS other than PRINCIPAL agree, within ten (10) days
following demand by RELIANCE, to exonerate RELIANCE from LOSS, by
satisfying such PRINCIPALS obligations under the CONTRACT(s) and
obtaining a withdrawal of all claims against RELIANCE UNDER THE
BOND(S) or a general release, or otherwise protecting RELIANCE
from Loss.
SECTION 3.3 CASH COLLATERAL. Upon refusal or failure of
PRINCIPAL to exonerate RELIANCE in accordance with the terms
hereof, INDEMNITORS agree to deposit with RELIANCE within ten
(10) days of INDEMNITORS receipt of written demand, an amount of
money reasonably designated by RELIANCE to secure payment of any
LOSS under this Agreement. The funds will be held by RELIANCE as
collateral, and INDEMNITORS do hereby grant to RELIANCE a
security interest to use such funds or any part thereof in
accordance with this Agreement or the SECURITY AGREEMENT.
SECTION 3.4 WAIVER OF CLAIMS AND HOLD HARMLESS. Except in the
case of bad faith or willful misconduct, each INDEMNITOR
specifically agrees to protect, indemnify and hold harmless
RELIANCE, each of its officers, directors, employees, agents and
its attorneys-in-fact against any and all LOSS that may in any
way arise in connection with this Agreement and the other
UNDERWRITING DOCUMENTS and the powers herein granted,
specifically waiving any claim (other than as set forth in the
sentence above) which any INDEMNITOR has or might hereafter have
against RELIANCE or its attorneys-in-fact on account of anything
lawfully done in enforcing the terms of this Agreement, the
BOND(s) or any other UNDERWRITING DOCUMENT.
SECTION 3.5 RIGHT OF INDEMNITORS TO TERMINATE AGREEMENT. Each
INDEMNITOR expressly recognizes and covenants this Agreement as
its continuing obligation to protect RELIANCE from all LOSS. Any
INDEMNITOR may notify RELIANCE at its Home Office, of such
INDEMNITORS withdrawal from this Agreement; and shall state when,
not less than thirty (30) days after receipt of such notice by
RELIANCE, such withdrawal shall be effective. Such INDEMNITOR
will not be liable under this Agreement as to any BOND(s)
executed by RELIANCE after the effective date of such notice;
provided, that as to any and all such BOND(s) executed or
authorized by RELIANCE prior to the effective date of such notice
and as to any and all renewals, continuations, extensions, or
substitutions (and, if a proposal or bid bond has been executed
or authorized prior to such effective date, as to any contract
bond executed pursuant thereto) regardless of when the same are
executed, such INDEMNITOR shall be and remain fully liable
hereunder, as if notice had not been served. Withdrawal by any
INDEMNITOR shall in no way affect the obligation of any other
INDEMNITOR who has given no notice of termination to RELIANCE.
SECTION 3.6 INDEMNITORS AGREE TO BECOME PARTY DEFENDANTS. In
the event of legal proceedings against RELIANCE pertaining to
PRINCIPALS performance under the CONTRACT(S), RELIANCE may apply
for a court order making any or all of the INDEMNITORS party
defendants, and each INDEMNITOR consents to the granting of such
application, including consent to the jurisdiction of the court
in which the proceedings against RELIANCE is brought, and agrees
to become such a party defendant or third-party defendant and to
allow judgment, in the event of judgment against RELIANCE, to be
rendered also against each INDEMNITOR, jointly and severally, in
like amount and in favor of RELIANCE unless such judgment is due
to the gross negligence or willful misconduct of RELIANCE.
SECTION 3.7 INDEMNITORS WAIVER OF NOTICE. INDEMNITORS waive
notice of the execution, continuation, modification, renewal,
enlargement or amendment of any BOND and of any fact, act or
information concerning or affecting the rights or liabilities of
RELIANCE or INDEMNITORS including, but not limited to, any acts
giving rise to any LOSS under the BOND(s). INDEMNITORS further
agree that any notification by RELIANCE to any one INDEMNITOR
shall constitute notice to all INDEMNITORS; provided, however,
that the waiver of notice provided for in this Section 3.7 shall
not operate to relieve RELIANCE of its obligation to provide
notice as set forth in the definition of EVENTS OF DEFAULT in
Section 1.1 of this Agreement.
SECTION 3.8 INDEMNITORS KNOWING CONSENT TO AGREEMENT. Each
INDEMNITOR warrants that it is specifically and beneficially
interested in obtaining the BOND(s) or the forbearance of
cancellation of any existing BOND(s). INDEMNITORS acknowledge
that the execution of this Agreement and the undertaking of
indemnity was not made in reliance upon any representation
concerning the responsibility of any INDEMNITOR or concerning the
competence of PRINCIPAL to perform. INDEMNITORS agree to make no
claim against RELIANCE for any oral representations, promises or
statements made to any of them by RELIANCE or any of its agents
or brokers, or for the failure of RELIANCE to disclose facts or
information to INDEMNITORS.
SECTION 3.9 INDEMNITORS DUTY TO REMAIN INFORMED OF PRINCIPALS
BUSINESS. INDEMNITORS possess the duty to remain informed of all
aspects of PRINCIPALS business and the business activities and
financial affairs of PRINCIPAL. INDEMNITORS acknowledge that
they are presently informed of the state of business activities
and financial affairs of PRINCIPAL and all INDEMNITORS. RELIANCE
possesses no obligation to inform any INDEMNITOR of any aspect of
PRINCIPALS business or the business activities and financial
affairs of the INDEMNITORS or of the request for, or issuance of,
any BOND(s).
SECTION 3.10 ENFORCEABILITY OF RIGHTS DIRECTLY AGAINST
INDEMNITORS. RELIANCE shall be entitled to enforce the
obligations of this AGREEMENT directly against any INDEMNITOR
without the necessity of first proceeding against the PRINCIPAL.
The failure of any INDEMNITOR to perform any of the terms of this
Agreement or the release of any INDEMNITOR by RELIANCE shall not
excuse or release the remaining INDEMNITORS from their
obligations under this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITION PRECEDENT TO EFFECTIVENESS OF THIS
AGREEMENT. The effectiveness of this Agreement is subject to the
condition precedent that RELIANCE shall have received on or
before the day hereof each of the following, in form and
substance satisfactory to RELIANCE and its counsel:
(a) A SECURITY AGREEMENT duly executed by PRINCIPAL, together
with acknowledgment copies of the Financing Statements (UCC-1)
duly filed under the Uniform Commercial Code of all jurisdictions
in the opinion of RELIANCE desirable to perfect the security
interest created by each SECURITY AGREEMENT;
(b) A favorable opinion of Michael G. Marsh, counsel to the
INDEMNITORS, in the form of Schedule 4.1(b) to this Agreement;
(c) An officers certificate of each INDEMNITOR certifying
copies of each INDEMNITORS articles of incorporation, by-laws,
corporate resolutions authorizing the execution, delivery and
performance of this Agreement and the other UNDERWRITING
DOCUMENTS to which such INDEMNITOR is a party and certifying
incumbencies and true signatures of its officers so authorized;
(d) Evidence of the good standing of each INDEMNITOR in the
jurisdiction in which such Person is incorporated;
(e) Evidence of the existence of insurance on the property of
PRINCIPAL described in the SECURITY AGREEMENT, together with
evidence establishing RELIANCE as a loss payee and/or additional
insured on all such insurance policies;
(f) Such other information and documents as may reasonably be
required by RELIANCE;
(g) A PREFERRED SHIP MORTGAGE duly executed by PRINCIPAL on
the floating drydock Emerald Sea;
(h) A PLEDGE AGREEMENT duly executed by PRINCIPAL pursuant to
which the Galveston Bonds are pledged to RELIANCE together with
delivery of said Bonds to RELIANCE;
(I) A FACILITIES AND EQUIPMENT UTILIZATION AGREEMENT duly
executed by the PRINCIPAL.
SECTION 4.2 CONDITIONS PRECEDENT TO ALL BONDS. The obligation
of RELIANCE to issue any BOND shall be subject to the further
conditions precedent that on the date of such issuance:
(a) The following statements shall be true and, by its request
for the issuance of such BOND, PRINCIPAL shall be deemed to have
certified to RELIANCE that as of the date of such issuance:
(i) The representations and warranties contained in Article V
of this Agreement, and in Section 4 of the SECURITY AGREEMENT are
correct in all material respects on and as of the date of such
issuance as though made on and as of such date; and
ii) No EVENT OF DEFAULT has occurred and is continuing, or
would result from the issuance of such BOND;
(b) RELIANCE shall have received such other approvals,
opinions, or documents as RELIANCE may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The INDEMNITORS represent and warrant to RELIANCE that
SECTION 5.1 INCORPORATION, GOOD STANDING, AND DUE QUALIFICATION.
Each INDEMNITOR: (1) is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation; (2) has the corporate power and authority,
and to the best of its knowledge has all material governmental
licenses, authorizations, consents and approvals necessary to own
its assets and to transact the business in which it is now
engaged or proposed to be engaged, except to the extent the
failure thereof would not be materially adverse to such
INDEMNITOR; and (3) is duly qualified as a foreign corporation
and in good standing under the laws of each other jurisdiction in
which such qualification is required except to the extent the
failure to so qualify would not result in a MATERIAL ADVERSE
CHANGE to such INDEMNITOR.
SECTION 5.2 CORPORATE POWER AND AUTHORITY. The execution,
delivery, and performance by each INDEMNITOR of the UNDERWRITING
DOCUMENTS to which each is a party have been duly authorized by
all necessary corporate and stockholder action and do not and
will not (1) contravene such corporations charter or bylaws; (2)
violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award presently
in effect having applicability to such corporation; (3) result in
a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease, or instrument
to which such corporation is a party or by which it or its
properties may be bound or affected (except where the appropriate
consents have been obtained); (4) result in, or require, the
creation or imposition of any Lien (except Liens in favor of
RELIANCE), upon or with respect to any of the properties now
owned or hereafter acquired by such corporation; or (5) cause
such corporation to be in default under any such law, rule
regulation, order, writ, judgment, injunction, decree,
determination, or award or any such indenture, agreement, lease,
or instrument (except where the appropriate consents have been
obtained).
SECTION 5.3 LEGALLY ENFORCEABLE AGREEMENT. This Agreement is,
and each of the other UNDERWRITING DOCUMENTS when delivered under
this Agreement will be, legal, valid, and binding obligations of
each INDEMNITOR party thereto, enforceable against such
INDEMNITOR, as the case may be, in accordance with their
respective terms, except to the extent that such enforcement may
be limited by applicable bankruptcy, insolvency, and other
similar laws affecting creditors rights generally.
SECTION 5.4 APPROVALS. To the best of its knowledge, except for
filings and recordings of Liens created pursuant to the SECURITY
AGREEMENT, no authorizations, approvals or consents of, and no
filings of registrations with, any governmental or regulatory
authority or agency are necessary for the execution, delivery or
performance by each INDEMNITOR of the UNDERWRITING DOCUMENTS to
which each is a party or for the validity or enforceability
thereof.
SECTION 5.5 OWNERSHIP AND LIENS. PRINCIPAL has title to, or
valid leasehold interests in, all of its properties described in
the SECURITY AGREEMENT, and none of the properties and assets
owned by PRINCIPAL and none of their leasehold interests is
subject to any Lien, except such as may be permitted pursuant to
Section 6.13 and/or 6.14 of this Agreement.
SECTION 5.6 REAL PROPERTY. Schedule 5.6 contains a complete and
accurate list, as of the date of this Agreement, of the address
and legal descriptions of any real property owned by PRINCIPAL.
SECTION 5.7 TAXES. Except for approved extensions, each
INDEMNITOR has filed all tax returns (federal, state, and local)
required to be filed and has paid all taxes, assessments, and
governmental charges and levies thereon to be due, including
interest and penalties, except to the extent the validity thereof
is being contested in good faith by appropriate proceedings and
for which adequate reserves have been set aside on the books of
such INDEMNITOR.
SECTION 5.8 INSURANCE. The PRINCIPAL represents that it has
insurance in force as disclosed in Schedule 5.8 attached hereto
and made a part hereof and that it will maintain the said
insurance in force with good and substantial carriers acceptable
to RELIANCE and has caused RELIANCE to be named as loss payee or
an additional insured as required by RELIANCE.
SECTION 5.9 COMPLIANCE. To the best of its knowledge, each
INDEMNITOR is in material compliance with all statutes and
governmental rules and regulations applicable to it, including
without limitation, ERISA insofar as ERISA applies to it, except
to the extent the failure to be in compliance therewith would not
be materially adverse to such INDEMNITOR, and no condition exists
or event or transaction has occurred in connection with any PLAN
which is likely to result in any material liability, fine or
penalty being asserted against it.
SECTION 5.10 LITIGATION. There is no action, suit or proceeding
pending against, or to the knowledge of INDEMNITORS threatened
against or affecting, the PRINCIPAL before any court or
arbitrator or any government body, agency or official in which
there is a reasonable likelihood of an adverse decision which
could materially adversely affect the business, financial
position or results of operations of PRINCIPAL or which in any
manner draws into question the validity of this Agreement except
those referred to in Schedule 5.10 attached hereto and made a
part hereof.
ARTICLE VI
COVENANTS
SECTION 6.1 CORPORATE EXISTENCE. PRINCIPAL will maintain its
corporate existence (in good standing where appropriate under
state law) and remain or become duly qualified or licensed (and
in good standing where appropriate under state law) as a foreign
corporation in each jurisdiction in which the conduct of its
businesses or location of its assets requires such qualification
or license, except for those jurisdictions where the failure to
so qualify would not result in a MATERIAL ADVERSE CHANGE to such
PRINCIPAL.
SECTION 6.2 MAINTENANCE OF RECORDS. PRINCIPAL will keep
adequate records and books of account, in which complete entries
will be made in accordance with GAAP consistently applied,
reflecting all financial transactions of PRINCIPAL.
SECTION 6.3 MAINTENANCE OF PROPERTIES. PRINCIPAL will maintain,
keep and preserve substantially all of its properties (tangible
and intangible) necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and
tear and obsolescence excepted.
SECTION 6.4 MAINTENANCE OF INSURANCE. PRINCIPAL will maintain
insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks
as are usually carried by companies engaged in the same or a
similar business and similarly situated, which insurance may
provide for reasonable deductibility from coverage thereof.
PRINCIPAL further agrees to furnish RELIANCE with an annual
report on the insurance in force and with copies of the policies
of said insurance evidencing the existence of the coverage called
for by this Agreement.
SECTION 6.5 COMPLIANCE WITH LAWS. PRINCIPAL will comply in all
material respects with all applicable laws, rules, regulations,
and orders the failure to comply with which would result in a
MATERIAL ADVERSE CHANGE to PRINCIPAL, such compliance to include,
without limitation, paying before the same become delinquent all
taxes, assessments, and governmental charges imposed upon it or
upon its property, except taxes, assessments and governmental
charges being contested in good faith by appropriate proceedings.
SECTION 6.6 TAXES. PRINCIPAL will promptly pay all of its
taxes, assessments and other governmental charges prior to the
date on which all penalties are attached thereto, establish
adequate reserves for the payment of taxes and assessments and
make all required withholding and other tax deposits; provided,
however that nothing herein contained shall be interpreted to
require the payment of any tax, assessment or charge so long as
its validity is being contested in good faith by appropriate
proceedings.
SECTION 6.7 BOOKS AND RECORDS. Until RELIANCE shall have been
furnished with evidence satisfactory to it of its discharge
without LOSS, upon reasonable notice RELIANCE shall have the
right at all reasonable times during normal business hours to
free access to the papers of PRINCIPAL including, without
limitation, its books, records, accounts, computer software and
other computer-stored information, for the purpose of examining,
copying, or reproducing the same. PRINCIPAL authorizes and
requests any and all depositories in which funds of PRINCIPAL may
be deposited to furnish to RELIANCE upon its written request
statements of account and any other documents reflecting receipts
and disbursements and any PERSON, doing business with PRINCIPAL
is authorized to furnish any information requested by RELIANCE
concerning any transaction. RELIANCE may furnish copies of any
and all statements, agreements and FINANCIAL STATEMENTS and any
information which it now has or may obtain concerning the
PRINCIPAL to other PERSONS for the purpose of procuring co-
suretyship or reinsurance. With regard to INDEMNITORS other than
PRINCIPAL, RELIANCE shall have free access to all such papers,
provided, however, that in the absence of a confidentiality
agreement reasonably satisfactory to such INDEMNITOR, then
RELIANCE shall be allowed access only to such papers that pertain
to any of the CONTRACTS.
SECTION 6.8 FINANCIAL RECORDS AND REPORTS. INDEMNITORS, on a
consolidated and consolidating basis, will provide RELIANCE with
copies of its yearly audited FINANCIAL STATEMENTS as soon as
possible upon completion and in no event later than ninety (90)
days after the end of the period under audit. In addition, the
PRINCIPAL will furnish RELIANCE with true copies of quarterly
internally prepared unaudited FINANCIAL STATEMENTS, and such
other financial information in a form as RELIANCE shall
reasonably require, upon completion and in no event later than
forty-five (45) days after the end of such quarterly period. The
FINANCIAL STATEMENTS to be provided by INDEMNITORS will be
prepared in conformity with GAAP applied on a basis consistent
with that of the preceding fiscal year and in each instance will
present fairly and accurately the financial condition of
INDEMNITORS as at the dates of the statements and the results of
their operations for the periods then ended. INDEMNITORS agree
to immediately notify RELIANCE of the occurrence of any MATERIAL
ADVERSE CHANGE with respect to the INDEMNITORS. INDEMNITORS
represent that their books and records are kept accurately and in
a timely manner and in accordance with GAAP.
SECTION 6.9 PRINCIPALS REPRESENTATION. PRINCIPAL will provide
RELIANCE on a quarterly basis with a letter in which its Chief
Operating Officer represents that to the best of his knowledge,
as of the date of such quarter end: (a) the representations and
warranties of PRINCIPAL contained in Article V of this Agreement,
and in Section 4 of each SECURITY AGREEMENT are correct as though
made on and as of such date; and (b) no condition, event or act
exists which constitutes, or which with notice or the lapse of
time, or both, would constitute an EVENT OF DEFAULT. This letter
shall accompany each delivery of FINANCIAL STATEMENTS required by
Section 6.8 hereof.
SECTION 6.10 NOTICE OF LITIGATION. PRINCIPAL shall promptly give
notice in writing to RELIANCE of any litigation filed or
threatened against such PRINCIPAL involving an amount in excess
of $100,000.00 which claim is not covered by insurance.
SECTION 6.11 TANGIBLE NET WORTH. The Principal will not permit
its TANGIBLE NET WORTH to be less than $30,000,000.00 from the
effective date of this Agreement. At no time shall the PRINCIPAL
permit the ratio of (a) DEBT plus LEASE DEBT to (b) TANGIBLE NET
WORTH to be greater than 2.0 to 1.0. In the event the PRINCIPAL
fails to maintain these levels it shall immediately notify
RELIANCE and shall have thirty days (30) in which to restore
compliance.
SECTION 6.12 NET CURRENT ASSETS. The PRINCIPAL will not permit
NET CURRENT ASSETS to be less than $10,000,000.00; provided,
however, that by the end of six (6) months after the first
CONTRACT is entered into with the State of Washington, the
PRINCIPAL may reduce NET CURRENT ASSETS to an amount not less
than $6,000,000.00, provided that the reduction is used for the
acquisition of capital assets. Beginning with the quarter ending
after said six month period, and by the end of the quarter ending
every six (6) months thereafter, NET CURRENT ASSETS shall
increase by $1,000,000.00 until NET CURRENT ASSETS of
$10,000,000.00 has been restored. In the event the PRINCIPAL
fails to maintain these levels it shall immediately notify
RELIANCE and shall have thirty days (30) in which to restore
compliance with such levels.
SECTION 6.13 LIENS. The PRINCIPAL will not create, incur,
assume, or suffer to exist any LIEN upon any of its properties or
assets now owned or hereafter acquired, except for PERMITTED
LIENS.
SECTION 6.14 INDEBTEDNESS, ASSUMPTIONS. GUARANTEES. The
PRINCIPAL will not, without the consent of RELIANCE (which shall
not be unreasonably withheld), incur, assume, or suffer to exist
any DEBT or become contingently liable including without
limitation, liable by way of agreement, contingent or otherwise,
to purchase assets, to provide funds for payment, to maintain net
worth or working capital, to supply funds to or invest in any
debtor, or otherwise to assure any creditor against loss for any
obligation of any other PERSON or entity, except:
(a) DEBT, assumptions, guaranties, endorsements, contingent
liabilities, or other agreements (i) existing at the effective
date of this Agreement and disclosed in the FINANCIAL STATEMENTS;
(ii) DEBT to purchase capital assets as permitted under Section
6.12 above; or (iii) DEBT described in Schedule 1.1 P(c) or (d)
or otherwise disclosed in writing prior to the effective date of
this Agreement, provided that the terms thereof are not amended
modified so as to impose more materially burdensome terms on
PRINCIPAL or INDEMNITORS;
(b) guaranties by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business;
(c) guaranties in connection with third party leases,
repurchase agreements or sales in the ordinary course of
business;
(d) trade debt and other short term liabilities (other than
indebtedness for borrowed money) incurred in the ordinary course
of business;
(e) DEBT and LEASE DEBT incurred to finance the acquisition of
equipment in the ordinary course of business in an aggregate
outstanding principal amount not greater than $1,000,000.00
during any fiscal year;
(f) DEBT other than paragraphs (a) through (e) above in an
aggregate outstanding principal amount not greater than
$500,000.00 at any time;
(g) guaranties of bonds issued to PRINCIPAL pursuant to the
terms hereof;
(h) indebtedness under capital leases or financed leases;
(I) indebtedness consisting of deferred payment obligations of
a PRINCIPAL for insurance premiums or of funds borrowed for the
payment of such premiums;
(j) contingent obligations arising from the issuance of
performance guarantees, assurances, indemnities or similar
agreement in the ordinary course of business in respect of
contracts of PRINCIPAL for the benefit of RELIANCE, sureties
existing prior to the date hereof, or for the benefit of others
to induce such others to forego the issuance of a surety bond in
their favor.
(k) Indebtedness of PRINCIPAL to INDEMNITORS, where such
indebtedness is incurred for the purpose of infusing capital into
PRINCIPAL and where such indebtedness is not due and payable
sooner than (13) months after the date PRINCIPAL receives
INDEMNITORS written demand for payment.
In the event PRINCIPAL executes a loan or credit agreement for
the acquisition of equipment valued at more than $500,000
(including a capital lease, financed lease or purchase money
security agreement), and such equipment is necessary to complete
the CONTRACT(S), PRINCIPAL shall secure for the benefit of
RELIANCE an agreement with the lessor or vendor of the equipment
that grants to RELIANCE the right, but not the obligation, to use
the equipment to complete the CONTRACT(s) upon payment of the
rent or debt service to the lessor or vendor as required under
the lease, loan or credit agreement. In the event RELIANCE
exercises its option, RELIANCE shall at all times maintain the
equipment in good working order and pay the scheduled rent or
debt service on the equipment during the period the equipment is
used for the CONTRACT(s).
SECTION 6.15 DISPOSITION OF ASSETS. Except for PERMITTED LIENS
and except as provided under Section 6.17, PRINCIPAL will not
sell, lease, transfer, or otherwise dispose of its assets whether
now owned or hereafter acquired except for sales of inventory in
the ordinary course of business and except for sales of equipment
or real property (including appurtenances) not necessary for the
conduct of its business provided that such sales of equipment or
real property not necessary for the conduct of its business do
not exceed in the aggregate in any fiscal year ten percent (10%)
of the book value of all assets.
SECTION 6.16 MERGERS. PRINCIPAL will not without the prior
written consent of RELIANCE (which consent shall not be
unreasonably withheld) merge or consolidate with or into any
PERSON.
SECTION 6.17 INVESTMENTS, DIVIDEND RESTRICTIONS. PRINCIPAL will
neither make or enter into any agreement to make any acquisition
nor make or suffer to exist any investment in any PERSON whether
in the form of equity or DEBT, or make any dividend or other
distribution to any other PERSON, except:
(a) time deposits and certificates of deposit with maturities of
three years or less of any of the Banks or of United States
commercial banks with capital, surplus and undivided profits of
$100,000,000.00 or more;
(b) securities issued, guaranteed or insured by the United
States Government or an instrumentality or agency thereof
maturing within three years from the date of acquisition thereof;
(c) commercial paper, bankers acceptances, demand notes or
municipal bonds rated at least P1 or A, respectively, by Moodys
Investors Service Inc., or rated at least A1 or A, respectively,
by Standard & Poors Corporation, or commercial paper or municipal
bonds receiving an equivalent rating from any other nationally
recognized rating agency;
(d) Collateralized Mortgage Obligations and Asset Backed
Securities with a life expectancy of three years or less. These
securities will be of AAA credit quality or backed by a U.S.
government agency (e.g. FNMA) or U.S. government-sponsored
enterprise (e.g. FHLMC);
(e) investments existing on the effective date of this Agreement
and disclosed in Schedule 6.17(e);
(f) credit extended in connection with the sale of goods or
rendering of services in the ordinary course of business and
promissory notes or other instruments evidencing such credit
(provided that the aggregate principal amount of such notes and
instruments outstanding at any time shall not exceed
$500,000.00);
(g) loans or advances to employees of PRINCIPALS made in the
ordinary course of business consistent with past business
practices; or
(h) investments made in the ordinary course of business in
connection with its capacity as a co-joint venturer in a joint
venture, corporation or similar pooling of efforts in respect of
a project or series of projects for a limited or fixed duration
to conduct a business of a type in which a PRINCIPAL is presently
engaged consistent with past practices.
(I) distributions to Todd Shipyards Corporation, provided that
both before and after giving effect to said payment thereof the
PRINCIPAL is in compliance with Section 6.11 and 6.12 of this
Agreement.
SECTION 6.18 PRINCIPALS ASSETS. PRINCIPAL will not commingle
assets, particularly but not limited to cash and cash
equivalents, with, and will hold such assets separately and
distinctly from assets of any other PERSON.
SECTION 6.19 RESTRICTIONS UPON CONTRACTS WITH AFFILIATES.
PRINCIPAL will not without the prior written consent of RELIANCE
enter into contracts, equipment leases or other agreements with
any AFFILIATE except on an arms length basis or except pursuant
to written agreements with third party PERSONS from which the
PRINCIPAL has been or is being benefited, including but not
limited to pension plans and other joint employee benefit
programs, insurance programs and other similar joint programs or
services. RELIANCE hereby consents to PRINCIPALS indebtedness to
an Affiliate where such debt is not due until thirteen (13)
months after demand and PRINCIPAL has otherwise maintained
compliance with the financial ratios set forth in Sections 6.11
and 6.12.
SECTION 6.20 NATURE OF BUSINESS. PRINCIPAL shall not engage in
any business activities or operations substantially different
from or unrelated to its present business activities and
operations without the written consent of RELIANCE first obtained
in advance, which consent shall not be unreasonably withheld.
SECTION 6.21 WORKING CAPITAL LINE. Prior to the issuance of any
Bond hereunder, PRINCIPAL shall have received a commitment from a
lender to provide a line of credit facility of at least
$3,000,000 to be used exclusively by the PRINCIPAL for working
capital needs. The commitment and the Facility shall be subject
to normal covenants, limitations and conditions to funding.
Within thirty (30) days after the date of the Notice to Proceed
or any similar notice to commence construction under the first
Jumbo Contract, the Working Capital Facility shall be activated
and available for working capital needs.
ARTICLE VII
RIGHTS OF RELIANCE
SECTION 7.1 FURTHER ASSURANCES/RELIANCE AS ATTORNEY-IN-FACT.
INDEMNITORS agree to sign, execute, file and/or deliver to
RELIANCE all documents, reports, papers, pleadings and/or
instruments required to obtain, and/or perfect any of RELIANCES
rights under the SECURITY AGREEMENT. INDEMNITORS irrevocably
nominate and appoint RELIANCE or any other PERSON(s) designated
by RELIANCE as the true and lawful attorney-in-fact of PRINCIPAL,
with full right and authority, but only upon the occurrence and
during the continuance of an EVENT OF DEFAULT, to execute on
behalf of, and sign the name of the PRINCIPAL to any voucher,
release, satisfaction, check, application for payment, bill of
sale or any other paper or contract necessary or desirable to
carry into effect the purposes of this Agreement or any other
UNDERWRITING DOCUMENT, with full right and authority, to satisfy
the performance of the CONTRACT(s). Furthermore, PRINCIPAL
ratifies and confirms that, upon the occurrence of an EVENT OF
DEFAULT, such attorney-in-fact or RELIANCE may lawfully exercise
all the rights granted and further authorizes and empowers
RELIANCE and such attorney-in-fact and each of them to enter upon
and take possession of the tools, plant, equipment, materials and
subcontracts and all other collateral security mentioned in this
Agreement and enforce, use, employ and dispose thereof for the
purposes set forth in this Agreement. INDEMNITORS recognize that
the appointment of such attorney-in-fact constitutes a power
coupled with an interest.
SECTION 7.2 CONTRACT FUNDS HELD IN TRUST. Upon the occurrence
and during the continuance of an Event of Default, PRINCIPAL
agrees and expressly declares that all funds due or to become due
under the CONTRACT(s) will immediately become trust funds,
whether in possession of PRINCIPAL or another, for the benefit
and the payment of all PERSONS to whom PRINCIPAL incurs
obligations in the performance of the CONTRACT(s), for which
RELIANCE would be liable under the BOND(s). If RELIANCE
discharges any such obligations, with or without a claim asserted
against RELIANCE under the BOND(s), it shall be entitled to
assert the right of such PERSON to the trust fund.
SECTION 7.3 APPLICATION OF COLLATERAL TO PAYMENT OF CLAIMS. Upon
the occurrence and during the continuance of an EVENT OF DEFAULT,
all equipment held as collateral by or assigned to RELIANCE by
PRINCIPAL may be used by RELIANCE to complete the Contract(s) in
accordance with the FACILITIES AND EQUIPMENT UTILIZATION
AGREEMENT. All collateral may be sold by RELIANCE in payment of
any LOSS. RELIANCE may sell or realize upon such collateral
security, in a commercially reasonable public or private sale,
with reasonable notice to INDEMNITORS, and with the right to be
purchaser itself at any such public sale, and shall be
accountable to INDEMNITORS only for such surplus or remainder of
such collateral security or the proceeds thereof as may be in
RELIANCES possession after it has been fully indemnified as
provided in this Agreement. RELIANCE shall not be liable for, and
INDEMNITORS agree to make no claim against RELIANCE for, decrease
in value or loss or destruction of or damage to such security,
provided that RELIANCE complies with the terms hereof.
SECTION 7.4 RIGHT OF RELIANCE TO SETTLE CLAIMS. Upon the
occurrence and during the continuance of an EVENT OF DEFAULT, and
after making reasonable efforts to consult with and consider the
advice of the PRINCIPAL, RELIANCE shall have the exclusive right
for itself and for INDEMNITORS to reasonably decide and
reasonably determine whether any claim, demand, suit or judgment
on the BOND(s) shall be paid, settled, defended or appealed. Any
payment or determination reasonably made by RELIANCE that either
RELIANCE was or might be liable therefor or such payments were
necessary or advisable to protect any of RELIANCES rights or to
avoid or lessen RELIANCES liability or alleged liability, shall
be final, conclusive and binding upon INDEMNITORS; and any LOSS
which may be reasonably sustained or reasonably incurred shall be
paid by INDEMNITORS within ten (10) days following demand by
RELIANCE. In the event of any payment, settlement, compromise,
or investigation, an itemized statement of LOSS sworn to by an
officer or authorized representative of RELIANCE or voucher(s) or
other evidence of such LOSS shall be prima facie evidence of the
fact and extent of the liability of INDEMNITORS to RELIANCE in
any claim or suit and in any and all matters arising between
INDEMNITORS and RELIANCE.
SECTION 7.5 AUTHORITY OF RELIANCE TO MAKE LOANS TO PRINCIPAL.
In addition to the other remedies provided herein, RELIANCE is
authorized and empowered, but is not obligated, to advance or
loan money or guarantee loans to PRINCIPAL as RELIANCE may see
fit for the purpose of any of the CONTRACT(s), or for the purpose
of meeting operational expenses or paying other obligations,
bonded or unbonded. Such funds may be advanced or guaranteed at
anytime, whether before or after default of PRINCIPAL under the
CONTRACT(s). Upon demand by RELIANCE, each INDEMNITOR shall be
responsible to reimburse RELIANCE for all funds so loaned,
advanced, or guaranteed and all LOSS incurred by RELIANCE in
relation thereto, notwithstanding the failure of PRINCIPAL to so
use those funds. INDEMNITORS waive all notice of such advance,
loan, or guarantee.
SECTION 7.6 AUTHORITY OF RELIANCE TO AMEND BOND. After the
occurrence and during the continuance of an EVENT OF DEFAULT,
RELIANCE shall have the right, and is hereby authorized and
empowered, but not required: (a) upon the request of any
INDEMNITOR to do any of the following: increase or decrease the
penalty or penalties of any BOND(s), change the OBLIGEE(s)
therein, execute any continuation, enlargements, modifications
and renewals thereof or substitute therefor with the same or
different conditions, provisions or OBLIGEE(s), and with the
same, larger or smaller penalties, it being agreed that this
instrument shall apply to and cover such new or changed BOND(s)
or renewals even though the consent of RELIANCE may or does
substantially increase the liability of the INDEMNITORS and the
PRINCIPAL; or (b) to take such reasonable steps as it may deem
necessary or proper to obtain release from liability under the
BOND(s); or (c) to assent to any reasonable changes in any
CONTRACT, including but not limited to, any change in the time
for completion of any CONTRACT and to payments or advances
thereunder; or (d) to assent to or take any assignment(s).
SECTION 7.7 RIGHTS OF RELIANCE TO TAKE POSSESSION OF THE WORK.
Upon the occurrence and during the continuance of an EVENT OF
DEFAULT, in addition to other remedies provided herein, RELIANCE
is authorized and empowered, but is not obligated, to take
possession of the work under any CONTRACT(s) and at the expense
of INDEMNITORS, in so far as it is reasonable, to complete or to
contract for the completion of the same, or to consent to the
reletting of the completion thereof by OBLIGEE, or to take such
other steps as in the discretion of RELIANCE may be advisable or
necessary to obtain its release or to avoid LOSS.
SECTION 7.8 DEPOSITORY TRUST ACCOUNTS. Upon the occurrence of
and during the continuance of an EVENT OF DEFAULT, INDEMNITORS
shall, within ten (10) days following demand of RELIANCE, open an
account(s) with a bank or similar depository designated by
INDEMNITORS and approved by RELIANCE, which account(s) shall be
designated as trust account(s) for the deposit of such trust
funds, and shall deposit therein all monies paid or to be paid
under the CONTRACT(s). Withdrawals from such account(s) shall be
by check or similar instruments signed by a representative of
RELIANCE and, at RELIANCES option, countersigned by an
INDEMNITOR. Said trust(s) shall terminate on the payment by
INDEMNITORS of all the contractual obligations for the payment of
which the trust(s) are created or upon the expiration of the
applicable statute of limitations with respect to such claims,
whichever shall first occur.
SECTION 7.9 PRESERVATION OF RELIANCES RIGHTS. Except as may be
limited by the CONTRACT(S), RELIANCE shall have every right and
remedy which a personal surety without compensation would have,
including the right to secure its discharge from the suretyship,
and nothing in this Agreement shall waive, abridge or diminish
any right which RELIANCE might have if this Agreement were not
executed.
SECTION 7.10 AUTHORITY OF RELIANCE TO ELECT REMEDIES. Each
right, remedy and power of RELIANCE provided in this Agreement or
by law, equity, or statute shall be cumulative, and the exercise
by RELIANCE of any right, remedy or power shall not preclude
RELIANCES simultaneous or subsequent exercise of any or all other
rights, powers or remedies. The failure or delay by RELIANCE to
exercise any right, power or remedy shall not waive any right,
power or remedy. No notice or demand upon RELIANCE by any
INDEMNITOR shall limit or impair RELIANCES right to take any
action under this Agreement or to exercise any right, power or
remedy, subject to the provisions of Section 3.5 herein.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 BENEFICIAL PARTIES. This Agreement shall, in all
its terms and agreements, be for the benefit of and protect any
PERSON joining with RELIANCE in executing any BOND or BONDS or
executing at the request of RELIANCE said BOND or BONDS as well
as any PERSON assuming co-suretyship or reinsurance thereupon.
SECTION 8.2 JOINT AND SEVERAL. The agreements and covenants
herein contained shall be binding upon the undersigned, both
jointly and severely, upon their successors and assigns jointly
and severely, provided, that the PRINCIPAL and the INDEMNITORS
may not assign their rights hereunder without the prior written
consent of RELIANCE which consent shall not unreasonably be
withheld.
SECTION 8.3 ATTORNEYS FEES. The INDEMNITORS agree hereby to pay
the attorneys fees and expenses incurred by RELIANCE in the
preparation of this Agreement and the other UNDERWRITING
DOCUMENTS. In the event of a dispute pertaining to this
Agreement and/or the other UNDERWRITING DOCUMENTS, the
substantially prevailing party shall be entitled to recover its
reasonable attorneys fees and costs, including fees and costs
incurred prior to the commencement of litigation and fees and
costs on appeal.
SECTION 8.4 APPLICABLE LAW. The terms and conditions of this
Agreement shall be construed under the laws of the State of
Washington.
SECTION 8.5 JURISDICTION FOR SUITS UNDER THIS AGREEMENT.
Separate suits may be brought hereunder as causes of action may
accrue, and the pendency or termination of any such suit shall
not bar any action, whether previously or subsequently arising.
INDEMNITORS and RELIANCE hereby consent to the jurisdiction of
the courts of the federal or state courts located in the State of
Washington in connection with any action under this Agreement or
the BOND(s). PRINCIPAL and each INDEMNITOR are the agents for
each other for the purpose of accepting service of process. The
foregoing notwithstanding, if a dispute arises involving an
OBLIGEE, the PRINCIPAL and RELIANCE, the dispute, at the option
of PRINCIPAL, shall be resolved in a single proceeding.
SECTION 8.6 INDEMNITORS WAIVE DEFENSE OF SUBSEQUENT EXECUTION.
INDEMNITORS waive any defense that this Agreement was executed
subsequent to any BOND, admitting that such BOND was executed
pursuant to each INDEMNITORS request and in reliance upon
INDEMNITORS promise to execute this Agreement.
SECTION 8.7 VALIDITY OF AGREEMENT. Failure to execute, or
defective execution, by any party shall not affect the validity
of this Agreement as to any other party executing the same and
each other party shall remain fully bound and liable hereunder.
Invalidity of any portion or provision of this Agreement by
reason of the laws of any state or for any other reason shall not
render the other provisions or portions invalid. Executions of
any application or submission for any BOND by PRINCIPAL, or of
any other indemnity agreement by any INDEMNITOR for the PRINCIPAL
shall not abrogate, waive or diminish any rights of RELIANCE
under this Agreement. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall
be an original, but all of which together shall constitute one
and the same instrument.
SECTION 8.8 ORAL MODIFICATIONS INEFFECTIVE. This Agreement may
not be changed or modified orally. No change or modification to
this Agreement shall be effective unless specifically agreed to
in writing and executed by RELIANCE.
SECTION 8.9 NOTICES. It is mutually agreed that any and all
notices or demands herein provided for must be given in writing
and shall be deemed given if and when delivered in person or five
(5) days following the date that the notice is duly deposited in
the United States mails, postage prepaid for regular or certified
mail, properly addressed to the party to whom given at the
address of such party shown in this Agreement; provided, however,
that any party may specify any other post office address in the
United States by giving at least ten (10) days written notice
thereof to the other party.
Notice to RELIANCE shall be sent to:
Reliance Insurance Company 2505 South 320th Street Federal Way,
WA 98003 Attention: Surety Department
Notice to PRINCIPAL and/or INDEMNITORS shall be sent to:
Stephen G. Welch Vice President Todd Shipyards
Corporation P.O. Box 3806 (Zip 98124) 1891 - 16th Ave. S.W.
Seattle, WA 98134
SECTION 8.10 CONSENT. Whenever the consent or approval of any
party to this Agreement is provided for in this Agreement, such
consent or approval shall not be unreasonably withheld.
IN WITNESS WHEREOF, this Agreement is executed by the parties on
the day and date first set forth above.
TODD PACIFIC SHIPYARDS CORPORATION
By:/s/ Michael G. Marsh Its: Secretary and General Counsel
TODD SHIPYARDS CORPORATION
By: S.G. Welch Its: Vice President
TSI MANAGEMENT, INC.
By: S.G. Welch Its: Chief Operating Officer
RELIANCE SURETY COMPANY
By: Frank Cartstrom Its: Senior Vice President
RELIANCE INSURANCE COMPANY
UNITED PACIFIC INSURANCE COMPANY
RELIANCE NATIONAL INDEMNITY COMPANY
By: Frank Cartstrom Its: Vice President
<PAGE>
SCHEDULE 1.1 P(c).
PERMITTED LIENS AND AGREEMENT REGARDING WORKING CAPITAL LINE
In accordance with the terms of Section 6.21 of this Agreement,
and notwithstanding any term or condition herein or in any other
Underwriting Document to the contrary, RELIANCE hereby consents,
in advance, to the PRINCIPAL granting a security interest in the
following items of collateral (the Working Capital Collateral)
which shall be used to secure a credit facility of at least $3
million from a commercial lender:
(i) all accounts and proceeds thereof now or hereafter due to
PRINCIPAL which arise from any contract between PRINCIPAL and the
State of Washington for construction of one or more Jumbo
ferries for the Washington State Ferry System; and
(ii) all other accounts which may arise from time to time from
performed by PRINCIPAL on contracts for which neither RELIANCE
nor any affiliate of RELIANCE has issued any bonds, whether
under this Agreement or any other Underwriting Document.
RELIANCE further agrees with PRINCIPAL that it shall promptly
enter into an intercreditor agreement with such a commercial
lender whereby RELIANCE shall subordinate the priority of its
Lien (without waiving its rights to equitable subrogation) on the
Working Capital Collateral to the security interest of the
commercial lender. The parties agree that time is of the essence
in concluding such an intercreditor agreement and RELIANCE agrees
to act promptly in negotiating the terms of such agreement.
<PAGE>
SCHEDULE 1.1 P(d).
EXISTING PERMITTED LIEN
UCC SEARCH RESULT TODD PACIFIC SHIPYARDS
Existing Liens
SECURED PARTY COLLATERAL
United States Trust Company of New The collateral described in
the
York as assignee from Industrial Security Agreement dated as of
Development Corporation of the Port February 1, 1983, between
the Debtor
of Seattle and the Secured Party, attached hereto as Exhibit A.
(83-130-0096
Manufacturers Hanover Trust Company The Collateral described
in the Second Security Agreement dated as of February 1, 1983,
between the Debtor and the Secured Party, attached hereto as
Exhibit A and all proceeds thereof(83-130-0097)
IMS Leasing Inc1 - 305AS4 mailing machine S/N 7045011 - IMS
Manifest System 100 S/N A126(86-113-0859)
United Pacific Insurance Company All items referred to in that
Application for Contractors Bond copy of which is attached and
incorporated herein. (87-204-0427)
Rogers Machinery Company, Inc. Two (2) Quincy Northwest
Model QNW- 1500 Oil Flooded Rotary Screw Air Compressors driven
by 300 HP 3/60/460 volt ODP motors complete with air cooled
aftercoolers and 3/60/460 volt 300 HP Xline starters in NEMA 1
enclosures. (94-320- 0129)
Principal hereby represents and warrants to Reliance that the
obligations originally secured by these filings have been fully
satisfied or discharged and the filings should be terminated.
<PAGE>
SCHEDULE 2.1
THE BOND FOR THE JUMBO FERRIES
The Jumbo Mark II Ferry Bonds include the bid bond and a
subsequent payment and performance bond in the penal sum equal to
twenty-eight percent (28%) of the total contract price divided by
three (3) to be issued in connection with the State of
Washingtons proposed contract for construction of three (3) or
more Jumbo Class Ferries. The ferries will be built in sequence,
and, subject to INDEMNITORS compliance with the terms of this
Agreement, RELIANCE shall permit its surety obligation under such
bond to be transferred from one Jumbo Ferry to the next as
successive Jumbo Ferries are completed in accordance with the
PRINCIPALS contract with the State of Washington.
<PAGE>
SCHEDULE 2.2
RATE SCHEDULE
Bond premiums for the Jumbo Mark II Ferry are as follows:
[Rate structure to be attached]
<PAGE>
SCHEDULE 4.1(b)
FORM OF LEGAL OPINION
<PAGE>
SCHEDULE 5.6
REAL ESTATE
None, excluding leasehold interests.
<PAGE>
SCHEDULE 5.8
INSURANCE
<PAGE>
SCHEDULE 5.10
LITIGATION
<PAGE>
SCHEDULE 6.17(e) INVESTMENTS
None
<PAGE>
Exhibit I
SECURITY AGREEMENT
<PAGE>
Exhibit II
FACILITIES AND EQUIPMENT UTILIZATION AGREEMENT
Waived by Reliance
<PAGE>
Exhibit III
PREFERRED SHIP MORTGAGE
<PAGE>
Exhibit IV
PLEDGE AGREEMENT
<PAGE>
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this Agreement) is dated as of
December 22, 1994 and is made by Todd Pacific Shipyards
Corporation, a Delaware corporation (Debtor), in favor of and for
the benefit of Reliance Surety Company, a Delaware corporation,
Reliance Insurance Company, a Pennsylvania corporation, United
Pacific Insurance Company, a Pennsylvania corporation, and
Reliance National Indemnity Company, a Wisconsin corporation,
(collectively, the Secured Party).
RECITALS
WHEREAS, concurrently herewith the Debtor is entering into that
certain Underwriting and Continuing Indemnity Agreement dated as
of even date herewith (as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time,
being the Underwriting Agreement; capitalized terms defined
therein and not otherwise defined herein being used herein as
therein defined) with the Secured Party.
WHEREAS, the Debtor desires to secure all obligations of the
Debtor now or hereafter existing under the Underwriting Agreement
and the other Underwriting Documents;
WHEREAS, the Debtor desires to grant security interests in
certain of its personal property in favor of the Secured Party;
and
WHEREAS, it is a condition precedent to the effectiveness of the
Underwriting Agreement, that the Debtor shall have granted the
security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to induce the Secured
Party to issue Bonds in connection with the Underwriting
Agreement, the parties hereto agree as follows:
AGREEMENT
SECTION 1. Grant of Security. The Debtor hereby assigns and
pledges to the Secured Party for its benefit, a first priority
security interest in all of the Debtors right, title and interest
in and to the following, in each case whether now existing or
hereafter arising, whether now owned or hereafter acquired and
wherever the same may be located (the Collateral) to secure the
Secured Obligations (as defined in Section 2):
(a) All Equipment and all Inventory (as such terms are
defined in the Uniform Commercial Code in effect in the
State of Washington (the Code)), including, without
limitation, all right, title and interest of Debtor in and
to all machinery, vehicles, equipment, inventory, fuel,
plant and tools owned by Debtor, and all materials and
supplies in any way related to any Contract, and whether
completed or in the process of construction or manufacture;
(b) All Accounts (as such term is defined in the Code),
including, without limitation, all right, title and interest
to all monies due or to become due to Debtor arising out of
or in any way relating to any Contract, including, but not
limited to progress payments, deferred payments, retained
percentages, compensation for other work, and claims and the
proceeds thereof, together with any and all sums due or
which may become due under or on all contracts not bonded by
the Secured Party in which the Debtor has an interest,
subject to an intercreditor agreement with Debtors lender as
described in Schedule 1.1P(c) of the Underwriting Agreement;
(c) All General Intangibles (as such term is defined in
the Code), including, without limitation, all rights,
actions, causes of action, claims and demands of the Debtor
in, or arising from or out of, (i) any Contract or any
extensions, modifications, changes or alterations thereof or
additions thereto or (ii) any subcontract in connection with
a Contract or against any subcontractor or any Person,
furnishing or agreeing to furnish or supply labor,
materials, supplies, machinery, tools, or other equipment in
connection with or on account of a Contract or against any
surety or sureties of any such materialman, subcontractor,
laborer or other Person;
(d) All Chattel Paper and Instruments (as such terms
are defined in the Code) with a face value in excess of
$100,000;
(e) All books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related
data processing software (owned by the Debtor or in which it
has an interest) that at any time evidence or contain
information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or
realization thereupon;
(f) All plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all
additions and accessions thereto and replacements thereof
and products thereof;
(g) All now existing or hereafter acquired trademarks,
trade names, patent applications, patents, copyrights,
rights and interests in copyrights and works protectable by
copyright, trade secrets, inventions, designs, franchises,
customer lists, and other confidential information relating
to the business of the Debtor owned by the Debtor or held by
the Debtor pursuant to licenses, to the extent permitted by
such licenses;
(h) All proceeds of any and all of the foregoing
Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not the Secured Party
is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral.
For purposes of this Agreement, the term proceeds includes
whatever is receivable or received when Collateral or
proceeds are sold, collected, exchanged or otherwise
disposed of, whether such disposition is voluntary or
involuntary, and includes, without limitation, all rights to
payment, including returned premiums, with respect to any
insurance relating thereto; and
(i) All of the vessel Emerald Sea, O/N 539677, Home
Port, Seattle, Washington, together with all of the mast,
bowsprit, boat anchors, cables, cabins, rigging, tackle,
apparel, furniture and all other necessaries now or
hereafter appurtenant and belonging thereto.
SECTION 2. Security for Obligations. This Agreement secures
and the Collateral is security for the prompt payment or
performance in full when due (including the payment of amounts
that would become due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, 11 U.S.C. 362(a))
of all obligations of every nature of the Debtor now or hereafter
existing under the Underwriting Agreement, the other Underwriting
Documents, whether now existing or hereafter arising, voluntary
or involuntary, whether or not jointly owed with others, direct
or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished
and later increased, created or incurred and all or any portion
of such obligations that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly
from the Secured Party as a preference, fraudulent transfer or
otherwise, (all such obligations being the Underlying Debt), and
all obligations of every nature of the Debtor now or hereafter
existing under this Agreement (all such obligations of the
Debtor, together with the Underlying Debt, being the Secured
Obligations).
SECTION 3. The Debtor Remains Liable. Anything herein to the
contrary notwithstanding, (a) the Debtor shall remain liable
under any contracts and agreements included in the Collateral, to
the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by the Secured Party of
any of the rights hereunder shall not release the Debtor from any
of its duties or obligations under the contracts and agreements
included in the Collateral and (c) except for the Secured Partys
obligations under the BOND(S), the Secured Party shall not have
any obligation or liability under any contracts and agreements
included in the Collateral by reason of this Agreement, nor shall
the Secured Party be obligated to perform any of the obligations
or duties of the Debtor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 4. Representations and Warranties. The Debtor
represents and warrants as follows:
(a) Location of Equipment and Inventory. All of the
Equipment and Inventory is located at the places specified in
Schedule I hereto.
(b) Delivery of Certain Collateral. All Chattel Paper and
Instruments (excluding checks) comprising any and all items of
Collateral have been delivered to the Secured Party duly endorsed
and accompanied by duly executed instruments of transfer or
assignment in blank.
(c) Ownership of Collateral. Except for the security
interest created by this Agreement and the Permitted Liens under
the Underwriting Agreement, and except for leased equipment, the
Debtor owns the Collateral free and clear of any Lien. Except
for the forgoing, no effective financing statement or other
instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office.
(d) Perfection. Subject to the Permitted Liens, this
Agreement creates a valid, perfected and first priority security
interest in the Collateral, to the extent a security interest in
such Collateral may be perfected by filing a financing statement
under the Uniform Commercial Code as in effect in each of the
relevant states or by possession of such Collateral, securing the
payment of the Secured Obligations, and all filings and other
actions necessary or desirable to perfect and protect such
security interest have been duly taken, except with respect to
filings and other actions to perfect and protect security
interests in motor vehicles.
(e) Governmental Authorizations. Other than those
authorizations and approvals which have been obtained, no
authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required either (i) for the grant by the Debtor of the security
interest granted hereby or for the execution, delivery or
performance of this Agreement by the Debtor or (ii) for the
perfection of or the exercise by the Secured Party of its rights
and remedies hereunder (except as may have been taken by or at
the direction of the Debtor).
(f) Other Information. All information heretofore, herein
or hereafter supplied to the Secured Party by or on behalf of the
Debtor with respect to the Collateral is accurate and complete in
all material respects.
(g) Office Locations; Fictitious Names. The chief place of
business, the chief executive office and the office where the
Debtor keeps its records regarding the Accounts and all
originals of all Chattel Paper that evidence Accounts is located
at the address of the Debtor set forth on the signature page
hereto. The Debtor does not do business under any trade-name or
fictitious business name.
(h) Incorporation of Underwriting Agreement Representations
and Warranties. Each representation and warranty of the
Debtor set forth in Article V of the Underwriting Agreement is
true and correct and such representations and warranties are
hereby incorporated herein by this reference with the same effect
as though set forth in their entirety herein.
SECTION 5. Further Assurances. (a) The Debtor agrees that from
time to time, at the expense of the Debtor, the Debtor will
promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably
necessary or desirable, or that the Secured Party may reasonably
request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the
Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral.
(b) The Debtor hereby authorizes the Secured Party to file one
or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without
the signature of the Debtor, to the extent permitted under
applicable law. A carbon, photographic or other reproduction of
this Agreement or a financing statement signed by the Debtor
shall be sufficient as a financing statement.
(c) The Debtor will furnish to the Secured Party from time to
time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the
Collateral as the Secured Party may reasonably request, all in
reasonable detail.
SECTION 6. Covenants of Debtor. The Debtor shall:
(a) Not use or permit any Collateral to be used unlawfully
or in violation of any provision of this Agreement, any policy
of insurance covering the Collateral or any applicable statute,
regulation or ordinance noncompliance with which could
reasonably be expected to result in an Event of Default;
(b) Notify the Secured Party of any change in the Debtors
name, identity or corporate structure prior to such change;
(c) Give the Secured Party 30 days prior written notice of
any change in the Debtors chief place of business;
(d) If the Secured Party gives value to enable the Debtor to
acquire rights in or the use of any Collateral, use such value
for such purposes; and
(e) Pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and
all claims (including claims for labor, materials and supplies)
against, the Collateral, and except to the extent the validity
thereof is being contested in good faith; provided that the
Debtor shall in any event pay such taxes, assessments,
governmental charges or levies not later than five days prior to
the date of any proposed sale under any judgment, writ or warrant
of attachment entered or filed against the Debtor as a result of
the failure to make such payment.
SECTION 7. Special Covenants With Respect to Equipment and
Inventory. The Debtor shall:
(a) Keep the Equipment and Inventory (other than Inventory
sold in the ordinary course of business) at the places
therefor specified on Schedule I hereto or, at Debtors election,
upon 30 days prior written notice to the Secured Party, at such
other places selected by Debtor where the Secured Party may
perfect, protect, exercise and enforce its rights and remedies
hereunder with respect to such Equipment and Inventory
(notwithstanding the forgoing, no collateral maybe moved to a
jurisdiction outside the United States without the Secured Partys
prior written consent);
(b) Cause the Equipment to be maintained and preserved in
thesame condition, repair and working order as when new, ordinary
wear and tear excepted, in accordance with the Debtors past
practices, and shall forthwith, or in the case of any loss or
damage to any of the Equipment as quickly as practicable after
the occurrence thereof, make or cause to be made all repairs,
replacements, and other improvements in connection therewith that
are necessary or desirable to such end, in the ordinary course
of business and in accordance with the Debtors past practices.
The Debtor shall promptly furnish to the Secured Party a
statement respecting any material loss or damage to any ofthe
Equipment; and
(c) Keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of
Inventory, and including such other information consistent with
the requirements of Section 6.2 of the Underwriting Agreement.
SECTION 8. Insurance. (a) The Debtor will maintain or cause to
be maintained, with financially sound and reputable insurers,
insurance with respect to its properties and business and the
properties and business of its Subsidiaries against loss or
damage of the kinds customarily insured by corporations of
established reputation engaged in the same or similar businesses
and similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other
corporations. Such insurance shall include, without limitation,
property damage insurance and liability insurance. The Debtor
shall, if so requested by the Secured Party, deliver to the
Secured Party original or duplicate policies of such insurance
and, as often as the Secured Party may reasonably request, a
report of a reputable insurance broker with respect to such
insurance.
(b) Reimbursement under any liability insurance maintained by
the Debtor pursuant to this Section 8 may be paid directly to the
Person who shall have incurred liability covered by such
insurance. In the case of any loss involving damage to Equipment
and Inventory when subsection (c) of this Section 8 is not
applicable, the Debtor may make or cause to be made the necessary
repairs to or replacements of such Equipment and Inventory, or
Debtor may retain the proceeds of such insurance to be used as
the Debtor sees fit, provided, however, that if the insured Loss
is to the dry dock which is the Secured Partys Collateral, then
Debtor shall have up to one calendar year to repair or replace
the dry dock, or to invest the proceeds in such other asset in
which Secured Party immediately shall be granted a perfected
security interest. Notwithstanding the foregoing, if the insured
loss is to the drydock, the proceeds of such insurance shall be
paid to and retained by the Secured Party in an interest-bearing
account for the benefit of Debtor, to be applied toward the
repair or replacement of the drydock or invested in such other
asset(s) as may be selected by Debtor and approved by Secured
Party and in which the Secured Party shall immediately be given a
perfected security interest.
(c) Upon the occurrence and during the continuance of any
Event of Default, all insurance payments in respect of the
Equipment and Inventory shall be paid to and applied at the
discretion of the Debtor toward the repair or replacement of the
lost or damaged Equipment and Inventory, or as provided in
Section 14 below, provided, however, that if the dry dock is
damaged, and if such damage exceeds fifty percent (50%) of the
fair market value of the dry dock prior to such insured Loss,
then the insurance proceeds shall be applied as directed by the
Secured Party for repairs, replacement or as provided by Section
14 below.
SECTION 9. Special Covenants With Respect to Accounts.
(a) The Debtor shall keep its chief place of business and
chief executive office and the office where it keeps its records
concerning the Accounts at the location therefor specified in
Section 4 or, at Debtors election, upon 30 days prior written
notice to the Secured Party, at such other locations selected by
Debtor where the Secured Party may perfect, protect, exercise and
enforce its rights and remedies hereunder with respect to such
Accounts. The Debtor will hold and preserve such records and
will permit representatives of the Secured Party upon reasonable
notice and at any time during normal business hours to inspect
and make abstracts from such records and the Debtor agrees to
render to the Secured Party, at the Debtors cost and expense,
such clerical and other assistance as may be reasonably requested
with regard thereto. (Notwithstanding the forgoing, Debtor shall
not move such office outside the United States without the
Secured Partys prior written consent.)
(b) Except as otherwise provided in this subsection (b) of
this Section 9, the Debtor shall continue to collect, at its own
expense, all amounts due or to become due the Debtor under the
Accounts. In connection with such collections, the Debtor may
take (and, at the Secured Partys direction, shall take) such
action as the Debtor or the Secured Party may deem necessary or
advisable to enforce collection of the Accounts; provided,
however, that Secured Party shall have the right at any time,
upon the occurrence and during the continuance of an Event of
Default and upon written notice to the Debtor of its intention to
do so, to notify the account debtors or obligors under any
Accounts of the assignment of such Accounts to the Secured Party
and to direct such account debtors or obligors to make payment of
all amounts due or to become due to the Debtor thereunder
directly to the Secured Party, upon such notification and at the
expense of the Debtor, to enforce collection of any such Accounts
and to reasonably adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as the
Debtor might have done. After receipt by the Debtor of the
notice from the Secured Party referred to in the proviso to the
preceding sentence, (i) all amounts and proceeds (including
checks and other instruments) received by the Debtor in respect
of the Accounts shall be received in trust for the benefit of the
Secured Party hereunder, shall be segregated from other funds of
the Debtor and shall be forthwith paid over or delivered to the
Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash collateral and applied as
provided in Section 14, and (ii) the Debtor shall not adjust,
settle or compromise the amount or payment of any Accounts, or
release wholly or partly any account debtor or obligor thereof,
or allow any credit or discount thereon.
SECTION 10. Secured Party Appointed Attorney-in-Fact. The
Debtor hereby irrevocably appoints the Secured Party the Debtors
attorney-in-fact with full authority in the place and stead of
the Debtor and in the name of the Debtor, the Secured Party or
otherwise, from time to time in the Secured Partys discretion to
take any commercially reasonable action and to execute any
instrument that the Secured Party may deem necessary or advisable
to accomplish the purposes of this Agreement, including, without
limitation upon the occurrence and continuation of an Event of
Default:
(a) to obtain and adjust insurance required to be
maintained by the Debtor or paid to the Secured Party pursuant to
Section 8,
(b) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(c) to receive, endorse, and collect any drafts or other
Instruments, Documents and Chattel Paper, in connection with
clauses (a) and (b) above,
(d) to file any claims or take any action or institute any
proceedings that the Secured Party may deem necessary or
desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Secured Party with respect
to any of the Collateral,
(e) to pay or discharge taxes or Liens, levied or placed
upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same
to be determined by the Secured Party in its sole discretion, and
such payments made by the Secured Party to become obligations of
the Debtor to the Secured Party, due and payable immediately
without demand,
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in
connection with accounts and other documents relating to the
Collateral,
(g) generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Secured Party were the
absolute owner thereof for all purposes, and to do, at the
Secured Partys option and the Debtors expense, at any time, or
from time to time, all acts and things that the Secured Party
deems necessary to protect, preserve or realize upon the
Collateral and the Secured Partys security interest therein, in
order to effect the intent of this Agreement, all as fully and
effectively as the Debtor might do.
SECTION 11. Secured Party May Perform. If the Debtor fails to
perform any agreement contained herein, the Secured Party may
itself perform, or cause performance of, such agreement, and the
reasonable expenses of Secured Party incurred in connection
therewith shall be payable by the Debtor under Section 15.
SECTION 12. Secured Partys Duties and Liabilities.
(a) The powers conferred on the Secured Party hereunder are
solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its possession or over
which the Secured Party asserts control, and except for the
accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
The Secured Party shall be required to and shall be deemed to
exercise reasonable care in the custody and preservation of such
Collateral if such Collateral is accorded treatment substantially
equal to that which the Secured Party accords its own
property.
(b) The Secured Party shall not be liable to the Debtor (i)
for any loss or damage sustained by it, or (ii) for any loss,
damage, depreciation or other diminution in the value of any of
the Collateral, that may occur as a result of, in connection with
or that is in any way related to (x) any easonable exercise by
the Secured Party of any right or remedy under this Agreement or
(y) any other reasonable act of or failure to act by the
Secured Party, except to the extent that the same shall be
determined by a judgment of a court of competent jurisdiction to
be the result of acts or omissions on the part of the Secured
Party constituting gross negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY THE DEBTOR AGAINST THE SECURED
PARTY OR ANY OF ITS AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES,
OR ATTORNEYS FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES
IN RESPECT OF ANY BREACH OR WRONGFUL CONDUCT (WHETHER THE
CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR DUTY IMPOSED BY LAW)
IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH; AND THE Debtor HEREBY EXPRESSLY WAIVES, RELEASES AND
AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO
EXIST IN ITS FAVOR, EXCEPT TO THEEXTENT SUCH CLAIM IS BASED UPON
BAD FAITH OR WILLFUL MISCONDUCT.
SECTION 13. Remedies. If any Event of Default shall have
occurred and be continuing, the Secured Party may exercise in
respect of the Collateral, (a) all the rights and remedies of a
secured party upon default under the Code (whether or not the
Code applies to the affected Collateral), (b) all of the rights
and remedies provided for in this Agreement, the Underwriting
Agreement and any other agreement between the Debtor and the
Secured Party and (c) such other rights and the remedies as may
be provided by law or otherwise (such rights and remedies of the
Secured Party to be cumulative and non-exclusive). If an Event
of Default shall have occurred and be continuing, the Secured
Party also may (i) require the Debtor to, and the Debtor hereby
agrees that it will at its expense and upon request of the
Secured Party forthwith, assemble all or part of Collateral as
directed by Secured Party and make it available to the Secured
Party at Debtors place of business, (ii) enter onto the property
where any Collateral is located and take possession thereof with
or without judicial process, (iii) store, process, repair or
recondition the Collateral or otherwise prepare the Collateral
for use in any reasonable manner to the extent the Secured Party
reasonably deems appropriate, (iv) take possession of the Debtors
premises or place custodians in exclusive control thereof, remain
on such premises and use the same and any equipment of the Debtor
for the purpose of completing any work in process, taking any
actions described in the preceding clause (iii) and collecting
any Account, and (v) without notice except as specified below,
sell the Collateral or any part thereof in a commercially
reasonable manner. The Debtor agrees that, at least ten business
days notice to the Debtor of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Secured Party shall not
be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Secured Party may adjourn any
public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned.
The Secured Party may retain any directors, officers and
employees of the Debtor, in each case upon such terms as the
Secured Party and any such person may agree, notwithstanding the
provisions of any employment, confidentiality or non-disclosure
agreement between any such person and the Debtor, and the Debtor
hereby waives its rights under any such agreement and consent to
each such retention, but only the extent reasonably necessary to
protect the Secured Partys interest in the Collateral.
SECTION 14. Application of Proceeds. Except as expressly
provided elsewhere in this Agreement, all proceeds received by
the Secured Party in respect of any sale of, collection from or
other realization upon all or any part of the Collateral may, in
the discretion of the Secured Party, be held by the Secured Party
as Collateral for, and/or then, or at any other time thereafter
applied, in full or in part by the Secured Party against the
Secured Obligations in the following order of priority:
FIRST: To the payment of all reasonable costs and expenses
of such sale, collection or other realization and all other
expenses, liabilities and advances made or incurred by the
Secured Party in connection therewith and all amounts for
which the Secured Party is entitled to indemnification
hereunder and all advances made by the Secured Party
hereunder for the account of the Debtor and for the payment
of all costs and expenses paid or incurred by the Secured
Party in connection with the exercise of any right or remedy
hereunder, all in accordance with Section 16;
SECOND: To the payment in full of the Secured Obligations
owing to the Secured Party; and
THIRD: After payment in full of the amounts specified in
the preceding paragraphs, to the payment to or upon the
order of the Debtor, or whomsoever may be lawfully entitled
to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such
proceeds.
All application of proceeds to the Secured Obligations
shall be applied to the payment of interest before
application of payment to principal.
SECTION 15. Indemnity and Expenses.
(a) The Debtor agrees to indemnify the Secured Party from and
against any and all claims, losses and liabilities growing out of
or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or
liabilities resulting from the Secured Partys bad faith, gross
negligence or willful misconduct.
(b) The Debtor will upon demand pay to the Secured Party the
amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any
experts and agents, that the Secured Party may incur in
connection with (i) the custody, preservation, use or operation
of, or the sale of, collection from, or other realization upon,
any of the Collateral, (ii) the exercise or enforcement of any of
the rights of the Secured Party hereunder or (iii) the failure by
the Debtor to perform or observe any of the provisions hereof.
SECTION 16. Other Waivers by the Debtor, Etc.
The Debtor waives any right to require the Secured Party to make
or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of
dishonor in connection with any obligation or evidences of
indebtedness held by the Secured Party as collateral, or in
connection with any obligations or evidences of indebtedness that
constitute in whole or in part the Underlying Debt, or in
connection with the creation of new or additional indebtedness.
The Debtor waives any defense arising by reason of, and agrees
that the rights of the Secured Party and the obligations of the
Debtor shall be absolute and unconditional irrespective of, (a)
any disability or other defense of any other Person; (b) the
unenforceability or cessation from any cause whatsoever, other
than the indefeasible payment in full, of the Underlying Debt;
(c) the application by the Debtor of the proceeds of any
Underlying Debt for purposes other than the purposes represented
by the Debtor to the Secured Party or intended or understood by
the Secured Party; (d) any modification of the Underlying Debt,
in any form whatsoever, including without limitation the renewal,
extension, acceleration or other changes in time for payment of
the Underlying Debt, or other change in the terms of the
Underlying Debt or any part thereof, including any increase or
decrease of the rate of interest thereon; (e) any right to
deferral or modification of the Debtors obligations hereunder by
reason of any bankruptcy, reorganization, arrangement, moratorium
or other debtor relief proceeding; and (f) any other
circumstance that might otherwise constitute a defense available
to, or a discharge of, any other Person in respect of the
Underlying Debt.
The Debtor waives any right to enforce any remedy that the
Secured Party now has or may hereafter have against any other
Person, and waives any benefit of, or any right to participate
in, any security whatsoever now or hereafter held by the Secured
Party, except to the extent that any recovery must be assigned to
Debtor or applied as a credit to the Underlying Debt.
SECTION l7. Waiver of Jury Trial. THE DEBTOR AND THE SECURED
PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims,
breach of duty claims, and all other common law and statutory
claims. The Debtor and the Secured Party each acknowledge that
this waiver is a material inducement for the Debtor and the
Secured Party to enter into a business relationship that the
Debtor and the Secured Party have already relied on the waiver in
entering into this Agreement and that each will continue to rely
on the waiver in their related future dealings. The Debtor and
the Secured Party further warrant and represent that each has
reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
SECTION 18. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall
(a) remain in full force and effect until the indefeasible
payment in full of the Secured Obligations and termination of
the Secured Partys obligations to provide or procure Bonds,
(b) be binding upon the Debtor, its successors and assigns and
(c) inure, together with the rights and remedies of the Secured
Party hereunder, to the benefit of the Secured Party and its
successors, transferees and assigns. Upon the termination of the
Underwriting Agreement, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to
the Debtor. Upon any such termination, the Secured Party will,
at the Debtors expense, promptly execute and deliver to the
Debtor such documents as the Debtor shall reasonably request to
evidence such termination.
SECTION 19. Amendments; Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the
Debtor here from, shall in any event be effective unless the same
shall be in writing and signed by the Secured Party and the
Debtor, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given.
SECTION 20. Addresses for Notices. All notices and other
communications provided for hereunder shall be made in accordance
with Section 8.9 of the Underwriting Agreement.
SECTION 21. Consent to Jurisdiction and Service of Process. The
Debtor and the Secured Party hereby submit to the nonexclusive
jurisdiction of the state courts of the State of Washington and
the federal courts located in the State of Washington for all
matters arising under this Agreement and related documents.
SECTION 22. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF WASHINGTON WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES. Unless otherwise defined herein
or in the Underwriting Agreement, terms used in Article 9 of the
Code as in effect in the State of Washington are used herein as
therein defined.
SECTION 23. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement or be given any
substantive effect.
SECTION 24. Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of
such provision or obligation and in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 25. No Other Writing. This writing is intended by the
Debtor and the Secured Party as the final expression of this
Agreement and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the
matters covered hereby. No course of dealing, course of
performance or trade usage, and no parol evidence of any nature,
shall be used to supplement or modify and terms of this
Agreement. There are no conditions to the full effectiveness of
this Agreement.
SECTION 26. Counterparts. This Agreement may be executed in
one or more counterparts, each of which when so executed shall be
deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the Debtor and the Secured Party have caused
this
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above
written.
TODD PACIFIC SHIPYARDS CORPORATION a Delaware corporation
By: Michael G. Marsh Its: Secretary and General Counsel
Address:
Todd Shipyards Corporation P.O. Box 3806 (Zip 98124) 1891 -
16th Ave. S.W. Seattle, WA 98134 Attention: Mr. Stephen G.
Welch
RELIANCE SURETY COMPANY
By: Frank Carlstrom Its: Senior Vice President
RELIANCE INSURANCE COMPANY UNITED PACIFIC INSURANCE COMPANY
RELIANCE NATIONAL INDEMNITY COMPANY
By: __________________________ Its:
__________________________
Address:
Reliance Insurance Company 2505 South 320 Street Federal Way, WA
98003 Attention: Surety Department
<PAGE>
SCHEDULE I
TO SECURITY AGREEMENT
Location of Equipment and Inventory:
Except for tools, equipment and supplies located at various
job sites in and around the Puget Sound area, all Equipment and
Inventory is located at 1801 16th Ave. SW, Seattle, Washington.
<PAGE>
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the Agreement) is made as of this 22nd day
of December, 1994, by TODD SHIPYARDS CORPORATION, a Delaware
corporation (Indemnitor), in favor of RELIANCE SURETY COMPANY, a
corporation (Reliance) as agent for itself and Reliance Insurance
Company, United Pacific Insurance Company, Reliance National
Indemnity Company, and their affiliates, subsidiaries, divisions,
co-sureties, reinsurers or other companies directly or indirectly
writing bonds for Indemnitor or Todd Pacific Shipyards
Corporation pursuant to the Indemnity Agreement defined below.
RECITALS
A.Indemnitor, together with Todd Pacific Shipyards Corporation
(Todd) and TSI Management, Inc. have entered into an Underwriting
and Continuing Indemnity Agreement with Reliance dated as of the
date hereof (the Indemnity Agreement). Pursuant to the Indemnity
Agreement, Reliance has agreed that upon satisfaction of certain
conditions Reliance may issue bonds in favor of Todd in
connection with, among other things, construction of the Jumbo
Class Ferries for the State of Washington.
B.One of the conditions to Reliance issuing any bonds in favor of
Todd is the grant by Indemnitor of a pledge of its holdings in
certain Revenue Bonds issued by the City of Galveston, Texas.
C.The purpose of this Agreement is to grant such a Pledge of
bonds for the purpose of securing performance of the Obligations
under the Indemnity Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties
hereto agree as follows:
(1) Defined Terms.
(a)Capitalized terms not otherwise defined herein shall have the
same meaning as used in the Indemnity Agreement.
(b)Collateral means all of the Pledged Bonds and proceeds
described in Section 2 hereof.
(c)Pledged Bonds means one hundred percent (100%) of the
Indemnitors holdings in the City of Galveston, Texas Wharves and
Terminal Subordinate Lien Revenue Bonds, more fully identified in
Schedule A attached hereto and incorporated herein.
(d)Obligations means all obligations of Todd, Indemnitor, or TSI
Management, Inc. to Reliance arising under or related to the
Indemnity Agreement.
2. PLEDGE. As security for the full, complete and punctual
performance of the Obligations, Indemnitor hereby pledges, grants
and assigns to Reliance a possessory lien and security interest
in and to all of the following, together with all funds,
securities, investments, proceeds, interest and income thereof
existing from time to time:
The Pledged Bonds; and
(a)All principal and interest payments and all noncash proceeds
of the foregoing property and all right, title, interest,
privileges and pertaining or incident thereto; provided, however,
that in the absence of an Event of Default, Indemnitor shall be
entitled to receive all principal and interest income from such
Pledged Bonds and Reliance shall cooperate in releasing the
originals of such interest coupons or the originals of any bonds
as they mature.
3.REPRESENTATIONS AND WARRANTIES. Indemnitor hereby
represents and warrants the following:
(a) The number and amount of each of the Pledged Bonds is
accurately stated in Schedule A hereto.
(b) Indemnitor owns the Pledged Bonds free and clear of all
Liens other than the lien created under this Agreement.
Indemnitor has, and has duly exercised, all requisite power and
authority to enter into this Agreement and to pledge, assign and
deliver the Pledged Bonds in the manner set forth herein.
(c) To the best of Indemnitors knowledge, the Pledged Bonds are
fully paid and are nonassessable and in good order for transfer.
One or more assignments separate from certificate covering each
of the Pledged Bonds has been duly executed in blank by
Indemnitor.
(d) To the best of Indemnitors knowledge, no authorization,
consent, approval, license, exemption, filing or registration
with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or
securities exchange or any other person is necessary or advisable
in order to pledge, assign and deliver the Pledged Bonds.
(e) Indemnitor is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation. Indemnitor has the corporate power and
authority, and to the best of its knowledge has all material
governmental licenses, authorizations, consents and approvals
necessary to own its assets and to transact the business in which
it is now engaged or proposed to be engaged, except to the extent
the failure thereof would not be materially adverse to such
Indemnitor.
(f) The execution, delivery, and performance by the
Indemnitor of this Agreement has been duly authorized by all
necessary corporate and stockholder action and will not
(1) contravene such corporations charter or bylaws; (2) violate
any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award presently
in effect having applicability to such corporation; (3) result in
a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease, or instrument
to which such corporation is a party or by which it or its
properties may be bound or affected (except where the appropriate
consents have been obtained); (4) result in, or require, the
creation or imposition of any Lien (except Liens in favor of
Reliance), upon or with respect to any of the properties now
owned or hereafter acquired by such corporation; or (5) cause
such corporation to be in default under any such law, rule
regulation, order, writ, judgment, injunction, decree,
determination, or award or any such indenture, agreement, lease,
or instrument (except where the appropriate consents have been
obtained).
(g) This Agreement is, and each of the other underwriting
documents when delivered under this Agreement will be, legal,
valid, and binding obligations of the Indemnitor, enforceable in
accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency,
and other similar laws affecting creditors rights generally.
4. COVENANTS. During the term of this Agreement, Indemnitor
covenants and warrants that:
Indemnitor will not sell, assign, transfer, encumber, hypothecate
or otherwise dispose of the Pledged Bonds, or any interest
therein nor contract to do the same, without the written consent
of Reliance.
(a) Indemnitor will not take any action with respect to the
Collateral which is inconsistent with the provisions or the
purpose of this Agreement or the Indemnity Agreement or which
would adversely affect the rights of Reliance hereunder.
5. EVENTS OF DEFAULT. The occurrence of any event that
constitutes an Event of Default as defined in the Indemnity
Agreement shall constitute an Event of Default under this
Agreement.
6. REMEDIES UPON DEFAULT. Upon the occurrence of an Event
of Default, Reliance shall have all of the rights and remedies as
set forth in the Indemnity Agreement.
7. FURTHER ASSURANCE; RELIANCE AS ATTORNEY-IN-FACT.
Indemnitor agrees to sign, execute, file and/or deliver to
Reliance all documents, reports, papers, pleadings and/or
instruments required to obtain, and/or perfect any of Reliances
rights under this Agreement. Indemnitor irrevocably nominates and
appoints Reliance or any other person(s) designated by Reliance
as the true and lawful attorney-in-fact of Indemnitor, with full
right and authority, but only upon the occurrence and during the
continuance of an event of default, to execute on behalf of, and
sign the name of Indemnitor to any voucher, release,
satisfaction, check, application for payment, bill of sale or any
other paper or contract necessary or desirable to carry into
effect the purposes of this Agreement, the Indemnity Agreement or
any other underwriting document, with full right and authority,
to satisfy the performance of the contract(s). Indemnitor
recognizes that the appointment of such attorney-in-fact
constitutes a power coupled with an interest.
8. APPLICATION OF PROCEEDS OF SALE AND COLLECTION. All
Collateral may be sold by Reliance in payment of any Loss.
Reliance may sell or realize upon such collateral security, in a
commercially reasonable public or private sale, with reasonable
notice to Indemnitor, and with the right to be purchaser itself
at any such public sale, and shall be accountable to Indemnitor
only for such surplus or remainder of such collateral security or
the proceeds thereof as may be in reliances possession after it
has been fully indemnified as provided in this Agreement. Lender
shall not be liable for, and Indemnitor agree to make no claim
against Lender for, decrease in value or loss or destruction of
or damage to such security, provided that Lender complies with
the terms hereof. The net cash proceeds resulting from the
collection, liquidation, sale, transfer or other disposition of
the Collateral shall be applied first, to the costs and expenses
(including reasonable attorneys fees) of retaking, holding,
processing and preparing for sale, selling, collecting,
liquidating and the like of the Collateral, and then to the
satisfaction of the Obligations, with application to principal,
interest, charges and expenses to be in such order and manner as
provided in the Indemnity Agreement. Indemnitor shall remain
liable for any deficiency remaining under the Indemnity Agreement
after such sale, lease, transfer or other disposition of the
Collateral.
9. POSSESSION OF COLLATERAL. Upon execution of this
Agreement (or upon issuance of any substitute or replacement
bonds), Indemnitor shall deliver to Reliance original
certificates evidencing all the Pledged Bonds, together with
assignments separate from certificate endorsed in blank for each
such Pledged Bond. Reliance shall retain possession of the
certificates and assignments until all Obligations secured hereby
have been fully paid or performed, provided that Reliance shall
surrender and deliver the coupons and originals of any Pledged
Bond that reaches maturity as provided in Section 2 above. As
long as there is no default in any of the Obligations, Indemnitor
shall have the right to receive directly any interest payment
paid on the Pledged Bonds. Upon full performance and discharge
of all the Obligations, Agent shall return to Indemnitor or its
assigns all the Pledged Bonds, together with the cash and noncash
proceeds thereof and all assignments separate from certificate.
10. NO WAIVER. No delay or failure on the part of Reliance
inexercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude any other
or future exercise thereof or the exercise of any other right,
power or privilege hereunder. The rights and remedies of
Reliance hereunder are not exclusive of any rights or remedies
which Reliance, would otherwise have, Reliance may, upon default
hereunder, proceed in the enforcement hereof independently of any
other remedy or collateral it may at any time hold in connection
with the Obligations, and it shall not be necessary to proceed
upon or against, and/or exhaust any other collateral or remedy
before proceeding to enforce this Agreement.
11. NO DUTY TO PRESERVE RIGHTS. Reliance shall not be under
any duty or obligation whatsoever to make or give any
presentments, demands for performance, notices of nonperformance,
protests, notices of protest or notices of dishonor in connection
with the Collateral. Beyond the exercise of reasonable care to
assure the safe custody of the Pledged Bonds while held
hereunder, Agent shall have no duty or liability to preserve
rights pertaining thereto, including, without limitation, any
duty to preserve rights against any parties with respect to any
of the Pledged Bonds or to take any action with respect to the
Pledged Bonds including for calls, conversions and exchanges.
12. COST AND EXPENSES IN ENFORCEMENT. All advances,
charges, costs and expenses, including reasonable attorneys fees,
incurred or paid by Reliance in exercising any right, power or
remedy conferred by this Agreement, or in the enforcement hereof,
shall become a part of the Obligations and shall be secured by
this Agreement. In the event of a default of the Obligations,
Indemnitor agrees to pay a reasonable attorneys fee and all other
costs and expenses which may be incurred by Reliance in the
enforcement of this Agreement.
13. NOTICES. All notices, requests, demands, directions,
and other communications provided for hereunder shall be in
writing and shall be transmitted by the means specified in the
Indemnity Agreement and if given to Indemnitor, shall be sent to
and delivered at the address set forth under its signature hereto
or to such other address as the Indemnitor may specify in a
notice given Reliance in the manner prescribed in the Indemnity
Agreement.
14. FURTHER ASSURANCES. Indemnitor agrees to do such
further acts and things, and to execute and deliver such
additional conveyances, assignments, agreements, documents and
instruments as Reliance, may at any time request in connection
with the administration or enforcement of this Agreement or
related to the Collateral or any part thereof or in order to
better assure and confirm unto Reliance its rights, powers and
remedies hereunder. Indemnitor hereby consents and agrees that
the issuers of or obligors in respect to the Collateral or any
registrar or transfer agent or trustee for any of the Collateral
shall be entitled to accept the provisions of this Agreement as
conclusive evidence of the right of Reliance, to effect any
transfer or exercise any right hereunder, notwithstanding any
other notice or direction to the contrary heretofore or hereafter
given by Todd, Indemnitor or any other person to any of such
issuers or obligors or to any such registrar or transfer agent or
trustee.
15. BINDING AGREEMENT. This Agreement and the terms,
covenants and conditions hereof, shall be binding upon and inure
to the benefit of Indemnitor and Reliance, and their respective
successors and assigns, except that Indemnitor shall not be
permitted to transfer, convey or assign this Agreement or any
interest herein or in the Collateral, or any part thereof.
16. AMENDMENTS. Neither this Agreement nor any provision
hereof may be amended, modified, waived, discharged or terminated
orally nor may any of the Collateral be released except by an
instrument in writing duly signed by Reliance.
17. SEVERABILITY. In case any lien, security interest or
other right Reliance shall be held to be invalid, illegal or
unenforceable, such invalidity, illegality and/or
unenforceability shall not affect any other lien, security
interest or other right of Reliance granted hereunder.
18. MISCELLANEOUS. All words used herein in the plural
shall be deemed to have been used in the singular where the
context and construction so require. The section headings used
herein are for convenience of reference only and shall not define
or limit the provisions of this Agreement.
19. GOVERNING LAW AND VENUE. This Agreement shall be
construed and enforced in accordance with the internal laws of
the State of Washington. Subject to the limitations imposed by
the Indemnity Agreement, by reason of location of Collateral or
otherwise, Reliance shall reasonably determine that the creation,
validity or perfection of the security interest provided for
herein may be governed by the laws of a jurisdiction other than
Washington, Indemnitor shall take such steps and execute and
deliver such documents as Reliance may from time to time request
to comply with the Uniform Commercial Code or equivalent, and
other applicable laws, of such other jurisdiction. Indemnitor
and Reliance hereby irrevocably submits to the jurisdiction of
any state or federal court sitting in Seattle, Washington, in any
action or proceeding brought to enforce or otherwise arising out
of or relating to this Agreement. Indemnitor and Reliance agree
that such action may be commenced and prosecuted in such courts
and that neither shall claim it is an inconvenient place for
trial.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first above written.
TODD SHIPYARDS CORPORATION
By: S.G. Welch
Its: Vice President
RELIANCE SURETY COMPANY
By: Frank Carlstrom
Its: Senior Vice President
RELIANCE INSURANCE COMPANY
UNITED PACIFIC INSURANCE COMPANY
RELIANCE NATIONAL INDEMNITY COMPANY
By: Frank Carlstrom
Its: Vice President
<PAGE>
SCHEDULE A
(To Pledge Agreement)
PLEDGED BONDS
Description: State of Texas, County of Galveston Wharves and
Terminal Subordinate Lien Revenue Bonds
Series: Series 1993B
Issuance Date: December 16, 1993
Interest Rate: 8.00%
Registered Owner: Todd Shipyards Corporation
Registered Number Principal Amount Maturity Date
001 $ 216,000 01/01/95
002 $ 216,000 01/01/96
003 $ 216,000 01/01/97
004 $ 216,000 01/01/98
005 $ 216,000 01/01/99
006 $ 216,000 01/01/00
007 $ 216,000 01/01/01
008 $ 216,000 01/01/02
009 $ 216,000 01/01/03
010 $ 3,456,000 01/01/04
<PAGE>
INTERCOMPANY CREDIT AGREEMENT
THIS INTERCOMPANY CREDIT AGREEMENT (the Agreement) is dated
December 22, 1994, between TODD SHIPYARDS CORPORATION, a Delaware
corporation (Todd Ship) and TODD PACIFIC SHIPYARDS CORPORATION, a
Delaware corporation (Todd Pacific).
RECITALS
A.Todd Ship and Todd Pacific are affiliated corporations and, as
such, there is from time to time intercompany debt between the
two corporations.
B.Prior to the date of this Agreement, intercompany debt between
Todd Ship and Todd Pacific was payable in full on demand without
the requirement of prior notice.
C.In connection with Todd Pacifics proposed ferry construction
bid to be submitted to the State of Washington, Todd Pacific
intends to secure necessary contract bonding from Reliance Surety
Company, a Pennsylvania corporation (Reliance).
D.As one of the conditions to issuing any bonds in favor of Todd
Pacific, Reliance has requested that Todd Pacific and Todd Ship
agree to enter into this Agreement to restrict their respective
abilities to make immediate demand for payment of intercompany
debt.
E.Todd Pacific and Todd Ship have confirmed that as of October
30, 1994, the intercompany debt between the companies totaled
approximately $2,189,000 payable by Todd Pacific to Todd Ship.
THEREFORE, the parties agree as follows:
1. Effective as of the date of this Agreement, and except as
provided in Section 2 below, all intercompany debt now or
hereinafter owing from Todd Pacific to Todd Ship, or from Todd
Ship to Todd Pacific, shall be due and payable only after
thirteen (13) months prior written notice of the demand for
payment has been given.
2. Notwithstanding the foregoing, nothing in this Agreement is
intended to restrict the ability of Todd Ship and Todd Pacific
from offsetting mutual obligations owed by one against the other
or voluntarily prepaying intercompany debt before it is due and
payable.
3. The parties mutually agree that this Agreement shall not be
modified without the prior written consent of Reliance, which
consent will not be unreasonably withheld. This Agreement shall
no longer be effective after all obligations under that certain
Underwriting and Confirming Indemnity Agreement has been fully
discharged.
IN WITNESS WHEREOF, this Agreement is dated as of the date first
above written.
TODD SHIPYARDS CORPORATION
By: S.G. Welch Its: Vice President
TODD PACIFIC SHIPYARDS CORPORATION
By: Michael G. Marsh Its: Secretary and General Counsel
APPROVED:
RELIANCE SURETY COMPANY
by: Frank Carlstrom
Its: Senior Vice President
<PAGE>
KIM MARINE DOCUMENTATION, INC.
720 OLIVE WAY, SUITE 1515
SEATTLE, WASHINGTON 98101
(206) 682-7013
PREFERRED MORTGAGE OF VESSEL
MORTGAGOR: TODD PACIFIC SHIPYARDS CORPORATION
1801 16th Avenue S.W.
P.O. Box 3806
Seattle, Washington 98134
MORTGAGEE: RELIANCE INSURANCE COMPANY, RELIANCE SURETY
COMPANY, UNITED PACIFIC INSURANCE COMPANY and
RELIANCE NATIONAL INDEMNITY COMPANY
4 Penn Center Plaza
Philadelphia, Pennsylvania 19103
VESSEL: EMERALD SEA, O/N. 539677
TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETINGS:
Know ye, That TODD PACIFIC SHIPYARDS CORPORATION, 100% (and all
heirs, executors, administrators, successors and assigns,
hereinafter referred to as MORTGAGOR), and sole owner of the
vessel called the EMERALD SEA, O/N 539677, of Seattle, Washington
(hereinafter referred to as VESSEL), being justly indebted to
RELIANCE INSURANCE COMPANY, RELIANCE SURETY COMPANY, UNITED
PACIFIC INSURANCE COMPANY and RELIANCE NATIONAL INDEMNITY
COMPANY, (collectively the MORTGAGEE), each Mortgagee holding an
undivided interest as Joint Tenants, 100% (and all heirs,
executors, administrators, successors and assigns, hereinafter
referred to as MORTGAGEE), in the sum of TEN MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($10,500,000.00), to secure the
performance and payment of those obligations which have been
incurred and will hereafter be incurred (monetary or otherwise)
by the Mortgagor to the Mortgagee (the Obligations) under or in
connection with that certain Reliance Insurance Companies
Underwriting and Continuing Indemnity Agreement (the Agreement)
dated December 22, 1994, among the Mortgagor, various affiliates
of the Mortgagor and the Mortgagee, has, for the purposes of
securing the performance and payment of the Obligations, and the
interest thereon, granted, bargained, sold and mortgaged and by
these presents does grant, bargain, sell and mortgage unto the
Mortgagee, the whole of the Vessel, together with all of the
mast, bowsprit, boat, anchors, cables, chains, rigging, tackle,
apparel, furniture and all other necessaries thereunto
appertaining and belonging.
To have and to hold the Vessel and all the other before-mentioned
appurtenances unto the Mortgagee, to the sole and only proper
use, benefit and behoof of the Mortgagee, forever:
Provided always, and the conditions of these presents is such,
that if the Mortgagor shall perform and pay or cause to be paid
to the Mortgagee, the Obligations, with the interest thereon, at
the time or times and in a manner following, to wit in accordance
with the terms and conditions of the Agreement, then these
presents shall be void and of no effect, subject, however, to the
provisions hereinafter contained; and the Mortgagor hereby agrees
to perform and pay the Obligations, and interest thereon, and to
fulfill and perform each and every one of the covenants and
conditions therein contained.
But if default be made in such payments, or in any one of such
payments or in performance of the Obligations, or if default be
made in the prompt and faithful performance of any of the
covenants herein contained, or if Mortgagor shall sell or attempt
to sell the Vessel, or any part thereof, or if the same shall be
levied upon or taken by virtue of any attachment or execution
against the Mortgagor, or if the Mortgagor shall suffer and
permit the Vessel to be run into debt beyond an amount necessary
to maintain the Vessel in a seaworthy conditions, or if the
Mortgagor shall negligently or willfully permit the Vessel to
waste, or be damaged or destroyed, subject to the notice and cure
provisions in the Agreement, Mortgagee is hereby authorized to
take possession of said goods, chattels and personal property at
any time, wherever found, either before or after the expiration
of such the time aforesaid, and to sell and convey the same, or
so much thereof as may be necessary to satisfy the Obligations,
interest and reasonable expenses, after first giving notice of a
legal number of days, to be given by publication in some
newspaper published in the city where Mortgagor resides or
conducts business, or the home port of the Vessel, and to retain
the same out of the proceeds of such sale; the surplus (if any)
to belong to and to be returned to the Mortgagor.
An it is agreed that on such sale, the Mortgagee may become the
purchaser.
And the Mortgagor does further covenant and agree, to and with
the Mortgagee, that Mortgagor will immediately procure the Vessel
to be insured against loss or damage by fire, and against all
marine risks and disasters, in some good and responsible
insurance company or companies, to be selected and approved by
the Mortgagee, for an amount at least equal to the amount which
shall from time to time remain unpaid upon the Obligations and
interest thereon, and that Mortgagor will keep such policy or
policies renewed from time to time, and keep the same valid at
all times for the amount aforesaid, and that Mortgagor will do,
suffer or permit to be done, no act whereby said insurance would
be liable to be vitiated or forfeited, and that Mortgagor will
immediately cause Mortgagee to be named as loss payee of said
insurance, and that the Mortgagor will also promptly deliver to
the Mortgagee the renewal certificates of said policies as
collateral security for the payment of the Obligations. And if
the Mortgagor shall fail to immediately procure such a policy and
loss payee endorsement as aforesaid, or shall at any time fail to
immediately renewal the same and deliver the renewal certificates
as aforesaid, the Mortgagee is hereby authorized to procure the
Vessel to be insured as aforesaid, and to keep the policy or
policies renewed, and that amount which Mortgagee has to pay
therefor shall be considered, and is hereby declared to be, an
additional Obligation indebtedness hereby intended to be secured,
and shall be repaid to the Mortgagee on demand, and shall bear
interest at the same rate reflected in the Agreement, from the
time of such payment, until repaid.
And it is hereby provided, that it shall be lawful for Mortgagor
to retain possession of the Vessel and at Mortgagors own expense
to use and enjoy the Vessel until the Obligations shall become
due, unless the Mortgagee should at any earlier date declare this
Mortgage forfeited for nonperformance of the Obligations or of
any of the covenants contained herein, or by virtue of any
authority hereby conferred on Mortgagee.
In pursuance of the provisions of 46 U.S.C. 31324, the
Mortgagor will place and use diligence to retain one copy of this
Mortgage on board the Vessel. The Mortgagor will cause such copy
and the document of the Vessel to be exhibited by the Master to
any person having business with the Vessel, which may give rise
to a maritime lien upon the Vessel or to the sale, conveyance or
mortgage thereof.
In testimony whereof, the Mortgagor has executed this instrument
on December 22, 1994.
TODD PACIFIC SHIPYARDS CORPORATION
By: /s/ Michael G. Marsh
Printed Name: Michael G. Marsh
Title: Secretary and General Counsel
STATE OF WASHINGTON )
)
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
Michael G. Marsh is the person who appeared before me, and said
person acknowledge that he signed this instrument, on oath stated
that he was authorized to execute this instrument and
acknowledged it as the Secretary and General Counsel of TODD
PACIFIC SHIPYARDS CORPORATION, to be the free and voluntary act
and deed of such party for the uses and purposes mentioned in
this instrument.
DATED: December 22, 1994.
/s/ Maja D. Larson
NOTARY PUBLIC in and for
The State of Washington
Printed Name: Maja D. Larson
Residing at: Seattle, WA
Commission Expires: 10/9/96
<PAGE>
PRIOR AND SUBSEQUENT LIENS AFFIDAVIT
STATE OF WASHINGTON )
)
COUNTY OF KING )
I/we, the undersigned, in pursuance of the provisions of 46
U.S.C. 31323, do hereby certify that at the time of executing a
certain Preferred Mortgage of Vessel on the EMERALD SEA,
O/N 539677 in favor of RELIANCE INSURANCE COMPANY, RELIANCE
SURETY COMPANY, UNITED PACIFIC INSURANCE COMPANY and RELIANCE
NATIONAL INDEMNITY COMPANY that there are no prior maritime
liens, mortgages or other obligations of liability upon the
Vessel known to the undersigned mortgagor.
It is further certified that without the consent of the
Mortgagee under this Mortgage, there will not be incurred after
the execution of this Mortgage, and before the Mortgagee has had
a reasonable time in which to record the same, any contractual
obligation creating a lien upon the Vessel other than liens for
wages for stevedores employed by the owner-master, or agent of
the Vessel, wages of the crew of the Vessel, general average
salvage, including contract salvage, in respect to the Vessel.
DATED: December 22, 1994.
TODD PACIFIC SHIPYARDS CORPORATION
By: /s/ Michael G. Marsh
Printed Name: Michael G. Marsh
Title: Secretary and General Counsel
SUBSCRIBED AND SWORN (OR AFFIRMED) to before me on December
22, 1994, by Michael G. Marsh, at Seattle, Washington.
/s/ Maja D. Larson
NOTARY PUBLIC in and for
The State of Washington
Printed Name: Maja D. Larson
Residing at: Seattle, WA
Commission Expires: 10/9/96
<PAGE>
This UCC-1 FINANCING STATEMENT is a present filing pursuant to
the WASHINGTON UNIFORM COMMERCIAL CODE, chapter 62A.9RCW, to
perfect a security interest in the below names collateral.
PLEASE TYPE FORM Filing fee $12.00
1. DEBTOR(S) ( see instruction #2)
PERSONAL (last, firs, middle name and address)
X BUSINESS (legal business name and address)
Debtor 1
SSN:
FEIN:
Debtor 2
SSN:
FEIN:
TODD PACIFIC SHIPYARDS CORPORATION
1801 16TH AVENUE SW
P.O. BOX 3806
SEATTLE, WA 98124
TRADE NAME, DBA, AKA:
2. FOR OFFICE USE ONLY - DO NOT WRITE IN THIS BOX
3. SECURED PARTY(IES) (name and address)
RELIANCE SURETY COMPANY AND THOSE PARTIES LISTED ON EXHIBIT 3
2505 S. 320TH ST.
P.O. BOX 9719
FEDERAL WAY, WA 98063-9719
4. ASSIGNEE(S) of SECURED PARTY(IES) if applicable (name and
address)
5. SECURED PARTY CONTACT PERSON: Lawrence W. Carlstrom
Phone:(206) 952-5000
6. CHECK ONLY IF APPLICABLE: (For definitions of TRANSMITTING
UTILITY AND PRODUCTS OF COLLATERAL, see instruction sheet.)
Debtor is a Transmitting Utility x Products of Collateral
are also covered
7. THIS FINANCING STATEMENT covers the following collateral:
(Attach additional 8-1/2 x 11 sheet(s) if needed.)
SEE ATTACHED EXHIBIT A INCORPORATED HEREIN BY THIS REFERENCE.
8. RETURN ACKNOWLEDGMENT COPY TO: (name and address)
RELIANCE SURETY COMPANY
2505 S. 320TH ST.
P. O. BOX 9719
FEDERAL WAY, WA 98063-9719
9. FILE WITH:
UNIFORM COMMERCIAL CODE
DEPARTMENT OF LICENSING
P.O. BOX 9660
OLYMPIA, WA 98507-9660
(206) 753-2523
MAKE CHECKS PAYABLE TO THE DEPARTMENT OF LICENSING
10. FOR OFFICE USE ONLY IMAGES TO BE FILMED
11. If collateral is described below, this statesmen may be
signed by the Secured Party instead of the Debtor. Please check
the appropriate box, complete the adjacent lines and box 13, if
collateral is:
a. already subject to a security interest in another
jurisdiction when it was brought into this state or when the
debtors location was changed to this state. (complete adjacent
lines 1 and 2)
b proceeds of the original collateral described above in which a
security interest was perfected (completed adjacent lines 1 and
2)
c listed on a filling which has lapsed. (complete adjacent lines
1 and 2)
d acquired after a change of name, identity or corporate
structure of the debtor(s). (complete adjacent lines 1 and 2)
1.________________________________
ORIGINAL FILING NUMBER
2.________________________________
FILING OFFICE WHERE FILED
__________________________________
3. ________________________________
FORMER NAME OR DEBTOR(S)
12. DEBTOR NAME(S) AND SIGNATURE(S):
TODD PACIFIC SHIPYARDS CORPORATION
___________________________________
TYPE NAME(S) OF DEBTOR(S) AS IT APPEARS IN BOX 1.
BY:
________________________________
SIGNATURE(S) OF DEBTOR(S)
________________________________
SIGNATURE(S) OF DEBTOR(S)
13. SECURED PARTY NAME(S AND SIGNATURE(S) ARE REQUIRED IF BOX 11
HAS BEEN COMPLETED.
______________________________
TYPE NAME(S) OF SECURED PARTY(IES) AS IT APPEARS IN BOX 3 OR 4.
_____________________________
SIGNATURE(S) OF SECURED PARTY(IES)
______________________________
SIGNATURE(S) OF SECURED PARTY(IES)
FORM APPROVED FOR USE IN THE STATE OF WASHINGTON (R/7/93)
WASHINGTON UCC-1
COPY 3 FILE COPY - DEBTOR
<PAGE>
To UCC-1 For
Todd Pacific Corporation
(a) All Equipment and all Inventory (as such terms are
defined in the Uniform Commercial Code in Effect in the State of
Washington ( the Code)),including, without limitation, all right,
title and interest of the debtor in and to all machinery,
vehicles, equipment, inventory, fuel, plant and tools owned by
Debtor, and all materials and supplies in any way related to any
Contract, and whether completed or in the process of construction
or manufacture;
(b) All Accounts ( as such term is defined in the code)
including, without limitation, all right, title and interest to
all monies due or to become due to Debtor arising out of or in
any way relating to any Contract, including, but not limited to
progress payments, deferred payments, retained percentages,
compensation for work, and claims and the proceeds thereof,
together with any and all sum due or which may become due under
or on all contracts not bonded by the Secured Party in which
Debtor has an interest, subject to an intercreditor agreement
with Debtors lender as described in Schedule 1.1P(c) of the
underwriting Agreement;
(c) All General Intangibles (as such term is defined in
the Code), including, without limitation, all rights, actions,
cause of action, claims and demands of the debtor in, or arising
from or out of,(i) any Contract or any extension, modifications,
changes or alterations there of or additions thereto or(ii) any
subcontract in connection with a Contract or against any
subcontractor or any Person, furnishing or agreeing to furnish or
supply labor, materials, supplies, machinery, tools, or other
equipment in connection with or on account of a contract or
against any surety or sureties of any such materialman,
subcontractor, laborer or other persons;
(d) All Chattel Paper and Instruments (as such terms are
defined in the Code) with a face value in excess of $100,000;
(e) All books, records, ledger cards, files,
correspondences, computer programs, tapes disk and related data
processing software( owned by the Debtor or in which it has an
interest) that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.;
(F) All plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all additions and
accessions thereto and replacements thereof and products thereof
(g) All now existing or hereafter acquired trademarks,
trade names, patent applications, patent, copyrights, rights and
interest in copyrights and work protectable by copyright, trade
secrets, inventions, designs, franchises, customer list, and
confidential information relating to the business of the Debtor
owned by the Debtor or held by the Debtor pursuant to licenses,
to the extent permitted by such license;
(h) All proceeds of any and all of the foregoing
Collateral and, to the extent not otherwise included, all
payments under insurance( whether or not the Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect
to any of the foregoing Collateral. For purpose of this
Agreement, the term proceeds includes whatever is receivable or
received when Collateral or proceeds are sold, collected,
exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without limitations, all
rights to payment, including returned premiums, with respect to
any insurance relating thereto ; and
(I) All of the vessel Emerald Sea O/N539677, Home Port,
Seattle, Washington, together with all of the mast bowsprit, boat
anchors, cables, cabins, rigging, tackle, apperal, furniture and
all other necessaries now or hereafter appurtenant and belonging
thereto.
<PAGE>
PLEASE TYPE FORM
The fixture filing is presented to the WASHINGTON UNIFORM
COMMERCIAL CODE.
LEASE - This filing is for informational purpose only. The term
debtor and secured party are to be constructed as LESSEE and
LESSOR.
CONSIGNMENT - This filing is for informational purpose only. The
Terms debtor and secured party are to be construed as CONSIGNEE
and CONSIGNOR.
_________________________________________________________________
______
1. DEBTOR(S) ( or assignor(s)) 2. FOR OFFICE
USE ONLY
(last name first, and address(ees))
TODD PACIFIC SHIPYARDS CORP.
1801 16TH AVE SW
P.O. BOX 3806
SEATTLE WA 981
_________________________________________________________________
_______
3. NUMBER OF ADDITIONAL SHEETS
ATTACHED: 6
_________________________________________________________________
_______
4. SECURED PARTY(IES)(OR ASSIGNEE(S)) (NAME AND ADDRESS
RELIANCE SURETY COMPANY AND THOSE PARTIES
LISTED ON EXHIBIT B
2505 S 330TH PST
PO BOX 9719
FEDERAL WAY WA 98063-9719
_________________________________________________________________
_______5. ASSIGNEE (S) OF SECURED PARTY(IES)
(IF APPLICABLE) (NAME AND ADDRESS(ES))
_________________________________________________________________
_______6. This FIXTURE FILING covers the following types or items
of property:
*
X The goods are to become fixtures on REAL PROPERTY DESCRIBED ON
EXHIBIT A.
The property is timber standing on...
The property is minerals or the like (including gas and oil)
or accounts to be financed at the wellhead or minehead of the
well or mine located on (described real estate. Use legal
description.)
* THE GOODS ARE DESCRIBED ON ATTACHED EXHIBIT C.
This FIXTURE FILING is to be filed for records in the real
estate records. if the debtor does not have an interest of record
in the realty, the name of a record owner is TODD PACIFIC
SHIPYARDS CORP.
Products of collateral are also covered.
_________________________________________________________________
_____
7. RETURN ACKNOWLEDGMENT COPY TO FILE FOR RECORD WITH
COUNTY AUDITOR OF COUNTY
RELIANCE SURETY COMPANY IN WHICH REAL PROPERTY IS
LOCATED
2505 S 330TH ST
PO BOX 9719
FEDERAL WAY WA 98063-9719
_________________________________________________________________
_______
8. This statement is signed by the Complete fully if
box
Second party(ies) instead of the (d) is checked
Debtors(s) to perfect a security Complete as
applicable for
interest in collateral (a), (b), and (c)
(a) already subject to a security
interest in another jurisdiction Original recording
number
when it was brought into this
state, or when the debtors location Filing office where
filed
was changed to this state or.
Former name of
Debtor(s)
(b).Which is proceeds of the original
collateral described above in which
a security interest was perfected, or
(c) as to which the filing has lapsed, or
(D)Acquired after a change of name identity,
or corporate structure of the debtor(s)
_________________________________________________________________
______99. USE IF APPLICABLE
TODD PACIFIC SHIPYARDS COOPERATION
________________________________
_____________________________
TYPE NAME(S) OF DEBTOR(S ) TYPE NAME(S) OF SECURED
PARTY(IES(or
assignee(s))
_____________________________
__________________________
TYPE NAME(S) OF DEBTOR(S ) TYPE NAME(S) OF SECURED
PARTY(IES(or
assignee(s))
_________________________________________________________________
_______
10. TERMINATION STATEMENT The SECURED PARTY(IES) certifies that
the SECURED PARTY(IES)no longer claim a security interest under
the FIXTURE FILING bearing the recording number shown above.
NAME_____________________________________DATE____________________
_____
SIGNATURE________________________________
SEATTLE PROPERTY
Parcel # 1: AKA Portions of lots 1-9; including all of
Block 404 of Seattle Tide Lands as set forth in auditors file
3191207, Records of King County, Washington, bounded and
described as follows:
Beginning at the Southwest corner of said Block 404,
which point is at the intersection of the East Margin of the West
Waterway and the Northerly margin of West Florida Street
(formerly Railroad Avenue West), in the City of Seattle and
running thence North, along the East Margin of said West Waterway
924.791 feet to Northwest corner of said Block 404; Thence North
76 42 13 East, along Northerly line of said Block 404; a distance
of 585.703 feet to the Northeast corner of said Block 404 thence
South, along the East line of said block 404, a distance of
924.971 feet to the Southeast corner of said block 404, thence
South 76 42 13 West, along the southerly line of said Block 404,
a distance of 585.703 feet to the point of beginning.
Parcel # 2: All that certain plot or parcel of land which is
the condemned portion of S.W. Florida Street between the east and
west boundary lines projected, of S.D. Block 404 as set forth in
U.S. Condemnation 488, modified by Quit Claim Deed to Richfield
Oil Corp. dated August 31, 1964, situated in the city of Seattle,
King County, Washington, Bounded and described as follows:
Beginning at the Southeast corner of Block 404, Seattle
Tide Lands Thence South 7642 13 West 585.703 feet along the South
side of said Block 404 to the South west corner thereof and the
Eastline of the West Waterway; Thence South along East Line
205.506 feet to the North line of a tract of land conveyed to
Richfield Oil Corporation under deed bearing auditors file no.
5835205; Thence North 76 42 13 East along said North line 585.703
feet to an intersection with the produced West line of 16th
Avenue Southwest; Thence North along said produced line 205.506
feet to the place of beginning.
Parcel # 3: All that certain plot of land situated in the
City of Seattle, King County, Washington, as set forth in
ordinance 96834, bounded and described as follows:
That portion of vacated 16th Avenue Southwest from the
production Easterly of the Southerly line of Block 404, Seattle
Tide Lands, to the production Easterly of the Northerly line of
said block, being 250 feet in width and 924.791 feet in length
and lying between Florida Street and the Imer Harbor Line.
Section 12-24.3.
An easement is reserved to the City of Seattle over,
through across and upon the following described property:
Portion of 16th Avenue Southwest as shown on the plot
Frinks Waterfront Addition, as recorded in Volume 12 of Plots,
Page 89, Records of King County, Washington, as vacated by this
ordinance; described as follows: Beginning at the intersection
of the northwesterly line of Southwest Florida Street and
westerly line of said 16th Avenue Southwest; thence northerly
along said westerly line 49.82 feet; thence south 83 37 56 east
144.07 feet to said northwesterly line extended; thence south 76
42 13 west along said northwesterly line 147.13 feet to the
beginning.
Parcel #4: All that certain plot of land situated in the
city of Seattle, King County, Washington which is that portion of
blocks C, D and E vacated Lewis Avenue and vacated Frink Place,
all in Frinks Waterfront Addition as set forth in Auditors file
6252658 and according to plot recorded in volume 12 of plots,
page 89, records of King County, Washington, bounded and
described as follows:
Beginning at a point on the east line of said block C
which is south 44.18 feet from the corner of said block C; thence
south 76 42 13 west parallel with the north line of said block C,
300.00 feet; thence north 188.96 feet to the north line of said
block E, thence south 76 42 13 west 254.89 feet to the northwest
corner of said block E; thence south along the west line of said
block E, its southerly extension and the west line of said block
D, 924.79 feet to the southwest corner of said block D; thence
north 76 42 12 west 117.85 feet from the southwest corner of said
block C; thence north parallel with the east line of said block C
327.23 feet: thence north 76 42 12 east 142.00 feet; thence south
6.85 feet; thence east 216.63 feet to the east line of said block
C; thence north along said east line 466.56 feet to the true
point of beginning.
SECURED PARTIES: RELIANCE INSURANCE COMPANY
UNITED PACIFIC INSURANCE COMPANY
RELIANCE NATIONAL INDEMNITY COMPANY
(A) All Equipment and all Inventory (as such terms are
defined in the Uniform Commercial Code in effect in the State of
Washington (the Code) including, with limitation, all right,
title and interest of Debtor in and to all machinery, vehicles,
equipment, inventory, fuel plant and tools owned by Debtor, and
all materials and supplies in any way related to any Contract,
and whether completed or in the process of construction or
manufacture;
(B) All Accounts (as such term is defined in the Code),
including, without limitation, all right, title and interest to
all monies due or to become due to Debtor arising out of or in
any way related to an Contract, including, but not limited to
progress payments, deferred payments, retained percentages,
compensation for other work, and claims and the proceeds thereof,
together with any and all sums due or which may become due under
or on all contracts not bonded by the Secured Party in with the
Debtor has interest, subject to and intercreditor agreement with
Debtors lender as described in Schedule 1.1P(c) of the
Underwriting Agreement;
(C) All General Intangibles (as such term is defined in
the Code), including, with limitation, all rights, actions,
causes of action, claims and demands of the Debtor in, or arising
from or out of, (i)any Contract or any extensions, modifications,
changes or alterations thereof or additions thereto or (ii) any
Subcontract in connection with a Contract or against any
subcontractor or any person, furnishing or agreeing to furnish or
supply labor, materials, supplies, machinery, tools, or other
equipment in connection with or on account of a Contract or
against any surety or sureties of any such materialman,
subcontractor, laborer or other Person.
(D) All Chattel Paper and Instruments (as such terms are
defined in the Code) with face value in excess of $100,000;
(E) All books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data
processing software (owned by the Debtor or in which it has an
interest) that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or
helpful in collection thereof or realization thereupon;
(F) All plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all additions and
accessions thereto and replacements thereof and products thereof;
(G) All now existing or hereafter acquired trademarks,
trade names, patent applications, patents, copyrights, right and
interests in copyrights and works protectable by copyright, trade
secrets, inventions, designs, franchises, customer lists, and
other confidential information relating to the businesses of the
Debtor owned by the Debtor or held by the Debtor pursuant to
licenses, to the extent permitted by such licenses;
(H) All proceeds of any and all of the foregoing
Collateral and, to the extent not otherwise included, all
payments under insurance( whether or not the Secured Party is the
loss payee thereof), or any indemnity warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect
to any of the foregoing Collateral. For purposes of this
Agreement, the term proceeds includes whatsoever is receivable
or received when Collateral or proceeds are sold, collected,
exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without limitation, all
rights to payment, including returned premiums, with respect to
any insurance relating thereto; and
(I) all of the vessel Emerald Sea, O/N539677, Home Port
Seattle, Washington, together with all of the mast, bowsprit,
boat anchors, cables, cabins, rigging, tackle, apparel, furniture
and all other necessaries now or hereafter appurtenant and
belonging thereto.
SECURITY AGREEMENT
This Security Agreement (Agreement) is made and entered
into as of, 9th day of March 1995, by TODD PACIFIC SHIPYARDS
CORPORATION, a Delaware corporation (Borrower), for the benefit
of U. S. BANK OF WASHINGTON, NATIONAL ASSOCIATION, a national
banking association (U. S. Bank).
R E C I T A L S :
A Concurrently with the execution hereof, U. S. Bank
and Borrower entered into a Business Loan Agreement (together
with all supplements, exhibits, and amendments thereto, referred
to as the Loan Agreement), pursuant to which U. S. Bank agreed to
extend to Borrower credit facilities as more fully described
therein (the Loan).
B. Borrower wishes to grant to U. S. Bank a security
interest in all its Accounts and Chattel Paper as security for
all the Secured Obligations.
NOW, THEREFORE, in order for U. S. Bank to make the
Loan, Borrower agrees as follows:
ARTICLE I. DEFINITIONS
Unless otherwise defined herein, terms defined in the
Loan Agreement shall have the same meanings when used herein.
For the purposes of this Agreement, the following terms shall
have the following meanings:
Account means any right to payment for goods sold or
leased or for services rendered, whether or not it has been
earned by performance, but not including Instruments held by
Borrower for investment purposes and not as a result of goods
sold or leased or services rendered or to be rendered.
Account Debtor means the party who is obligated on or
under any Account.
Assignee Deposit Account shall have the meaning set
forth in Section 5.7 hereof.
Chattel Paper means all interest of Borrower in
writings that evidence both a monetary obligation and a security
interest in or a lease of specific goods, including any group of
writings consisting of both a security agreement or a lease and
an instrument or series of instruments.
Collateral means all Accounts and Chattel Paper now
owned or hereafter acquired by Borrower, or in which Borrower has
or later obtains an interest (together with Instruments referred
to in Section 3.5 hereof, specifically including, without
limitation, Accounts and Chattel Paper arising out of that
certain Jumbo Mark II Class Vessels Construction Contract No. 00-
4464 entered into between Borrower and Washington State Ferries,
a division of the Washington State Department of Transportation
(together with all amendments, modifications, and replacements
thereof) (the Jumbo Ferry Contract).
Event of Default means an occurrence of a default or an
event of default as defined in the Loan Agreement.
Instrument means any negotiable instrument or security
or other writing that evidences a right to the payment of money
and is not itself a security agreement or lease and is of a type
that is in the ordinary course of business transferred by
delivery with any necessary endorsement or assignment.
Intercreditor and Subordination Agreement means that
certain Intercreditor and Subordination Agreement dated March 7,
1995 between U. S. Bank and Reliance Surety Company, together
with certain of its affiliates.
Loan Documents means the Loan Agreement, this
Agreement, the Note, and all other agreements, instruments, and
documents arising out of or in any way relating to the Loan.
Note means the promissory note executed and delivered
by Borrower to U. S. Bank in order to evidence the Loan, together
with all amendments, modifications, and replacements thereof.
Secured Obligations means any past, present, or future
Indebtedness of Borrower to U. S. Bank, and includes but is not
limited to (a) any indebtedness, obligation, or liability of any
kind arising in any way of Borrower to U. S. Bank, now existing
or hereafter created, under the Loan Agreement, the Note, or the
other Loan Documents, including any refinancing, renewal,
replacement, extension, amendment, or substitution of such
indebtedness, (b) any liability or obligation of Borrower
hereunder, (c) the obligations of Borrower under any guaranty
executed by Borrower and delivered to U. S. Bank, whereby
Borrower guarantees the indebtedness of any Person other than
Borrower to U. S. Bank, and (d) any cost, expense, or liability,
including but not limited to reasonable attorney fees, that may
be incurred and advances that may be made by U. S. Bank in any
way in connection with any of the foregoing or any security
therefor.
ARTICLE II. GRANT OF SECURITY INTEREST
As security for the payment and satisfaction of the
Secured Obligations, Borrower hereby grants to U. S. Bank a
continuing security interest in and assigns to U. S. Bank all of
Borrowers right, title, and interest in the Collateral and all
products, profits, rents, and proceeds thereof.
ARTICLE III. COVENANTS OF BORROWER
Borrower shall fully perform each of the covenants set
forth below.
3.1 Obligations to Pay.
(a) Borrower shall pay to U. S. Bank, in timely
fashion and in full, all amounts payable by Borrower to
U. S. Bank, pursuant to the Loan Agreement, the Note, and the
other Loan Documents; and
(b) Borrower shall pay and reimburse U. S. Bank for all
expenditures including reasonable attorney fees and legal
expenses in connection with the exercise by U. S. Bank of any of
its rights or remedies under the Loan Agreement or the other Loan
Documents.
3.2 Performance. Borrower shall fully perform in a
timely fashion every covenant, agreement, and obligation set
forth in the Loan Agreement and the other Loan Documents.
3.3 Further Documentation. At its own expense,
Borrower shall execute and deliver any financing statement, any
renewal, substitution, or correction thereof, or any other
similar document; shall procure any document; and shall take such
further action as U. S. Bank may require in obtaining the full
benefits of this Agreement.
3.4 Filing Fees. Borrower shall pay all costs of
filing any financing, continuation, or termination statement with
respect to the security interests granted herein.
3.5 Pledges. Borrower shall deliver and pledge to
U. S. Bank, endorsed or accompanied by instruments of assignment
or transfer satisfactory to U. S. Bank, any Instruments or
Chattel Paper obtained by Borrower evidencing any Accounts.
3.6 Maintenance of Records. Borrower shall keep and
maintain at its own cost and expense satisfactory and complete
records of the Collateral including but not limited to a record
of all payments received and all credits granted with respect to
the Collateral and all other dealings with the Collateral.
Borrower shall mark its books and records pertaining to the
Collateral to evidence this Agreement and the security interests
granted herein. Borrower shall deliver and turn over to
U. S. Bank copies of all books and records pertaining to the
Collateral at any time after the occurrence and during the
continuation of an Event of Default, if so demanded by
U. S. Bank.
3.7 Disposition of Collateral. Except as allowed in
the Loan Agreement, and in the ordinary course of Borrowers
business, or to the extent that the aggregate principal amount of
collateral subject to compromise, forbearance or modification at
any one time shall not exceed an aggregate value of $500,000,
Borrower shall not sell or transfer any of the Collateral or
release, compromise, or settle any obligation or receivable due
to Borrower.
3.8 Indemnification. Borrower agrees to pay, and to
indemnify U. S. Bank and hold U. S. Bank harmless from, all
liabilities, costs, and expenses including but not limited to
legal fees and expenses with respect to or resulting from (a) any
delay in paying any excise, sales, or other taxes that may be
payable or determined to be payable with respect to any of the
Collateral, (b) any delay by Borrower in complying with any
requirement of law applicable to any of the Collateral, or
(c) any of the transactions contemplated by this Agreement. In
any suit, proceeding, or action brought by U. S. Bank under any
Account to enforce payment of any sum owing thereunder or to
enforce any provisions of any Account, Borrower will indemnify
U. S. Bank and hold U. S. Bank harmless from all expense, loss,
or damage suffered by reason of any defense, setoff,
counterclaim, recoupment, reduction, or liability whatsoever of
the Account Debtor thereunder arising out of a breach by Borrower
of any obligation thereunder or arising out of any other
agreement, indebtedness, or liability at any time owing to or in
favor of such Account Debtor or its successors from Borrower.
3.9 Limitations on Amendments, Modifications,
Terminations, Waivers, and Extensions of Contracts and Agreements
Giving Rise to Accounts. Borrower will not (a) amend, modify,
terminate, waive, or extend any provision of any agreement giving
rise to an Account in any manner that could reasonably be
expected to have a material adverse effect on the value of such
Account as Collateral or (b) fail to exercise promptly and
diligently every material right that it may have under each
agreement giving rise to an Account, other than any right of
termination, except in the ordinary course of Borrowers business,
or to the extent that the aggregate principal amount of
collateral subject to compromise, forbearance or modification at
any one time shall not exceed an aggregate value of $500,000.
3.10 Limitations on Discounts, Compromises, and
Extensions of Accounts. Except in the ordinary course of
Borrowers business, or to the extent that the aggregate principal
amount of collateral subject to compromise, forbearance or
modification at any one time shall not exceed an aggregate value
of $500,000, Borrower will not grant any extension of the time of
payment of any of the Accounts; compromise, compound, or settle
the same for less than the full amount thereof; release, wholly
or partially, any Person liable for the payment thereof; or allow
any credit or discount whatsoever thereon.
3.11 Further Identification of Collateral. Borrower
will furnish to U. S. Bank from time to time statements and
schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as
U. S. Bank may request, all in reasonable detail.
3.12 Notices. Borrower will advise U. S. Bank
promptly in reasonable detail at its address set forth in
Section 7.9 (a) of any lien (other than liens created hereby or
permitted under the Loan Agreement) on or claim asserted against
any of the Collateral and (b) of the occurrence of any other
event that could reasonably be expected to have a material
adverse effect on the Collateral or on the liens created
hereunder.
3.13 Changes in Locations, Name, Etc. Borrower will
not (a) change the location of its chief executive office/chief
place of business from that specified in Section 4.9, or
(b) change its name, identity, or structure to such an extent
that any financing statement filed by U. S. Bank in connection
with this Agreement would become seriously misleading, unless it
shall have given U. S. Bank at least ten days prior written
notice thereof.
3.14 Copy of Financing Statement. Borrower agrees that
a carbon, photographic, or other reproduction of a financing
statement or this Agreement is sufficient as a financing
statement.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Borrower hereby makes the following representations and
warranties:
4.1 Title to Collateral. Borrower has good and
marketable title to all the Collateral, free and clear of all
liens excepting only the security interests created pursuant to
this Agreement or permitted pursuant to the Loan Agreement, and
the security interests granted by Borrower to Reliance Surety
Company, Reliance Insurance Company, United Pacific Insurance
Company, and Reliance National Indemnity Company (the Reliance
Security Interests).
4.2 No Impairment of Collateral. None of the
Collateral shall be impaired or jeopardized because of the
security interest herein granted.
4.3 Other Agreements. The execution and delivery of
this Agreement, the consummation of the transactions provided for
herein, and the fulfillment of the terms hereof will not result
in the breach of any of the terms, conditions, or provisions of,
or constitute a default under, or conflict with, or cause any
acceleration of any obligation under any (a) agreement or other
instrument to which Borrower is a party or by which Borrower is
bound or (b) Applicable Law.
4.4 No Approvals. Except as may be provided in the
Jumbo Ferry Contract, no Governmental Approvals of any nature are
required in connection with the security interests herein
granted.
4.5 Authority. Borrower has full power and authority
to assign to U. S. Bank and to grant to U. S. Bank a security
interest in the Collateral, subject to the Reliance Security
Interests and the terms of the Intercreditor and Subordination
Agreement.
4.6 Location of Records. The address of the office
where the books and records of Borrower are kept concerning the
Collateral is set forth on Schedule I.
4.7 Name. Borrower conducts its business only under
the names Todd Pacific Shipyards Corporation, Todd Shipyard, and
Todd.
4.8 Accounts. The amount represented by Borrower to
U. S. Bank from time to time as owing by each Account Debtor or
by all Account Debtors in respect of the Accounts will at such
time be the correct amount actually owing by such Account Debtor
or Debtors thereunder. No material amount payable to Borrower
under or in connection with any Account is evidenced by any
Instrument or Chattel Paper that has not been delivered to
U. S. Bank.
4.9 Chief Executive Office. Borrowers chief executive
office and chief place of business is located at the address set
forth on Schedule I.
Article V. U. S. BANKS RIGHTS WITH RESPECT
TO THE COLLATERAL
5.1 No Duty on U. S. Banks Part. U. S. Bank shall not
be required (except at its option upon the occurrence and during
the continuation of any Event of Default) to realize upon any
Accounts, Instruments evidencing any Accounts, or Chattel Paper;
collect the principal, interest, or payment due thereon, exercise
any rights or options of Borrower pertaining thereto; make
presentment, demand, or protest; give notice of protest,
nonacceptance, or nonpayment; or do any other thing for the
protection, enforcement, or collection of such Collateral. The
powers conferred on U. S. Bank hereunder are solely to protect
U. S. Banks interests in the Collateral and shall not impose any
duty upon U. S. Bank to exercise any such powers. U. S. Bank
shall be accountable only for amounts that U. S. Bank actually
receives as a result of the exercise of such powers; and neither
U. S. Bank nor any of its officers, directors, employees, or
agents shall be responsible to Borrower for any act or failure to
act hereunder.
5.2 Negotiations with Account Debtors. Upon the
occurrence and during the continuation of any Event of Default,
U. S. Bank may, in its sole discretion, extend or consent to the
extension of the time of payment or maturity of any Collateral.
5.3 Right to Assign. Except as otherwise provided in
the Loan Agreement, U. S. Bank may assign or transfer the whole
or any part of the Secured Obligations and may transfer therewith
as collateral security the whole or any part of the Collateral;
and all obligations, rights, powers, and privileges herein
provided shall inure to the benefit of the assignee and shall
bind the successors and assigns of the parties hereto.
5.4 Duties Regarding Collateral. Beyond the safe
custody thereof, U. S. Bank shall not have any duty as to any
Collateral in its possession or control, or as to any
preservation of any rights of or against other parties.
5.5 Collection From Account Debtors. Upon the
occurrence and during the continuation of any Event of Default,
Borrower shall, upon demand by U. S. Bank (and without any grace
or cure period), notify all Account Debtors to make payment to
U. S. Bank of any amounts due or to become due. Borrower
authorizes U. S. Bank to contact the Account Debtors for the
purpose of having all or any of them pay their obligations
directly to U. S. Bank. Upon demand by U. S. Bank, Borrower
shall enforce collection of any indebtedness owed to it by
Account Debtors.
5.6 Inspection. U. S. Bank and its designees, from
time to time at reasonable times and intervals, and with
reasonable notice, may inspect, audit, and make copies of and
extracts from all records and all other papers relating to the
Collateral in the possession of Borrower.
5.7 Assignee Deposit Account. Upon demand by
U. S. Bank after the occurrence and during the continuation of an
Event of Default, Borrower will transmit and deliver to
U. S. Bank, in the form received, immediately after receipt, all
cash, checks, drafts, Chattel Paper, Instruments, or other
writings for the payment of money (properly endorsed, where
required, so that the items may be collected by U. S. Bank) that
may be received by Borrower at any time. All items or amounts
that are delivered by Borrower to U. S. Bank, or collected by
U. S. Bank from the Account Debtors, shall be deposited to the
credit of a deposit account (Assignee Deposit Account) of
Borrower with U. S. Bank, as security for the payment of the
Secured Obligations. Borrower shall have no right to withdraw
any funds deposited in the Assignee Deposit Account, except to
have the funds applied by U. S. Bank to a cure of an Event of
Default. U. S. Bank may, from time to time in its discretion,
and shall, upon the request of Borrower made not more than twice
in any week, apply all or any of the balance, representing
collected funds, in the Assignee Deposit Account, to payment of
the Secured Obligations, whether or not then due, in such order
of application, not inconsistent with the terms of the Loan
Agreement and this Agreement, as U. S. Bank may determine; and
U. S. Bank may, from time to time in its discretion, release all
or any of such balance to Borrower.
5.8 Authority of Borrower. In the absence of an
exercise of U. S. Banks rights under Section 5.7 above, Borrower
shall have the right to collect the proceeds of its Accounts
directly from its Account Debtors, and apply the proceeds toward
payment of obligations arising in the ordinary course of
Borrowers business.
Article VI. U. S. BANKS RIGHTS AND REMEDIES
6.1 General. Upon the occurrence of any Event of
Default, U. S. Bank may exercise its rights and remedies in the
Loan Agreement and in any other Loan Documents and any other
rights and remedies at law and in equity, simultaneously or
consecutively, all of which rights and remedies shall be
cumulative. The choice of one or more rights or remedies shall
not be construed as a waiver or election barring other rights and
remedies. Borrower hereby acknowledges and agrees that
U. S. Bank is not required to exercise all rights and remedies
available to it equally with respect to all the Collateral and
that U. S. Bank may select less than all the Collateral with
respect to which the rights and remedies as determined by
U. S. Bank may be exercised.
6.2 Notice of Sale; Duty to Assemble Collateral. In
addition to or in conjunction with the rights and remedies
referred to in Section 6.1 hereof:
(a) Written notice mailed to Borrower at the address
designated herein ten days or more prior to the date of public or
private sale of any of the Collateral shall constitute reasonable
notice.
(b) If U. S. Bank requests, Borrower will assemble
copies of Borrowers records of the Collateral and make it
available to U. S. Bank at places that U. S. Bank shall
reasonably select, whether on Borrowers premises or elsewhere.
Article VII GENERAL PROVISIONS
7.1 Entire Agreement. This Agreement, together with
the Loan Agreement and the other Loan Documents, sets forth all
the promises, covenants, agreements, conditions, and
understandings between the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contempo
raneous agreements and understandings, inducements, or
conditions, express or implied, oral or written, with respect
thereto, except as contained or referred to herein. This
Agreement may not be amended, waived, discharged, or terminated
orally, but only by an instrument in writing signed by the party
against whom enforcement of such amendment, waiver, discharge, or
termination is sought.
7.2 Invalidity. If any provision of this Agreement
shall for any reason be held to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other
provision hereunder, but this Agreement shall be construed as if
such invalid or unenforceable provision had never been contained
herein.
7.3 Nonwaiver and Nonexclusive Rights and Remedies.
(a) No right or remedy herein conferred upon or
reserved to U. S. Bank is intended to be to the exclusion of any
other right or remedy, but each and every such right or remedy
shall be cumulative and shall be in addition to every other right
or remedy given hereunder and now or hereafter existing at law or
in equity.
(b) No delay or omission by U. S. Bank in exercising
any right or remedy accruing upon an Event of Default shall
impair any such right or remedy, or shall be construed to be a
waiver of any such Event of Default, or an acquiescence therein,
nor shall it affect any subsequent Event of Default of the same
or of a different nature.
7.4 Termination of Security Interest. When all the
Secured Obligations have been paid in full, the security interest
provided herein shall terminate and U. S. Bank shall return to
Borrower all Collateral then held by U. S. Bank, if any, and upon
written request of Borrower, shall execute, in form for filing,
termination statements of the security interests herein granted.
Thereafter, no party hereto shall have any further rights or
obligations hereunder.
7.5 Successors and Assigns. All rights of U. S. Bank
hereunder shall inure to the benefit of its successors and
assigns, and all obligations of Borrower shall be binding upon
its successors and assigns.
7.6 U. S. Banks Appointment as Attorney-in-Fact.
(a) Effective upon the occurrence and during the
continuation of an Event of Default, Borrower hereby irrevocably
constitutes and appoints U. S. Bank and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the
place and stead of Borrower and in the name of Borrower or in its
own name, from time to time in U. S. Banks discretion, for the
purpose of carrying out the terms of this Agreement, to take any
and all appropriate action, and to execute any and all documents
and instruments consistent with the Loan Documents and the
Intercreditor and Subordination Agreement that may be necessary
or desirable to accomplish the purposes of this Agreement; and
without limiting the generality of the foregoing, Borrower hereby
gives U. S. Bank the power and right, on behalf of Borrower,
without consent by or notice to Borrower, to do the following:
(i) to transfer to U. S. Bank or to any other person
all or any of said Collateral, to endorse Instruments evidencing
any Accounts pledged to U. S. Bank, and to fill in blanks in any
transfers of Collateral, powers of attorney, or other documents
delivered to U. S. Bank;
(ii) to pay or discharge taxes and liens levied or
placed on or threatened against the Collateral, to effect any
repairs or any insurance called for by the terms of this
Agreement, and to pay all or any part of the premiums therefor
and the costs thereof;
(iii) upon the occurrence and during the continuation
of any Event of Default (A) to take possession of, endorse, and
collect any checks, drafts, notes, acceptances, or other
instruments for the payment of moneys due under any Account or
Instrument, or with respect to any other Collateral and (B) to
file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by
U.S. Bank for the purpose of collecting all such moneys due under
any Account, Instrument, or with respect to any other Collateral
whenever payable; and
(iv) upon the occurrence and during the continuation
of any Event of Default (A) to direct any party liable for any
payment under any of the Collateral to make payment of all moneys
due or to become due thereunder directly to U. S. Bank or as
U. S. Bank shall direct; (B) to ask for, demand, collect, and
receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of
or arising out of any Collateral; (C) to sign and endorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifi
cations, notices, and other documents in connection with any of
the Collateral; (D) to commence and prosecute any suits, actions,
or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to
enforce any other right in respect of any Collateral; (E) to
defend any suit, action, or proceeding brought against Borrower
with respect to any Collateral; (F) to settle, compromise, or
adjust any suit, action, or proceeding described in
clause (E) above and, in connection therewith, to give such
discharge or releases as U. S. Bank may deem appropriate; and
(G) generally, to sell, transfer, pledge, and make any agreement
with respect to or otherwise deal with any of the Collateral as
fully and completely as though U. S. Bank were the absolute owner
thereof for all purposes; and to do, at U. S. Banks option and
Borrowers expense, at any time or from time to time, all acts and
things that U. S. Bank deems necessary to protect, preserve or
realize upon the Collateral and U. S. Banks liens thereon and to
effect the intent of this Agreement and the Intercreditor and
Subordination Agreement, all as fully and effectively as Borrower
might do.
(b) Borrower hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of
attorney is a power coupled with an interest and shall be
irrevocable.
(c) Borrower also authorizes U. S. Bank, at any time and
from time to time, to execute, in connection with the sale
provided for in Article VI hereof, any endorsements, assignments,
or other instruments of conveyance or transfer with respect to
the Collateral.
(d) The powers conferred on U. S. Bank hereunder are
solely to protect U. S. Banks interests in the Collateral and
shall not impose any duty upon U. S. Bank to exercise any such
powers. U. S. Bank shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and
neither it nor any of its officers, directors, employees, or
agents shall be responsible to Borrower for any act or failure to
act hereunder.
7.7 Performance by U. S. Bank of Borrowers
Obligations. If Borrower fails to perform or comply with any of
its agreements contained herein and U. S. Bank, as provided for
by the terms of this Agreement, shall itself perform or comply,
or otherwise cause performance or compliance, with such
agreement, the expense of U. S. Bank incurred in connection with
such performance or compliance, together with interest thereon at
the rate provided for in the Loan Agreement upon the occurrence
of an Event of Default, shall be payable by Borrower to
U. S. Bank on demand and shall constitute Secured Obligations.
7.8 Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be construed and
enforced in accordance with and shall be governed by the laws of
the state of Washington, without regard to the choice of law
rules thereof.
7.9 Notices. All notices, requests, consents,
demands, approvals, and other communications hereunder shall be
deemed to have been duly given, made, or served if in writing and
when delivered personally, or sent via facsimile, or mailed by
first class mail, postage prepaid, to the respective parties to
this Agreement as follows:
(a) If to U. S. Bank:
U. S. Bank of Washington,
National Association
1414 Fourth Avenue
Seattle, Washington 98101
Attn: Kenneth L. Bodmer
Facsimile number (206) 344-
2887
(b) If to Borrower:
Todd Pacific Shipyards
Corporation
1801 16th Avenue S.W.
Seattle, Washington
Attn: Michael G. Marsh, Esq.
Facsimile number (206) 442-
8505
The designation of the person to be so notified or the address of
such person for the purposes of such notice may be changed from
time to time by similar notice in writing, except that any
communication with respect to a change of address shall be deemed
to be given or made when received by the party to whom such
communication was sent.
7.10 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall constitute an
original Agreement, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, Borrower and U. S. Bank have caused
these presents to be duly executed by their respective duly
authorized signatories as of the day and year first above
written.
TODD PACIFIC SHIPYARDS
CORPORATION
/s/ S.G. Welch
By Stephen G. Welch
Title Acting CFO
ACCEPTED BY: U. S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
/s/ Kenneth Bodmer
By Kenneth Bodmer
Title Vice President
SCHEDULE I
Address of
chief executive office: Todd Pacific Shipyards
Corporation
1801 16th Avenue S.W.
Seattle, Washington
Attn: Michael G. Marsh, Esq.
Facsimile: (206) 442-8505
Address of Office where
books and records are kept: Todd Pacific Shipyards
Corporation
1801 16th Avenue S.W.
Seattle, Washington
Attn: Michael G. Marsh, Esq.
Facsimile: (206) 442-8505
Addresses of locations of
collateral: Todd Pacific Shipyards
Corporation
1801 16th Avenue S.W.
Seattle, Washington
Attn: Michael G. Marsh, Esq.
Facsimile: (206) 442-8505
<PAGE>
COMMERCIAL GUARANTY
Principal Loan Date Maturity Loan No Call 38832 Collateral
355
Account 8916945162 Officer 54827 Initials
References in the shaded are for Lenders use only and do not
limit the applicability of this document to any particular loan
or item.
Borrower: Todd Pacific Shipyards Corporation Lender: U.S. Bank
of Washington
1801 16th Avenue S.W. Metro
Corporate
Seattle, WA 98134 1414 4th
Avenue
WWH 470
Seattle,
WA 98101
Guarantor: Todd Shipyards Corporation
1801 16th Avenue S.W.
Seattle, WA 98134
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable
consideration, TODD SHIPYARDS CORPORATION (Guarantor) absolutely
and unconditionally guarantees and promises to pay to U.S. BANK
OF WASHINGTON, NATIONAL ASSOCIATION (Lender) or its order, in
legal tender of the United States of America, the indebtedness
(as that term is defined below) of TODD PACIFIC SHIPYARDS
CORPORATION (Borrower) to Lender on the terms and conditions set
forth in the Guaranty. Under this Guaranty, the liability of
Guarantor is unlimited and the obligations of Guarantor are
continuing.
DEFINITIONS. The following words shall have the following
meanings when used in this Guaranty:
Borrower. The word Borrower Means TODD PACIFIC SHIPYARDS
CORPORATION.
Guarantor. The word Guarantor means TODD SHIPYARDS CORPORATION.
Guaranty. The word Guaranty means this Guaranty made by
Guarantor for the benefit of Lender dated March 9, 1995.
Indebtedness. The word indebtedness is used in its most
comprehensive sense and means and includes any and all of
Borrowers liabilities, obligations, debts, and indebtedness to
Lender, new existing or hereinafter incurred or created,
including without limitation, all loans, advances, interest,
costs, debts, overdraft indebtedness, credit card indebtedness,
lease obligations, other obligations, and liabilities of
Borrower, or any of them, and any present or future judgments
against Borrower, or any of them; and whether any such
indebtedness is voluntarily or involuntarily incurred, due or not
due, absolute or contingent, liquidated or unliquidated,
determined or undetermined; whether Borrower may be liable
individually or jointly with others, or primarily or secondarily,
or as guarantor or surety; whether recovery on the indebtedness
may be or may become barred or unenforceable against Borrower for
any reason whatsoever; and whether the indebtedness arises from
transactions which may be voidable on account of infancy,
insanity, ultra vires, or otherwise.
Lender. The word Lender means U.S. BANK OF WASHINGTON, NATIONAL
ASSOCIATION, its successors and assigns.
Related Documents. The words Related Documents mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust and all other instruments,
agreements and documents, whether now or hereafter existing,
executed in connection with the indebtedness.
NATURE OF GUARANTY. Guarantors liability under this Guaranty
shall be open and continuous for so long as this Guaranty remains
in force. Guarantor intends to guarantee at all times the
performance and prompt payment when due, whether at maturity or
earlier by reason of acceleration or otherwise, of all
indebtedness. Accordingly, no payments made upon the
indebtedness will discharge or diminish the continuing liability
of Guarantor in connection with any remaining portions of the
indebtedness or any of the indebtedness which subsequently arises
or is thereafter incurred or contracted. Any married person who
signs this Guaranty as the Guarantor hereby expressly agrees that
recourse under this agreement may be had against both his or her
separate property and community property, whether new owned or
hereafter acquired.
DURATION OF GUARANTY. The Guaranty will take effect when
received by Lender without the necessity of any acceptance by
Lender, or any notice of Guarantor or to Borrower, and will
continue in full force until all indebtedness incurred or
contracted before receipts by Lender of any notice of revocation
shall have been fully and finally paid and satisfied and all
other obligations of Guarantor under this Guaranty shall have
been performed in full. If Guarantor elects to revoke this
Guaranty, Guarantor may only do so in writing. Guarantors
written notice of revocation must be delivered to Lender at the
address of Lender listed above or such other place as Lender may
designate in writing. Written revocation of this Guaranty will
apply only to advances or new indebtedness created after actual
receipt by Lender of Guarantors written revocation. For this
purpose and without limitation, the term new indebtedness: does
not include indebtedness which at the time of notice of
revocation is contingent, unliquidated, undetermined or not due
and which later becomes absolute, liquidated, determined or due.
This Guaranty will continue to bind Guarantor for all
indebtedness incurred by Borrower or committed by Lender prior to
receipt of Guarantors written notice of revocation, including any
extensions, renewals, substitutions or modifications of the
indebtedness. All renewals, extensions, substitutions, and
modifications of the indebtedness granted after Guarantors
revocation, are contemplated under this Guaranty and,
specifically will not be considered to be indebtedness. This
guaranty shall bind the estate of guarantor as to indebtedness
created both before and after the death or incapacity of
Guarantor, regardless of Lenders actual notice of Guarantors
death. Subject to the foregoing, Guarantors executor or
administrator or other legal representative may terminate this
Guaranty in the same manner in which Guarantor might have
terminated it and with the same effect. Release of any other
guarantor or termination of any other guaranty of the
indebtedness shall not affect the liability of Guarantor under
this Guaranty. A revocation received by Lender from any one or
more Guarantors shall not affect the liability of any remain
Guarantors under this Guaranty. It is anticipated that
fluctuations may occur in the aggregate amount of indebtedness
covered by the Guaranty, and it is specifically acknowledged and
agreed by Guarantor that reductions in the amount of
indebtedness, even to zero dollars ($0.0), prior to written
revocation of this Guaranty by Guarantor shall not constitute a
termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantors heirs, successors and assigns so long as
any of the guaranteed indebtedness remains unpaid and even though
the indebtedness guaranteed may from time to time be zero dollars
($0.00).
GUARANTORS AUTHORIZATION TO LENDER. Guarantor authorizes Lender,
either before or after any revocation hereof, without notice or
demand and without lessening Guarantors liability under this
Guaranty, from time to time: (a) prior to revocation as set
forth above, to make one or more additional secured or unsecured
loans to Borrower, to lease equipment or other goods to Borrower,
or otherwise to extend additional credit to Borrower; (b) to
alter, compromise, renew, extend, accelerate, or otherwise change
one or more times the time for payment or other terms of the
indebtedness or any part of the indebtedness or any part of the
indebtedness, including increases and decreases of the rate of
interest on the indebtedness; extensions may be repeated and may
be for longer than the original loan term; (c) to take and hold
security for the payment of this Guaranty or the indebtedness,
and exchange, enforce, waive fall or decide not to perfect, and
release any such security, with or without the substitution of
new collateral; (d) to release, substitute, agree not to sue, or
deal with any one or more of Borrowers sureties, endorsers, or
other guarantors on any terms or in any manner Lender may choose;
(e) to determine how, when and what application of payments and
credits shall be made on the indebtedness; (f) to apply such
security and direct the order or manner of sale thereof,
including without limitation, any nonjudicial sale permitted by
the terms of the controlling security agreement or deed of trust,
as Lender in its discretion may determine; (g to sell, transfer,
assign, or grant participation in all or any part of the
indebtedness; and (h) to assign or transfer this Guaranty in
whole or in part.
GUARANTORS REPRESENTATIONS AND WARRANTIES. Guarantor represents
and warrants to Lender that (a) no representations or agreements
of any kind have been made to Guarantor which would limit or
qualify in any way the terms of this Guaranty; (b) this Guaranty
is executed at Borrowers request and not at the request of
Lender; (d) Lender has made no representation to Guarantor as to
the creditworthiness of Borrower; (e) upon Lenders request,
Guarantor will provide to Lender financial and credit information
in form acceptable to Lender, and all such financial information
provided to Lender is true and correct in all material respects
and fairly presents the financial condition of Guarantor as of
the dates thereof, and no material adverse change has occurred in
the financial condition of Guarantor since the date of the
financial statements; and (f) Guarantor has established adequate
means of obtaining from Borrower on a continuing basis
information regarding Borrowers financial condition. Guarantor
agrees to keep adequately informed from such means of any facts,
events, or circumstances which might in any way affect Guarantors
risks under this Guaranty, and Guarantor further agrees that,
absent a request for information, Lender shall have no obligation
to disclose to Guarantor any information or documents acquired by
Lender in the course of its relationship with Borrower.
Guarantor also waives any and all rights or defenses arising by
reason of (a any one action or anti-deficiency law or any other
law which may prevent Lender from bringing any action, including
a claim for deficiency, against Guarantor, before or after
Lenders commencement or completion or any foreclosure action,
either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroys or otherwise
adversely affects Guarantors subrogation rights or Guarantors
rights to proceed against Borrower for reimbursement, including
without limitation, any loss of rights Guarantor may suffer by
reason of any law limiting, qualifying, or discharging the
indebtedness; (c) any disability or other defense of Borrower, of
any other guarantor, or of any other person, or by reason of the
cessation of Borrowers liability from any cause whatsoever, other
than payment in full in legal tender of the indebtedness; (d) any
right to claim discharge of the indebtedness on the basis of
unjustified impairment of any collateral for the indebtedness;
(e) any statute of limitations, if an any time any action or suit
brought by Lender against Guarantor is commenced there is
outstanding indebtedness of Borrower to Lender which is not
barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than
actual payment and performance of the indebtedness. If payment
is made by Borrower, whether voluntarily or otherwise, or by any
third party, on the indebtedness and thereafter Lender is forced
to remit the amount of that payment to Borrowers trustee in
bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the indebtedness
shall be considered unpaid for the purpose of enforcement of this
Guaranty.
Guarantor further waives and agrees not to assert or claim at any
time any deductions to the amount guaranteed under this Guaranty
for any claim of setoff, counterclaim, counter demand, recoupment
or similar right, whether such claim, demand or right may be
asserted by the Borrower, the Guarantor, or both.
GUARANTORS UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor
warrants and agrees that each of the waivers set forth above is
made with Guarantors full knowledge of its significance and
consequences and that, under the circumstances, the waivers are
reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
LENDERS RIGHT OF SETOFF. In addition to all liens upon and
rights of setoff against the moneys, securities or other property
of Guarantor given to Lender by law, Lender shall have, with
respect to Guarantors obligations to Lender under this Guaranty
and to the extent permitted by law, a contractual possessor
security interest in and a right of setoff against, and Guarantor
hereby assigns, conveys, delivers, pledges, and transfers to
Lender all of Guarantors right, title and interest in and to, all
deposits, moneys, securities and other property of Guarantor new
or hereafter in the possession of or on deposit with Lender,
whether held in a general or special account or deposit, whether
held jointly with someone else, or whether held for safekeeping
or otherwise, excluding however all IRA, Keogh, and trust
accounts. No security interest or right of setoff shall be
deemed to have been waived by any act or conduct on the part of
Lender or by any neglect to exercise such right of setoff or to
enforce such security interest or by any delay in so doing.
Every right of setoff and security interest shall continue in
full force and effect until such right of setoff or security
interest is specifically waived or released by an instrument in
writing executed by Lender.
SUBORDINATION OF BORROWERS DEBTS TO GUARANTOR. Guarantor agrees
that the indebtedness or Borrower to Lender, whether now existing
or hereafter created, shall be prior to any claim that Guarantor
may now have or hereafter acquire against Borrower, whether or
not Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon
any account whatsoever, to any claim that Lender may now or
hereafter have against Borrower. In the event of insolvency and
consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower
applicable to the payment of the claims of both Lender and
Guarantor shall be paid to Lender and shall be first applied by
Lender to the indebtedness of Borrower to Lender. Guarantor does
hereby assign to Lender all Claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy
of Borrower; provided however that such assignment shall be
effective only for the purpose of assuring to Lender full payment
in legal tender of the indebtedness. If Lender so requests, any
notes or credit agreements now or hereafter evidencing any debts
or obligations of Borrower to Guarantor shall be marked with a
legend that the same are subject to this Guaranty and shall be
delivered to Lender. Guarantor agrees, and Lender hereby is
authorized, in the name of Guarantor, from time to time to
execute and file financing statements and continuation statements
and to execute such other documents and to take such other
actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Guaranty. No alteration of
or amendment to this Guaranty shall be effective unless given in
writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Applicable Law. This Guaranty has been delivered to Lender and
accepted by Lender in the State of Washington. If there is a
lawsuit, Guarantor agrees upon Lenders request to submit to the
jurisdiction of the courts of King County, State of Washington.
Subject to the provisions on arbitration, this Guaranty shall be
governed by and construed in accordance with the laws of the
State of Washington.
Arbitration: Lender and Guarantor agree that all disputes, claims
and controversies between them, whether individual, joint, or
class in nature, arising from this Guaranty or otherwise,
including without limitation contract and tort disputes, shall be
arbitrated pursuant to the Rules of the American Arbitration
Association, upon request of either party. No act to take or
dispose of any Collateral shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration
agreement. This includes, without limitation, obtaining
injunctive relief or a temporary restraining order; invoking a
power of sale under any deed of trust or mortgage; obtaining a
writ of attachment or imposition of a temporary restraining
order; invoking a power of sale under any deed of trust or
mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property,
including taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial
Code. Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of any act, or exercise of any
right, concerning any Collateral, including any claim to rescind,
reform, or otherwise modify any agreement relating to the
Collateral, shall also be arbitrated, provided however that no
arbitrator shall have the right or the power to enjoin or
restrain any act of any party. Judgment upon any award rendered
by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Guaranty shall preclude any party
from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver,
laches, and similar doctrines which would otherwise be applicable
in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for
these purposes. The Federal Arbitration Act shall apply to the
construction, interpretation, and enforcement of this arbitration
provision.
Attorneys Fees Expenses. Guarantor agrees to pay upon demand all
of Lenders costs and expenses, including reasonable attorneys
fees and Lenders legal expenses, incurred in connection with the
enforcement of this Guaranty. Lender may pay someone else to
help enforce this Guaranty, and Guarantor shall pay the costs and
expenses of such enforcement. Costs and expenses include Lenders
attorneys fees and legal expenses whether or not there is a
lawsuit, including attorneys fees and legal expenses for
bankruptcy proceedings (and including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated
post-judgment collections services. Guarantor also shall pay all
court costs and such additional fees as may be directed by the
Court.
Notices. Except for revocation notices by Guarantor, all notices
required to be given by either party to the other under this
Guaranty shall be in writing and shall be effective when actually
delivered or when deposited with a nationally recognized
overnight courier, or when deposited in the United States mail,
first class postage prepaid, addressed to the party to whom the
notice is to be given at the address shown above or to such other
addresses as either party may designate to the other in writing.
All revocation notices by Guarantor shall be in writing and shall
be effective only upon delivery to Lender as provided above in
the section titled DURATION OF GUARANTY. If there is more than
one Guarantor, notice to any Guarantor will constitute notice to
all Guarantors. For notice purposes, Guarantor agrees to keep
Lender informed at all times of Guarantors current address.
Interpretation. In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty in
the singular shall be deemed to have been used in the plural
where the context and construction so require; and where there is
more than one Borrower named in this Guaranty or when this
Guaranty is executed by more than one Guarantor, the words
Borrower and Guarantor respectively shall mean all and any one or
more of them. The word Guarantor, Borrower, and Lender include
the heirs, successors, assigns, and transferees of each of them.
Caption headings in this Guaranty are for convenience purposes
only and are not to be used to interpret or define the provisions
of this Guaranty. If a court of competent jurisdiction finds any
provision of this Guaranty to be invalid or unenforceable as to
any person or circumstance, such finding shall not render that
provision invalid or unenforceable as to any other persons or
circumstances, and all provisions of this Guaranty, in all other
respects shall remain valid and enforceable. If any one or more
of Borrower or Guarantor are corporations or partnerships, it is
not necessary for Lender to inquire into the powers of Borrower
or Guarantor or of the officers, directors, partners, or agents
acting or purporting to act on their behalf, and any indebtedness
made or created in reliance upon the professes exercise of such
powers shall be guaranteed under this Guaranty.
Waiver. Lender shall not be deemed to have waived any rights
under this Guaranty unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or
any other right. A waiver by Lender of a provision of this
Guaranty shall not prejudice or constitute a waiver of Lenders
right otherwise to demand strict compliance with that provision
or any other provision of this Guaranty. No prior waiver by
Lender, nor any course of dealing between Lender and Guarantor,
shall constitute a waiver of any of Lenders rights or of any of
Guarantors obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
Statute of frauds disclosure. Oral Agreements or oral commitments
to loan money, extend credit, or to forbear from enforcing
repayment of a debt are not enforceable under Washington law.
Each undersigned guarantor acknowledges having read all the
provisions of this guaranty and agrees to its term. In addition,
each guarantor understands that this guaranty is effective upon
guarantors execution and delivery of this guaranty to lender and
that the guaranty will continue until terminated in the manner
set forth in the section titled Duration of Guaranty. No formal
acceptance by lender is necessary to make this guaranty
effective. This guaranty is dated March 9, 1995.
Guarantor:
Todd Shipyards Corporation
/s/ S.G. Welch
By: Stephen G. Welch, V.P., Acting CFO and Treasurer
/s/ Michael G. Marsh
By: Michael G. Marsh, Secretary and General Counsel
<PAGE>
Todd Pacific Shipyards Corporation
March 9, 1995
ATTACHMENT
REVOLVING CREDIT - ACCOUNTS RECEIVABLE COLLATERAL
U.S. Bank will grant revolving credit to borrower under the
following provisions
COLLATERAL
Accounts Receivable
Advance Rate 80% of Eligible Accounts
Eligible Accounts: [ ] Current - 60 days past due
[x] 90 days DOI
[ ] Other
Ineligible Accounts/Amounts
[x] Accounts with 25% of outstanding amount over 90 days DOI.
[x] Accounts due from officers, employees, affiliated companies
and individuals.
[x] Accounts subject to set off.
[x] Accounts resulting from CODs, finance charges and
consignment.
[x] Accounts due from foreign entities or individuals.
[x] Bonded accounts receivable with the exception of the Jumbo
contract.
[x] Retainages
[x] Dated Billings
Operating Parameters
Advance Base [x] Borrowers Certificate Each month end
there
is an
outstanding
balance
Bank Control Account [ ] Yes [x]No Bank reserves the
right
Agings [x] A/R [ ]A/P Frequency: Each
month end there
is an outstanding
balance
U.S. BANK OF WASHINGTON, N.A. TODD PACIFIC SHIPYARDS
CORPORATION
By: Kenneth Bodmer By: S. G. Welch
Its: Vice President Its: Acting CFO
<PAGE>
COMMERCIAL GUARANTY
Principal Loan Date Maturity Loan No Call 38832 Collateral
355
Account 8916945162 Officer 54827 Initials
References in the shaded are for Lenders use only and do not
limit the applicability of this document to any particular loan
or item.
Borrower: Todd Pacific Shipyards Corporation Lender: U.S. Bank
of Washington
1801 16th Avenue S.W. Metro
Corporate
Seattle, WA 98134 1414 4th
Avenue
WWH 470
Seattle,
WA 98101
Guarantor: TSI Management, Inc.
1801 16th Avenue S.W.
Seattle, WA 98134
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable
consideration,TSI Management, Inc. (Guarantor) absolutely and
unconditionally guarantees and promises to pay to U.S. BANK OF
WASHINGTON, NATIONAL ASSOCIATION (Lender) or its order, in legal
tender of the United States of America, the indebtedness (as that
term is defined below) of TODD PACIFIC SHIPYARDS CORPORATION
(Borrower) to Lender on the terms and conditions set forth in the
Guaranty. Under this Guaranty, the liability of Guarantor is
unlimited and the obligations of Guarantor are continuing.
DEFINITIONS. The following words shall have the following
meanings when used in this Guaranty:
Borrower. The word Borrower Means TODD PACIFIC SHIPYARDS
CORPORATION.
Guarantor. The word Guarantor means TSI Management, Inc..
Guaranty. The word Guaranty means this Guaranty made by
Guarantor for the benefit of Lender dated March 9, 1995.
Indebtedness. The word indebtedness is used in its most
comprehensive sense and means and includes any and all of
Borrowers liabilities, obligations, debts, and indebtedness to
Lender, new existing or hereinafter incurred or created,
including without limitation, all loans, advances, interest,
costs, debts, overdraft indebtedness, credit card indebtedness,
lease obligations, other obligations, and liabilities of
Borrower, or any of them, and any present or future judgments
against Borrower, or any of them; and whether any such
indebtedness is voluntarily or involuntarily incurred, due or not
due, absolute or contingent, liquidated or unliquidated,
determined or undetermined; whether Borrower may be liable
individually or jointly with others, or primarily or secondarily,
or as guarantor or surety; whether recovery on the indebtedness
may be or may become barred or unenforceable against Borrower for
any reason whatsoever; and whether the indebtedness arises from
transactions which may be voidable on account of infancy,
insanity, ultra vires, or otherwise.
Lender. The word Lender means U.S. BANK OF WASHINGTON, NATIONAL
ASSOCIATION, its successors and assigns.
Related Documents. The words Related Documents mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust and all other instruments,
agreements and documents, whether now or hereafter existing,
executed in connection with the indebtedness.
NATURE OF GUARANTY. Guarantors liability under this Guaranty
shall be open and continuous for so long as this Guaranty remains
in force. Guarantor intends to guarantee at all times the
performance and prompt payment when due, whether at maturity or
earlier by reason of acceleration or otherwise, of all
indebtedness. Accordingly, no payments made upon the
indebtedness will discharge or diminish the continuing liability
of Guarantor in connection with any remaining portions of the
indebtedness or any of the indebtedness which subsequently arises
or is thereafter incurred or contracted. Any married person who
signs this Guaranty as the Guarantor hereby expressly agrees that
recourse under this agreement may be had against both his or her
separate property and community property, whether new owned or
hereafter acquired.
DURATION OF GUARANTY. The Guaranty will take effect when
received by Lender without the necessity of any acceptance by
Lender, or any notice of Guarantor or to Borrower, and will
continue in full force until all indebtedness incurred or
contracted before receipts by Lender of any notice of revocation
shall have been fully and finally paid and satisfied and all
other obligations of Guarantor under this Guaranty shall have
been performed in full. If Guarantor elects to revoke this
Guaranty, Guarantor may only do so in writing. Guarantors
written notice of revocation must be delivered to Lender at the
address of Lender listed above or such other place as Lender may
designate in writing. Written revocation of this Guaranty will
apply only to advances or new indebtedness created after actual
receipt by Lender of Guarantors written revocation. For this
purpose and without limitation, the term new indebtedness: does
not include indebtedness which at the time of notice of
revocation is contingent, unliquidated, undetermined or not due
and which later becomes absolute, liquidated, determined or due.
This Guaranty will continue to bind Guarantor for all
indebtedness incurred by Borrower or committed by Lender prior to
receipt of Guarantors written notice of revocation, including any
extensions, renewals, substitutions or modifications of the
indebtedness. All renewals, extensions, substitutions, and
modifications of the indebtedness granted after Guarantors
revocation, are contemplated under this Guaranty and,
specifically will not be considered to be indebtedness. This
guaranty shall bind the estate of guarantor as to indebtedness
created both before and after the death or incapacity of
Guarantor, regardless of Lenders actual notice of Guarantors
death. Subject to the foregoing, Guarantors executor or
administrator or other legal representative may terminate this
Guaranty in the same manner in which Guarantor might have
terminated it and with the same effect. Release of any other
guarantor or termination of any other guaranty of the
indebtedness shall not affect the liability of Guarantor under
this Guaranty. A revocation received by Lender from any one or
more Guarantors shall not affect the liability of any remain
Guarantors under this Guaranty. It is anticipated that
fluctuations may occur in the aggregate amount of indebtedness
covered by the Guaranty, and it is specifically acknowledged and
agreed by Guarantor that reductions in the amount of
indebtedness, even to zero dollars ($0.0), prior to written
revocation of this Guaranty by Guarantor shall not constitute a
termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantors heirs, successors and assigns so long as
any of the guaranteed indebtedness remains unpaid and even though
the indebtedness guaranteed may from time to time be zero dollars
($0.00).
GUARANTORS AUTHORIZATION TO LENDER. Guarantor authorizes Lender,
either before or after any revocation hereof, without notice or
demand and without lessening Guarantors liability under this
Guaranty, from time to time: (a) prior to revocation as set
forth above, to make one or more additional secured or unsecured
loans to Borrower, to lease equipment or other goods to Borrower,
or otherwise to extend additional credit to Borrower; (b) to
alter, compromise, renew, extend, accelerate, or otherwise change
one or more times the time for payment or other terms of the
indebtedness or any part of the indebtedness or any part of the
indebtedness, including increases and decreases of the rate of
interest on the indebtedness; extensions may be repeated and may
be for longer than the original loan term; (c) to take and hold
security for the payment of this Guaranty or the indebtedness,
and exchange, enforce, waive fall or decide not to perfect, and
release any such security, with or without the substitution of
new collateral; (d) to release, substitute, agree not to sue, or
deal with any one or more of Borrowers sureties, endorsers, or
other guarantors on any terms or in any manner Lender may choose;
(e) to determine how, when and what application of payments and
credits shall be made on the indebtedness; (f) to apply such
security and direct the order or manner of sale thereof,
including without limitation, any nonjudicial sale permitted by
the terms of the controlling security agreement or deed of trust,
as Lender in its discretion may determine; (g to sell, transfer,
assign, or grant participation in all or any part of the
indebtedness; and (h) to assign or transfer this Guaranty in
whole or in part.
GUARANTORS REPRESENTATIONS AND WARRANTIES. Guarantor represents
and warrants to Lender that (a) no representations or agreements
of any kind have been made to Guarantor which would limit or
qualify in any way the terms of this Guaranty; (b) this Guaranty
is executed at Borrowers request and not at the request of
Lender; (d) Lender has made no representation to Guarantor as to
the creditworthiness of Borrower; (e) upon Lenders request,
Guarantor will provide to Lender financial and credit information
in form acceptable to Lender, and all such financial information
provided to Lender is true and correct in all material respects
and fairly presents the financial condition of Guarantor as of
the dates thereof, and no material adverse change has occurred in
the financial condition of Guarantor since the date of the
financial statements; and (f) Guarantor has established adequate
means of obtaining from Borrower on a continuing basis
information regarding Borrowers financial condition. Guarantor
agrees to keep adequately informed from such means of any facts,
events, or circumstances which might in any way affect Guarantors
risks under this Guaranty, and Guarantor further agrees that,
absent a request for information, Lender shall have no obligation
to disclose to Guarantor any information or documents acquired by
Lender in the course of its relationship with Borrower.
Guarantor also waives any and all rights or defenses arising by
reason of (a any one action or anti-deficiency law or any other
law which may prevent Lender from bringing any action, including
a claim for deficiency, against Guarantor, before or after
Lenders commencement or completion or any foreclosure action,
either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroys or otherwise
adversely affects Guarantors subrogation rights or Guarantors
rights to proceed against Borrower for reimbursement, including
without limitation, any loss of rights Guarantor may suffer by
reason of any law limiting, qualifying, or discharging the
indebtedness; (c) any disability or other defense of Borrower, of
any other guarantor, or of any other person, or by reason of the
cessation of Borrowers liability from any cause whatsoever, other
than payment in full in legal tender of the indebtedness; (d) any
right to claim discharge of the indebtedness on the basis of
unjustified impairment of any collateral for the indebtedness;
(e) any statute of limitations, if an any time any action or suit
brought by Lender against Guarantor is commenced there is
outstanding indebtedness of Borrower to Lender which is not
barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than
actual payment and performance of the indebtedness. If payment
is made by Borrower, whether voluntarily or otherwise, or by any
third party, on the indebtedness and thereafter Lender is forced
to remit the amount of that payment to Borrowers trustee in
bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the indebtedness
shall be considered unpaid for the purpose of enforcement of this
Guaranty.
Guarantor further waives and agrees not to assert or claim at any
time any deductions to the amount guaranteed under this Guaranty
for any claim of setoff, counterclaim, counter demand, recoupment
or similar right, whether such claim, demand or right may be
asserted by the Borrower, the Guarantor, or both.
GUARANTORS UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor
warrants and agrees that each of the waivers set forth above is
made with Guarantors full knowledge of its significance and
consequences and that, under the circumstances, the waivers are
reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
LENDERS RIGHT OF SETOFF. In addition to all liens upon and
rights of setoff against the moneys, securities or other property
of Guarantor given to Lender by law, Lender shall have, with
respect to Guarantors obligations to Lender under this Guaranty
and to the extent permitted by law, a contractual possessor
security interest in and a right of setoff against, and Guarantor
hereby assigns, conveys, delivers, pledges, and transfers to
Lender all of Guarantors right, title and interest in and to, all
deposits, moneys, securities and other property of Guarantor new
or hereafter in the possession of or on deposit with Lender,
whether held in a general or special account or deposit, whether
held jointly with someone else, or whether held for safekeeping
or otherwise, excluding however all IRA, Keogh, and trust
accounts. No security interest or right of setoff shall be
deemed to have been waived by any act or conduct on the part of
Lender or by any neglect to exercise such right of setoff or to
enforce such security interest or by any delay in so doing.
Every right of setoff and security interest shall continue in
full force and effect until such right of setoff or security
interest is specifically waived or released by an instrument in
writing executed by Lender.
SUBORDINATION OF BORROWERS DEBTS TO GUARANTOR. Guarantor agrees
that the indebtedness or Borrower to Lender, whether now existing
or hereafter created, shall be prior to any claim that Guarantor
may now have or hereafter acquire against Borrower, whether or
not Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon
any account whatsoever, to any claim that Lender may now or
hereafter have against Borrower. In the event of insolvency and
consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower
applicable to the payment of the claims of both Lender and
Guarantor shall be paid to Lender and shall be first applied by
Lender to the indebtedness of Borrower to Lender. Guarantor does
hereby assign to Lender all Claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy
of Borrower; provided however that such assignment shall be
effective only for the purpose of assuring to Lender full payment
in legal tender of the indebtedness. If Lender so requests, any
notes or credit agreements now or hereafter evidencing any debts
or obligations of Borrower to Guarantor shall be marked with a
legend that the same are subject to this Guaranty and shall be
delivered to Lender. Guarantor agrees, and Lender hereby is
authorized, in the name of Guarantor, from time to time to
execute and file financing statements and continuation statements
and to execute such other documents and to take such other
actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Guaranty. No alteration of
or amendment to this Guaranty shall be effective unless given in
writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Applicable Law. This Guaranty has been delivered to Lender and
accepted by Lender in the State of Washington. If there is a
lawsuit, Guarantor agrees upon Lenders request to submit to the
jurisdiction of the courts of King County, State of Washington.
Subject to the provisions on arbitration, this Guaranty shall be
governed by and construed in accordance with the laws of the
State of Washington.
Arbitration: Lender and Guarantor agree that all disputes, claims
and controversies between them, whether individual, joint, or
class in nature, arising from this Guaranty or otherwise,
including without limitation contract and tort disputes, shall be
arbitrated pursuant to the Rules of the American Arbitration
Association, upon request of either party. No act to take or
dispose of any Collateral shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration
agreement. This includes, without limitation, obtaining
injunctive relief or a temporary restraining order; invoking a
power of sale under any deed of trust or mortgage; obtaining a
writ of attachment or imposition of a temporary restraining
order; invoking a power of sale under any deed of trust or
mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property,
including taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial
Code. Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of any act, or exercise of any
right, concerning any Collateral, including any claim to rescind,
reform, or otherwise modify any agreement relating to the
Collateral, shall also be arbitrated, provided however that no
arbitrator shall have the right or the power to enjoin or
restrain any act of any party. Judgment upon any award rendered
by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Guaranty shall preclude any party
from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver,
laches, and similar doctrines which would otherwise be applicable
in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for
these purposes. The Federal Arbitration Act shall apply to the
construction, interpretation, and enforcement of this arbitration
provision.
Attorneys Fees Expenses. Guarantor agrees to pay upon demand all
of Lenders costs and expenses, including reasonable attorneys
fees and Lenders legal expenses, incurred in connection with the
enforcement of this Guaranty. Lender may pay someone else to
help enforce this Guaranty, and Guarantor shall pay the costs and
expenses of such enforcement. Costs and expenses include Lenders
attorneys fees and legal expenses whether or not there is a
lawsuit, including attorneys fees and legal expenses for
bankruptcy proceedings (and including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated
post-judgment collections services. Guarantor also shall pay all
court costs and such additional fees as may be directed by the
Court.
Notices. Except for revocation notices by Guarantor, all notices
required to be given by either party to the other under this
Guaranty shall be in writing and shall be effective when actually
delivered or when deposited with a nationally recognized
overnight courier, or when deposited in the United States mail,
first class postage prepaid, addressed to the party to whom the
notice is to be given at the address shown above or to such other
addresses as either party may designate to the other in writing.
All revocation notices by Guarantor shall be in writing and shall
be effective only upon delivery to Lender as provided above in
the section titled DURATION OF GUARANTY. If there is more than
one Guarantor, notice to any Guarantor will constitute notice to
all Guarantors. For notice purposes, Guarantor agrees to keep
Lender informed at all times of Guarantors current address.
Interpretation. In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty in
the singular shall be deemed to have been used in the plural
where the context and construction so require; and where there is
more than one Borrower named in this Guaranty or when this
Guaranty is executed by more than one Guarantor, the words
Borrower and Guarantor respectively shall mean all and any one or
more of them. The word Guarantor, Borrower, and Lender include
the heirs, successors, assigns, and transferees of each of them.
Caption headings in this Guaranty are for convenience purposes
only and are not to be used to interpret or define the provisions
of this Guaranty. If a court of competent jurisdiction finds any
provision of this Guaranty to be invalid or unenforceable as to
any person or circumstance, such finding shall not render that
provision invalid or unenforceable as to any other persons or
circumstances, and all provisions of this Guaranty, in all other
respects shall remain valid and enforceable. If any one or more
of Borrower or Guarantor are corporations or partnerships, it is
not necessary for Lender to inquire into the powers of Borrower
or Guarantor or of the officers, directors, partners, or agents
acting or purporting to act on their behalf, and any indebtedness
made or created in reliance upon the professes exercise of such
powers shall be guaranteed under this Guaranty.
Waiver. Lender shall not be deemed to have waived any rights
under this Guaranty unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or
any other right. A waiver by Lender of a provision of this
Guaranty shall not prejudice or constitute a waiver of Lenders
right otherwise to demand strict compliance with that provision
or any other provision of this Guaranty. No prior waiver by
Lender, nor any course of dealing between Lender and Guarantor,
shall constitute a waiver of any of Lenders rights or of any of
Guarantors obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
Statute of frauds disclosure. Oral Agreements or oral commitments
to loan money, extend credit, or to forbear from enforcing
repayment of a debt are not enforceable under Washington law.
Each undersigned guarantor acknowledges having read all the
provisions of this guaranty and agrees to its term. In addition,
each guarantor understands that this guaranty is effective upon
guarantors execution and delivery of this guaranty to lender and
that the guaranty will continue until terminated in the manner
set forth in the section titled Duration of Guaranty. No formal
acceptance by lender is necessary to make this guaranty
effective. This guaranty is dated March 9, 1995.
Guarantor:
TSI Management, Inc.
By: Stephen G. Welch, Chief Operating Officer
By: Michael G. Marsh, Secretary and General Counsel
<PAGE>
CORPORATE RESOLUTION TO BORROW
Principal $3,000,000.00 Loan Date 03-09-1995, Maturity 03-
01-1996 Loan No 394-18 Collateral 355 Account
8916945162 Officer 54827 Initials
References in the shaded area are for Lenders use only and do not
limit the applicability of this document to any particular loan
or item.
Borrower: Todd Pacific Shipyards Corporation
1801 16th avenue S.W.
Seattle, WA 98134
Lender: U.S. Bank of Washington, National Association
Metro Corporate
1414 4th Ave
WWH 470
Seattle, WA 98101
I, the undersigned Secretary or assistant Secretary of TODD
PACIFIC SHIPYARDS CORPORATION (the Corporation), HEREBY CERTIFY
that the Corporation is organized and existing under and by
virtue of the laws of the State of Delaware as a corporation for
profit, with its principal office at 1801 16th Avenue S.W.,
Seattle, WA 98134, and is duly authorized to transact business
in the State of Washington.
I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation (or by other duly authorized corporate action in lieu
of a meeting), duly called and held on March 27, 1995, at which a
quorum was present and voting, the following resolutions were
adopted:
BE IT RESOLVED, that any two (2) of the following named officers,
employees, or agents of this Corporation, whose actual signatures
are shown below:
NAMES POSITIONS
ACTUAL SIGNATURES
STEPHEN G. WELCH ACTING CFO AND TREASURER
STEPHEN G. WELCH
ROLAND H WEBB PRESIDENT & CEO
ROLAND H. WEBB
acting for and on behalf of this Corporation and as its act and
deed be, and they hereby are, authorized and empowered:
Borrow Money. To borrow from time to time from U.S. BANK OF
WASHINGTON, NATIONAL ASSOCIATION (Lender), on such terms as may
be agreed upon between the officers, employees, or agents and
Lender, such sum or sums of money as in their judgment should be
borrowed without limitation.
Execute Notes. To execute and deliver to Lender the promissory
note or notes of Todd, on Lenders forms, at such rates of
interest and on such terms as may be agreed upon, evidencing the
sums of money so borrowed or any indebtedness of Todd to Lender,
and also to execute and deliver to Lender one or more renewals,
extensions, modifications, refinancings, consolidations, or
substitutions for one or more of the notes, or any portion of the
notes.
Grant Security. To mortgage, pledge, hypothecate, or otherwise
encumber and deliver to Lender, as security for the payment of
any loans so obtained, any promissory notes so executed, or any
other or further indebtedness of Todd to Lender at any time
owing, however the same may be evidenced, any property now or
hereafter belonging to Todd or in which Todd now or hereafter may
have an interest, including without limitation all real property
and all personal property of Todd. Such property may be
mortgaged, pledged, hypothecated, or encumbered at the time such
loans are obtained or such indebtedness is incurred, or at any
other time or times, and may be either in addition to or in lieu
of any property theretofore mortgaged, pledged, hypothecated or
encumbered.
Execute Security Documents. To execute and deliver to Lender the
forms of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which may be submitted by Lender, and which shall evidence the
terms and conditions under and pursuant to which such liens and
encumbrances, or any of them, are given; and also to execute and
deliver to Lender any other written instruments, any chattel
paper, or any other collateral, of any kind or nature, which they
may in their discretion deem reasonably necessary or proper in
connection with or pertaining to the giving of the liens and
encumbrances. Notwithstanding the foregoing, any one of the
above authorized officers, employees, or agents may execute,
deliver, or record financing statements.
Negotiate Items. To draw, endorse, and discount with Lender all
drafts, trade acceptances, promissory notes, or other evidences
of indebtedness payable to or belonging to Todd or in which Todd
may have an interest, and either to receive cash for the same or
to cause such proceeds to be credited to the account of Todd with
Lender, or to cause such other disposition of the proceeds
derived therefrom as they may deem advisable.
Further Acts. In the case of lines of credit, to designate
additional or alternate individuals as being authorized to
request advances thereunder, and in all cases, to do and perform
such other acts and things, to pay any and all fees and costs,
and to execute and deliver such other documents and agreements as
they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these
Resolutions. The following person or persons are authorized to
request advances and authorize payments under the line of credit
until Lender receives written notice of revocation of their
authority: ROLAND H. WEBB, PRESIDENT AND COO; and STEPHEN G.
WELCH, ACTING CFO & TREASURER.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant
to these resolutions and performed prior to the passage of these
resolutions are hereby ratified and approved, that these
Resolutions shall remain in full force and effect and Lender may
rely on these Resolutions until written notice of their
revocation shall be delivered to and received by Lender. Any
such notice shall not affect any of Todds agreements or
commitments in effect at the time notice is given.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant
to these resolutions and performed prior to the passage of these
resolutions are hereby ratified and approved, that these
Resolutions shall remain in full force and effect and Lender may
rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender.
Any such notice shall not affect any of the Corporations
agreements or commitments in effect at the time notice is given.
STATUTE OF FRAUDS DISCLOSURE. ORAL AGREEMENTS OR ORAL COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW..
I FURTHER CERTIFY that the officers, employees, and agents named
above are duly elected, appointed, or employed by or for the
Corporation, as the case may be, and occupy the positions set
opposite their respective names; that the foregoing Resolutions
now stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been
modified or revoked in any manner whatsoever. The Corporation
has no corporate seal, and therefor, no seal is affixed to this
certificate.
IN TESTIMONY WHEREOF, I have hereunto set my hand on March 30,
1995 and attest that the signatures set opposite the names listed
above are their genuine signatures.
CERTIFIED TO AND ATTESTED BY:
Michael G. Marsh
Secretary
*NOTE: In case the Secretary or other certifying officer is
designated by the foregoing resolutions as one of the signing
officers, this certificate should also be signed by a second
Officer or Director of the Corporation.
<PAGE>
CORPORATE RESOLUTION TO GUARANTEE/GRANT COLLATERAL
Principal $3,000,000.00 Loan Date 03-09-1995, Maturity 03-
01-1996 Loan No 394-18 Collateral 355 Account
8916945162 Officer 54827 Initials
References in the shaded area are for Lenders use only and do not
limit the applicability of this document to any particular loan
or item.
Borrower: Todd Pacific Shipyards Corporation
1801 16th avenue S.W.
Seattle, WA 98134
Lender: U.S. Bank of Washington, National Association
Metro Corporate
1414 4th Ave
WWH 470
Seattle, WA 98101
Guarantor: Todd Shipyards Corporation
1801 16th Avenue S.W.
Seattle, WA 98134
I, the undersigned Secretary or Assistant Secretary of TODD
SHIPYARDS CORPORATION (the Corporation), HEREBY CERTIFY as
follows: The Corporation has its principal office at 1801 16th
Avenue S.W., Seattle, WA 98134.
I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation (or by other duly authorized corporate action in lieu
of a meeting), duly called and held on March 27, 1995, at which a
quorum was present and voting, the following resolutions were
adopted:
WHEREAS the granting of the loan or other financial
accommodations described below from U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION to TODD PACIFIC SHIPYARDS CORPORATION will
be beneficial to this corporation, and accordingly this
corporation is willing to provide its guaranty to Lender as
provided below:
AND WHEREAS one of the conditions required by Lender for the
granting of the loan or other financial accommodations is that
Lender be furnished with the written corporate guaranty of TSI
Management, Inc. as corporate guarantor.
BE IT RESOLVED, that any two (2) of the following named officers,
employees, or agents of this Corporation, whose actual signatures
are shown below:
NAMES POSITIONS
ACTUAL SIGNATURES
STEPHEN G. WELCH CHIEF OPERATING OFFICER
STEPHEN G. WELCH
MICHAEL G. MARSH SECRETARY AND GENERAL COUNSEL
MICHAEL G. MARSH
acting for and on behalf of this Corporation and as its act and
deed be, and they hereby are, authorized and empowered in the
name of the Corporation:
Guaranty. To guarantee or act as surety for loans or other
financial accommodations to TODD PACIFIC SHIPYARDS CORPORATION
from U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION (Lender) on
such guarantee or surety terms as may be agreed upon between the
officers or employees of this Corporation and Lender and in such
sum or sums of money as in their judgment should be guaranteed or
assured, without limit (the Guaranty).
Grant Security. To mortgage, pledge, hypothecate, or otherwise
encumber and deliver to Lender, as security for the Guaranty, any
property belonging to the Corporation or in which the Corporation
may have an interest , real, personal or mixed. Such property
may be mortgaged, pledged, hypothecated, or encumbered at the
time such loans are made or such indebtedness is incurred, or at
any other time or times, and may be either in addition to or in
lieu of any property theretofore mortgaged, pledged,
hypothecated, or encumbered. The provisions of these Resolutions
authorizing or relating to the pledge, mortgage, hypothecation,
granting of a security interest in, or in any way encumbering,
the assets of Todd shall include, without limitation, doing so in
order to lend collateral security for the indebtedness, now or
hereafter existing, and of any nature whatsoever, of TODD PACIFIC
SHIPYARDS CORPORATION to Lender. Todd has considered the value
to itself of lending collateral in support of such indebtedness,
and Todd represents to Lender that Todd is benefited by doing so.
Execute Security Documents. To execute and deliver to Lender the
form of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which may be submitted by Lender, and which shall evidence the
terms and conditions under and pursuant to which such liens and
encumbrances, or any of them, are given; and also to execute and
deliver to Lender any other written instruments, of any kind or
nature, which may be necessary or proper in connection with or
pertaining to the giving of liens and encumbrances.
Further Acts. To do and perform such other acts and things and
to execute and deliver such other documents as may in their
discretion be deemed reasonably necessary or proper in order to
carry into effect any of the provisions of these Resolutions.
STATUTE OF FRAUDS DISCLOSURE. ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW..
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant
to these resolutions and performed prior to the passage of these
resolutions are hereby ratified and approved, that these
Resolutions shall remain in full force and effect and Lender may
rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender.
Any such notice shall not affect any of the Corporations
agreements or commitments in effect at the time notice is given.
I FURTHER CERTIFY that the persons named above are principal
officers of the Corporation and occupy the positions set opposite
their respective names; that the foregoing Resolutions now stand
of record on the books of the Corporation; and that they are in
full force and effect and have not been modified or revoked in
any manner whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on March 30,
1995 and attest that the signatures set opposite the names listed
above are their genuine signatures.
Certified to and attested by:
Michael G. Marsh
Secretary
NOTE: In case the Secretary or other certifying officer is
designated by the foregoing resolutions as one of the signing
officers, this certificate should also be signed by a second
Officer or Director of the Corporation.
<PAGE>
CORPORATE RESOLUTION TO GUARANTEE/GRANT COLLATERAL
Principal $3,000,000.00 Loan Date 03-09-1995, Maturity 03-
01-1996 Loan No 394-18 Collateral 355 Account
8916945162 Officer 54827 Initials
References in the shaded area are for Lenders use only and do not
limit the applicability of this document to any particular loan
or item.
Borrower: Todd Pacific Shipyards Corporation
1801 16th avenue S.W.
Seattle, WA 98134
Lender: U.S. Bank of Washington, National Association
Metro Corporate
1414 4th Ave
WWH 470
Seattle, WA 98101
Guarantor: TSI Management, Inc.
1801 16th Avenue S.W.
Seattle, WA 98134
I, the undersigned Secretary or Assistant Secretary of TSI
MANAGEMENT, INC. (the Corporation), HEREBY CERTIFY as follows:
The Corporation has its principal office at 1801 16th Avenue
S.W., Seattle, WA 98134.
I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation (or by other duly authorized corporate action in lieu
of a meeting), duly called and held on March 27, 1995, at which a
quorum was present and voting, the following resolutions were
adopted:
WHEREAS the granting of the loan or other financial
accommodations described below from U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION to TODD PACIFIC SHIPYARDS CORPORATION will
be beneficial to this corporation, and accordingly this
corporation is willing to provide its guaranty to Lender as
provided below:
AND WHEREAS one of the conditions required by Lender for the
granting of the loan or other financial accommodations is that
Lender be furnished with the written corporate guaranty of TODD
SHIPYARDS CORPORATION as corporate guarantor.
BE IT RESOLVED, that any two (2) of the following named officers,
employees, or agents of this Corporation, whose actual signatures
are shown below:
NAMES POSITIONS
ACTUAL SIGNATURES
STEPHEN G. WELCH ACTING CFO AND TREASURER
STEPHEN G. WELCH
MICHAEL G. MARSH SECRETARY AND GENERAL COUNSEL
MICHAEL G. MARSH
acting for and on behalf of this Corporation and as its act and
deed be, and they hereby are, authorized and empowered in the
name of the Corporation:
Guaranty. To guarantee or act as surety for loans or other
financial accommodations to TODD PACIFIC SHIPYARDS CORPORATION
from U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION (Lender) on
such guarantee or surety terms as may be agreed upon between the
officers or employees of this Corporation and Lender and in such
sum or sums of money as in their judgment should be guaranteed or
assured, without limit (the Guaranty).
Grant Security. To mortgage, pledge, hypothecate, or otherwise
encumber and deliver to Lender, as security for the Guaranty, any
property belonging to the Corporation or in which the Corporation
may have an interest , real, personal or mixed. Such property
may be mortgaged, pledged, hypothecated, or encumbered at the
time such loans are made or such indebtedness is incurred, or at
any other time or times, and may be either in addition to or in
lieu of any property therefore mortgaged, pledged, hypothecated,
or encumbered. The provisions of these Resolutions authorizing
or relating to the pledge, mortgage, hypothecation, granting of a
security interest in, or in any way encumbering, the assets of
Todd shall include, without limitation, doing so in order to lend
collateral security for the indebtedness, now or hereafter
existing, and of any nature whatsoever, of TODD PACIFIC SHIPYARDS
CORPORATION to Lender. Todd has considered the value to itself
of lending collateral in support of such indebtedness, and Todd
represents to Lender that Todd is benefited by doing so.
Execute Security Documents. To execute and deliver to Lender the
form of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which may be submitted by Lender, and which shall evidence the
terms and conditions under and pursuant to which such liens and
encumbrances, or any of them, are given; and also to execute and
deliver to Lender any other written instruments, of any kind or
nature, which may be necessary or proper in connection with or
pertaining to the giving of liens and encumbrances.
Further Acts. To do and perform such other acts and things and
to execute and deliver such other documents as may in their
discretion be deemed reasonably necessary or proper in order to
carry into effect any of the provisions of these Resolutions.
STATUTE OF FRAUDS DISCLOSURE. ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW..
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant
to these resolutions and performed prior to the passage of these
resolutions are hereby ratified and approved, that these
Resolutions shall remain in full force and effect and Lender may
rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender.
Any such notice shall not affect any of the Corporations
agreements or commitments in effect at the time notice is given.
I FURTHER CERTIFY that the persons named above are principal
officers of the Corporation and occupy the positions set opposite
their respective names; that the foregoing Resolutions now stand
of record on the books of the Corporation; and that they are in
full force and effect and have not been modified or revoked in
any manner whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on March 30,
1995 and attest that the signatures set opposite the names listed
above are their genuine signatures.
Certified to and attested by:
Michael G. Marsh
Secretary
NOTE: In case the Secretary or other certifying officer is
designated by the foregoing resolutions as one of the signing
officers, this certificate should also be signed by a second
Officer or Director of the Corporation.
<PAGE>
BUSINESS LOAN AGREEMENT
Principal $3,000,000.00 Loan Date 03-09-1995, Maturity 03-
01-1996 Loan No 394-18 Collateral 355 Account
8916945162 Officer 54827 Initials
References in the shaded area are for Lenders use only and do not
limit the applicability of this document to any particular loan
or item.
Borrower: Todd Pacific Shipyards Corporation
1801 16th avenue S.W.
Seattle, WA 98134
Lender: U.S. Bank of Washington, National Association
Metro Corporate
1414 4th Ave
WWH 470
Seattle, WA 98101
THIS BUSINESS LOAN AGREEMENT between TODD PACIFIC SHIPYARDS
CORPORATION (Borrower) and U.S. BANK OF WASHINGTON, NATIONAL
ASSOCIATION (Lender) is made and executed on the following terms
and conditions. Borrower has received prior commercial loans
from Lender or has applied to Lender for a commercial loan or
loans and other financial accommodations, including those which
may be described on any exhibit or schedule attached to this
Agreement. All such loans and financial accommodations, together
with all future loans and financial accommodations from Lender to
Borrower, are referred to in this Agreement individually as the
Loan and collectively as the Loans. Borrower understands and
agrees that: (a) in granting, renewing, or extending any Loan,
Lender is relying upon Borrowers representations, warranties, and
agreements, as set forth in this Agreement; (b) the granting,
renewing, or extending of any Loan by Lender at all times shall
be subject to Lenders sole Judgment and discretion; and (c) all
such Loans shall be and shall remain subject to the following
terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of March 9, 1995, and
shall continue thereafter until all indebtedness of Borrower to
Lender has been performed in full and the parties terminate this
Agreement in writing.
DEFINITIONS. The following words shall have the following
meanings when used in this Agreement. Terms not otherwise
defined in this Agreement shall have the meanings attributed to
such terms in the Uniform Commercial Code. All references to
dollar amounts shall mean amounts in lawful money of the United
States of America.
Agreement. The word Agreement means this Business Loan Agreement,
as this Business Loan Agreement may be amended or modified from
time to time, together with all exhibits and schedules attached
to this Business Loan Agreement from time to time.
Borrower. The word Borrower means TODD PACIFIC SHIPYARDS
CORPORATION. The word Borrower also includes, as applicable, all
subsidiaries and affiliates of Borrower as provided below in the
paragraph titled Subsidiaries and Affiliates.
CERCLA. The word CERCLA means Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
Collateral. The word Collateral means and includes without
limitation all property and assets granted as collateral security
for a Loan, whether real or personal property, whether granted
directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage,
deed of trust, assignment pledge, chattel mortgage, chattel
trust, factors lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security devise, or any other security
or lien interest whatsoever, whether created by law, contract, or
otherwise.
ERISA. The word ERISA means the Employee Retirement Income
Security Act of 1974, as amended.
Event of Default, The words Event of Default mean and include
without limitation any of the Events of Default set forth below
in the section titled EVENTS OF DEFAULT.
Grantor. The word Grantor means and includes without limitation
each and all of the persons or entities granting a Security
Interest in any Collateral for the indebtedness, including
without limitation all Borrowers granting such a Security
interest.
Guarantor. The word Guarantor means and includes without
limitation each and all of the persons or entities granting a
Security Interest in any Collateral for the indebtedness,
including without limitation all Borrowers granting such a
Security interest.
Indebtedness. The word indebtedness means and includes without
limitation all Loans, together will all other obligations, debts
and liabilities of Borrower to Lender, or any one or more of
them, as well as all claims by Lender against Borrower, or any
one or more of them; whether now or hereafter existing, voluntary
or involuntary, due or not due, absolute or contingent,
liquidated or unliquidated; whether Borrower may be liable
individually jointly with others; whether Borrower may be
obligated as a guarantor, surety; or otherwise; whether recovery
upon such indebtedness may be hereafter may become barred by any
statute of limitations; and whether such indebtedness may be or
hereafter may become otherwise unenforceable.
Lender. The word Lender means U.S. BANK OF WASHINGTON, NATIONAL
ASSOCIATION, its successors and assigns.
Loan. The word Loan or Loans means and includes without
limitation any and all commercial loans and financial
accommodations from Lender to Borrower, whether now or hereafter
existing, and however evidenced, including without limitation
those loans and financial accommodations described herein or
described on any exhibit or schedule attached to this Agreement
from time to time.
Note. The word Note means and includes without limitation
Borrowers promissory note or notes, if any evidencing Borrowers
Loan obligations in favor of Lender, as well as any substitute,
replacement or refinancing note or notes therefor.
Related Documents. The words Related Documents mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust, and all other instruments,
agreements and documents, whether now or hereafter existing,
executed in connection with the indebtedness.
Security Agreement. The words Security Agreement mean and include
without limitation any agreements, promises, covenants,
arrangements, understandings or other agreements, whether created
by law, contract, or otherwise, evidencing, governing,
representing or creating a Security Interest.
Security Interest. The words Security Interest mean and include
without limitation any type of collateral security, whether in
the form of a lien, charge, mortgage, deed of trust, assignment,
pledge, chattel mortgage, chattel trust, factors lien, equipment
trust, conditional sale, trust receipt, lien or title retention
contract lease or consignment intended as a security device, or
any other security or lien interest whatsoever, whether created
by law, contract, or otherwise.
SARA. The word SARA means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to Lender as of the date of this Agreement and as of the date of
each disbursement of Loan proceeds:
Organization. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the
State of Delaware. Borrower has the full power and authority to
own its properties and to transact the businesses in which it is
presently engaged or presently proposes to engage, Borrower also
is duly qualified as a foreign corporation and is in good
standing in all states in which the failure to so quality would
have a material adverse effect on its businesses or financial
condition.
Authorization. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to
be executed, delivered or performed by Borrower, have been duly
authorized by all necessary action by Borrower; do not require
the consent or approval of any other person, regulatory authority
or governmental body; and do not conflict with, result in a
violation of or constitute a default under (a) any provision of
its articles of incorporation or organization, or bylaws or any
agreement or other instrument binding upon Borrower or (b) any
law, governmental regulation, court decree or order applicable to
Borrower.
Financial Information. Each financial statement of Borrower
supplied to Lender truly and completely disclosed Borrowers
financial condition as of the date of the statement, and there
has been no material adverse change in Borrowers financial
condition subsequent to the date of the most recent financial
statement supplied to Lender. Borrower has no material
contingent obligations except as disclosed in such financial
statements.
Legal Effect. This Agreement constitutes, and any instrument or
agreement required hereunder to be give by Borrower when
delivered will constitute, legal, valid and binding obligation of
Borrower enforceable against Borrower in accordance with their
respective terms.
Properties. Except as contemplated by this Agreement or as
previously disclosed in Borrowers financial statements or in
writing to Lender and as accepted by Lender, and except for
Property tax liens for taxes not presently due and payable,
Borrower owns and has good title to all of Borrowers properties
free and clear of all Security Interests, and has not executed
any security documents or financing statements relating to such
properties. All of Borrowers properties are titled in Borrowers
legal name, and Borrower has not used, or filed a financing
statement under any other name for at least the last five (5)
years.
Litigation and Claims. No material litigation, claim,
investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Borrower is pending or
threatened and no other event has occurred which may materially
adversely affect Borrowers financial condition or properties,
other than litigation, claims, or other events, if any, that have
been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrowers knowledge, all tax returns and
reports of Borrower that are or were required to be filed, have
been filed, and all taxes, assessments and other governmental
charges have been paid in full, except those presently being or
to be contested by Borrower in good faith in the ordinary course
of business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or
indirectly securing repayment of Borrowers Loan and Note, that
would be prior or that may in any way be superior to Lenders
Security interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note and all Security
Agreements directly or indirectly securing repayment of Borrowers
Loan and Note are binding upon Borrower as well as upon Borrowers
successors, representatives and assigns, and are legally
enforceable in accordance with their respective terms.
Commercial Purposes. Borrower intends to use the Loan proceeds
solely for business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to which
Borrower may have any liability complies in all material respects
with all applicable requirements of law and regulations, and (I)
no Reportable Event nor Prohibited Transaction (as defined in
ERISA) has occurred with respect to any such plan, (ii) Borrower
has not withdrawn from any such plan or initiated steps to do so,
and (iii) no steps have been taken to terminate any such plan.
Location of Borrowers Offices and Records. The chief place of
business of Borrower and the office or offices where Borrower
keeps its records concerning the Collateral is located 1801 16th
Avenue S., Seattle, WA 98134.
Information. All information heretofore or contemporaneously
herewith furnished by Borrower to Lender for the purposes of or
in connection with this Agreement or any transaction contemplated
hereby is, and all information hereafter furnished by or on
behalf of Borrower to Lender will be, true and accurate in every
material respect on the date as of which such information is
dated or certified; and none to such information is or will be
incomplete by omitting to state any material fact necessary to
make such information not misleading.
Survival of Representation and Warranties. Borrower understands
and agrees that Lender is relying upon the above representations
and warranties in extending Loan Advances to Borrower. Borrower
further agrees that the foregoing representations and warranties
shall be continuing in nature and shall remain in full force and
effect until such time as Borrowers Loan and Note shall be paid
in full, or until this Agreement shall be terminated in the
manner provided above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender
that, while this Agreement is in effect, Borrower will
Litigation. Promptly inform Lender in writing of (a) all material
adverse changes in Borrowers financial condition, and (b) all
litigation and claims and all threatened litigation and claims
affecting Borrower or any Guarantor which could materially affect
the financial condition of Borrower or the financial condition of
any Guarantor.
Financial Records. Maintain its books and records in accordance
with generally accepted accounting principles, applied on a
consistent bases and permit Lender to examine and audit Borrowers
books and records at all reasonable times.
Additional Information. Furnish such additional information and
statements, lists of assets and liabilities, agings of
receivables and payables, inventory schedules, budgets,
forecasts, tax returns, and other reports with respect to
Borrowers financial condition and business operations as Lender
may request from time to time.
Insurance. Maintain fire and other risk insurance, public
liability insurance, and such other insurance as Lender may
require with respect to Borrowers properties and operations, in
form, amounts, coverages and with insurance companies reasonably
acceptable to Lender. Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates
of insurance in form satisfactory to Lender, including
stipulations that coverages will not be canceled or diminished
without at lease ten(10) days prior written notice to Lender.
Each insurance policy also shall include an endorsement providing
that coverage in favor of Lender will not be impaired in any way
by any act, omission or default of Borrower or any other person.
In connection with all policies covering assets in which Lender
holds or is offered a security interest for the Loans, borrower
will provide Lender with such loss payable or other endorsements
as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender,
reports on each existing insurance policy showing such
information as Lender may reasonably request, including without
limitation the following: (a) the name of the insurer; (b) the
risks insured; (c) the amount of the policy; (d) the properties
insured; (e) the then current property values on the basis of
which insurance has been obtained, and the manner of determining
those values; and (f) the expiration date of the policy. In
addition, upon request of Lender (however not more often than
annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash
value or replacement cost of any Collateral.
Guaranties. Prior to disbursement of any Loan proceeds, furnish
executed guaranties of the Loans in favor of Lender, on Lenders
forms, and in the amounts and by the guarantors names below:
Guarantors Amounts
TSI Management, Inc. Unlimited
Todd Shipyards, Inc. Unlimited
Other Agreements. Comply with all terms and conditions of all
other agreements valued at $1 million or above, whether now or
hereafter existing, between Borrower and any other party and
notify Lender immediately in writing of any default in connection
with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrowers
business operations, unless specifically consented to the
contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens or
every kind and nature, imposed upon Borrower or its properties,
income or profits, prior to the date on which penalties would
attach, and all lawful claims that, if unpaid, might become a
lien or charge upon any of Borrowers properties, income, or
profits. Provided however, Borrower will not be required to pay
and discharge any such assessment, tax, charge, levy, lien or
claim so long as (a) the legality of the same shall be contested
in good faith by appropriate proceedings, and (Borrower shall
have established on its books adequate reserves with respect to
such contest assessment, tax, charge, levy, lien, or claim in
accordance with generally accepted accounting practices.
Borrower, upon demand of Lender, will furnish to Lender evidence
of payment of the assessments, taxes, charges, levies, liens and
claims and will authorize the appropriate governmental official
to deliver to Lender at any time a written statement of any
assessments, taxes, charges, levies, liens and claims against
Borrowers properties, income, or profits.
Performance. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in all other
instruments and agreements between Borrower and Lender in a
timely manner, and promptly notify Lender if Borrower learns of
the occurrence of any event which constitutes an Event of Default
under this Agreement.
Operations. Substantially maintain its present executive and
management personnel, conduct its business affairs in a
reasonable and prudent manner and in compliance with all
applicable federal, state and municipal laws, ordinances, rules
and regulations respecting its properties, charters, businesses
and operations, including without limitation, compliance with the
Americans with Disabilities Act and with all minimum funding
standards and other requirements of ERISA and other laws
applicable to Borrowers employee benefit plans.
Inspection. Permit employees or agents of Lender at any
reasonable time to inspect any and all Collateral for the Loan or
Loans and Borrowers other properties and to examine or audit
Borrowers books, accounts, and records and to make copies and
memoranda of Borrowers books, accounts, and records. If Borrower
now or at any time hereafter maintains any records (including
without limitation computer generated records and computer
software programs for the generation of such records at all
reasonable times and to provide Lender with copies of any records
it may request, all at Borrowers expense.
Compliance Certificate. Unless waived in writing by Lender,
provide Lender at least annually and at the time of each
disbursement of Loan proceeds with a certificate executed by
Borrowers chief financial officer, or other officer or person
acceptable to Lender, certifying that the representations and
warranties set forth in this Agreement are true and correct as of
the date of the certificate and further certifying that, as of
the date of the certificate, no Event of Default exists under
this Agreement.
Environmental Compliance and Reports. Borrower shall comply in a
material respects with all environmental protection federal,
state and local laws, statutes, regulations and ordinances; not
cause or permit to exist, as a result of an intentional or
unintentional action or omission on its part of on the part of
any third party, on property owned and/or occupied by Borrower,
any environmental activity where damage may result to the
environment, unless such environmental activity is pursuant to
and in compliance with those conditions of a permit issued by the
appropriate federal state or local governmental authorities;
shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional
or unintentional action or omission on Borrowers part in
connection with any environmental activity whether or not there
is damage to the environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements
as Lender or its attorneys may reasonably request to evidence and
secure the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender
that while this Agreement is in effect, Borrower shall not,
without the prior written consent of Lender:
Indebtedness and Liens. (c) sell with recourse any of Borrowers
accounts, except to Lender.
Continuity of Operations. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer,
acquire or consolidate with any other entity, change ownership,
dissolve or transfer or sell Collateral, or (d) purchase or
retire any of Borrowers outstanding shares or alter or amend
Borrowers capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or
advance money or assets, (b) purchase, create or acquire any
interest in any other enterprise or entity, or (c) incur any
obligation as surety or guarantor other than in the ordinary
course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make
any Loan to Borrower, whether under this Agreement or under any
other agreement, Lender shall have no obligation to make Loan
Advances or to disburse Loan proceeds it: (a) Borrower or any
Guarantor is in default under the terms of this Agreement or any
of the Related Documents or any other agreement that Borrower or
any Guarantor has with Lender; (b) Borrower becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is
adjudged a bankrupt; (c) there occurs a material adverse change
in Borrowers financial condition, in the financial condition of
any Guarantor, or in the value of any Collateral securing any
Loan; (d) any Guarantor seeks, claims or otherwise attempts to
limit, modify or revoke such Guarantors guaranty of the Loan or
any other loan with Lender.
STATUTE OF FRAUDS DISCLOSURE. ORAL AGREEMENTS OR ORAL COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
ACCESS LAWS. Without limiting the generality of any provision of
this agreement requiring Borrower to comply with applicable laws
relating to disabled access, including, but not limited to, all
applicable titles of the Americans with Disabilities Act of 1990.
ADDITIONAL RATIOS AND FINANCIAL COVENANTS FOR TODD PACIFIC
SHIPYARDS, INC. ONLY.
1. WORKING CAPITAL NOT PERMITTED TO BE LESS THAN $10,000.000.00
UNTIL 07-30-95 WHEN WORKING CAPITAL SHALL NOT BE LESS THAN
$6,000,000.00.
2. CASH DIVIDENDS ARE ALLOWED ONLY IF BORROWER IS IN FULL
COMPLIANCE WITH ALL LOAN COVENANTS BEFORE AND AFTER SUCH
DISTRIBUTION.
3. ALL INTERCOMPANY LOANS TO THE GUARANTOR OR RELATED COMPANIES
ARE TO BE CLASSIFIED AS INTANGIBLE ASSETS AND EXCLUDED WHEN
CALCULATING LOAN COVENANT COMPLIANCE.
4. BORROWER TO PROVIDE BANK WITH MONTHLY INTERNALLY PREPARED
FINANCIAL STATEMENTS NO LATER THAN 30 DAYS AFTER EACH MONTH END.
5. BORROWER TO PROVIDE BANK WITH QUARTERLY 10Q STATEMENTS ON ITS
PARENT, TODD SHIPYARDS CORPORATION WITHIN 45 DAYS AFTER EACH
FISCAL QUARTER END AND SHALL PROVIDE ANNUAL AUDITED CONSOLIDATING
FINANCIAL STATEMENT WITHIN 120 DAYS AFTER EACH YEAR END.
6. A DEFAULT IN RELIANCE INSURANCE COMPANIES UNDERWRITING AND
CONTINUING INDEMNITY AGREEMENT DATED DECEMBER 22, 1994 IS A
DEFAULT IN THIS LOAN AGREEMENT.
7. CAPITAL EXPENDITURES ARE LIMITED TO $7,000,000.00 IN ANY ONE
FISCAL YEAR.
8. TOTAL DEBT TO TANGIBLE NET WORTH IS NOT TO EXCEED .65 TO
1.00.
9. TANGIBLE NET WORTH IS NOT PERMITTED TO DECREASE BELOW
$30,000,000.00.
10. TANGIBLE NET WORTH IS DEFINED AS EQUITY LESS RELATED COMPANY
NOTES AND ACCOUNTS RECEIVABLE AND INTANGIBLES.
RIGHT OF SETOFF. Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns, conveys,
delivers, pledges, and transfers to Lender all Borrowers right,
title and interest in and to, Borrowers accounts with Lender
(whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else
and all accounts Borrower may open in the future, excluding
however all IRA, Keogh, and trust accounts. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or
setoff all sums owing on the indebtedness against any and all
such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
Default on indebtedness. Failure of Borrower to make any payment
when due on the Loans.
Other Defaults. Failure of Borrower or any Grantor to comply with
or to perform when due any other term, obligation, covenant or
condition contained in any other agreement between Lender and
Borrower.
Default in Favor of Third Parties. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of
any other creditor or person that may materially affect any of
Borrowers property or Borrowers or any Grantors ability to repay
the Loans or perform their respective obligations under this
Agreement or any of the Related documents.
False Statements. Any warranty, representation or statement made
or furnished to Lender by or on behalf of Borrower or any Grantor
under this Agreement or the Related Documents is false or
misleading in any material respect, with now or at the time made
or furnished.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including
failure of any Security Agreement to create a valid and perfected
Security Interest) at any time and for any reason.
Insolvency. The dissolution or termination of Borrowers existence
as a going business, the insolvency of Borrower, the appointment
of a receiver for any part of Borrowers property, any assignment
for the benefit of creditors, any type of creditor workout, or
the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure
or forfeiture proceedings, whether by judicial proceeding, self-
help, repossession or any other method, by any creditor of
Borrower, any creditor of any Grantor against any material
collateral securing the indebtedness, or by any governmental
agency. This includes a garnishment, attachment, or levy on or
of any of Borrowers deposit accounts with Lender. However, this
Event of Default shall not apply if there is a good faith dispute
by Borrower or Grantor, as the case may be, as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding, and if Borrower or Grantor gives Lender
written notice of the creditor or forfeiture proceeding and
furnishes reserves or a surety bond for the creditor or
forfeiture proceeding satisfactory to Lender.
Events Affecting Guarantor. Any of the preceding events occurs
with respect to any Guarantor for any of the indebtedness or such
Guarantor dies or becomes incompetent or any Guarantor revokes
any guaranty of the indebtedness. Lender, at its option, may,
but shall not be required to, permit the Guarantors estate to
assume unconditionally the obligations arising under the guaranty
in a manner satisfactory to Lender, and, in doing so, cure the
Event of Default.
Change in Ownership. Any change in ownership of twenty-five
percent (25%) or more of the common stock of Borrower.
Right to Cure. If any default, is curable and if Borrower or
Grantor, as the case may be, has not been given a notice of a
similar default within the preceding twelve (12) months, it may
be cured (and not Event of Default will have occurred) if
Borrower or Grantor, as the case may be, after receiving written
notice from Lender demanding cure of such default; (a) cures the
default within fifteen (15) days; or (b) if the cure requires
more than fifteen (15) days, immediately initiates steps which
Lender deems in Lenders sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable
and necessary steps sufficient to produce compliance as soon as
reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall
occur, all commitments and obligations of Lender under this
Agreement or the Related Documents or any other agreement
immediately will terminate (including any obligation to make Loan
Advances or disbursements), and at Lenders option, all Loans
immediately will become due and payable, all without notice of
any kind to Borrower, except that in the case of an Event of
Default of the type described in the insolvency subsection above,
such acceleration shall be automatic and not optional.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Agreement. No alteration of
or amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Applicable Law. This Agreement has been delivered to Lender and
accepted by Lender in the State of Washington. If there is a
lawsuit, Borrower agrees upon Lenders request to submit to the
jurisdiction of the courts of King County, the State of
Washington. Subject to the provisions on arbitration, this
Agreement shall be governed by and construed in accordance with
the laws of the State of Washington.
Arbitration. Lender and Borrower agree that all disputes, claims
and controversies between them, whether individual, join, or
class in nature, arising from this Agreement or otherwise,
including without limitation contract and tort disputes, shall be
arbitrated pursuant to the Rules of the America Arbitration
association, upon request of either party. No act to take or
dispose of any Collateral shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration
agreement. This includes, without limitation, obtaining
injunctive relief or a temporary restraining order; invoking a
power of sale under any deed of trust or mortgage; obtaining a
writ of attachment or imposition of a receiver; or exercising any
rights relating to personal property, including taking or
disposing of such property with or without judicial process
pursuant to Article 9 of the Uniform Commercial Code. Any
disputes, claims, or controversies concerning the lawfulness or
reasonableness of any act, or exercise any right, concerning any
Collateral, including any claim to rescind, reform, or otherwise
modify any agreement relating to the act, or exercise of any
right, concerning any Collateral, including any claim to rescind,
reform or otherwise modify any agreement relating to the
Collateral, shall also be arbitrated, provided however that no
arbitrator shall have the right or the power to enjoin or
restrain any act of any party. Judgment upon any award rendered
by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Agreement shall preclude any party
from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver,
laches, and similar doctrines which would otherwise be applicable
in an action brought by a party shall be applicable in any
arbitration proceeding, and commencement of an arbitration
proceeding shall be deemed the commencement of an action for
these purposes. The Federal Arbitration shall apply to the
construction, interpretation, and enforcement of this arbitration
provision.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
Multiple Parties; Corporate Authority. All obligations of
Borrower under this Agreement shall be joint and several, and all
references to Borrower shall mean each and every Borrower. This
means that each of the persons signing below is responsible for
all obligations in this Agreement.
Consent to Loan Participation. Borrower agrees and consents to
Lenders sale or transfer, whether now or later, of one or more
participation interests in the Loans to one or more purchasers,
whether related or unrelated to Lender. Lender may provide,
without any limitation whatsoever, to any one or more purchasers,
or potential purchasers, any information or knowledge Lender may
have about Borrower or about any other matter relating to the
Loan, and Borrower hereby waives any rights to privacy it may
have with respect to such matters. Borrower additionally waives
any and all notices of sale of participation interests will be
considered as the absolute owners of such interests in the Loans
and will have all the rights granted under the participation
agreement or agreements governing the sale of such participation
interest. Borrower further waives all rights of offset or
counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may
enforce Borrowers obligation under the Loans irrespective of the
failure or insolvency of any holder of any interest in the Loans.
Borrower further agrees that the purchaser of any such
participation interests may enforce its interests irrespective of
any personal claims or defenses that Borrower may have against
Lender.
Costs and Expenses. Borrower agrees to pay upon demand all of
Lenders out-of-pocket expenses, including without limitation
reasonable attorneys fees, incurred in connection with the
preparation, execution, enforcement and collection of this
Agreement or in connection with the Loans made pursuant to this
Agreement. Lender may pay someone else to help collect the Loans
and to enforce this Agreement, and Borrower will pay that amount.
This includes, subject to any limits under applicable law,
Lenders attorneys fees and Lenders legal expenses, whether or not
there is a lawsuit, including attorneys fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic
stay or injunction), appeals, and any anticipated post-judgment
collection services. Borrower also will pay any court costs, in
addition to all other sums provided by law.
Notices. All notices required to be given under this Agreement
shall be given in writing and shall be effective when actually
delivered or when deposited with a nationally recognized
overnight courier or deposited in the United States mail, first
class, postage prepaid, addressed to the party to whom the notice
is to be given at the address shown above. Any party may change
its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose
of the notice is to change the partys address. To the extent
permitted by applicable law, if there is more than one Borrower,
notice to any Borrower will constitute notice to all Borrowers.
For notice purposes, Borrower agrees to keep Lender informed at
all times of Borrowers current address(es).
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be invalid or unenforceable as to
any person or circumstance, such finding shall not render that
provision invalid or unenforceable as to any other persons or
circumstances. If feasible, any such offending provision shall
be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other
provisions of this Agreement in all other respects shall remain
valid and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the
context of any provisions of this Agreement makes it appropriate,
including without limitation any representation, warranty or
covenant, the word Borrower as used herein shall include all
subsidiaries and affiliates of Borrower. Notwithstanding the
foregoing however, under no circumstances shall this Agreement be
construed to require Lender to make any Loan or other financial
accommodation to any subsidiary or affiliate of Borrower.
Successors and Assigns. All covenants and agreements contained by
or on behalf of Borrower shall bind its successors and assigns
and shall inure to the benefit of Lender, its successors and
assigns. Borrower shall not, however, have the right to assign
its rights under this Agreement or any interest therein, without
the prior written consent of Lender.
Survival. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other
instrument delivered by Borrower to Lender under this Agreement
shall be considered to have been relied upon by Lender and will
survive the making of the Loan and delivery to Lender of the
Related Documents, regardless of any investigation made by Lender
or on Lenders behalf.
Waiver. Lender shall not be deemed to have waived any rights
under this Agreement unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of the Lender
in exercising any right shall operate as a waiver of such right
or any other right. A waiver by Lender of a provision of this
Agreement shall not prejudice or constitute a waiver of Lenders
right otherwise to demand strict compliance with that provision
or any other provision of this Agreement. No prior waiver by
Lender, nor any course of dealing between Lender and Borrower, or
between Lender and Grantor, shall constitute a waiver of any of
Lenders rights or of any obligations of Borrower or of any
Grantor as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such
consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required,
and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
BUSINESS LOAN AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS
AGREEMENT IS DATED AS OF MARCH 9, 1995.
BORROWER:
TODD PACIFIC SHIPYARDS CORPORATION
BY: STEPHEN G. WELCH, ACTING CFO AND TREASURER
BY: ROLAND H. WEBB. PRESIDENT & CHIEF OPERATING OFFICER
<PAGE>
PROMISSORY NOTE
Principal $3,000,000.00 Loan Date 03-09-1995, Maturity 03-
01-1996 Loan No. 394-18 Call 38832 Collateral 355
Account 8916945162, Officer 54827 Initials
Borrower: TODD PACIFIC SHIPYARDS CORPORATION
1801 16TH AVENUE S.W.
SEATTLE, WA 98134
Lender: U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION
METRO CORPORATE
1414 4TH AVENUE
WWH 470
SEATTLE, WA 98101
Principal Amount: $3,000,000.00
Initial Rate: 9.600%
Date of Note: March 9, 1995
PROMISE TO PAY. TODD PACIFIC SHIPYARDS CORPORATION (Borrower)
promises to pay to U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION
(Lender), or order, in lawful money of the United States of
America, the principal amount of Three Million & 00/100 Dollars
($3,000,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each
advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on March
1, 1996. In addition, Borrower will pay regular monthly payments
of accrued unpaid interest beginning April 15, 1995, and all
subsequent interest payments are due on the same day of each
month after that. Interest on the Note is computed on a 365/360
simple interest basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of
days the principal balance is outstanding. Borrower will pay
Lender at Lenders address shown above or at such other place as
Lender may designate in writing. Unless otherwise agreed or
required by applicable law, payments will be applied first to
accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject
to change from time to time based on changes in an index which is
the LENDERS PRIME RATE. THIS IS THE RATE OF INTEREST WHICH
LENDER FROM TIME TO TIME ESTABLISHES AS ITS PRIME RATE AND IS
NOT, FOR EXAMPLE, THE LOWEST RATE OF INTEREST WHICH LENDER
COLLECTS FROM ANY BORROWER OR CLASS OF BORROWERS (the Index).
The interest rate shall be adjusted without notice effective on
the day Banks prime rate changes. Lender will tell Borrower the
current index rate upon Borrowers request. Borrower understands
that Lender may make loans based on other rates as well. The
interest rate change will not occur more often than each DAY.
The index currently is 9.000% per annum. The interest rate to be
applied to the unpaid balance of this Note will be at a rate of
0.600 percentage points over the index, resulting in an initial
rate of 9.6090% per annum. NOTICE: Under no circumstances will
the interest rate on this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid
finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether
voluntary or as a result of default), except as otherwise
required by law. Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than
it is due. Early payments will not, unless agreed to by Lender
in writing, relieve Borrower of Borrowers obligation to continue
to make payments of accrued unpaid interest. Rather, they will
reduce the principal balance due.
DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b)
Borrower breaks any promise Borrower has made to Lender, or
Borrower fails to perform promptly at the time and strictly in
the manner provided in this Note or any agreement related to this
Note, or in any other agreement or loan Borrower has with Lender.
(c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may
materially affect any of Borrowers property or Borrowers ability
to repay this Note or perform Borrowers obligations under this
Note or any of the Related Documents. (d) Any representation or
statement made or furnished to Lender by Borrower or on Borrowers
behalf is false or misleading in any material respect. (e)
Borrower becomes insolvent, a receiver is appointed for any part
of Borrowers property, Borrower makes an assignment for the
benefit of creditors, or any proceeding is commenced either by
Borrower or against Borrower under any bankruptcy or insolvency
laws. (f) Any creditor tries to take any of Borrowers property
on or in which Lender has a lien or security interest. This
includes a garnishment of any of Borrowers accounts with Lender.
(g) any of the events described in this default section occurs
with respect to any guarantor of this Note.
If any default, other than a default in payment, is curable and
if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months,
it may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lenders sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
LENDERS RIGHTS. Upon default, Lender may declare the entire
unpaid principal balance on the Note and all accrued unpaid
interest immediately due, without notice, and then Borrower will
pay that amount. Upon default, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted
under applicable law, increase the variable interest rate on this
Note to 5.600 percentage points over the index. The interest
rate will not exceed the maximum rate permitted by applicable
law. Lender may hire or pay someone else to help collect this
Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under
applicable law, reasonable Lenders attorneys fees and Lenders
legal expenses whether or not there is a lawsuit, including
attorneys fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment
collection services. If not prohibited by applicable law,
Borrower also will pay any court costs, in addition to all other
sums provided by law. This Note has been delivered to Lender and
accepted by Lender in the State of Washington. Subject to the
provisions on arbitration, this Note shall be governed by and
construed in accordance with the laws of the State of Washington.
RIGHT OF SETOFF. Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns, conveys,
delivers, pledges, and transfers to Lender all Borrowers right,
title and interest in and to. Borrowers accounts with Lender
(whether checking savings, or some other account), including
without limitation all accounts held jointly with someone else
and all accounts Borrower may open in the future, excluding
however all IRA, Keogh, and trust accounts. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or
setoff all sums owing on this Note against any and all such
accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note may be requested either orally or in
writing by Borrower or by an authorized person. Lender may, but
need not, require that all oral requests be confirmed in writing.
All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to Lenders office shown
above. The following party or parties are authorized to request
advances under the line of credit until Lender receives from
Borrower at Lenders address shown above written notice of
revocation of their authority: STEPHEN G. WELCH, ACTING CFO AND
TREASURER; and ROLAND H. WEBB, PRESIDENT AND CHIEF OPERATING
OFFICER. Borrower agrees to be liable for all sums either (a)
advanced in accordance with the instructions of an authorized
person or (b) credited to any of Borrowers accounts with Lender.
The unpaid principal balance owing on this Note at any time may
be evidenced by endorsements on this Note or by Lenders internal
records, including daily computer print-outs. Lender will have
no obligation to advance funds under this Note if: (a) Borrower
or any guarantor is in default under the terms of this Note or
any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of
this Note; (b) Borrower or any guarantor ceases doing business or
is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantors guarantee of
this Note or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Note for purposes other than
those authorized by Lender.
ARBITRATION. Lender and Borrower agree that all disputes, claims
and controversies between them, whether individual , joint, or
class in nature, arising from this Note or otherwise, including
without limitation contract and tort disputes, shall be
arbitrated pursuant to the Rules of the American Arbitration
Association, upon request of either party. No act to take or
dispose of any collateral securing this Note shall constitute a
waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This includes, without limitation,
obtaining injunctive relief or a temporary restraining order;
invoking a power of sale under any deed of trust or mortgage;
obtaining a writ of attachment or imposition of a receiver; or
exercising any rights relating to personal property, including
taking or disposing of such property with or without judicial
process pursuant to Article 9 of the Uniform Commercial Code.
Any disputes, claims, or controversies concerning the lawfulness
or reasonableness of any act, or exercise of any right,
concerning any collateral securing this Note, shall also be
arbitrated, provided however that no arbitrator shall have the
right or the power to enjoin or restrain any act of any party.
Judgment upon any award rendered by any arbitrator may be entered
in any court having jurisdiction. Nothing in this Note shall
preclude any party from seeking equitable relief from a court of
competent jurisdiction. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an
action for these purposes. The Federal Arbitration Act shall
apply to the construction, interpretation, and enforcement of
this arbitration provision.
STATUTE OF FRAUDS DISCLOSURE. ORAL AGREEMENTS OR ORAL COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
LATE CHARGE. If a payment is 15 days or more past due, borrower
will be charged a late charge of 5% of the delinquent payment or
$5, whichever is greater, subject to a maximum of $100.
ADDENDUM TO PROMISSORY NOTE. AN EXHIBIT TITLED ADDENDUM TO
PROMISSORY NOTE IS ATTACHED TO THIS NOTE AND BY THIS REFERENCE
MADE A PART OF THIS NOTE AS IF ALL THE PROVISIONS, TERMS AND
CONDITIONS OF THE EXHIBIT AHD BEEN FULLY SET FORTH IN THIS NOTE.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive presentment,
demand for payment, protest and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this
loan, or release any party of guarantor or collateral; or impair,
fail to realize upon or perfect Lenders security interest in the
collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent
of or notice to anyone other than the party with whom the
modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
TODD PACIFIC SHIPYARDS CORPORATION
By: Stephen G. Welch, Acting CFO and Treasurer
By: Roland H. Webb, President and Chief Operating Officer
LENDER: U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION
BY: Kenneth Bodmer
ADDENDUM TO PROMISSORY NOTE
This Addendum supplements the Promissory Note dated March 9,
1995, in the amount of $3,000,000.00 between Todd Pacific
Shipyards Corporation (Borrower) and U.S. Bank of Washington,
National Association (Bank).
INTEREST RATE. Borrower promises to pay interest on the Principal
Balance in accordance with the terms of this Section.
The interest rate on the Principal Balance outstanding may vary
from time to time pursuant to the provisions of this note.
Subject to the provisions of this note, Borrower shall have the
option from time to time of choosing to pay interest at the rate
or rates and for the applicable periods of time based on the rate
options provided herein; provided however, that once Borrower
notifies Bank of the rate option chosen in accordance with the
provisions of this note, such notice shall constitute Borrowers
irrevocable request for an Advance hereunder at the rate option
specified such notice.
The rate options are the Prime Borrowing Rate and the IBC
Borrowing Rate, each as defined herein.
A. The Prime Borrowing Rate.
(i) The Prime Borrowing Rate is a per annum rate equal to Banks
prime rate plus .60 % per annum.
(ii) Whenever Borrower desire to use the Prime Borrowing Rate
option, Borrower shall give Bank notice, which notice shall
specify the requested disbursement date and principal amount of
the Advance, and that Borrower has chosen the Prime Borrowing
Rate option.
(iii) Prepayments of all or any part of the Principal Balance
bearing interest at the Prime Borrowing Rate may be made at any
time without penalty. Upon prepayment of any such principal
amount, Borrower also must pay all accrued interest thereon to
the date of prepayment.
(iv) Interest shall accrue on the unpaid Principal Balance at the
Prime Borrowing Rate unless and except tot he extent that the
IBOR Borrowing Rates in effect. When the Prime Borrowing Rate is
effective, the interest rate shall be adjusted without notice
effective on the day Banks prime rate changes.
B. The IBOR Borrowing Rate.
(I) The following terms shall have the following meanings:
Business Day means any day other than a Saturday, Sunday or other
day that commercial banks in Seattle, Washington and New York
City are authorized or required by law to close.
IBOR Borrowing Rate Amount means each principal amount for which
Borrower chooses to have the IBOR Borrowing Rate apply for any
specified IBOR Interest Period.
IBOR Interest Period means as to any IBOR Borrowing Rate Amount,
a period of 1,2,3, or 6 months commencing on the date the IBOR
Borrowing Rate becomes applicable thereto; provided however, that
(a) no IBOR Interest Period shall be selected which would extend
beyond March 1, 1996; (b) any IBOR Interest Period which would
otherwise expire on a day which is not a Business Day, shall be
extended to the next succeeding Business Day, unless the result
of such extension would be to extend such IBOR Interest Period
into another calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such IBOR Interest Period) shall end on the last Business Day of
a calendar.
(ii) The IBOR Borrowing Rate is Banks IBOR Rate plus 2.50% per
annum. Banks IBOR Rate for any IBOR Interest Period is the rate
per annum (computed on the basis of a 360-day year and the actual
number of days elapsed) equal to the arithmetic average (rounded
upward to the nearest 1/16 of 1%) of the rates per annum
determined by Bank as of the times specified in Section B(iii) on
the date of two (2) Business Days prior to the first day of the
applicable IBOR Interest Period as the rates offered to Bank by
three Eurodollar money market dealers in such Eurodollar market
as may be select by Bank for U.S. dollar deposits to be delivered
on the first day of such IBOR Interest Period for the number of
months therein; provided, however, that Banks IBOR Rate shall be
adjusted to take into account the maximum reserves required to be
maintained for Eurocurrency liabilities by banks during each such
IBOR Interest Period as specified in Regulation D of the Board of
Governors of the Federal Reserve System or any successor
regulation.
(iii) Borrower may obtain IBOR Borrowing Rate quotes from Bank
between 8:00 a.m. and 10:00 noon (Seattle, Washington time) on
any Business Day. Any IBOR Borrowing Rate quoted (a) before
10:00 a.m. shall be based on Banks IBOR Rate determined as of
approximately 8:00 a.m. on such day, and Borrower may request an
advance at such rate only by giving Bank notice in accordance
with Section B(iv) before 10L:00 a.m. on such date; and (b)
between 10:00 a.m. and 10:00 noon shall be based on Banks IBOR
Rate determined as of approximately 10:00 a.m. on such day, and
Borrower may request an advance at such rate only by giving Bank
notice in accordance with Section B(iv) not later than 10:00 noon
on such date.
(iv) Whenever Borrower desires to use the IBOR Borrowing Rate
option, Borrower shall give Bank irrevocable notice (either in
writing or orally and promptly confirmed in writing) between 8:0
a.m. and 12:00 noon (Seattle, Washington time). Any oral notice
shall be given by, and any written notice or confirmation of an
oral notice shall be signed by authorized person(s) and shall
specify the requested effective date of the rate, IBOR Interest
Period and IBOR Borrowing Rate Amount, and whether Borrower is
requesting an new Advance at the IBOR Borrowing Rate, conversion
of any portion of the Principal Balance bearing interest at the
Prime Borrowing Rate to an IBOR Borrowing Rate Amount, or a new
IBOR Interest Period for an outstanding IBOR Borrowing Rate
Amount. Notwithstanding any other term of this note, Borrower
may elect the IBOR Borrowing Rate in the minimum principal amount
of $1,000,000.00 and in integral multiples of $500,00.00
provided, however, that no more than N/A separate IBOR Interest
Periods may be in effect at any one time.
(v) Borrower may not prepay all or any part of any IBOR Borrowing
Rate Amount(s).
(vi) If at any time Banks IBOR Rate is unascertainable or
unavailable to Bank or if IBOR Rate loans become unlawful, the
option to select the IBOR Borrowing Rate shall terminate
immediately. If the IBOR Borrowing Rate then is in effect, (a)
it shall terminate automatically with respect to all IBOR
Borrowing Rate Amounts (i) on the last day of each then
applicable IBOR Interest Period, if Bank may lawfully continue to
maintain such loans, or (ii) immediately if Bank may not lawfully
continue to maintain such loans through such day, and (b) the
Prime Borrowing Rate automatically shall become effective as to
such amounts upon such termination.
(vii) If at any time after the date hereof (a) any revision in or
adoption of any applicable law, rule or regulation or in the
interpretation or administration thereof (i) shall subject Bank
or its Eurodollar lending office to any tax, duty or other
charge, or change the basis to taxation of payments to Bank with
respect to any loans bearing interest based on Banks IBOR Rate,
or (ii) shall impose or modify any reserve, insurance, special
deposit or similar requirements against assets of, deposits with
or for the account of, or credit extended by Bank or its
Eurodollar lending office, or impose on Bank or its Eurodollar
lending office any other condition affecting any such loans, and
(b) the result of any of the foregoing is (i) to increase the
cost to Bank of making or maintaining any such loans or (ii) to
reduce the amount of any sum receivable under this not by Bank or
its Eurodollar lending office, Borrower shall pay Bank within 15
days after demand by Bank such additional amount as will
compensate Bank for such increased cost or reduction with respect
to IBOR periods and not retroactive. The determination hereunder
by Bank of such additional amount shall be conclusive in he
absence of manifest error. If Bank demands compensation under
this Section B(vii), Borrower may upon three business days notice
to Bank pay the accrued interest on all IBOR Borrowing Rate
Amounts, together with any additional amounts payable under
Section b(viii). Upon Borrowers paying such accrued interest and
additional costs, the Prime Borrowing Rate immediately shall be
effective with respect to the unpaid principal balance of such
IBOR Borrowing Rate Amounts.
(viii) Upon any termination of any IBOR Borrowing Rate (including
but not limited to conversion to another rate) or payment of all
or any portion of any IBOR Borrowing Rate Amount on a date other
than the last day of the then applicable IBOR Interest Period,
including without limitation (a) acceleration in the event of
default (b) repayment in repines to notice under Section B(vii),
Borrower shall pay to Bank on a demand such amount as Bank
reasonable determines (determined as though 100% of the
applicable IBOR Borrowing Rate Amount had been funded in the
applicable Eurodollar market) is equivalent to all direct or
indirect losses, expenses, liabilities or reductions in yield to
Bank resulting therefrom, whether incurred in connection with
liquidation or reemployment of funds or otherwise.
(ix) If Borrower chooses the IBOR Borrowing Rate, Borrower shall
pay interest based on such rate, plus any other applicable taxes
or charges hereunder, even though Bank may have obtained the
funds loaned to Borrower from sources other than the applicable
Eurodollar market. Banks determination of the IBOR Borrowing
rate and any such taxes or charges shall be conclusive in the
absence of manifest error.
(x) Notwithstanding any other term of this note, Borrower may not
select the IBOR Borrowing Rate if an event of default hereunder
has occurred and is continuing.
(xi) Nothing contained in this note, including without limitation
the determination of any IBOR Interest Period or Banks quotation
of any IBOR Borrowing Rate, shall be construed to prejudice Banks
right to decline to make any requested Advance.
BORROWER:
Todd Pacific Shipyards Corporation
By S.G. Welch
Title: Acting CFO and Treasurer
By: Rolland Webb
Title: President and Chief Operating Officer
BANK:
U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION
BY: Kenneth Bodmer
TITLE: VICE PRESIDENT
<PAGE>
WASHINGTON LEGAL BLANK, INC.
This UCC-1 FINANCING STATEMENT is presented for filing pursuant
to the WASHINGTON UNIFORM COMMERCIAL CODE, chapter 62A.9 RCW, to
perfect a security interest in the below named collateral.
Filing fee: $12.00
1. DEBTOR(S) (see instruction #2)
x BUSINESS (legal business name and address)
Todd Pacific Shipyards Corporation
1801 16th Avenue S.W.
Seattle, WA 98134
TRADE NAME, DBA, AKA: Todd Shipyards, Todd
2. FOR OFFICE USE ONLY - DO NOT WRITE IN THIS BOX
3. SECURED PARTY(IES) (name and address)
U. S. Bank of Washington, National Association
1420 Fifth Avenue, 11th Floor
Seattle, WA 98101
4. ASSIGNEE(S) of SECURED PARTY(IES) if applicable
(name and address)
5. SECURED PARTY CONTACT PERSON: Kenneth L. Bodmer Phone:
(206) 344-3758
6. CHECK ONLY IF APPLICABLE: (For definitions of TRANSMITTING
UTILITY AND PRODUCTS OF COLLATERAL, (see instruction sheet.)
7. THIS FINANCING STATEMENT covers the following collateral:
(Attach additional 8-1/2 x 11 sheet(s) if needed.)
See attached Exhibit A.
8. RETURN ACKNOWLEDGMENT COPY TO: (name and address)
U. S. Bank of Washington, National Association
1420 Fifth Avenue, 11th Floor
Seattle, WA 98101
Attention: Kenneth J. Bodmer
9. FILE WITH:
UNIFORM COMMERCIAL CODE
DEPARTMENT OF LICENSING
P.O. BOX 9660
OLYMPIA, WA 98507-9660
(206) 753-2523
10. FOR OFFICE USE ONLY
11. If collateral is described below, this statement may be
signed by the Secured Party instead of the Debtor. Please check
the appropriate box, complete the adjacent lines and box 13, if
collateral is.
12. DEBTOR NAME(S) AND SIGNATURE(S)
Type Name(s) of Debtor(s) as it appears in Box 1.: Todd Pacific
Shipyards Corporation
Signature of Debtor(s):
S. G. Welch
Rolland H. Webb
13. SECURED PARTY NAME(S) AND SIGNATURE(S) ARE REQUIRED IF BOX 11
HAS BEEN COMPLETED.
Type Name(s) of secured party(ies) as it appears in Box 3 or 4:
U. S. Bank of Washington, National Association
Signature of Secured Party(ies): Kenneth L. Bodmer, Vice
President
Exhibit A to UCC-1 Financing Statement
UCC-1 Financing Statement
DEBTOR: TODD PACIFIC SHIPYARDS CORPORATION
1801 16th Avenue S.W.
Seattle, Washington 98134
Attn: David J. Poston
SECURED PARTY: U. S. Bank of Washington, National Association
1420 Fifth Avenue, 11th Floor
Seattle, Washington 98101
Attn: Kenneth Bodmer, Vice President
All of Debtors accounts, chattel paper, and instruments
evidencing any accounts now owned or hereafter acquired by
Debtor, or in which Debtor has or later obtains an interest,
specifically including, without limitation, accounts, chattel
paper, and instruments arising out of that certain Jumbo Mark II
Class Vessels Construction Contract No. 00-4464 (together with
all amendments, modifications, and replacements thereof) entered
into by and between Debtor and Washington State Ferries, a
division of the Washington State Department of Transportation.
<PAGE>
DISBURSEMENT REQUEST AND AUTHORIZATION
Principal $3,000,000.00 Loan Date 03-09-1995 Maturity 03-01-
1996 Loan No. 394-18 Call 38832 Collateral 355
Account 8916945162 Officer 54827 Initials
References in the shaded area are for Lenders use only and do not
limit the applicability of this document to any particular loan
or item.
Borrower: TODD PACIFIC SHIPYARDS CORPORATION
1801 16TH AVENUE S.W.
SEATTLE, WA 98134
Lender: U.S. BANK OF WASHINGTON, NATIONAL ASSOCIATION
METRO CORPORATE
1414 4TH AVE
WWH 470
SEATTLE, WA 98101
LOAN TYPE. This is a Variable Rate (0.600% over LENDERS PRIME
RATE. THIS IS THE RATE OF INTEREST WHICH LENDER FROM TIME TO TIME
ESTABLISHES AS ITS PRIME RATE AND IS NOT, FOR EXAMPLE, THE LOWEST
RATE OF INTEREST WHICH LENDER COLLECTS FROM ANY BORROWER OR CLASS
OF BORROWERS, making an initial rate of 9.600%), Revolving Line
of Credit Loan to a Corporation for $3,000,000.00 due on March 1,
1996.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is
for:
Business (including Real Estate Investment).
SPECIFIC PURPOSE: The specific purpose of this loan is:
OPERATING FUNDS IN SUPPORT OF ACCOUNTS RECEIVABLE.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan
proceeds will be disbursed until all of Lenders conditions for
making the loan have been satisfied. Please disburse the loan
proceeds of $3,000,000.00 as follows:
Amount paid to Borrower directly: $0.00
Undisbursed Funds: $3,000,000.00
Note Principal $3,000,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as
agreed the following charges:
Prepaid Finance Charges Paid in Cash: 6,000.00
$6,000.00 Loan Fees
Other Charges Paid in Cash $66.00
$30.00 PRELIMINARY CODE SEARCH (ESTIMATED)
$12.00 UCC-1
$24.00 UCC-11r
Total Charges Paid in Cash: $6,066.00
AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender
automatically to deduct from Borrowers account numbered 0017-
919424 the amount of any loan payment. If the funds in the
account are insufficient to cover any payment, Lender shall not
be obligated to advance funds to cover the payment. At any time
and for any reason, Borrower or Lender may voluntarily terminate
Automatic Payments.
TAX IDENTIFICATION NUMBER CERTIFICATION. Borrower hereby
certifies under penalties of perjury that Borrowers Federal Tax
I.D. Number 13-2906669 is correct.
LOAN FEE. .125% annual unused portion fee assessed and collected
quarterly in arrears.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER
REPRESENTS AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED
ABOVE IS TRUE AND CORRECT AND THAT THERE HAS BEEN NO ADVERSE
CHANGE IN BORROWERS FINANCIAL CONDITION AS DISCLOSED IN BORROWERS
MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS
DATED MARCH 9, 1995.
BORROWER:
TODD PACIFIC SHIPYARDS CORPORATION
BY: STEPHEN G. WELCH, ACTING CFO AND TREASURER
BY: ROLAND H. WEBB, PRESIDENT AND CHIEF OPERATING OFFICER
APPENDIX A INCENTIVE STOCK COMPENSATION PLAN OF TODD SHIPYARDS
CORPORATION
SECTION 1. INTRODUCTION
1.1 PURPOSE The purpose of the Incentive Stock Compensation
Plan of Todd Shipyards Corporation (the Plan) is to advance and
promote the interest of Todd Shipyards Corporation (the Company)
and its employees and stockholders by encouraging the acquisition
of its common stock by key employees who perform significant
services for the benefit of the Company. Accordingly, the Plan
is intended as a means of attracting and retaining outstanding
employees and to promote a close commonality of interest between
employees and stockholders.
2.1 DEFINITIONS The following terms shall have the meanings set
forth below: (a) Appreciation Date. The date designated by a
Grantee of Stock Appreciation Rights as defined herein for
measurement of the appreciation in the value of rights awarded to
him or her which date shall be the date notice of such
designation is received by the Administrator of the Plan. (b)
Board. The Board of Directors of the Company or any successor of
the Company. (c) Code. the Internal Revenue Code of 1986, as
amended. (d) Committee. The Compensation Committee of the
Board which shall consist of two or more persons not eligible to
receive grants or awards under the Plan. (e) Common Stock.
The Common Stock of the Company, $.01 par value. (f)
Disability. Complete and permanent disability as defined in
Section 22(e)(3) of the Code. (g) Employee. Any of the
officers or other employees of the Company or any Subsidiary
including officers who are members of the Board. (h) Fair
Market Value. The mean of the highest and lowest sales prices of
Common Stock as reported on the consolidated tape of a national
securities exchange on any relevant date for valuation, or, if
there be no such sale, the mean of the highest and lowest sales
prices of such Common Stock as so reported on the nearest
preceding date upon which such sales took place. In the event
the shares of Common Stock are no longer listed on a national
securities exchange, the Fair Market Value of such shares shall
be determined by the Committee in its sole discretion. (i)
Grantee. Any Employee who, in the opinion of the Committee,
performs significant services for the benefit of the Company and
who is granted awards under thePlan. (j) Incentive Stock
Option. A stock option granted by the Committee to a Grantee
under the Plan which is designated by the Committee as an
Incentive Stock Option and intended to qualify as an Incentive
Stock Option under Section 422 of the Code. (k) Non-qualified
Stock Option. A stock option granted by the Committee to a
Grantee under the Plan, which is not designated by the Committee
as an Incentive Stock Option. (l) Option. An Incentive Stock
Option or Non-qualified Stock Option granted by the Committee to
a Grantee under the Plan. (m) Option Expiration Date. The
date on which an Option becomes unexercisable by reason of the
lapse of time or otherwise becomes unexercisable. (n) Plan
Administrator. The Plan Administrator shall be the Treasurer of
the Company or his designee. (o) Restricted Stock. Shares of
Common Stock issued or transferred to a Grantee subject to the
restrictions set forth in Section 4.2 hereof. (p) Restricted
Stock Award. An authorization by the Committee to issue or
transfer Restricted Stock to a Grantee. (q) Restriction
Period. The period of time determined by the Committee during
which Restricted Stock is subject to the restrictions under the
Plan. (r) Retirement. The termination of employment
constituting retirement under the terms of any formal retirement
plan of the Company or any of its Subsidiaries at or after the
attainment of age 65. (s) Stock Appreciation Right (SAR). A
right to earn additional compensation for the performance of
future services, based on the stock market performance of the
Common Stock. (t) SAR Expiration Date. The date on which a
Stock Appreciation Right becomes unexercisable by reason of the
lapse of time or otherwise in accordance with the Plan. (u)
Subsidiary. Any corporation (whether now or hereafter existing)
which constitutes a subsidiary of the Company, as defined in
Section 424(F) of the Code.
1.3 OPERATION OF PLAN (a) The Committee shall have authority,
acting in its sole discretion, to grant to such Employees who, in
the opinion of the Board of Directors, perform significant
services for the benefit of the Company, as it may designate,
Option, SARs, Restricted Stock Awards or any combination of such
grants, on the terms and conditions hereinafter set forth. In
the event an Option is granted to an Employee, the Committee
shall also have authority to determine whether such option is a
Non-qualified Stock Option or Incentive Stock Option and whether
a SAR shall be granted in connection with any such Option.
1.4 MAXIMUM NUMBER OF SHARES Notwithstanding anything contained
herein to the contrary, the maximum number of shares of Common
Stock available for issuance or transfer to all Grantees pursuant
to the Plan shall be 500,000 shares. Shares of Common Stock
issued under the Plan shall be, when issued, fully paid and non
assessable. The Common Stock available for issuance or transfer
under the Plan shall be made available from shares now or
hereafter held in the treasury of the Company or from authorized
but unissued shares.
SECTION 2. STOCK OPTIONS
2.1 GRANT OF OPTIONS (a) The Committee may grant Options to
Grantees for the purchase of shares of Common Stock. (b) The
purchase price per share of Common Stock under each Option shall
be not less than 100 percent of the Fair Market Value per share
of such stock on the date the Option is granted, as determined by
the Committee. An option may be exercised only when the Fair
Market Value of the shares subject to the option exceeds the
exercise price of the option. (c) Unless otherwise provided
in the grant, stock Options granted under the Plan may be
exercised in any order, regardless of the date of grant or the
existence of any outstanding Option.
2.2 INCENTIVE STOCK OPTION (a) Unless otherwise provided in
the grant, each Incentive Stock Option shall become exercisable
by the Grantee in accordance with the following schedule.
Cumulative Percentage of Shares Covered by Completed Years
Incentive Stock Option From Date of Grant Which May be
Exercised Less than 3 years Zero percent 3 but less than 4
years Up to fifty percent four or more years Up to one hundred
percent (b) At or prior to the time an Incentive Stock Option
is granted, the Committee shall fix the term of such option which
shall be not more than ten years from the date of grant. In the
event the Committee takes no action to fix the term, such option
shall expire seven years from the date of grant. (c) The
aggregate Fair Market Value (determined as of the time the
Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable for
the first time by any Grantee during any single calendar year
(under the Plan and any other Incentive Stock Option plans of the
Company and its Subsidiaries or any parent corporation, as
defined in Section 424(e) of the Code, of the Company (a Parent
Corporation)) shall not exceed $100,000. (d) Anything in the
Plan notwithstanding, an Incentive Stock Option shall not be
granted to any Grantee who, at the time such Incentive Stock
Option is granted, owns (including constructive ownership as
described in Section 424(d) of the Code) shares of stock
possessing more than 10% of the total combined voting power of
all classes of stock of the Company, a Subsidiary or a Parent
Corporation; provided, however, that this restriction shall not
apply if, at the time such Incentive Stock Option is granted (i)
the per share exercise price of such Option is at least 110% of
the Fair Market Value of the shares of Common Stock subject to
such Option, and (ii) such Option is by its terms not exercisable
after the expiration of five years from the date of grant of such
Option. (e) The Grantee shall give prompt notice to the
Company of any disposition of Common Stock acquired upon exercise
of an Incentive Stock Option (and such information regarding such
disposition as the Company may reasonably request) if such
disposition occurs within either two years after the date of
grant or one year of the receipt of such common stock by the
Grantee.
2.3 NON-QUALIFIED STOCK OPTIONS (a) Each Non-qualified Stock
Option shall become exercisable by the Grantee in accordance with
the following schedule. Cumulative Percentage of shares
Covered by Completed Years Non-qualified Stock Option From
Date of Grant Which May be Exercised Less than 1 year Zero
percent 1 but less than 3 years Up to thirty-three percent 3
but less than 4 years Up to sixty-six percent Four or more
years Up to one hundred percent (b) The Committee shall fix the
term of each Non-qualified Stock Option which shall be not more
than ten years from the date of grant. In the event no term is
fixed, such term shall be ten years from the date of grant. The
Committee may, from time to time, extend the Option Expiration
Date of any Non-qualified Stock Option upon such terms and
conditions as the Committee shall determine; provided, however,
that no such extension or extensions shall extend the Non-
qualified Stock Option for an aggregate period in excess of three
years from the date of the original Option Expiration Date of
such Non-qualified Stock Option and no such Non-qualified Stock
Option shall be extended within six months after the date on
which the Non-qualified Stock Option was originally granted or
within six months prior to the Option Expiration Date of such Non-
qualified Stock Option as the same may have been extended. (c)
The Committee may grant to one or more holders of Non-qualified
Stock Option, in exchange for their voluntary surrender and the
cancellation of such Options and their corresponding SARs, if
any, new Options having different Option prices than the Option
prices provided in the Options so surrendered and canceled and
containing such other terms and conditions as the Committee may
deem appropriate.
2.4 SARS ATTACHED TO OPTIONS (a) The Committee may award an
SAR with respect to any shares covered by any Option granted
under the Plan. Except as otherwise provided in this Section,
the terms and procedures set out in Section 3.1 shall be
applicable to SARs with respect to shares covered by a related
Option. (b) Each SAR shall be subject to the same terms and
conditions as the related Option with respect to date of
expiration, difference between Fair Market Value on the
Appreciation Date and the date of the award, limitations on
transferability, and eligibility to exercise. When an SAR is
awarded with respect to shares covered by a related Incentive
Stock Option, such SAR may be exercised only when the Option is
exercisable. The exercise of a SAR awarded with respect to
shares covered by a related Incentive Stock Option must have the
same economic and tax consequences to the Grantee as the exercise
of the Option followed by an immediate sale of the Option shares.
(c) Any extension of the Option Expiration Date of a Non-
qualified Stock Option shall also extend the related SAR, and any
acceleration of the exercise date of an Option shall likewise
accelerate the exercise date of the related SAR. (d) Upon the
exercise of an SAR, the related Option shall cease to be
exercisable as to the shares with respect to which such right was
exercised and the related Option shall be considered to have been
exercised to that extent. Upon the exercise or Option Expiration
Date of a related Option, the SAR granted with respect thereto
shall terminate.
2.5 PAYMENT FOR COMMON STOCK (a) Payment for shares of Common
Stock purchased upon the exercise of an Option shall be made in
cash, in shares of Common Stock valued at the then Fair Market
Value thereof, or by a combination of cash and shares of the
Companys Common Stock. (b) The Company may extend and
maintain, or arrange for the extension and maintenance of,
financing to any Grantee to purchase shares pursuant to exercise
of an Option on such terms as may be approved by the Committee in
its sole discretion. In considering the terms for extension or
maintenance of credit by the Company, the Committee shall, among
other factors, consider the cost to the Company of any financing
extended by the Company. (c) The proceeds received by the
Company from the sale of shares of Common Stock pursuant to the
Plan will be used for general corporate purposes.
SECTION 3. STOCK APPRECIATION RIGHTS AWARDS
3.1 SAR AWARDS (a) The Committee shall have authority to award
SARs to Grantees and to determine the number of SARs to be
awarded to each Grantee. (b) The Committee shall have sole
discretion to determine whether payment of SARs shall be made
wholly in cash, wholly in shares of Common Stock or by a
combination of cash and shares of Common Stock. In the event no
action is taken by the Committee to determine the method of
payment, the amount due shall be paid half in cash and half in
shares of Common Stock. In the event shares of Common Stock are
issued, the Committee shall fix the amount of consideration
represented by the past services performed by the Grantee with
respect to such shares. (c) The amount of additional
compensation which may be received pursuant to the award of one
SAR is the excess of the Fair Market Value of one share of Common
Stock at the Appreciation Date over the Fair Market Value on the
date the SAR was awarded. (d) A Grantee may designate an
Appreciation Date in accordance with the following schedule,
unless otherwise changed by the Committee, by filing an
irrevocable written notice with the Plan Administrator of the
Company specifying the number of SARs to which the Appreciation
Date relates, and the date on which such SARs were awarded:
Cumulative Percentage of SARs Awarded for Completed Years Which
Appreciation From Date of Grant Date May be Designated Less
than 1 year Zero percent 1 but less than 3 years Up to thirty-
three percent 3 but less than 4 years Up to sixty-six percent
Four or more years Up to one hundred percent The Appreciation
Date shall be the date the notice is received by the Plan
Administrator. (e) In the event that a payment is made to a
Grantee pursuant to an SAR in whole or in part in the form of
shares of Common Stock, the shares shall be valued at their Fair
Market Value on the Appreciation Date. (f) Except as
otherwise provided in the case of SARs granted in connection with
Options, the SAR Expiration Date shall be a date designated by
the Committee which is not later than ten years after the date on
which the SAR was awarded. (g) On the SAR Expiration Date,
the SAR shall terminate, the amount of additional compensation
represented thereby shall become zero, and all rights relating to
the SAR shall expire.
SECTION 4. RESTRICTED STOCK
4.1 AWARD OF RESTRICTED STOCK (a) The Committee shall have the
authority (i) to grant Restricted Stock Awards, (ii) to issue or
transfer Restricted Stock to Grantees, and (iii) to establish
terms, conditions and restrictions in connection with the
issuance or transfer of Restricted Stock, including the
Restriction Period, which may differ with respect to each
Grantee. (b) The Grantee of Restricted Stock shall execute
and deliver to the Plan Administrator of the Company an Incentive
Plan Agreement under Section 5.1(a), an escrow agreement
satisfactory to the Committee and the appropriate blank stock
powers with respect to the Restricted Stock covered by such
agreements. The Committee shall then cause stock certificates
registered in the name of the Grantee to be issued and deposited
together with the stock powers with an escrow agent to be
designated by the Committee. The Committee shall cause the
escrow agent to issue to the Grantee a receipt evidencing any
stock certificate held by it registered in the name of the
Grantee. 4.2 RESTRICTIONS (a) Restricted Stock awarded to a
Grantee shall be subject to the following restrictions until the
expiration of the Restriction Period: (i) a Grantee shall be
issued, but shall not be entitled to delivery of the stock
certificate; (ii) the shares of Common Stock of the Company shall
be subject to the restrictions on transferability set forth in
Section 5.2; (iii) the shares of Common Stock of the Company
shall be forfeited and the stock certificates shall be returned
to the Company and all rights of the Grantee to such shares and
as a shareholder shall terminate without further obligation on
the part of the Company when an Employee leaves the employ of the
Company except in the case of Disability or death; and (iv) any
other restrictions which the Committee may determine in advance
are necessary or appropriate. (b) The Committee shall have
the authority to remove any or all of the restrictions on the
Restricted Stock whenever it may determine that, by reason of
changes in applicable laws or other changes in circumstances
arising after the date of the Restricted Stock Award, such action
is appropriate. 4.3 RESTRICTION PERIOD The Restriction
Period of Restricted Stock shall commence on the date of grant
and unless otherwise established by the Committee in the
Agreement setting forth the terms of the award of Restricted
Stock or advanced pursuant to Section 6.2(c), shall expire from
time to time as that part of the Restricted Stock Award
determined in accordance with the following schedule: Percentage
of Each Restricted Stock Award Completed Years for Which
From Date of Grant Restriction Period Expires Less than 5 years
Zero percent Five years One hundred percent
4.4 DELIVERY OF SHARES OF COMMON STOCK Subject to Section 6.4,
at the expiration of the Restriction Period, a stock certificate
evidencing the Restricted Stock with respect to which the
Restriction Period has expired (to the nearest full share) shall
be delivered without charge to the Grantee, or his personal
representative, free of all restrictions under the Plan.
SECTION 5. PROVISIONS RELATING TO PLAN PARTICIPATION
5.1 PLAN CONDITIONS (a) Each Grantee to whom an Option, SAR
Award or Restricted Stock Award is granted under the Plan shall
be required to enter into an Incentive Plan Agreement with the
Company in a form provided by the Committee, including provisions
that the Grantee (i) shall not disclose any trade or secret data
or any other confidential information of the Company acquired
during employment by the Company or a Subsidiary, or after the
termination of employment or Retirement, (ii) shall abide by all
the terms and conditions of the Plan and such other terms and
conditions as may be imposed by the Committee, and (iii) shall
not interfere with the employment of any other Company employee.
Options, SARs and Restricted Stock Awards may contain such terms
and conditions, not inconsistent with the Plan, as shall be
determined from time to time by the Committee. (b) The Plan
shall not create any employment rights in any Grantee and the
Company shall have no liability for terminating the employment of
a Grantee before the Grantee becomes entitled to designate an
Appreciation Date with respect to any SAR, before the exercise
date of any Option, or during the Restriction Period of any
Restricted Stock.
5.2 TRANSFERABILITY (a) Options, SAR Awards and Restricted
Stock are not transferable other than by will or by the laws of
descent and distribution. No transfer by will or by the laws of
descent and distribution shall be effective to bind the Company
unless the Committee shall have been furnished with a copy of the
deceased Grantees will or such other evidence as the Committee
may deem necessary to establish the validity of the transfer.
(b) Only the Grantee (or, except in the case of Incentive Stock
Options and related SARs, the Grantees guardian if the Grantee
becomes disabled), or in the event of his death, his legal
representative or beneficiary, may exercise Options, designate
Appreciation Dates and receive cash payments and deliveries of
shares or otherwise exercise rights under the Plan.
5.3 RIGHTS AS A STOCKHOLDER (a) A Grantee of an Option or a
SAR Award or a transferee of such Grantee shall have no rights as
a stockholder with respect to any shares of Common Stock until
the issuance of a stock certificate for such shares. No
adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities, or other property) or
distributions or other rights for which the record date is prior
to the date such stock certificate is issued unless otherwise
expressly provided herein. (b) A Grantee of Restricted Stock
or a transferee of such Grantee shall, upon the date certificates
for the Restricted Stock are issued, have all of the rights of a
shareholder including the right to vote such shares and to
receive dividends, subject however to the restrictions
established by the Committee pursuant to Section 4.2.
5.4 LISTING AND REGISTRATION OF SHARES OF COMMON STOCK The
Company, in its discretion, may postpone the issuance and/or
delivery of shares of Common Stock upon any exercise of an Option
or pursuant to an SAR Award or Restricted Stock Award until
completion of such stock exchange listing, or registration, or
other qualification of such shares under any state and/or federal
law, rule or regulation as the Company may consider appropriate,
and may require any Grantee to make such representations and
furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares in
compliance with applicable laws, rules and regulations.
5.5 CHANGE IN STOCK AND ADJUSTMENTS (a) In the event the
outstanding shares of the Common Stock, as constituted from time
to time, shall be changed as a result of a change in
capitalization of the Company or a combination, merger, or
reorganization of the Company into or with any other corporation
or any other transaction with similar effects, there then shall
be substituted for each share of Common Stock theretofore
subject, or which may become subject, to issuance or transfer
under the Plan, the number and kind of shares of Common Stock or
other securities or other property into which each outstanding
share of Common Stock shall be changed or for which each such
share shall be exchanged and the Committee may make other
equitable adjustments which it deems to be warranted including,
in the case of any combination, merger or reorganization of the
Company, such acceleration of vesting (in the case of Options or
SAR) or release of restrictions (in the case of Restricted Stock)
as the Committee may in its sole discretion deem warranted or
appropriate. (b) In the event of any change in applicable
laws or any change in circumstances which results in or would
result in any dilution of the rights granted under the Plan, or
which otherwise warrants equitable adjustment because it
interferes with the intended operation of the Plan, then, if the
Committee shall, in its sole discretion, determine that such
change equitably requires an adjustment in the number or kind of
shares of stock or other securities or other property theretofore
subject, or which may become subject, to issuance or transfer
under the Plan or in the terms and conditions of outstanding
Options or Restricted Stock Awards, such adjustment shall be made
in accordance with such determination. Any adjustment of an
Incentive Stock Option under this paragraph shall be made only to
the extent not constituting a modification within the meaning of
Section 424(h) (3) of the Code. The Committee shall give notice
to each Grantee, and upon notice such adjustment shall be
effective and binding for all purposes of the Plan. (c) In
the event (i) the number of shares of Common Stock to be
delivered upon the exercise in full of any Option granted under
the Plan is reduced for any reason, (ii) any Option granted under
the Plan can no longer under any circumstances be exercised, or
(iii) shares awarded as Restricted Stock are forfeited, the
number of shares no longer subject to such Option or forfeited
shall thereupon be released and shall thereafter be available for
new Option grants, new SAR Awards or new Restricted Stock Awards
under the Plan; provided, however, that a surrender of all or
part of an Option pursuant to Section 2.4 shall not be considered
a lapse or termination for purposes of this provision. (d) In
the event of any stock split or combination or in the event of
any dividend payable in shares of Common Stock, the Committee
shall make such adjustment in the exercise price and number of
shares subject to an Option (or the Fair Market Value on grant
date and number of SARS) as may be equitable and appropriate.
The terms of such adjustments may be included in documentation
evidencing the Option or SAR. The certificate representing any
stock dividend or stock split in respect of Restricted Stock
Awards shall, during the Restricted Period, be delivered to and
held in escrow as though delivered on the date of grant.
5.6 TERMINATION OF EMPLOYMENT AND DEATH (a) If an Employees
employment is terminated for any reason whatsoever, any Option or
SAR granted pursuant to the Plan outstanding at the time and all
rights thereunder shall wholly and completely terminate except as
provided in (b) and (c) below. (b) Upon the normal retirement
of an Employee: (i) any unvested portion of any outstanding
Restricted Stock, ISO or SAR grant shall be canceled and no
further vesting will occur; (ii) any portion of an ISO or SAR
grant which vested on or before the normal Retirement date shall
expire on the earliest of: (a) the Option Expiration Date or
the SAR Expiration Date as the case may be, or (b) the
expiration of three years from the normal Retirement date, or
(c) one year from the date of death of a retiree in the event of
death after normal Retirement; and (iii) Any unvested
portion of any outstanding Non-qualified Stock Option granted to
an Employee shall vest in accordance with the terms of the Plan,
and any portion of a Non-qualified Stock Option granted to an
Employee which vested on or before the normal Retirement date
shall expire in accordance with the terms of the Plan, in each
case notwithstanding the normal Retirement date. (c) Upon
termination of employment as a result of death or disability:
(i) all outstanding grants of Restricted Stock, Options or SARs
shall vest notwithstanding the original vesting schedule; and,
(ii) any vested Option of SAR (including those vested pursuant
to 5.6(c)(i)) shall expire upon the earlier of (a) the Option
Expiration Date or SAR Expiration Date (as applicable) or (b) the
first anniversary of such termination. (d) Anything to the
contrary herein notwithstanding, in no event shall an Incentive
Stock Option terminate later than ten years after the date of
grant.
SECTION 6. ADMINISTRATION
6.1 EFFECTIVE DATE AND GRANT PERIOD The Plan shall become
effective on October 1, 1993 (the Effective Date). No Stock
Options, SARs or Restricted Stock Awards may be granted under the
Plan after ten years from the Effective Date. The Plan is
subject to the approval of a majority of the shares of Common
Stock present and voting at a meeting of stockholders of the
Company. If the Plan is not so approved within one year after
its adoption by the Board of Directors, the Plan shall not come
into effect and any Option, SAR or Restricted Stock Award granted
under the Plan shall terminate. No Option or SAR granted under
the Plan shall be exercisable nor Restricted Stock vest unless
and until such stockholder approval is obtained.
6.2 COMMITTEE AUTHORITY (a) In addition to other authority
granted to the Committee in the Plan, the Committee shall
prescribe such forms and make such rules as it deems necessary
for the proper administration of the Plan, shall correct any
defect, supply any omission and reconcile any inconsistency in
the Plan or in any Option, SAR or Restricted Stock Award in the
manner and to the extent the Committee deems desirable to carry
the Plan, Option, SAR or Restricted Stock Award into effect. (b)
The Committee may interpret or construe the Plan and any Option,
SAR or Restricted Stock Award granted, and any interpretation of
construction made by it in good faith shall be conclusive on the
Company, its Subsidiaries, their successors and assigns, the
Company stockholders, the participants in the Plan and their
transferees, and other employees of the Company and its
Subsidiaries. (c) The Committee shall have the authority to
advance (i) the Grantees right to designate an Appreciation Date
for any SAR, (ii) the date on which an Option shall become
exercisable by the Grantee, and (iii) the date on which the
Restriction Period of any Restricted Stock shall expire;
provided, however, that no Option shall be exercised and no
Appreciation Date shall be designated by an officer or director
of the Company until the expiration of six months from the date
of grant.
6.3 FUNDING Except as provided under Section 4.1(b), no
provision of the Plan shall require or permit the Company, for
the purpose of satisfying any obligations under the Plan, to
purchase assets or place any assets in a trust or other entity to
which contributions are made or otherwise to segregate any
assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated
or separately maintained or administered fund for such purposes.
Grantees shall have no rights under the Plan other than as
unsecured general creditors of the Company except that insofar as
they may have become entitled to payment of additional
compensation by performance of services, they shall have the same
rights as other employees under general law.
6.4 WITHHOLDING TAXES (a) Whenever shares are to be issued
or delivered pursuant to the Plan, the Company shall have the
right, in its sole discretion, to either (i) require the Grantee
to remit to the Company or (ii) withhold from any salary, wages
or other compensation payable by the Company to the Grantee, an
amount sufficient to satisfy federal, state and local withholding
tax requirements prior to the delivery of any certificate or
certificates for such shares. Whenever payments are to be made
in cash, such payments shall be net of an amount sufficient to
satisfy federal, state and local withholding tax requirements and
authorized deductions. (b) With respect to shares received by a
Grantee pursuant to the exercise of an Incentive Stock Option, if
such Grantee disposes of any such shares within two years from
the date of grant of such option or within one year after the
transfer of such shares to the Grantee, the Company shall have
the right to withhold from any salary, wages or other
compensation payable by the Company to the Grantee an amount
sufficient to satisfy federal, state and local withholding tax
requirements attributable to such disposition.
6.5 AMENDMENT AND TERMINATION (a) The Plan may be amended or
terminated by the Board of Directors of the Company by the
affirmative vote of a majority of the directors in office. The
Plan, however, shall not be amended, without prior approval of
the shareholders, to increase the number of shares which may be
issued or transferred to Grantees or transferees, to modify the
eligibility requirements of the Plan pertaining to Incentive
Stock Options, to extend the right of the Committee to grant
Options, SARs and Restricted Stock Awards beyond ten years from
the Effective Date, to reduce any Option price except to the
extent authorized herein, or to alter any other feature of
Incentive Stock Options as to which federal law required
shareholder approval as a condition for incentive stock option
treatment. (b) No amendment or termination of the Plan shall
impair any rights which have accrued under the Plan. However,
any shares of the Company theretofore reserved for options not
granted prior to such termination and any shares that have been
awarded as Restricted Stock that are forfeited shall be released.
(c) The Plan shall be construed in accordance with the laws of
the State of Delaware.
Todd Shipyards Corporation Incentive Stock Compensation Plan
GRANT OF STOCK OPTION
Date of Grant: June 24, 1994
This Grant, dated as of the date of grant first stated above
(the Date of Grant) is delivered by Todd Shipyards Corporation, a
Delaware corporation (Todd) to Patrick W.E. Hodgson (the Grantee)
who is an employee or officer of Todd or one of its subsidiaries
(the Grantees employer is sometimes referred to herein as the
Employer).
WHEREAS, the Board of Directors of Todd (the Board) on June 2,
1993, adopted, with subsequent shareholder approval, the Todd
Incentive Stock Compensation Plan (the Plan); and
WHEREAS, the Plan provides, inter alia, for the granting of
stock options by a committee to be appointed by the Board (the
Committee) to directors, officers and key employees of Todd or
any subsidiary of Todd (excluding directors and officers who are
not employees) to purchase, or to exercise certain rights with
respect to, shares of the Class A Common Stock of Todd, par value
$.01 per share (the Stock), in accordance with the terms and
provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person who
is eligible for a grant of stock options under the Plan, and has
determined that it would be in the best interest of Todd to grant
the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth,
Todd, with the approval and at the direction of the Committee,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to 100,000 shares of Stock at a price of $4.25 per
share, the fair market value. Such option is hereinafter
referred to as the Option and the shares of stock purchasable
upon exercise of the Option are hereinafter sometimes referred to
as the Option Shares. The Option is intended by the parties
hereto to be, and shall be treated as, a non-incentive stock
option (as such term is defined under section 422 of the Internal
Revenue Code of 1986).
2. Exercise.
Subject to such further limitations as are provided herein, the
Options shall become exercisable as of the Date of Grant.
3. Termination of Option.
(a) The Option and all rights hereunder with respect thereto,
to the extent such rights shall not have been exercised, shall
terminate and become null and void after the expiration of five
(5) years from the Date of Grant (the Option Term).
(b) Upon the occurrence of the Grantees ceasing for any reason
to be employed by the Employer (such occurrence being a
termination of the Grantees employment), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantees
employment, except in a case where the termination of the
Grantees employment is by reason of retirement, disability or
death.
Upon a termination of the Grantees employment by reason of
retirement, disability or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantees employment
in the case of disability (within the meaning of Section 22(e)(3)
of the Code), (ii) the six-month period following the date of
issuance of letters testamentary or letters of administration to
the executor or administrator of a deceased Grantee, in the case
of Grantees death during his employment by the Employer, but not
later than one year after the Grantees death, and (iii) the three-
month period following the date of such termination in the case
of retirement on or after the attainment of age 65, or in the
case of disability other than as described in (i) above. In no
event, however, shall any such period extend beyond the Option
Term.
(c) In the event of the death of the Grantee, the Option may
be exercised by the Grantees legal representative(s), but only to
the extent that the Option would otherwise have been exercisable
by the Grantee.
(d) A transfer of the Grantees employment between Todd and any
subsidiary of Todd, or between any subsidiaries of Todd, shall
not be deemed as a termination of the Grantees employment.
(e) Notwithstanding any other provisions set forth herein or
in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Todd or any subsidiary of
Todd, (ii) breach any covenant not to compete or employment
contract with Todd or any subsidiary of Todd, or (iii) engage in
conduct that would warrant the Grantees discharge for cause
(excluding general dissatisfaction with the performance of the
Grantees duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Todd or any
subsidiary of Todd), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all or
any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of Todd written notice of
intent to exercise. The notice of exercise shall specify the
number of Option shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date,
provided, however, that the shares to be so surrendered have been
held and fully paid for by Grantee for (i) not less than six
months or (ii), if such shares were acquired pursuant to the
exercise of an incentive stock option as defined in the Code, not
less than one year.
On the exercise date specified in the Grantees notice or as
soon thereafter as is practicable, Todd shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Todd may elect) upon full payment
for such Option shares. The obligation of Todd to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Grantees right to purchase such Option Shares may be terminated
by Todd.
(d) The date specified in the Grantees notice as the date of
exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date. Notwithstanding the foregoing, for purposes of Section
3(b) above, the exercise date shall be the date of Grantees
notice to Todd so long as payment for the shares to be acquired
upon exercise is made in full within five business days
thereafter.
(e) Anything to the contrary herein nothwithstanding, Todd may
condition the exercise of the option or any portion thereof
(and/or restrict the delivery of certificates representing the
shares acquired upon exercise) upon the receipt in cash by Todd
from the Grantee of such amounts as may be required to be
withheld by Todd for federal, state or local income taxes in
respect of the employee and arising from the exercise.
Alternatively, by agreement between Todd and the Grantee, Todd
shall withhold from the number of shares to be delivered upon
exercise such number of shares as has a fair market value equal
to the taxes required to be withheld.
5. Adjustment of and Changes in Stock of Todd.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation,
rights offering or any other change in the corporate structure or
shares of capital stock of Todd, the Committee shall make such
adjustment as it deems appropriate in the number and kind of
shares of Stock subject to the Option or in the option price;
provided, however, that no such adjustment shall give the Grantee
any additional benefits under the Option.
6. Fair Market Value.
As used herein, the fair market value of a share of Stock shall
be the average of the high and low sale prices per share of Stock
on the New York Stock Exchange, as determined by the Committee,
on the applicable date or reference hereunder, or if there is no
sale on such date, then the average of such high and low sale
prices on the last previous day on which a sale is reported.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be,
or shall have any of the rights and privileges of, a stockholder
of Todd with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantees lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except in the case of the death of the Grantee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Grantee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, Todd may terminate the Option by
notice to the Grantee and it shall thereupon become null and
void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall be
construed as granting to the Grantee any right with respect to
continuance of employment with the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantees employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by Todd, as the Employer or on behalf of the Employer
(whichever the case may be), and acknowledged by Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at any
time (i) if the Board or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light
of any addition to or change in the Internal Revenue Code of 1986
or in the regulations issued thereunder, or any federal or state
securities law or other law or regulation, which change occurs
after the date of Grant and by its terms applies to the Option;
or (ii) other than in the circumstances described in clause (i),
with the consent of the Grantee.
11. Notice.
Any notice to Todd provided for in this instrument shall be
addressed to it in care of its Secretary at its offices at 1801-
16th Avenue SW, Seattle, WA 98134, and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on
the payroll records of the Employer. Any notice shall be deemed
to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan
and this instrument, and its interpretations and determinations
shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any
issue arising hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the laws of the State of Washington, except to
the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Todd has caused its duly authorized officer
to execute and attest this Grant of Incentive Stock Option, and
to apply the corporate seal hereto, and the Grantee has placed
his or her signature hereon, effective as of the Date of Grant.
Todd Shipyards Corporation ACCEPTED AND AGREED TO:
/s/ Michael G. Marsh /s/ Patrick W.E. Hodgson
By: Michael G. Marsh Patrick W.E. Hodgson, Grantee
Secretary and General Counsel
<PAGE>
Todd Shipyards Corporation Incentive Stock Compensation Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: September 29, 1994
This Grant, dated as of the date of grant first stated above
(the Date of Grant) is delivered by Todd Shipyards Corporation, a
Delaware corporation (Todd) to Michael G. Marsh (the Grantee) who
is an employee or officer of Todd or one of its subsidiaries (the
Grantees employer is sometimes referred to herein as the
Employer).
WHEREAS, the Board of Directors of Todd (the Board) on June 2,
1993, adopted, with subsequent shareholder approval, the Todd
Incentive Stock Compensation Plan (the Plan); and
WHEREAS, the Plan provides, inter alia, for the granting of
incentive stock options by a committee to be appointed by the
Board (the Committee) to directors, officers and key employees of
Todd or any subsidiary of Todd (excluding directors and officers
who are not employees) to purchase, or to exercise certain rights
with respect to, shares of the Class A Common Stock of Todd, par
value $.01 per share (the Stock), in accordance with the terms
and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person who
is eligible for a grant of incentive stock options under the
Plan, and has determined that it would be in the best interest of
Todd to grant the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth,
Todd, with the approval and at the direction of the Committee,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to 10,000 shares of Stock at a price of $4.50 per
share, the fair market value. Such option is hereinafter
referred to as the Option and the shares of stock purchasable
upon exercise of the Option are hereinafter sometimes referred to
as the Option Shares. The Option is intended by the parties
hereto to be, and shall be treated as an incentive stock option
(as such term is defined under section 422 of the Internal
Revenue Code of 1986).
2. Exercise.
Subject to such further limitations as are provided herein, the
Options shall become exercisable as follows: September 30, 1995
- - 3,333 shares; September 30, 1996 - 3,333 shares; September 30,
1997 - 3,334 shares.
3. Termination of Option.
(a) The Option and all rights hereunder with respect thereto,
to the extent such rights shall not have been exercised, shall
terminate and become null and void after the expiration of ten
(10) years from the Date of Grant (the Option Term).
(b) Upon the occurrence of the Grantees ceasing for any reason
to be employed by the Employer (such occurrence being a
termination of the Grantees employment), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantees
employment, except in a case where the termination of the
Grantees employment is by reason of retirement, disability or
death.
Upon a termination of the Grantees employment by reason of
retirement, disability or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantees employment
in the case of disability (within the meaning of Section 22(e)(3)
of the Code), (ii) the six-month period following the date of
issuance of letters testamentary or letters of administration to
the executor or administrator of a deceased Grantee, in the case
of Grantees death during his employment by the Employer, but not
later than one year after the Grantees death, and (iii) the three-
month period following the date of such termination in the case
of retirement on or after the attainment of age 65, or in the
case of disability other than as described in (i) above. In no
event, however, shall any such period extend beyond the Option
Term.
(c) In the event of the death of the Grantee, the Option may
be exercised by the Grantees legal representative(s), but only to
the extent that the Option would otherwise have been exercisable
by the Grantee.
(d) A transfer of the Grantees employment between Todd and any
subsidiary of Todd, or between any subsidiaries of Todd, shall
not be deemed as a termination of the Grantees employment.
(e) Notwithstanding any other provisions set forth herein or
in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Todd or any subsidiary of
Todd, (ii) breach any covenant not to compete or employment
contract with Todd or any subsidiary of Todd, or (iii) engage in
conduct that would warrant the Grantees discharge for cause
(excluding general dissatisfaction with the performance of the
Grantees duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Todd or any
subsidiary of Todd), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all or
any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of Todd written notice of
intent to exercise. The notice of exercise shall specify the
number of Option shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date,
provided, however, that the shares to be so surrendered have been
held and fully paid for by Grantee for (i) not less than six
months or (ii), if such shares were acquired pursuant to the
exercise of an incentive stock option as defined in the Code, not
less than one year.
On the exercise date specified in the Grantees notice or as
soon thereafter as is practicable, Todd shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Todd may elect) upon full payment
for such Option shares. The obligation of Todd to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Grantees right to purchase such Option Shares may be terminated
by Todd.
(d) The date specified in the Grantees notice as the date of
exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date. Notwithstanding the foregoing, for purposes of Section
3(b) above, the exercise date shall be the date of Grantees
notice to Todd so long as payment for the shares to be acquired
upon exercise is made in full within five business days
thereafter.
5. Adjustment of and Changes in Stock of Todd.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation,
rights offering or any other change in the corporate structure or
shares of capital stock of Todd, the Committee shall make such
adjustment as it deems appropriate in the number and kind of
shares of Stock subject to the Option and/or in the option price;
provided, however, that no such adjustment shall give the Grantee
any additional benefits under the Option.
6. Fair Market Value.
As used herein, the fair market value of a share of Stock shall
be the average of the high and low sale prices per share of Stock
on the New York Stock Exchange, as determined by the Committee,
on the applicable date or reference hereunder, or if there is no
sale on such date, then the average of such high and low sale
prices on the last previous day on which a sale is reported.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be,
or shall have any of the rights and privileges of, a stockholder
of Todd with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantees lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except in the case of the death of the Grantee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Grantee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, Todd may terminate the Option by
notice to the Grantee and it shall thereupon become null and
void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall be
construed as granting to the Grantee any right with respect to
continuance of employment with the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantees employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by Todd, as the Employer or on behalf of the Employer
(whichever the case may be), and acknowledged by Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at any
time (i) if the Board or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light
of any addition to or change in the Internal Revenue Code of 1986
or in the regulations issued thereunder, or any federal or state
securities law or other law or regulation, which change occurs
after the date of Grant and by its terms applies to the Option;
or (ii) other than in the circumstances described in clause (i),
with the consent of the Grantee.
11. Notice.
Any notice to Todd provided for in this instrument shall be
addressed to it in care of its Secretary at its offices at 1801-
16th Avenue SW, Seattle, WA 98134, and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on
the payroll records of the Employer. Any notice shall be deemed
to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan
and this instrument, and its interpretations and determinations
shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any
issue arising hereunder or thereunder.
13. Notice of Disposition.
The Grantee agrees to give Todd immediate notice of any sale,
transfer, assignment or disposition of the shares acquired upon
exercise if such event occurs within one year from the date of
exercise.
14. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the laws of the State of Washington, except to
the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Todd has caused its duly authorized officer
to execute and attest this Grant of Incentive Stock Option, and
to apply the corporate seal hereto, and the Grantee has placed
his or her signature hereon, effective as of the Date of Grant.
TODD SHIPYARDS CORPORATION ACCEPTED AND AGREED TO:
/s/ Patrick W. E. Hodgson /s/ Michael G. Marsh
By: Patrick W. E. Hodgson Michael G. Marsh, Grantee
Chairman and Chief Executive Officer
<PAGE>
Todd Shipyards Corporation Incentive Stock Compensation Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: September 29, 1994
This Grant, dated as of the date of grant first stated above
(the Date of Grant) is delivered by Todd Shipyards Corporation, a
Delaware corporation (Todd) to Stephen G. Welch (the Grantee) who
is an employee or officer of Todd or one of its subsidiaries (the
Grantees employer is sometimes referred to herein as the
Employer).
WHEREAS, the Board of Directors of Todd (the Board) on June 2,
1993, adopted, with subsequent shareholder approval, the Todd
Incentive Stock Compensation Plan (the Plan); and
WHEREAS, the Plan provides, inter alia, for the granting of
incentive stock options by a committee to be appointed by the
Board (the Committee) to directors, officers and key employees of
Todd or any subsidiary of Todd (excluding directors and officers
who are not employees) to purchase, or to exercise certain rights
with respect to, shares of the Class A Common Stock of Todd, par
value $.01 per share (the Stock), in accordance with the terms
and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person who
is eligible for a grant of incentive stock options under the
Plan, and has determined that it would be in the best interest of
Todd to grant the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth,
Todd, with the approval and at the direction of the Committee,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to 75,000 shares of Stock at a price of $4.50 per
share, the fair market value. Such option is hereinafter
referred to as the Option and the shares of stock purchasable
upon exercise of the Option are hereinafter sometimes referred to
as the Option Shares. The Option is intended by the parties
hereto to be, and shall be treated as an incentive stock option
(as such term is defined under section 422 of the Internal
Revenue Code of 1986).
2. Exercise.
Subject to such further limitations as are provided herein, the
Options shall become exercisable as follows: September 29, 1994
- - 22,000 shares; September 30, 1995 - 22,000 shares; September
30, 1996 - 22,000 shares; September 30, 1997 - 9,000 shares.
3. Termination of Option.
(a) The Option and all rights hereunder with respect thereto,
to the extent such rights shall not have been exercised, shall
terminate and become null and void after the expiration of ten
(10) years from the Date of Grant (the Option Term).
(b) Upon the occurrence of the Grantees ceasing for any reason
to be employed by the Employer (such occurrence being a
termination of the Grantees employment), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantees
employment, except in a case where the termination of the
Grantees employment is by reason of retirement, disability or
death.
Upon a termination of the Grantees employment by reason of
retirement, disability or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantees employment
in the case of disability (within the meaning of Section 22(e)(3)
of the Code), (ii) the six-month period following the date of
issuance of letters testamentary or letters of administration to
the executor or administrator of a deceased Grantee, in the case
of Grantees death during his employment by the Employer, but not
later than one year after the Grantees death, and (iii) the three-
month period following the date of such termination in the case
of retirement on or after the attainment of age 65, or in the
case of disability other than as described in (i) above. In no
event, however, shall any such period extend beyond the Option
Term.
(c) In the event of the death of the Grantee, the Option may
be exercised by the Grantees legal representative(s), but only to
the extent that the Option would otherwise have been exercisable
by the Grantee.
(d) A transfer of the Grantees employment between Todd and any
subsidiary of Todd, or between any subsidiaries of Todd, shall
not be deemed as a termination of the Grantees employment.
(e) Notwithstanding any other provisions set forth herein or
in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Todd or any subsidiary of
Todd, (ii) breach any covenant not to compete or employment
contract with Todd or any subsidiary of Todd, or (iii) engage in
conduct that would warrant the Grantees discharge for cause
(excluding general dissatisfaction with the performance of the
Grantees duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Todd or any
subsidiary of Todd), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all or
any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of Todd written notice of
intent to exercise. The notice of exercise shall specify the
number of Option shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date,
provided, however, that the shares to be so surrendered have been
held and fully paid for by Grantee for (i) not less than six
months or (ii), if such shares were acquired pursuant to the
exercise of an incentive stock option as defined in the Code, not
less than one year.
On the exercise date specified in the Grantees notice or as
soon thereafter as is practicable, Todd shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Todd may elect) upon full payment
for such Option shares. The obligation of Todd to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Grantees right to purchase such Option Shares may be terminated
by Todd.
(d) The date specified in the Grantees notice as the date of
exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date. Notwithstanding the foregoing, for purposes of Section
3(b) above, the exercise date shall be the date of Grantees
notice to Todd so long as payment for the shares to be acquired
upon exercise is made in full within five business days
thereafter.
5. Adjustment of and Changes in Stock of Todd.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation,
rights offering or any other change in the corporate structure or
shares of capital stock of Todd, the Committee shall make such
adjustment as it deems appropriate in the number and kind of
shares of Stock subject to the Option and/or in the option price;
provided, however, that no such adjustment shall give the Grantee
any additional benefits under the Option.
6. Fair Market Value.
As used herein, the fair market value of a share of Stock shall
be the average of the high and low sale prices per share of Stock
on the New York Stock Exchange, as determined by the Committee,
on the applicable date or reference hereunder, or if there is no
sale on such date, then the average of such high and low sale
prices on the last previous day on which a sale is reported.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be,
or shall have any of the rights and privileges of, a stockholder
of Todd with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantees lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except in the case of the death of the Grantee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Grantee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, Todd may terminate the Option by
notice to the Grantee and it shall thereupon become null and
void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall be
construed as granting to the Grantee any right with respect to
continuance of employment with the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantees employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by Todd, as the Employer or on behalf of the Employer
(whichever the case may be), and acknowledged by Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at any
time (i) if the Board or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light
of any addition to or change in the Internal Revenue Code of 1986
or in the regulations issued thereunder, or any federal or state
securities law or other law or regulation, which change occurs
after the date of Grant and by its terms applies to the Option;
or (ii) other than in the circumstances described in clause (i),
with the consent of the Grantee.
11. Notice.
Any notice to Todd provided for in this instrument shall be
addressed to it in care of its Secretary at its offices at 1801-
16th Avenue SW, Seattle, WA 98134, and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on
the payroll records of the Employer. Any notice shall be deemed
to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan
and this instrument, and its interpretations and determinations
shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any
issue arising hereunder or thereunder.
13. Notice of Disposition.
The Grantee agrees to give Todd immediate notice of any sale,
transfer, assignment or disposition of the shares acquired upon
exercise if such event occurs within one year from the date of
exercise.
14. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the laws of the State of Washington, except to
the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Todd has caused its duly authorized officer
to execute and attest this Grant of Incentive Stock Option, and
to apply the corporate seal hereto, and the Grantee has placed
his or her signature hereon, effective as of the Date of Grant.
TODD SHIPYARDS CORPORATION ACCEPTED AND AGREED TO:
/s/ Patrick W.E. Hodgson /s/ Stephen G. Welch
By: Patrick W. E. Hodgson Stephen G. Welch, Grantee
Chairman and Chief Executive Officer
<PAGE>
Todd Shipyards Corporation Incentive Stock Compensation Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: June 24, 1994
This Grant, dated as of the date of grant first stated above
(the Date of Grant) is delivered by Todd Shipyards Corporation, a
Delaware corporation (Todd) to Roland H. Webb (the Grantee) who
is an employee or officer of Todd or one of its subsidiaries (the
Grantees employer is sometimes referred to herein as the
Employer).
WHEREAS, the Board of Directors of Todd (the Board) on June 2,
1993, adopted, with subsequent shareholder approval, the Todd
Incentive Stock Compensation Plan (the Plan); and
WHEREAS, the Plan provides, inter alia, for the granting of
incentive stock options by a committee to be appointed by the
Board (the Committee) to directors, officers and key employees of
Todd or any subsidiary of Todd (excluding directors and officers
who are not employees) to purchase, or to exercise certain rights
with respect to, shares of the Class A Common Stock of Todd, par
value $.01 per share (the Stock), in accordance with the terms
and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person who
is eligible for a grant of incentive stock options under the
Plan, and has determined that it would be in the best interest of
Todd to grant the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth,
Todd, with the approval and at the direction of the Committee,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to 25,000 shares of Stock at a price of $4.25 per
share, the fair market value. Such option is hereinafter
referred to as the Option and the shares of stock purchasable
upon exercise of the Option are hereinafter sometimes referred to
as the Option Shares. The Option is intended by the parties
hereto to be, and shall be treated as an incentive stock option
(as such term is defined under section 422 of the Internal
Revenue Code of 1986).
2. Exercise.
Subject to such further limitations as are provided herein, the
Options shall become exercisable as follows: June 24, 1994 -
12,500 shares; June 24, 1995 - 12,500 shares.
3. Termination of Option.
(a) The Option and all rights hereunder with respect thereto,
to the extent such rights shall not have been exercised, shall
terminate and become null and void after the expiration of ten
(10) years from the Date of Grant (the Option Term).
(b) Upon the occurrence of the Grantees ceasing for any reason
to be employed by the Employer (such occurrence being a
termination of the Grantees employment), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantees
employment, except in a case where the termination of the
Grantees employment is by reason of retirement, disability or
death.
Upon a termination of the Grantees employment by reason of
retirement, disability or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantees employment
in the case of disability (within the meaning of Section 22(e)(3)
of the Code), (ii) the six-month period following the date of
issuance of letters testamentary or letters of administration to
the executor or administrator of a deceased Grantee, in the case
of Grantees death during his employment by the Employer, but not
later than one year after the Grantees death, and (iii) the three-
month period following the date of such termination in the case
of retirement on or after the attainment of age 65, or in the
case of disability other than as described in (i) above. In no
event, however, shall any such period extend beyond the Option
Term.
(c) In the event of the death of the Grantee, the Option may
be exercised by the Grantees legal representative(s), but only to
the extent that the Option would otherwise have been exercisable
by the Grantee.
(d) A transfer of the Grantees employment between Todd and any
subsidiary of Todd, or between any subsidiaries of Todd, shall
not be deemed as a termination of the Grantees employment.
(e) Notwithstanding any other provisions set forth herein or
in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Todd or any subsidiary of
Todd, (ii) breach any covenant not to compete or employment
contract with Todd or any subsidiary of Todd, or (iii) engage in
conduct that would warrant the Grantees discharge for cause
(excluding general dissatisfaction with the performance of the
Grantees duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Todd or any
subsidiary of Todd), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all or
any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of Todd written notice of
intent to exercise. The notice of exercise shall specify the
number of Option shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date,
provided, however, that the shares to be so surrendered have been
held and fully paid for by Grantee for (i) not less than six
months or (ii), if such shares were acquired pursuant to the
exercise of an incentive stock option as defined in the Code, not
less than one year.
On the exercise date specified in the Grantees notice or as
soon thereafter as is practicable, Todd shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Todd may elect) upon full payment
for such Option shares. The obligation of Todd to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Grantees right to purchase such Option Shares may be terminated
by Todd.
(d) The date specified in the Grantees notice as the date of
exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date. Notwithstanding the foregoing, for purposes of Section
3(b) above, the exercise date shall be the date of Grantees
notice to Todd so long as payment for the shares to be acquired
upon exercise is made in full within five business days
thereafter.
5. Adjustment of and Changes in Stock of Todd.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation,
rights offering or any other change in the corporate structure or
shares of capital stock of Todd, the Committee shall make such
adjustment as it deems appropriate in the number and kind of
shares of Stock subject to the Option and/or in the option price;
provided, however, that no such adjustment shall give the Grantee
any additional benefits under the Option.
6. Fair Market Value.
As used herein, the fair market value of a share of Stock shall
be the average of the high and low sale prices per share of Stock
on the New York Stock Exchange, as determined by the Committee,
on the applicable date or reference hereunder, or if there is no
sale on such date, then the average of such high and low sale
prices on the last previous day on which a sale is reported.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be,
or shall have any of the rights and privileges of, a stockholder
of Todd with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantees lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except in the case of the death of the Grantee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Grantee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, Todd may terminate the Option by
notice to the Grantee and it shall thereupon become null and
void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall be
construed as granting to the Grantee any right with respect to
continuance of employment with the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantees employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by Todd, as the Employer or on behalf of the Employer
(whichever the case may be), and acknowledged by Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at any
time (i) if the Board or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light
of any addition to or change in the Internal Revenue Code of 1986
or in the regulations issued thereunder, or any federal or state
securities law or other law or regulation, which change occurs
after the date of Grant and by its terms applies to the Option;
or (ii) other than in the circumstances described in clause (i),
with the consent of the Grantee.
11. Notice.
Any notice to Todd provided for in this instrument shall be
addressed to it in care of its Secretary at its offices at 1801-
16th Avenue SW, Seattle, WA 98134, and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on
the payroll records of the Employer. Any notice shall be deemed
to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan
and this instrument, and its interpretations and determinations
shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any
issue arising hereunder or thereunder.
13. Notice of Disposition.
The Grantee agrees to give Todd immediate notice of any sale,
transfer, assignment or disposition of the shares acquired upon
exercise if such event occurs within one year from the date of
exercise.
14. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the laws of the State of Washington, except to
the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Todd has caused its duly authorized officer
to execute and attest this Grant of Incentive Stock Option, and
to apply the corporate seal hereto, and the Grantee has placed
his or her signature hereon, effective as of the Date of Grant.
TODD SHIPYARDS CORPORATION ACCEPTED AND AGREED TO:
/s/ Patrick W.E. Hodgson /s/ Roland H. Webb
By: Patrick W. E. Hodgson Roland H. Webb, Grantee
Chairman and Chief Executive Officer
Exhibit 22-1
Subsidiaries of Todd Shipyards Corporation
==========================================
Todd Pacific Shipyards Corporation
Montana Valley Land Company
TSI Management, Inc.
Elettra Broadcasting, Inc.
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] APR-02-1995
[PERIOD-END] APR-02-1995
[CASH] 12,279
[SECURITIES] 41,901
[RECEIVABLES] 7,314
[ALLOWANCES] 548
[INVENTORY] 7,455
[CURRENT-ASSETS] 68,462
[PP&E] 61,129
[DEPRECIATION] 36,577
[TOTAL-ASSETS] 110,924
[CURRENT-LIABILITIES] 17,758
[BONDS] 0
[COMMON] 120
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 71,757
[TOTAL-LIABILITY-AND-EQUITY] 110,924
[SALES] 69,096
[TOTAL-REVENUES] 69,096
[CGS] 45,234
[TOTAL-COSTS] 67,994
[OTHER-EXPENSES] (2,300)
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] 3,402
[INCOME-TAX] 0
[INCOME-CONTINUING] 3,402
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 438
[NET-INCOME] 3,840
[EPS-PRIMARY] .36
[EPS-DILUTED] .36
</TABLE>
INDEMNITY AGREEMENT
This Agreement is made and entered into by the undersigned
Indemnitor (Indemnitors) in favor of ACSTAR Insurance
Company, 233 Main Street, New Britain, CT 06050-4011
(surety) for purpose of inducing Surety to furnish bonds.
WHEREAS, in the transaction of business, certain bonds,
undertakings and other writing obligatory in the nature of a
bond may have heretofore been, and may hereafter be,
required by, for, or on, behalf of the Indemnitors or any
one or more of the Indemnitor in whose bonds and
undertakings the Indemintors do hereby affirm to have a
substantial material and beneficial interest, and as such a
condition precedent to the execution of any and all such
bonds, the Surety requires execution of this Indemnity
Agreement.
WHEREAS, the Indeemnitor have or may have a substantial,
material and beneficial interest in obtaining of said bond
on behalf of various related companies, it is agreed that
this Agreement shall apply to any bonds executed on behalf
of any subsidiary, affiliated partnership, joint venture or
corporation of Indemnitors, now existing or hereafterformed
or acquired, and whether partially or wholly owned or
controlled, as fully as if the names and signatures of such
subsidiaries or affiliates appeared herein as Indemniator.
NOW, THEREFORE, in consideration of the foregoing premises,
and of the execution for continuance of such bonds and
undertaking, and for other good and valuable considerations,
the Indemnitors do, for themselves, their heirs, executors,
administrators and assigns, jointly and severally agree with
the Surety as follows:
1. The Indemnitor will pay , when due, all premiums for
each of such bonds in accordance with the Surety rates in
effect on the date each of such bonds become effective, as
long as liability thereunder shall continue, and until the
surety is furnished with evidence satisfactory to the Surety
of its discharge or release from the bonds, or of all
liability by reason thereof.
2. The Indemnitors will (A) perform all the conditions
of each said bond or obligation, and any and all
alterations, modifications, renewals, continuations, and
extensions thereof, an (B) indemnify and save the Surety
harmless from amd against any and all liability, loss, cost,
damages, fees of attorneys and other expenses which the
Surety may sustain or incur by reason or in consequences of
execution of such bond or bonds and any renewal,
continuation or successor thereof, including but not limited
to, (i) sums paid or liabilities incurred in settlement of,
and expenses paid or incurred in connection with claims,
suits or judgments under such bonds, or (ii) expenses paid
or incurred (a) in enforcing the terms thereof, (b) in
procuring or attempting to procure release from liability,
or (c) in recovering or attempting to recover losses or
expenses paid or incurred, as aforesaid. In the event of
payments by the surety or other evidence of surety the
Indemnitors agree to accept the voucher of the Surety or
other evidence of such payment as prima face evidence of the
propriety thereof, and of the Indemnitors liability
therefore to the surety.
3. If the Surety shall set up a reserve to cover any
claim liability, suite or judgment under any such bond the
Indemnitor , immediately upon demand, deposit with the
Surety a sum of money equal to such reserve and any increase
thereof as collateral security on such bond or bonds Such
sum and any other money or property which shall have been,
or shall hereafter be, pledged as collateral security on any
on any such bond or bonds shall, unless otherwise agreed in
writing by the Surety, be available, in the discretion of
the Surety, as collateral security on all bonds coming
within the scope of this instrument or for any other
indebtedness of the Indemnitors to Surety
4. The surety in its sole discretion, is authorized but
not required, (A) to consent to any changes in the contract
or the contract documents including the plans and
specification; (B) to make or guarantee advances or loans
for the purpose of executing the contract without any
obligation to see to the application thereof, it being
understood that the amount of all such advances or loans
shall be conclusively presumed to be a loss hereunder for
which the Indemnitor are liable; and (C) in the event of
any breach, delay or default asserted by the Obligee in any
said bonds, or in the performance of the contract, or a
breach of this Agreement or of any bond or bonds connected
therewith, or the failure to diligently prosecute the work
under any contract, or to pay for labor and materials used
in the prosecution of the contract, or in the event work has
ceased or been suspended on any contract or work under the
contracts covered buy any said bonds, to take possession of
the work under the contract and at the expense of the
Indemnitors, to complete the contract or cause the same to
be completed or to consent to the completion thereof, and
to take any other action which the Surety may deem necessary
The Indemnitors hereby release and discharge the Surety from
any and all liability for all its actions and omissions.
5. The Indemnitor hereby transfer, assign, pledge and
convey to the surety a security interest in (A) all
equipment, tools and materials in which the indemnitors have
interest, whether on site or elsewhere or on order: (B) all
sums due or to become due to Indemnitors or any of them in
connection with any contract; and (C) all subcontracts let
by Indemnitor in connection with any contract. The security
interest granted herein are effective in the case of each
contract as of the form of financing statement or other
agreement or writing which Surety, in its sole discretion,
deems necessary or advisable to perfect the security
interest granted herein, and further authorize Surety at its
discretion and at any time to file or serve this instrument,
or a true copy hereof, or statement or other notice under
the Uniform Commercial Code or any similar law, and
Indemnitors authorize Surety to complete this instrument in
any manner required for such use, and to prepare an attached
schedule describing items of security covered hereunder. The
Indemnitor hereby appoint Surety as Attorney-In-Fact for
each of them to endorse and to deposit or negotiate checks,
drafts, and all similar instruments payable to Indemnitors,
with the right, but not the obligation to exercise all of
the rights of the Indemnitors assigned, transferred and set
over to the Surety in this Agreement and in the name of the
Indemnitors to mask, execute and deliver any and all
additional assignments, documents as deemed necessary and
proper by the Surety to give full force and effect to this
paragraph (5). The Indemnitors agree that all equipment,
tools and material and all subcontracts are dedicated to the
performance of the contract to which they pertain and that
such equipment, tools and material and subcontracts shall be
subject to a trust in favor of the contract owner and Surety
and that they be used to that end.
6. The Surety shall have the exclusive right to
determine for itself and the Indemnitors whether any claim
or suit brought against the Surety or the principal upon any
such bond shall be settled or defended and the Suretys
decision shall be final and binding upon the Indemnitors.
7. If any of the bonds are executed in connection with a
contract which by its terms or by law prohibits the
assignment of the contract price, or any part thereof,
Indemnitors covenant and agree that all payments due or
received for or on account of said contract shall be held in
trust for Surety for the payment of obligations incurred in
the performance of the contract and for labor, materials,
and services furnished in the prosecution of the work
provided in said contract or any authorized extension or
modification thereof; and, further, it is expressly
understood that all monies due and to become due under any
contract or contracts covered by the bonds shall be held in
trust, whether such monies are in the possession of the
Indemnitors or otherwise, for the benefit of and for payment
of all such obligations in connection with any such contract
or contracts for which the Surety would be liable under any
of said bonds.
8. The Surety may decline to execute any bond and if the
Surety executes a bid or proposal bond, it shall have the
right to decline to execute any and all of the bonds that
may be required in connection with any award that may be
made under the proposal for which the bid or proposal bond
is given and such declination shall not diminish or alter
the liability that may arise by reason of having executed
the bid or proposal bond.
9. The indemnitors hereby waive notice of the execution
of any such bonds or of any act, fact or information coming
to the knowledge or notice of the Surety concerning or
affecting its rights or liabilities under any such bonds or
rights or liabilities of the Indemnitors hereunder, notice
of all such being hereby expressly waived.
10. If the Surety shall procure any other company or
companies to execute or join with it in executing, or to
reinsure, any such bond or bonds, this instrument shall
inure to the benefit of such other company or companies, its
or their successors and assigns, so as to give to it or them
a direct right of action against the Indemnitors to enforce
this instrument and, in that event, the work Surety,
wherever used herein, shall be deemed to include such
company or companies, as their respective interest may
appear.
11. The Indemnitors hereby waive all rights to claim any
of their property, including their respective homesteads, as
exempt from levy, execution, sale or other legal process
under the laws of any state.
12. In the event any claim or demand is made by the
Surety against Indemnitors, or any one or more of them, by
reason of the execution of a bond or bonds, the Surety is
hereby expressly authorized to settle with any one or more
of the Indemnitors individually, and without reference to
the others, and such settlement or composition shall not
affect the liability of any of the others, and the
Indemnitors hereby expressly waive the right to be
discharged and released by reason of the release of any one
or more of the Indemnitors and hereby consent to any
settlement or compromise that may hereafter be made.
Separate suits may be brought hereunder as causes of action
accrue and the bringing of suit or the recovery of judgment
upon any cause of action shall not prejudice or bar the
bringing of other suites upon other causes of action whether
theretofore or thereafter arising.
13. In the event any Indemnitor fails to execute this
Agreement or in the event the execution hereof by any
Indemnitor be defective or invalid for any reason, such
failure, defect or invalidity shall not in any manner affect
the validity of this Agreement or the liability of any other
Indemnitor executing the same, but each and every party so
executing shall be and remain fully bound and liable.
14 This Agreement may be terminated by any Indemnitor
upon twenty days written notice received by the Surety but
any such notice of termination shall not operate to modify,
bar or discharge the Indemnitor as to the bonds that may
have been theretofore executed.
15. This Agreement may not be changed or modified orally.
No. change or modification shall be effective unless made by
written endorsement executed by the Surety and the
Indemnitors to form a part hereof.
16. The Indemnitor agree to notify the surety immediately
upon their receiving any notice or knowledge that there
liability insurance has been or will be canceled or non-
renewed, or that such coverage is or will be reduced.
17. At any time, and until such time as the liability of
the Surety under any and all said bonds is terminated, the
surety shall have the right to reasonable access to books,
records, and accounts of the Indemnitor and Indeminators;
and any bank depository, material man, supply, or other
person, firm, or corporation when requested by the Surety is
hereby authorized to furnish the surety any information
requested including but not limited to , the status of the
work under contract being performed by the Indemnitor, the
condition of the performance of such contracts and payments
of accounts.
18 The work Indemnitor or pronouns referring to said
word, whether singular or plural, are to be construed as
referring to each of the undersigned Indemnitor,
individually and collectively, though the Indemnitor be one
or more individually, partnerships, associations, or
corporations.
IN TESTIMONY WHEREOF. the Indemnitors intending to be
legally bound hereby have hereunto set their hands and affix
their seals this
______________________________day
of________________________, 1990
Witness or Attest
All individual and Corporate signatures must be
acknowledged.
Name of Individual (Type): Address
Signature___________________________
_______________________
_______________________
Name of Individual (Type): Address
Signature___________________________
_______________________
_______________________
Name of Individual (Type): Address
Signature___________________________
_______________________
_______________________
Name of Individual (Type): Address
Signature___________________________
_______________________
_______________________
Name of Company : (Type):Todd Shipyards Corporation
Signature_By__________________________1801 S.W Massachusetts
Street
Name: Alfred J. Koontz Jr. Seattle, WA 98134
Title: Senior V.P. Finances & Administration
and Treasurer
Name of Company : (Type):Todd Pacific Shipyards Corporation
Signature_By___________________________1801 S.W
Massachusetts Street
Name: Hans K. Schaefer Seattle, WA 98134
Title: President
INDIVIDUAL (S) ACKNOWLEDGEMENT
STATE OF_____________________]
COUNTY OF____________________]
ON This _________________________day
of________________________________, 1990, before me
personally came________________________________, to me known
and known to me to be the Individual (s) who executed the
foregoing instrument, and acknowledge that
_______________________he_____________________ excuted same.
STATE OF_____________________]
COUNTY OF____________________]
ON This _________________________day
of________________________________, 1990, before me
personally came________________________________, to me known
and known to me to be the Individual (s) who executed the
foregoing instrument, and acknowledge that
_______________________he_____________________ excuted
same.
STATE OF_____________________]
COUNTY OF____________________]
ON This _________________________day
of________________________________, 1990, before me
personally came________________________________,to me known
and known to me to be the Individual (s) who executed the
foregoing instrument, and acknowledge that
_______________________he_____________________excuted same.
PARTNER (S) ACKNOWLEDGEMENT
STATE OF_____________________]
COUNTY OF____________________]
ON This _________________________day
of________________________________, 1990, before me
personally came ___________________________________ to me
know, and state that _______________he
(They)______________________is (are) partner (s) in the firm
of _____________________________________and acknowledge that
_______________________He (they) __________________executed
the foreging instrument as the act of said firm.
STATE OF Washington ]
]
COUNTY OF King ]
ON This _________________________day
of________________________________, 1990, before me
personally came Alfred J. Koontz , Jr.to me known, who,
being duly sworn, did depose and say that he resides in King
County Washington, that hi is the Sr. V. P., Financing &
Administration & Treasurer of the Todd Shipyards Corporation
, the corporation which executed the foregoing instrument;
that he knows the seal of the said corporation; that the
seal affixed to the said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of
said corporation, and that he signed his name to said
instrument by like order.
STATE OF Washington ]
]
COUNTY OF King ]
ON This _________________________day
of________________________________, 1990, before me
personally came Hans K. Schaefer. to me known, who, being
duly sworn, did depose and say that he resides in King
County Washington, that he is the President of the Todd
Pacific Shipyards Corporation , the corporation which
executed the foregoing instrument; that he knows the seal of
the said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and
that he signed his name to said instrument by like order.
STATE OF Washington ]
]
COUNTY OF King ]
ON This _________________________day
of________________________________, 1990, before me
personally came Hans K. Schaefer. to me known, who, being
duly sworn, did depose and say that he resides in King
County Washington, that he is the President of the Todd
Pacific Shipyards Corporation , the corporation which
executed the foregoing instrument; that he knows the seal of
the said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and
that he signed his name to said instrument by like order.
Page 4
SEPARATION AGREEMENT
AND
RELEASE AND COVENANT NOT TO SUE
1. The Parties. The parties to this Agreement are Todd
Shipyards Corporation ("Todd") and David K. Gwinn.
2. Severance of Employment Relationship. Todd and Mr. Gwinn
have mutually agreed that Mr. Gwinns employment with Todd shall
cease, effective March 3, 1995.
3. Obligations of Todd. For the consideration set forth
below, Todd agrees as follows:
3.1 Severance Payments and Benefits. Mr. Gwinns employment
by Todd shall continue until March 3, 1995. Mr. Gwinn shall
cease to be an employee of Todd, but Todd shall pay Mr. Gwinn the
sum of Five Thousand Five Hundred Dollars ($5,500.00) per month
for nine calendar months. Payments shall be made on the 30th day
of each month, commencing on March 30, 1995, with the last
payment to be made on November 30, 1995. Mr. Gwinn shall be
responsible for the payment of all taxes, including federal
withholding and self-employment taxes. In addition, during the
period ending November 30, 1995, Todd will continue to provide
Mr. Gwinn with medical, dental, vision and long term disability
benefits in accordance with the terms of those plans. After
March 3, 1995, Mr. Gwinn shall not be entitled to accrue any
vacation leave, sick leave, compensatory time, pension credits
under the Todd Retirement System, make contributions to Todds
401(k) Plan or receive benefits of any other nature.
3.2 Vacation and Compensatory Time. On March 3, 1995, all
accrued and unused vacation leave and all accrued and unused
compensatory time will be paid to Mr. Gwinn in accordance with
Todds policies. Todd will not pay for more than 300 hours of
compensatory time.
3.3 Out-Placement Services. Mr. Gwinn will be provided with
out-placement services described in Exhibit A.
3.4 COBRA Benefits. Effective December 1, 1995, Mr. Gwinn
will be entitled to continue his health benefits pursuant to
COBRA.
4. Obligations of Mr. Gwinn. For the consideration set forth
above, Mr. Gwinn agrees as follows:
4.1 Release and Covenant Not to Sue. Mr. Gwinn, on behalf
of himself, his spouse, his marital community, his heirs and any
successors and assigns, hereby releases Todd, its successors,
predecessors, subsidiaries, parents and affiliated companies and
their officers, agents and employees (hereinafter collectively
referred to as Releasees) from any and all claims he might have
against them arising out of his employment by Todd, or his
separation from said employment. Unless otherwise specified
above, this Release specifically encompasses any and all claims
including, but not limited to, claims for wages; bonuses;
compensatory time; pension benefits; vacation pay; attorneys
fees; costs; emotional distress or humiliation; damage to
character; breach of contracts; wrongful termination;
discrimination, including discrimination under the Age
Discrimination in Employment Act, 29 U.S.C., Section 621 et seq.
(ADEA). Mr. Gwinn further covenants that he will not sue these
Releasees or file any charges against them with any federal,
state or local agencies, regarding any matters arising out of his
employment with Todd or his separation from said employment.
This Release and Covenant Not to Sue encompasses any and all
claims whether currently known or unknown to Mr. Gwinn, except
that as to any claims under the ADEA, this Release does not apply
to any events arising after the execution of this Agreement.
4.2 Consultation. Mr. Gwinn agrees to make himself
available to consult with Todd with regard to any matters or
claims arising out of events which occurred during the time that
he was employed by Todd. Said consultation may consist of, but
is not limited to, testimony in depositions, trials, or other
administrative proceedings and the preparation for same. Any
consultation requested by Todd and rendered by Mr. Gwinn after
November 30, 1995 shall be remunerated at the rate of $45.00 per
hour. The Indemnification Agreement entered into between Todd
and Mr. Gwinn on March 1, 1994, (attached hereto), shall remain
in full force and effect according to its terms.
4.3 Confidentiality of the Agreement. Mr. Gwinn agrees to
keep the facts and terms of this Agreement in strictest
confidence and will not disclose the dollar amount or any of the
terms of this Agreement to anyone except his attorney, his spouse
or except as may be required by law. Mr. Gwinn represents that
he has not, prior to signing this Agreement, told anyone about
the Separation Agreement or the consideration being provided to
him by Todd. Mr. Gwinn understands that this pledge of
confidentiality is an integral part of Todds agreement to provide
the consideration set forth in paragraph 3 above.
4.4 Confidentiality of Trade Secrets and Business Sensitive
Information. Mr. Gwinn agrees that at no time shall he in any
way reveal to any third party any confidential or business
sensitive information with regard to Todd, or its parents,
subsidiaries, successors, predecessors, and affiliated companies.
5. Waiting Period Under the ADEA. In accordance with the
ADEA, Mr. Gwinn may consider this Agreement for a period of
twenty-one (21) days up to and including March 24, 1995. He may
accept this Agreement at any time on or prior to that date by
signing and delivering it to: Secretary & General Counsel, Todd
Shipyards Corporation, 1801 16th Avenue SW, Seattle Washington.
Up until the conclusion of the seventh day after this Agreement
has been signed and delivered in the fashion described above, Mr.
Gwinn may revoke the Agreement by notifying: Secretary & General
Counsel, Todd Shipyards Corporation, at the above address, in
writing, of said revocation.
6. Nonadmission. No provisions or statements contained in
this Agreement shall be construed as an admission by the
Releasees that they have either acted improperly, or that they
are in any way liable to Mr. Gwinn for any matters arising during
his employment by Todd or his separation therefrom. Any such
liability is expressly denied.
7. Consequence of Breach. If either party breaches this
Agreement in any way, the other party shall be entitled to seek
enforcement and/or damages and the prevailing party in such
action shall be entitled to its attorneys fees and costs. Venue
shall be in King County, Washington and Washington law shall
govern the dispute.
8. Notice to Consult with an Attorney. Both parties agree
that they have freely and voluntarily entered into this
Agreement. Mr. Gwinn further acknowledges that he has read this
Agreement in its entirety and by the terms of this Agreement has
been advised to seek the independent advice and counsel of an
attorney before executing it. By his execution of this
Agreement, he acknowledges that he has had the opportunity to
seek an attorneys advice and that he understands the contents of
this Agreement.
9. Entire Agreement. This Agreement sets forth the complete
understanding of the parties concerning their respective
commitments and obligations arising out of the severance of the
employment relationship. This Agreement contains all
representations, obligations and prior understandings between the
parties and supersedes any other negotiations or agreements
preceding the execution of this Agreement.
DATED: ______________________
TODD SHIPYARDS CORPORATION
By: ___________________________________
DATED: ______________________
_______________________________________
DAVID K. GWINN, on behalf of himself and his
marital community, heirs and assigns
