EXHIBIT 10.1

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS
BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF
PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

Confidential Commercial InformationExecution Version

 

 

 

 

VESSEL CONSTRUCTION AGREEMENT

BY AND BETWEEN

CONRAD SHIPYARD, L.L.C.

(Builder)

AND

GREAT LAKES DREDGE & DOCK COMPANY, LLC

(Owner)

ONE (1) TRAILING SUCTION HOPPER DREDGE

And Option Vessel

Dated June 5, 2020

 

 

 

 

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

TABLE OF CONTENTS

  

Article 1UNDERTAKING AND PRICE1

Article 2DEFINITIONS2

Article 3SCOPE OF WORK9

Article 4PAYMENT13

Article 5DESIGN OWNERSHIP AND RESPONSIBILITY17

Article 6PROSECUTION OF THE WORK, PROJECT SCHEDULE18

Article 7CHANGE orders22

Article 8OWNER’S REPRESENTATIVE25

Article 9OWNER’S RIGHT OF INSPECTION26

Article 10TRIALS AND DELIVERY28

Article 11WARRANTY32

Article 12INSURANCE34

Article 13FINANCIAL SECURITY37

Article 14FORCE MAJEURE AND PERMISSIBLE DELAY38

Article 15EARLY DELIVERY BONUS, LIQUIDATED DAMAGES FOR DELAY41

Article 16DEFAULT AND TERMINATION44

Article 17LIMITATION OF DAMAGES48

Article 18ASSIGNMENT OF THIS AGREEMENT49

Article 19COMPLIANCE WITH LAWS49

Article 20INTELLECTUAL PROPERTY50

Article 21NOTICES AND COMMUNICATIONS51

Article 22TITLE, SECURITY, AND WARRANTY OF TITLE53

Article 23INDEMNIFICATION55

Article 24TECHNICAL DISPUTES.57

Article 25DISPUTE RESOLUTION AND LIMITATIONS PERIOD58

Article 26TAXES, DUTIES, AND TARIFFS59

Article 27CONTRACT INTERPRETATION60

Article 28PUBLICITY AND DISCLOSURES.61

- i -

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Article 29AUDITS61

Article 30MISCELLANEOUS61

 

 

LIST OF EXHIBITS

 

 

 

 

 

 

Exhibit A

  

Vessel Contract Price and Delivery Date

Exhibit B

  

Specifications

Exhibit C

  

[Intentionally Omitted]

Exhibit D

  

[Intentionally Omitted]

Exhibit E

  

Owner Furnished Items

Exhibit F-1

  

Form of Stage Completion Certificate

Exhibit F-2

  

Form of Builder's Invoice

Exhibit G-1

  

Form of Builder's Lien Release

Exhibit G-2

  

Form of Subcontractors' and Suppliers' Lien Release

Exhibit H

  

Form of Certificate of Completion and Delivery

Exhibit I

  

Form of Change Order

Exhibit J

  

Form of Owner's Warranty Notification to Builder

Exhibit K

  

Builder's Preliminary Schedule

Exhibit L-1

  

Form of Payment Bond

Exhibit L-2

  

Form of Performance Bond

Exhibit M

  

Form of Protocol of Delivery and Acceptance

Exhibit N

  

Form of Builder’s Corporate Parent Guarantee

Exhibit O

  

Time and Material Rates

Exhibit P

  

Form of Shipyard Contract Deficiency Report

Exhibit Q

  

Interim Installment and Stage of Completion Schedule

Exhibit R

 

Alternate Scope Proposals

 

 

 

 

 

 

- ii -

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

 

 

 

VESSEL CONSTRUCTION AGREEMENT

THIS VESSEL CONSTRUCTION AGREEMENT is made as of the 5th day of June, 2020
(hereinafter, this “Agreement”), between Conrad Shipyard, L.L.C. (hereinafter,
“Builder”), a Louisiana limited liability company whose principal place of
business address is 1501 Front Street, Morgan City, Louisiana 70380 and Great
Lakes Dredge & Dock Company, LLC (hereinafter, “Owner”), a Delaware limited
liability company whose principal place of business address is 2122 York Road,
Oak Brook, Illinois 60523, for the design and construction of the Vessel (as
defined below).

Builder and Owner agree as set forth below.

W I T N E S S E T H:

Article 1UNDERTAKING AND PRICE

1.1Initial Undertaking.  Builder agrees to build at its own risk and expense and
to sell, and Owner agrees to purchase, the Initial Vessel (as defined below) on
the terms and conditions as set forth herein.  The Initial Vessel shall be a
trailing suction hopper dredge vessel, constructed to the Design, for the
Contract Price, all in accordance with the Contract Documents.  

1.2U.S. Build.  Without limitation to the foregoing, Builder is to ensure that
the Initial Vessel is built in the United States as required by United States
law to be eligible for documentation under the United States flag with a
coastwise trade endorsement; including ensuring that all major components used
in the construction of the Initial Vessel are fabricated in the United States,
and that all construction and all assembly for the construction of the Initial
Vessel is done in the United States.

1.3Contract Price.  The Contract Price to be paid by Owner for the Work for the
Initial Vessel shall be as set forth in Exhibit A and may only be adjusted as
provided in accordance with the terms of this Agreement.

1.4Delivery.  Builder shall deliver the Initial Vessel to Owner at the Delivery
Point, safely afloat, in all respects fully seaworthy, fully constructed, fully
outfitted, and fully tested in accordance with the Design as set forth in the
Contract Documents.  Delivery shall be made by the Delivery Date shown on
Exhibit A, subject to any Permissible Delays permitted in accordance with
Article 14.

- 1 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

1.5Option Vessel.  Owner shall have the option to purchase an additional Vessel
(the “Option Vessel”) on the terms and conditions set forth below:

 

(a)

The Contract Price for the Option Vessel shall be the Option Vessel Price set
forth in Exhibit A, which may only be adjusted as provided in accordance with
the terms of this Agreement.  

 

(b)

As long as Owner is not in default under this Agreement pursuant to Section
16.2, notwithstanding any cure period that may be applicable, at the time Owner
exercises the following right, Owner may exercise its right to purchase the
Option Vessel by written notification delivered to Builder not later than twelve
(12) months from the Effective Date of this Agreement, or such later date as may
be mutually agreed by the Parties.  

 

(c)

If Owner’s option is exercised within the foregoing period, the initial
Scheduled Delivery Date for the Option Vessel will be determined by a schedule
mutually agreed between the Parties at the time that Owner exercises its option,
provided, however, that the duration of the construction period shall not exceed
that used for the Initial Vessel unless otherwise mutually agreed in writing.

 

(d)

All other provisions of this Agreement shall apply in connection with the
construction of the Option Vessel, mutatis mutandis.

 

(e)

For convenience, all subsequent references below shall be to a single Vessel,
but without limitation of Owner’s right to order an Option Vessel; where this
Agreement refers to “the Vessel,” such reference shall be deemed to refer to
either the Initial Vessel or the Option Vessel, as applicable.

1.6Specifications.  The Parties have agreed that the Vessel shall be built to
the specifications set forth in the attached Exhibit B (the
“Specifications”).  The Specifications may be changed from time to time during
the construction of the Vessel in accordance with the procedures stated below,
and such changes will be set forth in one or more sequentially numbered Change
Orders (as defined below).  

Article 2DEFINITIONS

“Affiliates” means for purposes of this Agreement any entity that controls, is
controlled by, or is under common control with another entity.  An entity is
deemed to control another if it owns directly or indirectly at least fifty
percent (50%) of (i) the shares entitled to vote at a general election of
directors of such other entity, or (ii) the voting interest in such other entity
if such other entity does not have either shares or directors.

- 2 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

“Agreement” has the meaning defined in the Preamble.

“Alternate Scope Proposals” has the meaning defined in Section 7.11.

“Announced Regulatory Amendment” shall mean an announcement by a Regulatory
Authority of an upcoming Change in Law applicable to the Vessel that has an
established effective date and has been publicly promulgated by means of a
Circular issued by the IMO or an IMO Committee, or similar announcement from the
Classification Society, or a Final Rule issued by a Regulatory Authority.

“Approval Disputes” has the meaning defined in Section 24.2.

“Bond” means a surety bond to be provided by Builder pursuant to Section 13.1
that shall be substantially in the form of American Institute of Architects
standard form document A312-2010, forms of which are attached hereto as Exhibit
L-1 and Exhibit L-2, or as otherwise reasonably acceptable to Owner.

“Builder” has the meaning defined in the Preamble.

“Builder Group” has the meaning defined in Section 23.3.

“Builder Personnel” means all employees of Builder and the employees of any
Subcontractor of Builder, at any tier.

“Builder’s Corporate Parent Guarantee” means a corporate parent guarantee to be
provided by Builder’s corporate parent to Owner pursuant to Section 13.3,
substantially in the form of Exhibit N, or as otherwise reasonably acceptable to
Owner.

“Builder’s Representative” means those Persons designated in writing by Builder
to act as Builder’s representative and act on behalf of Builder as its primary
point of contact in connection with this Agreement and the Work.

“Builder’s Process” means the detailed construction documentation of the Vessel,
including construction modeling, lofting, numerical control code and/or tapes,
detail construction documentation including but not limited to material lists,
all of which have been developed by Builder for the work contemplated by this
Agreement.

“Certificate of Completion and Delivery” has the meaning defined in Section 4.9.

“Change Order” means a written instrument prepared by Builder and signed by
Owner and Builder, stating their agreement upon: (1) a change in the Work;
(2) the amount of the

- 3 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

adjustment in the Contract Price if any; and (3) the extent of the adjustment in
the Delivery Date, if any.

“Classification Society” means the American Bureau of Shipping.

“Coast Guard” means the United States Coast Guard.

“Contract Documents” has the meaning defined in Section 27.1.

“Contract Drawings” means the contract drawings listed in an addendum to the
Specifications showing the design and construction of the Vessel as further
described in the Specifications.

“Contract Price” means the price for the Vessel to be constructed pursuant to
this Agreement as shown on Exhibit A including any Modifications thereto and any
price adjustments allowed by this Agreement.

“Days” means Gregorian Calendar days, unless otherwise defined.  Each Day shall
be a single twenty-four hour period commencing at 12:00 a.m., local time at the
Shipyard at Amelia, Louisiana.

“Delivery” means Builder’s transfer of possession and Owner's acceptance of the
Vessel completed in accordance with the Contract Documents, subject to the
warranties set forth in Article 11, as evidenced by Builder's and Owner's
execution of a Protocol of Delivery and Acceptance in the form of Exhibit M.

“Delivery Documents” has the meaning defined in Section 4.9(f).

“Delivery Date” means the date on which Builder is required to deliver the
Vessel to Owner as shown on Exhibit A, subject to extensions through Permissible
Delays pursuant to Article 14.

“Delivery Payment” means the final payment to be made by Owner to Builder in
connection with the construction of the Vessel.

“Delivery Point” means the location at which the Delivery of the Vessel is to be
made in accordance with Section 10.18, which shall be Builder's Shipyard located
in Amelia, Louisiana, or such other location as may be mutually agreed.

“Design” means the design of a trailing suction hopper barge, as described and
specified in the Specifications and other Contract Documents, and shall also
include all documents embodying such design and all Intellectual Property
embodied in such design documents, as specified in the Contract Documents.

- 4 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

“Detailed Construction Documentation” means all construction documentation of
the Vessel created by Builder or its Subcontractors, as specified in Exhibit B.

“Dock Trials” means the testing of any portion of the Work by Builder or Owner
prior to, and as a condition of, Delivery as described in Section 10.3 and in
the Specifications.

“Dredging System” has the meaning defined in Section 10.6.

“Effective Date” shall be the date on which the later of the following events
have occurred: (i) this Agreement has been signed by both Parties, and (ii)
Owner has made payment of the initial Interim Installment Payment to Builder in
accordance with Exhibit Q.

“EPA” means the United States Environmental Protection Agency.

“Force Majeure” has the meaning defined in Section 14.2.

“Good Shipbuilding Practice” as used herein, means the construction of a ship or
vessel in accordance with all applicable flag state regulations and
classification society rules using those vessel construction practices and work
management systems employed by competent and well-qualified commercial vessel
builders, with due consideration to good quality, incorporating the specified
components to meet Specification requirements, utilizing construction and
testing methods to ensure that the completed Vessel will conform to the Contract
Documents.

“IMO” means the International Maritime Organization.

“Initial Vessel” means the first Vessel to be constructed under this Agreement,
in the event that Owner exercises its option for the construction of an Option
Vessel under the terms and conditions of this Agreement.

“Intellectual Property” means all trade names, trademarks, service marks, and
other identifying names or source indicia associated with the Work, whether
registered or unregistered, and including all goodwill relating to any of the
foregoing, and all applications for any of the foregoing; all patents,
copyrights, including any design copyrights protected pursuant to 17 U.S.C. §
1301, et seq., copyright registrations and patent applications for the
foregoing, together with all divisions, renewals, and continuations of any of
the foregoing, and all know-how, unpatented inventions, trade secrets, and other
intellectual property embodied in or pertaining to the Work or the Design.

“Interim Installment Payment” means a payment due upon completion of a Stage of
Completion in accordance with Section 4.2 and Exhibit Q.

- 5 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

“IP Claims” has the meaning defined in Section 20.1.

“Joint Surveyor” has the meaning defined in Section 24.3.

“Letter of Credit” has the meaning defined in Section 13.2.

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust, or other preferential arrangement
having the practical effect of any of the foregoing.

“Lien Release” means a lien release in favor of the Vessel and Owner, executed
by Builder and each Material Subcontractor or Supplier, in the form of Exhibits
G-1 and G-2.

“Maker’s List” has the meaning defined in Section 3.21.

“Major Equipment” means all items with a purchase cost of [***] or greater, and
also includes without regard to cost all engines, gearboxes, and the Dredging
System”.

“Materials” means everything, other than Owner Furnished Items, that is required
for the construction and Delivery of the Vessel in compliance with the
Specifications, including, without limitation, all materials, supplies,
machinery, machinery parts, equipment, electronics, hardware, piping, timber,
ferrous and non-ferrous plate, shapes, and other tangible items that are
incorporated or used in, or that are identified to or intended to be
incorporated or used in, the construction of the Vessel.

“Material Non-Conformities” has the meaning defined in Section 10.15.

“Material Subcontract” means any contract of Builder with a Subcontractor,
Supplier, or other vendor in connection with the Work with a value in excess of
[***].

“Material Subcontractor or Supplier” means Subcontractor or Supplier of Builder
providing goods and/or services in excess of [***] in respect of the Work.

“Minor Non-Conformities” has the meaning defined in Section 10.13.

“Modification” means: (1) a written amendment to this Agreement signed by both
Parties, or (2) a Change Order.

“Notice of Arbitration” has the meaning defined in Section 25.6.

“Option Vessel” means the second Vessel to be constructed under this Agreement,
in the event

- 6 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

that Owner exercises its option for the construction of a second Vessel under
the terms and conditions of this Agreement.

“Owner” has the meaning defined in the Preamble.

“Owner Furnished Items” means those items furnished by Owner to be installed in
the Vessel by Builder as part of the Work as defined in Exhibit E.

“Owner Group” has the meaning defined in Section 23.1.

“Owner Personnel” means all employees of Owner, Owner's Representative, and the
employees of any subcontractor of Owner (excluding Builder Personnel), at any
tier.

“Owner’s Representative” means those Persons designated in writing by Owner to
represent and act on behalf of Owner as described more fully in Section 8.1. as
Owner’s primary point of contact in connection with this Agreement and the Work.

“Parties” refers to Owner and Builder collectively, and “Party” means either of
them individually.

“Permissible Delay” has the meaning defined in Section 14.1.

“Person” means an individual, or any corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or agency or political subdivision thereof (including
any subdivision or ongoing business of any such entity).

“Project Schedule” has the meaning defined in Section 6.7 and more fully
described in Article 6.

“Protocol of Delivery and Acceptance” means a document in the form of Exhibit M
to be executed by Builder and Owner upon Delivery of the Vessel.

“Rain Day” has the meaning defined in Section 14.5.

“Regulatory Authorities” as used herein means the Coast Guard, the
Classification Society, the U.S. Public Health Service, the International
Maritime Organization, United States Customs and Border Protection, the EPA, and
any other applicable governmental body or agency responsible for ensuring the
Vessel's compliance with all requirements imposed by United States law and
regulations, international conventions, the Classification Society, or any other
requirement applicable to the Vessel (each a “Regulatory Authority”).

- 7 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

“Retained Amount” has the meaning defined in Section 10.6.

“Sea Trials” means those trials as described in Section 10.4 and in the
Specifications.

“Shipyard” means collectively those shipyards and ancillary facilities owned,
leased, or used by Builder in connection with the Work under this Agreement.

“Shipyard Contract Deficiency Report” means a report in the form set out in
Exhibit P.

“SMA Rules” has the meaning defined in Section 25.4.

“SOLAS” means the International Convention for the Safety of Life at Sea.

“Specifications” means the specifications attached hereto as Exhibit B.

“Stage Completion Certificate” means a certificate, in the form set forth in
Exhibit F-1, attesting to the completion of each stage of the Work as referred
to in Section 4.4 and corresponding to the Interim Installment Schedule set
forth in Exhibit Q.

“Subcontractor” means any Person other than an employee of Builder, engaged by
Builder to execute any part of the Work under this Agreement on behalf of
Builder.

“Supplier” means any Person responsible for the supply, manufacture,
construction, installation, or delivery to Builder of any of the Materials.

“System Tests” has the meaning defined in Section 10.6.

“Technical Disputes” has the meaning defined in Section 24.3.

“Vessel” means the vessel to be designed and constructed in accordance with the
Contract Documents.

“Warranty Period” as used herein means a three hundred and sixty-five (365) Day
period following Delivery of the Vessel, or in the case of a warranty given by a
third party, such period specified in such warranty, but not less than a three
hundred and sixty-five (365) Day period following Delivery of the Vessel.

“Work” as used herein, means the work required to be performed by Builder in
accordance with the Contract Documents, whether performed by Builder or any
Subcontractor and whether completed or partially completed, and includes all
labor, Materials, equipment and services provided or to be provided by or on
behalf of Builder to fulfill Builder's obligations hereunder.  The Work shall
also include Builder's obligation to pay in due course for all such labor,

- 8 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Materials, equipment, and services provided or to be provided on behalf of
Builder to fulfill Builder's obligations hereunder.

“Working Days” means “business days,” Monday through Friday, excluding weekends
and national or state recognized holidays applicable to the local jurisdiction
in which the Work is performed.

Terms defined in this Agreement, either in Article 2 or elsewhere in this
Agreement, which are used in the other Contract Documents or Change Orders but
not otherwise defined therein, shall have the meanings assigned to them in this
Agreement.  References to Articles, Sections and Exhibits shall constitute
references to Articles and Sections of this Agreement and Exhibits attached to
this Agreement, unless otherwise indicated.

Article 3SCOPE OF WORK

3.1The Vessel shall be constructed in accordance with the Contract Documents as
well as all applicable rules and regulations of the Regulatory Authorities,
including, without limitation, Coast Guard regulations, EPA regulations, SOLAS,
the International Convention on Load Lines (as amended), and all applicable
Rules of the Classification Society. Without limitation to the Specifications,
the Vessel shall have the following principal characteristics:

Length overall (max)[***] feet

Length between perpendiculars[***] feet

Breadth, moulded[***] feet

Depth, moulded[***] feet

Draft, max dredge[***] feet

Displacement at [***] foot draft[***] long tons*

Deadweight “all told” at [***] foot draft[***] long tons*

Gross Tonnage (ITC)[***] gross tons (ITC)*

Net Tonnage (ITC) [***] net tons (ITC)*

Hopper capacity at highest overflow level, net[***] cubic yards

Inside diameter of trailing suction pipes[***] inches

Maximum Dredging depth below waterline (approximate)[***] feet

(* tonnage figures are approximates pending vessel admeasurement)

3.2Owner and Builder each expressly acknowledge and agree that Owner has
provided to Builder the Design as reviewed by the Classification Society.  Upon
execution of this Agreement, Builder shall have the sole and exclusive
responsibility to finalize all Design drawings for the performance of the Work,
and to submit all Design drawings, plans, and documentation as may be required
for final review and approval of the Regulatory Authorities having jurisdiction

- 9 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

over the Vessel, and the creation of any design models or similar products
required for the performance of the Work.

3.3Builder shall have sole and exclusive responsibility to obtain timely any
approval required by any Regulatory Authority for any Builder Process derived by
Builder from the Specifications, Contract Documents, Design drawings, or Builder
furnished equipment that requires approval by any Regulatory Authority.  Without
limitation to the foregoing, Builder shall be solely responsible to obtain all
necessary approvals from the Regulatory Authorities for the construction,
classification, and issuance of the Coast Guard Certificate of Inspection for
the Vessel, including the final approval of all plans, arrangements, and
drawings.  

3.4Builder shall provide copies to Owner of each and all stamped plans, approval
letters, equipment documentation approvals, Class survey reports, and all other
approvals issued by Regulatory Authorities as Builder receives same from the
Regulatory Authorities.

3.5Builder agrees to furnish a suitable location at its Shipyard for the full
and timely construction of the Vessel together with all labor, management,
tools, equipment, Materials, services, and fees necessary for the construction,
completion, inspection, and certification of the Vessel.  Without limitation to
the foregoing or to the provisions of Section 3.12, Builder also agrees to
furnish a suitable location for the storage of Owner Furnished Items in
accordance with Good Shipbuilding Practice, including without limitation the
protection of Owner Furnished Items from the elements, theft, and damage as may
be required by the nature of specific Owner Furnished Items.

3.6Subject to Article 19, Builder will comply with, and construct the Vessel to
comply with, all applicable requirements of governing Regulatory Authorities in
effect at the Effective Date.  All fees and charges of a Regulatory Authority,
including fees and charges for inspection of the Work shall be for the account
of and paid by Builder, except those fees and charges of the Classification
Society for the review of Owner Furnished Items, which shall be for the account
of and paid for by Owner.

3.7If after the Effective Date Builder becomes aware that any portion of the
Contract Documents do not comply with any rules, regulations, or requirements of
the Regulatory Authorities, Builder shall promptly notify Owner of such
non-compliance.  Any alterations in the Work required to correct such
non-compliance shall be addressed through a Change Order in accordance with
Section 7.8.

3.8Builder will provide and/or install and commission all Materials shown in the
Specifications, including the installation of Owner Furnished Items, except
those items which the Specifications state are to be installed by Owner or its
separate contractors.  

- 10 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

3.9With respect to such items to be installed by Owner or its separate
contractors, Builder shall provide reasonable assistance with respect to such
installation in accordance with the Contract Documents and the Project
Schedule.  Without limitation to the foregoing, Builder shall receive, store,
protect, and insure all Owner Furnished Items to be incorporated into the Vessel
delivered to the Shipyard.  Upon receipt of such Owner Furnished Items at the
Shipyard, Builder shall inspect for, and note on the carrier's receipt, any
shipping damage that is reasonably ascertainable upon a reasonable examination
of the item, material, and packaging, and check that the item or material
conforms to the applicable Bills of Lading with regard to item description and
quantity.

3.10Upon delivery of each Owner Furnished Item to the Shipyard, as soon as
possible, but not later than the following Working Day, Builder shall notify
Owner's Representative of such delivery.  Upon such notification, Owner’s
Representative shall, at Owner's expense and risk, inspect such Owner Furnished
Item.

3.11Provided that Builder has complied with the obligations of this Article,
Builder shall not be liable for any damage to an Owner Furnished Item for loss
or damage arising prior to delivery to the Shipyard.  

3.12Builder shall have the duties of a bailee with respect to all Owner
Furnished Items in Builder’s custody, and Builder shall be liable to Owner to
the extent of available insurance coverage for any damage to, or loss of, any
Owner Furnished Item while in Builder's custody howsoever occurring.  Owner
shall be responsible for providing Builder accurate values of all Owner
Furnished Items upon Builder’s request.  

3.13Builder shall schedule the commissioning of Owner Furnished Items in
cooperation with Owner.  The cost of technical support required to commission
Owner Furnished Items after installation by Builder shall be the responsibility
of Owner.  

3.14Builder shall allow sufficient time and working area to allow the timely and
safe installation and commissioning of all equipment and the loading of supplies
prior to the Vessel's departure voyage.  

3.15Exhibit E attached hereto identifies all Owner Furnished Items and vendor
furnished information for Owner Furnished Items together with the fair market
value of such equipment and appurtenances for use in determining the policy
value of Builder's Risk Insurance under Article 10.1(c).  The cost of Builder's
Risk Insurance for Owner Furnished Items (for values shown in Exhibit E) shall
be for the account of and paid by Builder.  If Owner requests Builder to place
additional insurance, the cost to Owner will be Builder's incremental cost for
such additional

- 11 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

insurance.  Owner Furnished Items and vendor furnished information shall be
delivered free of cost to Builder at Builder's Shipyard by the dates set forth
in Exhibit E.

3.16Builder will allow Owner’s Representative to examine the Vessel and the Work
during construction at the Shipyard and all other facilities used in the Work,
at all reasonable times.

3.17The Parties understand and accept the relationship of trust and confidence
established between them by this Agreement.

3.18The Parties agree and understand that Builder is an independent contractor
in the performance of the Work, maintaining complete control of its workers, the
worksite, and its operations.  Neither Builder nor anyone employed, engaged, or
subcontracted by Builder shall become an agent, representative, servant, or
employee of Owner in the performance of the Work or any part of it.  Subject to
Owner’s rights in the event of a default under Article 16, Owner shall have no
right or authority to supervise, direct, or instruct Builder's personnel or to
bind Builder in any way to any third party.  

3.19This Agreement does not convey any agency authority on Builder, and Builder
shall have no authority whatsoever to act on behalf of Owner or to bind Owner in
any way, except as may be provided expressly elsewhere in this Agreement or in
separate documents for specified purposes.  Builder expressly agrees that it
shall not attempt or purport to act on behalf of Owner without Owner’s prior
express written authorization.  

3.20Builder shall be responsible for completion of the Work as a whole.  Builder
may allocate certain portions of the Work to be performed under subcontracts or
similar agreements between Builder and Subcontractor, and Owner shall have no
liability for such subcontracts.  Nothing contained in the Contract Documents
shall create any contractual relationship between Owner and any Subcontractor.  

3.21Without limitation to the provisions of Section 3.20, the Specifications
shall include a list of mutually acceptable subcontractors and suppliers in
connection with the Vessel (such list, the “Maker’s List”).  Builder shall have
the right to designate specific Persons from the list for specific work or
supplies.  Builder may not use a subcontractor or supplier not on the Maker’s
List without the prior written approval of Owner.

3.22Owner shall have the right to designate other specific Persons, from the
Maker’s List or otherwise, to serve as subcontractors or suppliers in connection
with the Work; provided, however, that: (i) Builder shall have the right to
reasonably object to any Owner-recommended sub-contractors or suppliers not
chosen from the Maker’s List; and (ii) any increase in cost, delay

- 12 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

in delivery, or other change to the speed, weight, or other characteristic of
the Vessel resulting from such designation by Owner shall be for Owner’s
account.  

3.23Builder shall furnish to Owner at its request a copy of each Material
Subcontract it enters into in connection with the Work.

Article 4PAYMENT

4.1The Work shall be performed by Builder in consideration of Owner's payment of
the Contract Price for Vessel set forth in Exhibit A of this Agreement, as may
be modified by Change Orders.

4.2Owner agrees to pay the Contract Price of Vessel to Builder in Interim
Installment Payments correlating to the Stage of Completion schedule as set
forth in Exhibit Q.  In the event that Owner fails to pay the first Interim
Installment Payment on the date of execution of the Agreement, Builder shall
have the right to (i) cancel this Agreement, in which event Builder shall have
no further obligation to Owner hereunder, or (ii) suspend performance of the
Agreement until Owner pays the first Interim Installment Payment.  In the event
of such suspension, the Effective Date of this Agreement shall be deemed to be
the date on which Owner pays the first Interim Installment Payment and the
Project Schedule, including the Delivery Date, shall be adjusted commensurate
with the period of suspension.  In no event shall Owner be required to make an
Interim Installment Payment to Builder until Builder has accomplished the
progress of Work required for that Interim Installment Payment.

4.3Notwithstanding any other provision of this Agreement, Owner shall have the
right, in its sole discretion, to pay supplier’s invoices for Major Equipment
directly upon written request to Builder.  Builder shall credit the amount of
any such direct payment to the next Interim Installment Payment due from Owner.

4.4Builder shall give Owner written notice of the intended date of issuance of a
relevant Stage Completion Certificate not more than fifteen (15) or less than
ten (10) Working Days before issuance.  The form of Stage Completion Certificate
is attached as Exhibit F-1 to this Agreement.  Builder shall tender to Owner
each Stage Completion Certificate along with a Builder's Invoice in the form
attached as Exhibit F-2 and with the appropriate Lien Release(s) as described in
Section 4.7.

4.5Except for the first Interim Installment Payment, the Delivery Payment, and
any Interim Installment Payment that is disputed and subject to resolution
pursuant to Section 4.8, Owner shall make each Interim Installment Payment
within ten (10) Days of receipt of the relevant Stage Completion Certificate,
Lien Release(s), and Builder's Invoice, each properly completed and

- 13 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

executed.  With respect to Interim Installment Payments disputed and resolved
pursuant to Section 4.8, payment shall be due within ten (10) Days of resolution
of such dispute.  With respect to the Delivery Payment, payment shall be due
upon Delivery of the Vessel and prior to the Vessel leaving Builder's Delivery
Point.  

4.6Except for the first Stage of Completion, Builder shall furnish a Stage
Completion Certificate for each Stage of Completion for Vessel which shall
state: (i) the stage of Work achieved; (ii) that the Work completed complies
with the Contract Documents; and (iii) that, subject to payment by Owner
therefor, there are no Liens upon the Vessel for labor, Materials or equipment,
except for those created by Owner or Owner’s subcontractors, vendors, or
employees.  Each required Stage Completion Certificate shall be executed and
certified by the President of Builder.  

4.7If Builder has created or suffered any outstanding Lien on the Vessel, Owner
shall not be obligated to make payment until such Lien is resolved, unless such
Lien is held by Owner, its employees, subcontractors, vendors, inspectors,
assigns or Affiliates.  Confirmation of the absence of Liens against the Vessel
shall be certified through the tender of Lien Release(s) in the forms of Exhibit
G-1 and G-2 in favor of the Vessel and Owner executed by Builder and each
Material Subcontractor or Supplier.

4.8Except for disputes arising during the final Stage of Completion, if Owner
objects upon receipt of the Stage Completion Certificate on grounds that the
pertinent stage has not been reached, the dispute will be submitted to a Senior
Surveyor of the Classification Society whose decision as to achievement of the
relevant stage will be final and binding.

4.9Not later than the time of Delivery of Vessel, Builder shall execute and
deliver to Owner the following certifications:

 

(a)

a Certificate of Completion and Delivery in the form of Exhibit H (including all
documents listed therein) stating:

 

(i)

that the Vessel has been completed;

 

(ii)

that all trials and tests have been satisfactorily completed; and

 

(iii)

that the Vessel complies with the Contract Documents and is free from known
defects in Builder's materials and workmanship;

 

(b)

final Lien Releases from Builder, in the form of Exhibit G-1 and from all
Subcontractors and Suppliers in the form attached as Exhibit G-2;

- 14 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

 

(c)

the Detailed Construction Documentation;

 

(d)

a Protocol of Delivery and Acceptance in the form set forth in Exhibit M and
signed by Builder;

 

(e)

any other documents set forth in the Specifications; and

 

(f)

any other documents required by applicable law or by any Regulatory Authority
for Owner to have the Vessel documented in Owner's name and to enable the Vessel
to commence operations as a trailing suction hopper dredge inspected under 46
C.F.R. Subchapter I with a United States coastwise trade endorsement; or as may
otherwise reasonably be required by Owner (the foregoing documents collectively
referred to as the “Delivery Documents”).

4.10Upon receipt of all Delivery Documents, Owner shall co-execute the Protocol
of Delivery and Acceptance or a counterpart and shall pay Builder the Delivery
Payment indicated in Exhibit Q, subject to the following adjustments:

 

(a)

plus any and all time and material payments that have not been paid to date;

 

(b)

plus any applicable State or Local Sales and/or Use Taxes, unless Owner has
provided to Builder documents or copies of documents as may be required by
applicable law to obtain a sales or use tax exemption (s);

 

(c)

plus or less any changes in the Contract Price resulting from fully executed
Change Orders that have not been paid or credited prior to Delivery;

 

(d)

plus the value of any Builder-furnished stores on board at time of Delivery;

 

(e)

plus any early delivery bonus that may have accrued in accordance with Section
15.1; and

 

(f)

less any liquidated damages for delay that may have accrued in accordance with
Article 15.

4.11If the amount of undisputed adjustments set out in Section 4.10 in favor of
Owner is greater than the amount owed for the Delivery Payment, then Builder
shall pay the difference to Owner at the time of Delivery.

4.12In the event of any dispute between the Parties at the time of Delivery, the
Parties shall reserve their respective rights regarding the dispute and Builder
shall make, and Owner shall accept, Delivery of the Vessel subject to such
reservations.  Furthermore, in the event of such

- 15 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

dispute, Owner shall deposit any disputed amounts in escrow, and Builder shall
deliver the Vessel with the disputed amount to be listed as an exception to
Delivery on the Protocol of Delivery and Acceptance.  Without limitation to the
foregoing and for the sake of clarity, Builder shall not withhold or otherwise
delay or encumber the Delivery of the Vessel and Owner shall not withhold
acceptance of the Vessel or the payment of any undisputed amounts as determined
pursuant to Section 4.10.

4.13All payments due hereunder shall be made by wire transfer unless otherwise
specified herein.  Builder and Owner shall furnish their respective wire
transfer instructions to the other Party.  

4.14Any late payments shall accrue interest at the average prime rate issued by
Bank of America N.A.  per annum rate of interest plus two percent (2%) per annum
from the date that the payment was due until paid.

4.15Any payments made by Owner shall be without prejudice to, or waiver of, any
of Owner’s rights, defenses, claims, and remedies arising under or related to
the Vessel and this Agreement.

4.16The Contract Price shall be adjusted by any change or adjustment agreed by
the Parties in accordance with Article 7.  For any change in the Work giving
rise to an increase or decrease in the Contract Price where the value of such
change has not been determined or agreed by the Parties as of the time of the
next Interim Installment Payment, then for purposes of determining the Interim
Installment Payment and subject to a final determination, the value shall be
estimated as the midpoint between Builder's and Owner's independent estimates of
the increase or decrease in the Contract Price due to such change or adjustment,
unless Owner and Builder agree otherwise.  When the value of such change or
adjustment is finally determined, the Parties shall adjust the Contract Price
and the remaining Interim Installment Payments to reflect any variance between
the estimate and the final determination.

4.17In the event that an increase or decrease in the Contract Price due to
change or adjustment under Article 7 below is not mutually agreed to prior to
Delivery of the Vessel to Owner, appropriate adjustment of any overpayment or
underpayment shall be made promptly upon final determination in accordance with
Article 25 as to the increase or decrease and any adjustments required to the
Contract Price shall be paid or refunded within ten (10) Days of the date of
such final determination.

4.18If a change or adjustment shall result in an agreed increase or decrease in
the Contract Price for the Vessel, all remaining Interim Installment Payments
shall take account of such increased or decreased Contract Price, as set forth
above.  Without limitation to the foregoing,

- 16 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

in addition, the first such Interim Installment Payment that becomes due after
the subject increase or decrease shall be adjusted by an amount equal to the
product of (a) the amount of the increase or decrease in the Contract Price and
(b) the aggregate percentage of the Contract Price required to be paid on or
before the due date of such Interim Installment Payment.

Article 5DESIGN OWNERSHIP AND RESPONSIBILITY

5.1The Design and any Detailed Construction Documentation prepared by or for
Owner in connection with the Design or the Work and any Intellectual Property
they embody is and shall remain the sole and exclusive property of Owner and may
be used by Owner without restriction.  

5.2Owner certifies and warrants that Owner has the right to possess, modify and
otherwise use the Design and any Detailed Construction Documentation furnished
by Owner or by Owner’s engineering, design, marine architect, or other
subcontractors during the performance of the Work hereunder.

5.3Nothing contained herein shall be deemed to transfer any right of title or
ownership of any Intellectual Property to Builder and nothing herein contained
shall be deemed to limit Owner's right to market, license, sell, use, modify or
construct from such Intellectual Property for or to others.

5.4In no event is Builder permitted or licensed to use the Design or any
Intellectual Property to construct or have constructed on its behalf any
additional vessel or part thereof except as otherwise expressly agreed to by
Owner at its sole option and absolute discretion, in writing.

5.5In the event any third party presents a design to Builder identical or
substantially similar to the Design utilized under this Agreement, Builder will
take all reasonable steps necessary to verify that the design is independent and
not misappropriated from Owner. Unless Builder can verify that the design is
independent and not misappropriated from Owner, Builder agrees not to use
Builder’s Process for any non-Owner project.  Furthermore, unless Builder can
verify that the design is independent and not misappropriated from Owner,
Builder agrees that Builder shall not construct a vessel similar or identical to
the Vessel for any party other than Owner.

5.6Owner agrees that Builder’s Process is and shall remain the property of
Builder and may not be disclosed by Owner to any third party or used directly or
indirectly by Owner or any third party in the construction of a vessel for Owner
by any party other than Builder, except as may be required in the exercise of
Owner’s rights in the event of a Default under Article 16.

- 17 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

5.7Builder agrees that the Design is and shall remain the property of Owner and
may not be disclosed by Builder to any third party or used directly or
indirectly by Builder or any third party in the construction of a vessel by
Builder for any party other than Owner, unless otherwise permitted as provided
in Section 5.5.

5.8Builder shall not be liable for any errors, omissions, defects, or failures
in the Design, as provided by Owner to Builder, and Builder makes no
representations or warranties with respect to the Vessel’s speed, tonnage, cargo
capacity, displacement, or fuel consumption; provided, however, that nothing
herein shall relieve Builder from liability for any errors, omissions, defects,
or failures in the performance of the Work, including the workmanlike
performance of Builder’s obligations under Article 3.

Article 6PROSECUTION OF THE WORK, PROJECT SCHEDULE

6.1Builder shall provide at no charge other than the Contract Price all things
required for the complete performance of the Work, except for such items as are
specifically required by the Contract Documents to be furnished by Owner.  

6.2Builder shall at all times prosecute the Work diligently to ensure its
completion in full accordance with the Contract Documents within the time
required for delivery of the Vessel by the Delivery Date.  Builder shall at all
times furnish sufficient numbers or amounts of properly skilled and qualified
workers, acceptable materials and equipment and adequate services and tools and
equipment necessary for the Work and the delivery of Vessel by the Delivery
Date.

6.3Builder shall perform all of the Work in accordance with the Contract
Documents, Good Shipbuilding Practice, and all applicable laws, regulations,
rules, codes, and standards of the Regulatory Authorities or otherwise.  

6.4Builder shall provide all engineering and design services required for the
performance of the Work utilizing Good Shipbuilding Practice and the generally
accepted standard of care, skill, and diligence as would be provided by an
engineering or naval architecture firm experienced in supplying engineering or
naval architecture services nationally to the United States’ maritime
industry.  Builder shall construct the Vessel in a good and workmanlike manner
and in accordance with the Classification Society rules and standards set forth
in the Specifications, Contract Documents, and the requirements of the governing
Regulatory Authorities.  Builder shall ensure that all Work requiring
certification shall be duly certified, and that all designs requiring sealing
shall be sealed by professional engineers licensed and properly qualified to
perform such engineering services in the appropriate jurisdiction.

- 18 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

6.5Builder expressly understands that time is of the essence for Owner and that
an essential basis of consideration for this Agreement and the fundamental
reason that Builder's proposal has been selected and that Owner has entered into
this Agreement with Builder is the representation by Builder and the commitment
made in this Agreement that, except for causes of Force Majeure or other
Permissible Delays excused in accordance with the terms of this Agreement,
Builder can and will perform the Work and can and will deliver the Vessel by the
Delivery Date agreed in Exhibit A.  

6.6Builder shall carry out the Work with full dispatch to complete the Vessel in
the most timely manner reasonably achievable by Builder.  Builder shall not fail
to allocate all necessary and available resources to the timely completion of
the Work to prevent or alleviate any actual or potential delay under any
circumstances.  Builder expressly agrees it will not take, or fail to take, any
action based on an assumption that the payment of liquidated damages would be
more economically advantageous for Builder than the cost of allocating necessary
available resources to the construction of the Vessel that, if so allocated
would prevent or lessen any delay in the delivery of the Vessel.  Builder
acknowledges and agrees that a breach by Builder of its obligations under this
Section 6.6 would present irreparable harm to Owner and Owner shall have the
right to equitable relief, including an injunction, to prevent or rectify any
such breach by Builder.  Notwithstanding anything to the contrary in Article 25,
Owner may seek such injunction in any court of competent jurisdiction.

6.7Builder shall establish a baseline project schedule and maintain throughout
the performance of the Work a detailed current project schedule and execution
plan (the “Project Schedule”) in electronic form including embedded logic and
data for completion of the Work by the Delivery Date.  The Project Schedule
shall remain a living document and shall include all significant activities in
the design, procurement, construction, and testing and commissioning phases of
the Vessel, including the work of Material Subcontractors or Suppliers. Unless
otherwise agreed, Builder shall maintain the Project Schedule from a Level 4 up.

6.8The Project Schedule shall be a resource loaded schedule that includes a
critical path analysis and reflects resource requirements, and complies with the
standards set out in the Project Management Body of Knowledge (6th edition,
September 6, 2017) maintained by the Project Management Institute. More
specifically, the Project Schedule shall clearly show the critical path and the
schedule’s calendar shall be set up to include the number of Working Days per
week, the number of shifts per Day, and non-Working Days and holidays. The
Project Schedule shall show the loading of resources, which shall represent the
total work hours required to complete the Work, including all activities. The
format of the Project Schedule shall be subject to Owner’s approval, such
approval not to be unreasonably withheld.

- 19 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

6.9Without limitation to Sections 6.7 and 6.8, the Project Schedule shall
include the following elements and features:

 

(a)

the dates for commencement and completion of the Work, reflecting an overall
project execution strategy;

 

(b)

description of the Work in sufficient detail to allow weekly progress
measurement;

 

(c)

all significant activities in the design, procurement, construction, and testing
and commissioning phases of the Vessel, including the work of Subcontractors or
Suppliers, including requests and deadlines for required vendor-furnished
information;

 

(d)

sequencing and dependencies of all activities, and all predecessors and
successors to each activity, including vendor-furnished scheduling information
and constraints;

 

(e)

activity durations, including start and finish dates;

 

(f)

representative manning levels for each activity;

 

(g)

all points of interface between Owner and Builder, including instances where
performance of Builder's Work depends upon Owner, such as dates on which Owner
information and Owner Furnished Items are required;

 

(h)

scheduling float for component activities and total float;

 

(i)

due dates for engineering design deliverables;

 

(j)

required-in-yard dates for all major and long-lead (exceeding thirty (30) Days
from order to delivery) materials and equipment;

 

(k)

minimum leads or lags;

 

(l)

no constraints of major milestones, including Vessel Delivery;

 

(m)

a histogram showing hours by month and the corresponding Full Time Equivalent;

 

(n)

the expected surveying and testing schedule for the various components of the
Work; and

 

(o)

the dates of expected completion of each Stage of Completion task set forth in
Exhibit Q.

- 20 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

6.10Builder shall actively maintain the Project Schedule on an ongoing
basis.  At a minimum, Builder shall update the Project Schedule weekly in
advance of each weekly status meeting held in accordance with Section 6.16, and
shall revise the Project Schedule as necessary throughout the duration of the
Work.

6.11Updates to the Project Schedule shall include each activity’s actual start
date, actual finish date, and the remaining duration of the Work, and shall
reflect the effect of Change Orders, if any.

6.12Following the distribution of the initial Project Schedule as provided in
Section 6.14, Builder may, in the exercise of Good Shipbuilding Practice,
propose a modification to the build strategy of the Vessel that alters the
predicates to milestone payments from those set forth in this Agreement, but
such modification shall be permitted only upon prior written approval by Owner.

6.13Builder shall provide to Owner an as-built Project Schedule for the
permanent project record not later than fourteen (14) Days following Delivery of
the Vessel.

6.14Builder has provided to Owner a preliminary schedule attached hereto as
Exhibit K.  Not later than ninety (90) Days following the Effective Date,
Builder shall submit to Owner the initial detailed Project Schedule prepared in
accordance with the requirements of Sections 6.7 to 6.9.

6.15If Builder fails to provide the initial detailed Project Schedule by the
date required in Section 6.14, or if Builder thereafter fails to maintain and
update the Project Schedule as required by this Article 6, Owner shall notify
Builder of such failure in writing.  If Builder fails to remedy such failure
within twenty-one (21) Days, then Owner shall have the option thereafter, in its
sole option and absolute discretion, to terminate this Agreement in its
entirety.

6.16The Parties’ representatives shall meet (in person, by conference call, or
by other mutually agreed electronic means), not less frequently than weekly to
discuss the status of the Work and all issues related thereto, including but not
limited to:

 

(a)

the status and progress of the Work, including a two (2) week “look ahead” with
regard to planned activities and expected progress;

 

(b)

S-Curve charts, including Baseline S-Curve, Target S-Curve, and Actual S-Curve;

 

(c)

any information needed by Builder, Owner, or the Classification Society to
advance the Work;

- 21 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

 

(d)

pending Change Orders;

 

(e)

the integration of Owner Furnished Items;

 

(f)

any Owner concerns with the maintenance of the Project Schedule;

 

(g)

test and inspection schedules;

 

(h)

commissioning plans;

 

(i)

Dock Trials and Sea Trials; and

 

(j)

any other matters pertinent to construction and Delivery of the Vessel.  

6.17If the actual progress of the Work in comparison to the Project Schedule
indicates that the Work is not substantially on schedule as set out in the
Project Schedule and that the completion of the Vessel by the Delivery Date is
in jeopardy, then Builder shall promptly notify Owner and provide a proposed
revision to the Project Schedule with such adjustments to sequencing or
allocation of resources as may be necessary to overcome such delays and complete
the Vessel on time.  If Builder fails to provide such notice and take such
action, then Owner shall notify Builder of its concerns (without prejudice to
any of Owner’s other rights pursuant to this Agreement).  In such case, within
fifteen (15) Working Days thereafter, Builder shall provide to Owner a revised
Project Schedule showing such adjustments as necessary to complete the Vessel on
time.

6.18If the Project Schedule shows that the actual date on which the Vessel will
be delivered will be more than one hundred fifty-one (151) Days later than the
Delivery Date, such delay shall be an event of default and Owner shall be
permitted to terminate this Agreement pursuant to the provisions of Section
16.2, subject to Builder’s right to cure such event of Default as provided
therein.

Article 7CHANGE orders

7.1Owner reserves the right to make any deductions from or additions to the Work
on giving due notice in writing to Builder.  

7.2The cost of any such changes and the impact of such changes are to be agreed
upon in advance by Owner and Builder, and added to, or deducted from the total
Contract Price for the Vessel.  If any such change will affect the Delivery Date
of the Vessel, the Delivery Date shall be adjusted accordingly.  

- 22 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

7.3Builder shall submit a Change Order form to Owner setting out a statement of
the amount of increase or reduction to the Contract Price on a firm fixed-bid
basis, and any adjustment to the Delivery Date as a consequence of the proposed
changes to the Work.  The Change Order form to be utilized is attached hereto as
Exhibit I.  Builder shall provide documentation of the basis of its price for
the Change Order and the proposed adjustment to the Delivery Date.  Builder
shall not implement any proposed changes to the Work until the Change Order form
is approved by Owner in writing.

7.4Owner shall reply to the proposed Change Order within five (5) Working Days,
noting its agreement or disagreement.  If Owner fails to state its disagreement
in writing within five (5) Working Days, then Owner shall be deemed to have
approved the Change Order and Builder shall note that deemed approval on the
Change Order form.  

7.5Each approved Change Order shall be signed by both Parties, numbered, and
made a part of the Agreement.  Copies of the executed Change Order form shall be
exchanged by the Parties.  

7.6Builder shall document the changes to the Work required by an approved Change
Order in the Project Schedule as soon as possible and shall perform the changes
to the Work subject to the applicable provisions of the Contract Documents as
promptly as possible unless otherwise provided in the Change Order.  

7.7When Owner and Builder agree on adjustments in the Contract Price and/or
adjustments of the Delivery Date, or Modifications in the Specifications or any
Contract Documents or otherwise reach agreement upon the adjustments, such
agreement shall be effective only upon execution of an appropriate Change Order,
signed by the authorized signatories identified in Section 21.3.

7.8Builder may propose a change in any part of the Work, either due to an
Announced Regulatory Amendment or other change in the applicable regulations or
rules of a Regulatory Authority after the Effective Date that may require
changes to the Contract Documents, or for any change in any part of the Work
that in Builder’s judgment would result in an improvement to the Work.  If
Builder wishes to make such a proposal, Builder shall give Owner written notice
in the form of a proposed Change Order.  Builder may not make any changes to the
proposed Work until the Parties reach agreement on the Change Order in
accordance with Sections 7.3 through 7.7, except in an emergency endangering
life or property, in which case Builder may proceed.  

7.9If Owner and Builder cannot agree on the amount of the adjustments in the
Contract Price and/or the Delivery Date of a Change Order proposed under
Sections 7.3 or 7.8, then Owner

- 23 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

shall have the right to direct in writing that Builder proceed with the Change
Order on the following basis:

 

(a)

the Contract Price will be provisionally adjusted on a time and materials basis
in accordance with Section 7.10;

 

(b)

the Project Schedule will be provisionally adjusted based upon Builder's
estimate of the impact of the Change Order on the Delivery Date;

 

(c)

the dispute concerning the adjustments to the Contract Price and/or the Delivery
Date shall be noted on the Change Order form; and

 

(d)

the Owner shall have the right to dispute the provisional adjustments in the
Contract Price and/or the Delivery Date by submitting the dispute to resolution
pursuant to Article 25.

7.10Any Work performed on a time and materials basis under this Agreement shall
be subject to Builder's published rate sheet, attached as Exhibit
O.  Notwithstanding the foregoing, in no event shall Builder be entitled to a
markup for materials in excess of Builder's cost plus ten percent (10%).

7.11Builder has identified certain potential alternate scope proposals
(“Alternate Scope Proposals”) on a firm fixed-price basis for Owner’s review and
election, as set out in Exhibit R.  Those alternate scope proposals identified
as “Accepted” in Table R-1 in Exhibit R have been accepted by Owner, and the
costs and credits associated with such Alternate Scope Proposals have been
included in the Contract Price.  Those Alternate Scope Proposals identified as
“Deferred” in Table S-1 may be elected after the Effective Date, in Owner’s
discretion, in which case such election will be treated as a Change Order
pursuant to this this Article 7, with the Contract Price adjustment agreed as
shown in Exhibit R, and the Delivery Date adjustment, if any, to be determined
in accordance with this this Article 7.  

7.12Each approved Change Order shall be deemed to include all direct and
indirect costs, including delay, local disruption, cumulative disruption,
cumulative impact, acceleration, and like costs associated with, resulting from,
or incidental to an approved Change Order, including all such costs that may be
incurred by Builder, its Subcontractors and its Suppliers.  Builder agrees that
upon its acceptance of an approved Change Order, Builder shall be deemed to
waive and release all claims against Owner for any and all additional costs or
delays to the Delivery Date, including without limitation costs and delays based
on any legal or equitable theory such as cumulative disruption or cumulative
impact theories, resulting from an approved Change Order.

- 24 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

7.13No change in the Work under this Agreement, whether by way of alteration or
addition to or deletion of the Work, shall be the basis of a change to the
Contract Price or a change in the Delivery Date unless and until such alteration
or addition or deletion has been authorized by a Change Order executed and
issued in accordance with and in strict compliance with the requirements of this
Article and the Contract Documents.  In no event shall Builder be obligated or
authorized to perform any changes to the Work upon verbal or written direction
of Owner which is not in conformity with the requirements of this Article and
this Agreement.

Article 8OWNER’S REPRESENTATIVE

8.1Owner shall designate in writing a Person to represent and act on behalf of
Owner at the Shipyard as Owner’s Representative.  Such designation shall state
any limits on the authority granted by Owner to Owner’s Representative.  Owner’s
Representative may be assisted by assistants or consultants notified in writing
by Owner to Builder, who shall be subject to the same access rights and
restrictions as Owner’s Representative in connection with their duties at the
Shipyard.  Owner’s Representative may designate in writing one or more deputies
to act on behalf of Owner’s Representative during any period that Owner’s
Representative may be unavailable.

8.2During the whole of the period of construction until Delivery of the Vessel
or termination of this Agreement, whichever comes first, and for a reasonable
period of time thereafter to permit the winding up of activities, Builder shall
provide to Owner’s Representative facilities and access to inspect the Vessel,
the Material, workmanship, plans, tests, and movements, wherever
located.  Builder shall provide a suitable office for up to four (4) of Owner's
personnel equipped with customary office fittings, including a meeting table, a
drawing table, desks, chairs, locking file cabinets, private telephone with
voice messaging, private fax/scanner, printer, computer modem, extra phone line,
copy machine, secure business-grade LAN or Wi-Fi internet connection, and heat
and air conditioning.  During the final six (6) months of the Work, Builder
shall provide such suitable office space for up to eight (8) of Owner’s
personnel.  Owner shall pay telephone and internet charges at Builder’s cost.

8.3Owner’s Representative or Owner’s other agents, contractors, and employees
shall observe the rules and regulations prevailing at the Shipyard and Builders’
Subcontractors' facilities.  Builder may deny access to the Shipyard or its
Subcontractor’s facilities to Owner’s Representative or Owner’s other agents,
contractors, or employees, only if such Persons fail to comply with Builder's or
such Subcontractor’s health, safety and environmental policies or security
requirements, or otherwise unreasonably interfere with Builder’s timely
performance of the Work.  In such an event, Builder shall promptly advise Owner,
stating the specific cause(s), of the denial of access.

- 25 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

8.4Subject to Section 8.3, at any time during which the Work is being done on
the construction of the Vessel, Owner’s Representative shall be given free and
ready access to the Vessel, its engines and accessories, and to any other place
where the Work is being done, or materials are being processed or stored, in
connection with the Work, including the Shipyard, workshops, stores and offices
of Builder, and the premises of subcontractors of Builder who are doing the Work
or storing Materials in connection with the Work.

Article 9OWNER’S RIGHT OF INSPECTION

9.1Owner’s Representative and Owner’s other authorized agents shall be entitled
to inspect, at Owner’s expense, progress on the Work and the Materials at any
reasonable time, upon reasonable notice, terms, and conditions.  

9.2All completed milestones of the Work and the workmanship and Material
required under this Agreement shall be inspected promptly by Owner and promptly
accepted or rejected in accordance with the Contract Documents.  Failure to
object will not prevent Owner from later identifying defects or rejecting
workmanship, subject to the terms of the Warranty under Article 11.

9.3Builder shall schedule for and carry out tests, inspections, and approvals of
portions of the Work required by the Contract Documents or by applicable laws,
ordinances, rules, regulations, or orders of Regulatory Authorities at
appropriate times under the Project Schedule.  

9.4Builder shall give advance notice to Owner’s Representative of the time and
place of all tests, trials, inspections, and approvals.  In the case of tests,
inspections, and approvals at the Shipyard, Builder shall endeavor to give at
least five (5) Days prior notice.  In the case of tests, inspections, and
approvals conducted away from the Shipyard, Builder shall endeavor to give at
least seven (7) Days prior notice.

9.5Unless otherwise provided, Builder shall make all necessary arrangements for
such tests, inspections, and approvals, and shall bear all related costs,
including the costs of fuels, lubricants, and consumable fluids used in the
cleaning and testing of the Work.

9.6Builder shall set out the onboard testing and trial procedures in cooperation
with Owner.  Builder shall give a list of inspection items to Owner for Owner's
reference.

9.7The necessary tests and inspections of the Vessel, its machinery, equipment,
and outfitting as may be required by the Regulatory Authorities, or as otherwise
agreed by the Parties, shall be carried out by the Regulatory Authorities as
required throughout the period of construction.  Owner’s Representative shall
have the right to attend such tests and inspections.

- 26 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

9.8A failure by Owner to have Owner’s Representative or other duly qualified
agent present at tests, inspections, and approvals after due notice shall be
deemed to be a waiver of Owner’s right to attend such tests, trials, and
inspections.

9.9If Owner determines that portions of the Work require additional testing,
inspection, or approval not included under Section 9.1, Owner will instruct
Builder to make arrangements for such additional testing, inspection, or
approval by an entity acceptable to Owner, and Builder shall give at least
twenty-four (24) hours’ notice to Owner of when and where such tests,
inspections, and approvals are to be made so that Owner may observe such
procedures.  Owner shall bear the initial cost of such additional tests,
inspections, and approvals.

 

(a)

If any testing, inspection, or approval conducted by Builder as provided in this
Section affirms that Builder's workmanship is acceptable under the Contract
Documents, then if such testing, inspection, or approval caused a delay to the
critical path, Builder shall receive an adjustment of the Delivery Date, at
Builder's option, for the Days of Work lost as a result of such testing,
inspection, or approval.

 

(b)

If any testing, inspection, or approval conducted by Builder as provided in this
Section 9.9 discloses that any methods or means of construction or material or
workmanship are not acceptable under the Contract Documents, Builder shall
reimburse Owner for the costs of such tests, inspections, and approvals,
including the costs of related labor and facilities, and shall remedy the Work
so as to comply with the Contract Documents.

9.10In the event that Owner’s Representative discovers any construction,
material, or workmanship that does not conform to the requirements of this
Agreement and/or the Specifications, Owner’s Representative shall give Builder a
notice in writing of such non-conformity within three (3) Days.  Upon receipt of
such notice from Owner’s Representative, Builder shall correct such
non-conformity, unless Builder disputes the claimed nonconformity, in which case
the matter shall be resolved in accordance with Article 24.

9.11If Owner’s Representative does not notify Builder of any nonconformities in
accordance with Section 9.10, such lack of notice shall be deemed an acceptance
of the Work tested, tried, or inspected.

9.12No failure by Owner to notify Builder of a nonconformity or acceptance of
Work tested, tried, or inspected shall be deemed to relieve Builder of its
obligation to deliver the Vessel in compliance with the Contract Documents and
to remedy any warranty defects identified during the Warranty Period.

- 27 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

9.13If a claim of nonconformity is found to be unsubstantiated, then any delay
caused by such claim shall be a Permissible Delay.

9.14Subject to any contrary provisions of the Contract Documents, Builder shall
promptly obtain and deliver to Owner all required certificates of testing,
inspection, or approval.

9.15Neither the observations of Owner nor inspections, tests, or approvals by
Persons other than Builder shall relieve Builder from its obligations to perform
the Work in accordance with the Contract Documents.

Article 10TRIALS AND DELIVERY

10.1Upon installation of any of the Vessel's machinery, equipment and systems,
Builder shall cause each item to be tested to ensure its proper
operation.  Materials and consumables necessary for operational testing,
including but not limited to fresh water, fuels, oils, greases, filters,
hydraulic fluids, shall be furnished by and for the account of Builder.  

10.2Builder shall hand over to Owner user’s manuals, calculations, drawings,
recommended maintenance intervals and procedures, and recommended spares lists
applicable to machinery, equipment, and systems as they are installed or as soon
as possible thereafter to facilitate Owner’s inspections and preparations for
such machinery, equipment, and systems.

10.3Upon completion of the Work on the Vessel, Builder shall launch, commission
and conduct Dock Trials of the Vessel at Builder’s cost and expense to
demonstrate that the Work and all the Vessel's machinery, equipment and systems
operate in accordance with the Contract Documents.  Builder shall give Owner not
less than seven (7) Days’ advance written notice of the scheduled dates for Dock
Trials.

10.4Upon satisfactory completion of Dock Trials, and satisfactory correction of
any defective or non-compliant Work, Builder shall take the Vessel on Sea Trials
immediately prior to its intended Delivery to Owner to demonstrate that the Work
is completed.  During Sea Trials, Builder shall demonstrate that the Vessel and
its machinery, equipment and systems operate satisfactorily while the Vessel is
in service and that Builder has constructed the Vessel in accordance with the
Contract Documents and all applicable requirements of the Regulatory
Authorities.  The foregoing shall be without limitation or relief of any of
Builder’s obligations under this Agreement

10.5During any trials, the Vessel may be examined or inspected by the Regulatory
Authorities, Builder and Owner.  

- 28 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

10.6The parties recognize that the Vessel’s dredging system (“Dredging System”)
can only be effectively tested by loading and unloading a quantity of material
into and out of the Vessel’s hopper, and that such testing cannot be completed
until after the time of Delivery when the Vessel has commenced work on its first
dredging project.  Accordingly, Owner shall withhold from the Delivery Payment
the sum of [***] (the “Retained Amount”) until such time as the Dredging System
has been tested (such tests, the “System Tests”) and has been determined by
Owner to be operating in accordance with the Specifications.  Owner agrees that
the System Tests will be performed no later than three (3) months following
Delivery (excluding time lost due to warranty issues for which Builder is
responsible).

10.7Owner shall give Builder not less than three (3) Days’ notice of the
scheduled date for the System Tests, and Builder shall have the right to attend
the System Tests.  Owner shall notify Builder of the results of the System Tests
and of any defects in the Dredging System within twenty (20) Days of the date of
completion of the System Tests.  If Owner does not notify Builder of a defect in
the Dredging System within such time, Owner shall pay the Retained Amount to
Builder.  

10.8If Owner notifies Builder of any defects in the Dredging System discovered
during the System Tests, Builder shall remedy such defects as soon as possible,
provided that such defects are attributable to Builder’s workmanship and not to
the Owner-furnished Design.  The period of time required for such repairs shall
count as a delivery delay for purposes of determining liquidated damages payable
to Owner; provided, however, that in no event shall the liquidated damages
attributable to such defects in the Dredging System discovered during the System
Tests exceed the Retained Amount.  Upon satisfactory remediation of defects in
the Dredging System by Builder, Owner shall pay the Retained Amount to Builder,
less any amount of liquidated damages incurred as a result of the Dredging
System repair delay.

10.9Owner shall notify Builder of any complaint as to the satisfactory
completion of the Work promptly, and in any event within two (2) Working Days
after conclusion of each trial.  Such notice shall be in writing and shall set
forth the nature and character of the complaint in sufficient detail to fully
apprise Builder of the basis of the complaint.  If Builder agrees that Owner has
a valid complaint as to the unsatisfactory completion of the Work, Builder shall
resolve the complaint so that the Work conforms with the Contract
Documents.  When the inspection is complete and complaints, if any, are
satisfactorily resolved, the Work and the Vessel will be complete and accepted
in writing by Owner, subject to Owner’s warranty rights under Article 11.

10.10If Builder disputes a complaint, the Parties shall seek to resolve the
dispute through good faith discussions between the Parties.  If such good faith
discussions fail to resolve the issue, then the Parties shall resolve the matter
in accordance with Article 25 of this Agreement.  

- 29 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

10.11During the pendency of any such dispute, Owner shall have the right to give
written direction to Builder to resolve Owner’s complaint as directed by
Owner.  Upon such direction from Owner, Builder shall perform all Work necessary
to resolve Owner's complaint in accordance with such written direction, and
Owner shall provisionally pay Builder for such Work on a time and material basis
as set forth in Section 7.10 and the Delivery Date shall be provisionally
adjusted by the number of Days of the Work required by the compliance with
Owner’s written direction. If the resolution of the dispute determines that the
disputed Work was required by the Contract Documents, then the Work shall be
deemed to have been part of the Contract Price, and Builder shall be deemed to
have been required to correct the Work at Builder's sole cost and expense,
including costs of such additional testing and Dock or Sea Trials as may have
been required in order to complete the Work in accordance with the Contract
Documents.  In such case, Builder shall reimburse Owner for all such correction
costs previously paid to Builder and pay any liquidated damages for delay for
each Day by which the delivery of the Vessel was delayed past the Delivery Date.

10.12Owner may provide to Builder a Shipyard Contract Deficiency Report in the
form of Exhibit P as a means to communicate items that need to be addressed by
Builder before Delivery and Acceptance.

10.13When the Vessel is tendered for delivery by Builder, Owner shall not reject
the Vessel for minor non-conformities due to faulty design related to the Work,
bad workmanship, use of defective materials or failure to build the Vessel
strictly in accordance with the Specifications and Contract Drawings, where such
minor non-conformities do not make the Vessel unsuited to the service for which
she was ordered and cannot reasonably be expected to affect the approval of the
Vessel by Regulatory Authorities or the safety and operational activity of the
Vessel, at Owner’s reasonable discretion (such minor non-conformities, “Minor
Non-Conformities”).  Owner shall provide Builder with a listing of the Minor
Non-Conformities prior to Delivery or as soon as possible thereafter.

10.14Builder shall undertake in writing to remedy such Minor Non-Conformities as
soon as possible and within the Warranty Period.  Builder and Owner shall
jointly schedule the correction of such remaining Minor Non-Conformities, to be
completed as soon as possible.  The value of such remaining Minor
Non-Conformities may be negotiated by the Parties and may be reserved from the
Delivery Payment, at Owner’s option, pending satisfactory resolution of such
Minor Non-Conformities.

10.15Builder shall promptly correct all non-conformities other than Minor
Non-Conformities (such other non-conformities, “Material Non-Conformities”) and
shall advise Owner

- 30 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

of such completion.  Owner shall have the opportunity to inspect the Vessel and
confirm the correction of Material Non-Conformities prior to accepting the
Vessel.

10.16When Builder has corrected all Material Non-Conformities and provided a
written undertaking to correct Minor Non-Conformities in accordance with Section
10.14, Owner shall make the Delivery Payment in full as specified in Exhibit Q.
and shall sign and deliver a Protocol of Delivery and Acceptance, whereupon
Builder shall deliver to Owner, at the Shipyard or such other location as
mutually agreed, title and possession to the Vessel free and clear of all Liens
and encumbrances, together with all documents that may be required to confirm
Owner’s title to the Vessel, including but not limited to: (i) a Builder’s
Certificate of completion, in form and content as may be required to obtain
Vessel documentation and registration under the laws of the United States and
other applicable laws, and (ii) duly executed Lien Releases in accordance with
Section 4.7.

10.17Builder shall deliver the Vessel to Owner in accordance with this Agreement
on or before the Delivery Date, free and clear of Liens and encumbrances and
with Lien Release(s) in the forms of Exhibits G-1 and G-2, as required by
Section 4.7.

10.18Delivery shall be made safely afloat at the Shipyard in Amelia, Louisiana
or at a location mutually agreed by Owner and Builder.  If Delivery is made at
an offshore location, the costs of such offshore delivery will be the subject of
a Change Order for the account of Owner.

10.19The date on which Owner delivers the Protocol of Delivery and Acceptance
and Builder delivers the documents required by this Article shall be the date of
Delivery for purposes of the start of the Warranty Period and the assumption of
risk of loss of the Vessel by Owner.

10.20Owner may also identify additional work and request Builder to provide
estimates for such additional work.  Such additional work shall be handled
separately from the correction of Minor Non-Conformities and shall be considered
service requests.  Any additional work requested by Owner and agreed by Builder
shall not delay Owner from accepting the completion of the Vessel by execution
of a Protocol of Delivery and Acceptance in substantial conformity with the form
set forth as Exhibit M, and shall not excuse or delay any payments due to
Builder under this Agreement, except as otherwise agreed in writing by the
Parties.  

10.21If Owner: (i) does not undertake final inspection within ten (10) Days’ of
notice from Builder of satisfactory completion of Sea Trials, or (ii) wrongfully
refuses Delivery within ten (10) Days’ of completion of a final inspection
(including correction by Builder of identified Material Non-Conformities, if
any) by failing to make the Delivery Payment, failing to sign the Protocol of
Delivery and Acceptance, or otherwise, then Owner shall assume responsibility
for

- 31 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

payment of all reasonable charges incurred by Builder relating to the insurance,
storage and maintenance of the Vessel at Builder’s Shipyard, pending completion
of the Delivery process.

10.22In the event of a dispute between the Parties as to the condition of the
Vessel for Delivery or the obligation of Owner to accept Delivery, all charges
relating to the insurance, storage or maintenance of the Vessel during the
dispute will be paid by Builder, with final responsibility for such costs to be
determined by good faith discussion, mediation, and/or arbitration as provided
in Article 25.

Article 11WARRANTY

11.1Builder warrants that the Vessel shall be delivered in a seaworthy
condition.  Builder further warrants that the Work shall be done, and the Vessel
constructed, in accordance with the Contract Documents and the Vessel shall be
free from defects in workmanship and materials for a period of three hundred
sixty-five (365) Days after the Delivery of the Vessel.  If within three hundred
sixty five (365) Days after Delivery of Vessel, any of the Work performed by
Builder or its Subcontractors is found to be not in accordance with the
requirements of the Contract Documents, Builder shall remedy such Work promptly
after receipt of written notice from Owner to do so given in accordance with
Section 11.4.  This express warranty specifically excludes damages arising from
normal wear and tear, casualty, misuse, neglect, alterations, unauthorized
repairs, or minor cosmetic items, and finishes, or as excluded pursuant to
Section 5.8.

11.2Builder does not warrant that any equipment purchased by it for installation
in the Vessel are free from manufacturer’s defects, and specifically disclaims
any warranties, expressed or implied, with respect to such equipment, but does
hereby extend the manufacturers’ warranties, if any, to Owner.  Builder will use
commercially reasonable efforts and will cooperate with Owner to enforce any
claims with respect to manufacturers’ defects in such equipment that may occur.

11.3Builder warrants that it will purchase paint of good marine quality approved
by Owner and that it will prepare the surface and apply the paint in accordance
with the manufacturers’ specifications and recommendations.  Except as
specifically stated herein, Builder makes no warranty, expressed or implied,
with respect to the fitness of the paint for any use or purpose.

11.4Within a reasonable time of becoming aware of a warranty claim, Owner shall
issue a Warranty Notification to Builder in the form of Exhibit J.  In such
Notification Owner should provide as much information as reasonably available,
including photographs where possible.

11.5Subject to Section 11.8, Builder shall repair or replace any defects in its
Work that are discovered within such three hundred sixty-five (365) Day period,
provided Owner has

- 32 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

complied with its written notice obligations.  Builder shall use its best
efforts to effect warranty repairs without necessitating that the Vessel be
removed or prevented from commercial service.

11.6Builder shall designate a Warranty Manager for Vessel at least sixty
(60) Days prior to Delivery.  The Warranty Manager shall be familiar with the
Work and all Builder's Suppliers, vendors and/or Subcontractors.  Upon receipt
of a Warranty Notification, the Warranty Manager will take all reasonable steps
to resolve the claim.  Without limitation to the foregoing, the Warranty Manager
shall work with Owner's Representative in: (i) understanding the nature of any
warranty claim; (ii) coordinating remedies with Builder or Builder's Supplier or
Subcontractor; and (iii) assisting to coordinate payments on any third-party
vendor or Subcontractor work.  

11.7Subject to Section 11.11, this warranty shall extend to likewise warrant
such replaced or repaired Work for an additional three hundred sixty-five
(365) Day period from the date such replacement or repair of the Work is
completed, provided that the replacement or repair is accomplished by Builder or
Builder’s Supplier or Subcontractor.

11.8In conjunction with the notice required under Section 11.4, Owner shall give
reasonable notice to Builder of the Vessel’s location and the relevant
operational issues to enable the Parties to plan cooperatively for the
inspection of the warranty claim and necessary repairs and replacements.  

11.9Where the geographical distances and/or operational issues involved make the
return of the Vessel to the Shipyard for repairs or replacements under this
warranty impractical, Builder may, at its option, inspect such alleged defect(s)
and make the necessary repairs or replacement on site at the Vessel’s
location.  If Builder advises that it cannot or will not be able to make such
repairs on-site in an expedient manner, or if Builder fails to carry out such
inspection, repairs or replacement within a reasonable time, Owner shall have
the right to effect the necessary repairs or replacements at other available
facilities, and Builder shall reimburse Owner for the costs of such
repairs.  Notwithstanding the foregoing, Builder’s liability for reimbursement
under this Section shall not exceed the amount such repairs would have cost as
calculated on the time and material rates basis as set forth in Section 7.10.  

11.10Subject to Article 25, if Builder fails to take action to resolve a
warranty claim within thirty (30) Days of written notice of such claim by Owner
as provided pursuant to Section 11.4, then Owner shall have the right to
correct, or procure the correction of such warranty claim by a qualified third
party contractor and Builder shall be liable for the commercially reasonable
costs of the correction of such warranty claim.

11.11Builder shall advise Owner of, and deliver the original documentation for,
any manufacturer's warranties applicable to equipment or Materials furnished by
Builder or its

- 33 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Subcontractors or Suppliers.  Builder shall and does hereby assign, convey, and
transfer over to Owner any Warranty issued by any third party for any equipment
or Materials purchased by Builder and installed on the Vessel.  

11.12Builder shall require manufacturers providing Materials for incorporation
into the Vessel to arrange for such manufacturer’s warranties to commence in
favor of Owner on the date of Delivery of the Vessel.  

11.13Builder shall provide Owner with any standard commercially available
operating and maintenance manuals with respect to all equipment installed in the
Vessel in accordance with the quantities set forth in the Specifications.

11.14THE WARRANTY EXPRESSLY PROVIDED IN ARTICLE 11 IS EXPRESSLY IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED BY LAW OR OTHERWISE, INCLUDING ANY WARRANTY
OF MERCHANTABILITY OR THAT THE VESSEL'S MATERIALS OR SERVICES ARE FIT FOR ANY
PARTICULAR PURPOSE OR USE, AND THE REMEDIES PROVIDED HEREUNDER ARE OWNER'S SOLE
AND EXCLUSIVE REMEDY FOR BREACH OF WARRANTY AND ARE SPECIFICALLY IN LIEU OF ALL
OTHER REMEDIES OR DAMAGES, WHETHER DIRECT, INDIRECT, SPECIAL, PUNITIVE OR
CONSEQUENTIAL, EXCEPTING FRAUD AND INTENTIONAL MISCONDUCT.

Article 12INSURANCE

12.1At any and all times during the term of this Agreement, Builder shall at its
own expense maintain, with an insurance company or companies authorized to do
business in the state in which Work is to be performed and reasonably acceptable
to Owner, insurance coverages of the kind and in the minimum amounts as follows:

 

(a)

Workmen's Compensation Insurance including occupational disease and coverage
under the United States Longshoremen's and Harbor Worker's Compensation Act,
such insurance to cover all benefits provided by the applicable Act, also
Employer's Liability Insurance extended to include coverage for Maritime
Employer's Liability (i.e., Jones Act, Death on the High Seas Act, and
transportation, wages, and maintenance and cure) with minimum limits of
$1,000,000 in any one occurrence.  Owner agrees that Builder's statutorily
approved self-insured status issued by the U.S.  Department of Labor for such
liability is acceptable in lieu of commercial insurance.  

- 34 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

 

(b)

Comprehensive General Liability Insurance with an endorsement specifically
covering the liability assumed by Builder under this Agreement or evidence of
blanket contractual liability that specifically addresses the exposures of this
Agreement, sudden and accidental seepage and pollution coverage, watercraft
exclusion deleted or modified to address the exposures of this Agreement, and
“in rem” endorsement with minimum limits of $1,000,000 per occurrence.

 

(c)

Builder's Risk Insurance naming Owner as a named insured and loss payee, as its
interests may appear, covering the Vessel, the Work, and Materials for their
full insurable value against all risks, including but not limited to fire, while
under construction and/or fitting out and/or on Dock Trials or Sea Trials,
including Materials in buildings, workshops, yards and docks of Builder, or on
quays, pontoons, craft, etc., and against all risks while in transit to and from
the Shipyard and/or the Vessel, wherever it may be lying, also all risks of loss
or damage through collapse of supports or ways from any cause whatsoever, and
all liability risks of Builder and Owner with respect to the construction and
Delivery of the Vessel.  Such policy shall provide coverage for any Owner
Furnished Items while at the Shipyard and during transit to and/or from the
Shipyard as declared, valued, and identified by Owner to Builder.  Such
insurance will be in the amount of the full insurable value of the Vessel, Work,
and Materials.  Any provisions of Builder's Risk Insurance liability coverages
that would limit liability coverage for any assured to liabilities “as owner,”
or words of similar effect, or that would exclude liabilities for injury or
death of “employees” of an assured, while part of the Vessel's crew for purposes
of Dock Trials or Sea Trials, must be deleted or appropriately modified by
endorsement to the policy.

 

(d)

With respect to any vessels owned or bareboat chartered by Builder used in
conjunction with Builder's operations, Hull & Machinery, Protection & Indemnity
(P&I) and Pollution cover as described more fully below:

 

(i)

Hull & Machinery per American Institute Hull Sections (amended for the vessel
operations at the Shipyard) or equivalent to the fair market value of the
vessel.  Any references to “other than owner” or other owner limitations to be
deleted by endorsement to the policy as respects the naming of Owner as an
additional assured;

 

(ii)

P&I per P&I form SP 23 or equivalent (amended for the vessel operations at the
Shipyard) with a minimum limit of $1,000,000 per occurrence.  Any references to
“other than owner” or other owner limitations to be deleted by

- 35 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

 

endorsement to the policy as respects the naming of Owner as an additional
assured; and

 

(iii)

Pollution per Water Quality Insurance Syndicate (WQIS) or equivalent pollution
cover with a minimum limit of $5,000,000.

 

(e)

Pollution Coverage for Vessels under Repair, Construction or Modification per
WQIS policy wording, inclusive of Builder's responsibility for pollution
liability and/or Certificate of Financial Responsibility (COFR) with a minimum
limit of $5,000,000.

 

(f)

Bumbershoot or Excess Liabilities cover providing excess liability coverage
above the primary liability coverages noted above with a minimum limit of
$25,000,000.  To the extent limits above this $25,000,000 minimum limit are
purchased by Builder, such additional limits shall also cover Owner as an
additional insured with the same provisions as noted for the $25,000,000 minimum
limit.

12.2Prior to commencing the Work, each Party shall procure, from each of its
insurers in respect of risks assumed under this Agreement, a written and
enforceable specific endorsement of such Party's policies (excluding worker's
compensation, which is noted below) to provide a blanket and unrestricted waiver
of the underwriter's or insurers' rights of subrogation against the other party
and shall be endorsed to name the other Party's respective Group, as defined in
Article 23, and their successors and assigns as additional insured.  Builder
agrees that its policies shall be primary in all cases, except cases in which
liabilities result directly from the acts or omissions of Owner's Representative
or Owner's separate contractors.  Any insurance that may be carried by Owner
shall be excess over and above the amount recoverable under the policies of
Builder, except cases in which liabilities result directly from the acts or
omissions of Owner's Representative or Owner's separate contactors.  The
policies of insurance procured by Builder shall acknowledge that such policies
are primary, and that no pro-rata contributions are required by Owner or Owner's
insurers, except cases in which liabilities result directly from the acts or
omissions of Owner's Representative or Owner's separate contactors.  Builder
further agrees that its workers’ compensation insurance policies shall be
endorsed to designate Owner Group, as defined in Section 23.1, and their
successors and assigns, as an alternate and statutory employer and shall be
endorsed to provide a blanket and unrestricted waiver of its underwriters' or
insurers' rights of subrogation against Owners’ Group.

12.3Certificates of Insurance.  Before commencing Work, Builder shall furnish
Owner with Certificates of Insurance indicating (1) kinds and amounts of
Insurance as required, (2) the names of the insurance company or companies
providing the aforesaid coverages, (3) the effective and expiration dates of
policies, (4) that Owner will be given thirty (30) Days written advance

- 36 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

notice of any cancellation or material change in any policy, or in the event of
non-payment of premiums, five (5) Days written advance notice, (5) that a waiver
of subrogation endorsement has been attached to all policies, (6) that all of
Owner's Group have been named as additional insureds by endorsements attached to
all policies, provided that Owner shall be named as a named insured under
Builder's Risk insurance policy, and (7) the territorial limits of all
policies.  All deductibles will be for the account of Builder.

12.4Owner's Representative and its separate vendor representatives or
contractors performing work on or in connection with Vessel shall at all times
be deemed agents or contractors of Owner.  Owner's Representative and separate
contractors shall provide Builder with evidence of insurance (including
Longshoremen and Harbor Workers’ Compensation coverage) naming Builder as an
alternate and statutory employer and shall be endorsed to provide a blanket and
unrestricted waiver of its underwriters' or insurers' rights of subrogation,
which covers them under normal commercial terms and limits, with waiver of
subrogation provisions, at no cost or expense to Builder.

Article 13FINANCIAL SECURITY

13.1To secure Builder's obligations and Owner’s remedies under this Agreement
(as may be limited in accordance with Article 17), Builder shall deliver to
Owner Performance and Payment Bonds (the “Bonds”) covering faithful performance
of this Agreement and payment of Builder’s obligations arising thereunder, each
in the amount of [***] in the forms attached hereto as Exhibit L-1 and Exhibit
L-2 or as otherwise reasonably acceptable to Owner.  Builder shall deliver the
Bonds to Owner within seven (7) Days of Builder's execution of this
Agreement.  Builder shall pay all premiums and costs associated with the
Bonds.  However, if Owner directs that the Bonds be increased during the term of
this Agreement, any increases in premiums shall be for the account of Owner.

13.2To further secure Builder’s obligations and Owner’s remedies under this
Agreement (as may be limited in accordance with Article 17), including the
timely and proper performance of the Work hereunder as stipulated in the
Contract Documents, Builder shall, within seven (7) Days of Builder’s execution
of this Agreement, deliver to Owner an irrevocable stand-by letter of credit
(the “Letter of Credit”) in a form and issued by a bank reasonably acceptable to
Owner in the amount of [***].  Builder shall bear all charges or costs
associated with the Letter of Credit.

13.3To further secure Builder’s obligations and Owner’s remedies under this
Agreement (as may be limited in accordance with Article 17), including the
timely and proper performance of the Work hereunder as stipulated in the
Contract Documents, Builder shall, not

- 37 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

later than the Effective Date, cause its parent company to execute and deliver
to Owner a guaranty agreement (the “Builder’s Corporate Parent Guarantee”) in
favor of Owner, in the form attached hereto as Exhibit N, to guaranty the
performance of Builder’s obligations under this Agreement

13.4If any security required from Builder under this Article has not been issued
and delivered to Owner when due by Builder, then Owner shall have the option
thereafter, in its sole option and absolute discretion, to terminate this
Agreement in its entirety upon seven (7) Days’ prior written notice, unless
Builder shall deliver the required security to Owner prior to the end of such
seven (7) Day period.

Article 14FORCE MAJEURE AND PERMISSIBLE DELAY

14.1The Delivery Date shall automatically be extended by the amount of time
equal to the duration of any Permissible Delay.  A “Permissible Delay” shall
mean a delay in the performance of the Work that could not be avoided through
the exercise of due diligence, due to causes including:

 

(a)

an event of Force Majeure;

 

(b)

the delayed delivery of Owner Furnished Items, subject to Section 14.17;

 

(c)

the delayed delivery of necessary Owner-supplied information or documents,
subject to Section 14.18;

 

(d)

delays agreed by the Parties in accordance with a Change Order pursuant to
Article 7;

 

(e)

an unsubstantiated claim of nonconformity pursuant to Section 9.13; or

 

(f)

enjoinment of Builder proceeding with the Work due to claims of infringement of
any third party’s intellectual property rights as set forth in Section 20.9.

14.2For purposes of this Agreement, “Force Majeure” means an act, event, or
circumstance, whether of the kind described herein or otherwise, which: (a) is
not reasonably within the control of Builder; (b) prevents Builder from carrying
out the Work for a period of time; and (c) Builder is unable to overcome by the
exercise of due diligence, acting in accordance with Good Shipbuilding
Practice.  Such events of Force Majeure may include acts of God, landslides,
floods, named tropical storms, hurricanes, tornadoes, earthquakes and other
natural disasters, wars and acts of terrorism, sabotage or vandalism not
involving Builder's own workers or Builder's Subcontractors, riots,
insurrection, strikes, lockouts, or any other industrial disturbance (not within
the control of Builder and not involving its own workers), fire, epidemics or
pandemics, governmental actions, actions or restraints of princes, and the
unavailability, inadequacy, or delay

- 38 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

of fuel, electricity, supplies, Materials, or equipment arising from causes
outside the reasonable control of Builder and not avoidable through the exercise
of due diligence and planning.

14.3A Permissible Delay arising from an event of Force Majeure shall be of no
greater duration than is required by the event of Force Majeure.

14.4Builder shall use its best efforts, acting in accordance with Good
Shipbuilding Practice, to mitigate the consequences of an event of Force
Majeure.

14.5Rain is a common occurrence that the Parties have factored into the Delivery
Date, and Builder has factored or shall factor into the Project Schedule twenty
(20) days during which rain or other environmental factors may prevent Builder
from carrying out the Work and thereby delays completion of the Work (each such
day, a “Rain Day”).  Rain Days in excess of the foregoing anticipated number,
and any period of rain that occurs in connection with a named tropical storm or
hurricane, shall constitute Force Majeure, provided that such excess Rain Days
or named tropical storm or hurricane prevents Builder from carrying out the
Work.  Builder shall notify Owner’s Representative of each claimed Rain Day
during the conduct of the Work in accordance with Section 14.8.

14.6Claims of governmental interferences in the Shipyard will only be considered
Force Majeure if exercised by the governmental entity pursuant to clear legal
authority.  If exercised without clear legal authority, such interferences will
only be considered Force Majeure if Builder exercises its legal rights to oppose
such interference by all reasonable legal means to prevent any such interference
from delaying the delivery of the Vessel.

14.7The unavailability, inadequacy, or delay of fuel, electricity, supplies,
Materials, or equipment will not be considered Force Majeure unless Builder has
made every reasonable effort to procure the timely provision or delivery of such
items through the placement of timely orders and follow-up communications with
the provider concerning the status of such orders and their delivery as
appropriate to the circumstances to ensure delivery as required by the Project
Schedule, and that any such unavailability, inadequacy, or delay is not due to
any cause within the reasonable control of Builder or otherwise avoidable
through the exercise of due diligence and planning.

14.8In the event of an incident claimed by Builder to constitute Force Majeure,
Builder’s Representative shall notify Owner’s Representative at the Shipyard of
such claim of Force Majeure on the Day claimed to be lost due to the event of
Force Majeure, or as soon as reasonably possible thereafter, and the
representatives shall consult that Day or as soon as reasonably possible
thereafter.  Builder’s notice shall be in writing and shall include, at a
minimum, a description of the event of claimed Force Majeure, an estimate of the
duration of the delay anticipated from such event, and the expected impact of
the event on the Project Schedule and the

- 39 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Delivery Date, if known.  No claim of Force Majeure may be made for an incident
or event unless notified to Owner in accordance with this Section, and in any
event within seven (7) Days of the incident or event.

14.9If Builder’s Representative and Owner’s Representative agree that the event
was or was not one of Force Majeure, they shall document such agreement by email
or otherwise in writing, and such agreement shall be conclusive and binding.  If
the representatives agree that the event was one of Force Majeure, then the
resulting delay shall be a Permissible Delay and the Delivery Date shall be
extended by the amount of time equal to the duration of the event.  

14.10If the Owner’s Representative does not agree that the event was Force
Majeure, then the Owner’s Representative shall refer the issue to duly
authorized officers of the Parties for decision.  If the duly authorized
officers do not reach agreement within five (5) Working Days, the Parties shall
refer such disputes to resolution under Article 25.

14.11Builder shall notify Owner in writing of the end of any claimed Force
Majeure event as soon as reasonably practical after its cessation but not
exceeding five (5) Working Days and provide an updated Project Schedule
reflecting the impact, if any, of the event of Force Majeure.

14.12If Builder claims Permissible Delays due to Force Majeure for one hundred
and twenty (120) or more Days in the aggregate, then Owner, in its absolute
discretion, shall have the right to terminate this Agreement for convenience
upon seven (7) Days prior written notice to Builder.  

14.13Upon receipt of such notice, Builder shall release Vessel, and the Work and
any Materials or equipment relating thereto to Owner and shall invoice Owner:

 

(a)

for the portion of the Contract Price(s) allocable to the Work in progress
performed on and Material commitments made for the Vessel as of the effective
date of the termination, less the aggregate of previous payments relating to
Vessel; and

 

(b)

for all documented expenditures made and costs incurred reasonably necessary to
the settling or discharging of outstanding commitments relating to Vessel
entered into by Builder in performing under this Agreement.  

14.14Owner shall pay the invoice at the time Builder releases the Vessel to
Owner, and upon such payment, shall be discharged from further obligations under
this Agreement, except as provided in Section 14.15.

- 40 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

14.15Upon Builder’s release of the Vessel pursuant to Section 14.13 Builder
shall allow Owner a reasonable period of time to remove the Vessel and the
Materials from the Shipyard, and shall cooperate with Owner with regard to the
removal of the Vessel and the Materials from the Shipyard, including launching
the Vessel (if it is in a condition for launching), and access to the Shipyard
for Persons and equipment necessary to remove the Vessel, including transport of
Vessel to and/or from a barge (if the Vessel is not in a condition for
launching).  Owner shall not be liable for wharfage or storage for the first
seven (7) Days following Delivery, but shall pay Builder for any wharfage and
storage thereafter, and shall pay for all other services at Builder’s standard
rates.

14.16In the event of termination for Force Majeure pursuant to this Article by
Owner, Owner's right to terminate shall be its sole and exclusive remedy and the
provisions of Article 16 shall not apply and the termination shall not be deemed
to be on account of a Builder default.  Upon such termination and payment by
Owner to Builder of the amounts required under Section 14.13, the Parties shall
execute and deliver a mutual release of all obligations under this Agreement
relating to the Vessel, except for those that this Agreement provides survive
termination.  

14.17A delay due to the delayed delivery of Owner Furnished Items shall not
constitute a Permissible Delay unless the delayed delivery causes an actual
delay in the progress of the Work that could not be avoided by the exercise of
reasonable judgment by Builder.  The extent of such Permissible Delay shall be
only to the extent of its actual impact on the Progress of the Work.  In the
event that Builder claims that a delayed delivery should constitute a
Permissible Delay, the Parties shall evaluate such claim in accordance with the
procedures set out in Sections 14.8 through 14.10, mutatis mutandis.

14.18A delay due to the delayed delivery of necessary Owner-supplied information
or documents shall not constitute a Permissible Delay unless: (i) Builder timely
informed Owner of the need for such information or documents pursuant to Section
6.9(g) and 6.16(c) and as otherwise reasonable; and (ii) the delayed delivery
causes an actual delay in the progress of the Work that could not be avoided by
the exercise of reasonable judgment by Builder.  The extent of such Permissible
Delay shall be only to the extent of its actual impact on the Progress of the
Work.  In the event that Builder claims that a delayed delivery should
constitute a Permissible Delay, the Parties shall evaluate such claim in
accordance with the procedures set out in Sections 14.8 through 14.10, mutatis
mutandis

Article 15EARLY DELIVERY BONUS, LIQUIDATED DAMAGES FOR DELAY

15.1In the event Builder shall deliver the Vessel earlier than the Delivery
Date, the Contract Price for the Vessel shall be increased in the amount of
[***] per Day for each and every

- 41 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Day by which the actual Vessel Delivery Date for the Vessel precedes the
Delivery Date, by more than thirty (30) Days, up to a maximum of thirty (30)
Days.

15.2Builder shall be entitled to a thirty (30) day grace period in delay of
delivery beyond the Delivery Date, after which Builder shall be liable for
payment of liquidated damages to Owner in accordance with this Article.

15.3If Builder shall deliver the Vessel later than thirty-one (31) Days after
the Delivery Date, then Builder shall pay to Owner as liquidated damages in the
form of a reduction in the Contract Price, to the extent any amounts are still
owing, and any balance in cash, the amount of [***] per Day for each and every
Day that the actual date of Delivery for the Vessel occurs exceeds thirty (30)
Days after the Delivery Date, up to sixty (60) Days. of delay.

15.4In the event Builder shall deliver the Vessel later than sixty (60) Days
after the Delivery Date, but less than ninety-one (91) Days after the Delivery
Date, Builder shall pay to Owner as liquidated damages in the form of a
reduction in the Contract Price for the Vessel, to the extent any amounts are
still owing, and any balance in cash, the amount of [***] per Day for each and
every Day that the actual date of Delivery of that Vessel exceeds sixty
(60) Days after the Delivery Date, up to ninety (90) Days of delay.  Any amount
payable as liquidated damages under this Section 15.4 shall be in addition to
the liquidated damages payable under Section 15.3.

15.5In the event Builder shall deliver the Vessel later than ninety (90) Days
after its Delivery Date, but less than one hundred twenty-one (121) Days after
the Delivery Date, Builder shall pay to Owner as liquidated damages in the form
of a reduction in the Contract Price for the Vessel, to the extent any amounts
are still owing, and any balance in cash, the amount of [***] per Day for each
and every Day that the actual date of Delivery of the Vessel exceeds ninety
(90) Days after the Delivery Date, up to one hundred twenty (120) Days of
delay.  Any amount payable as liquidated damages under this Section 15.5 shall
be in addition to the liquidated damages payable under Sections 15.4 and 15.3.

15.6In the event Builder shall deliver the Vessel later than one hundred twenty
(120) Days after the Delivery Date, but less than one hundred fifty-one
(151) Days after the Delivery Date, Builder shall pay to Owner as liquidated
damages in the form of a reduction in the Contract Price for the Vessel, to the
extent any amounts are still owing, and any balance in cash, the amount of [***]
per Day for each and every Day that the actual date of Delivery of the Vessel
exceeds one hundred twenty (120) Days after the Delivery Date, up to one hundred
fifty (150) Days of delay.  Any amount payable as liquidated damages under this
Section 15.6 shall be in addition to the liquidated damages payable under
Sections 15.5, 15.4 and 15.3.

- 42 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

15.7In the event Builder shall deliver the Vessel later than one hundred and
fifty (150) Days after its Delivery Date, Builder shall pay to Owner as
liquidated damages in the form of a reduction in the Contract Price for the
Vessel, to the extent any amounts are still owing, and any balance in cash, the
amount of [***] per Day for each and every Day that the actual date of Delivery
for the Vessel exceeds one hundred and fifty (150) Days after the Delivery
Date.  Any amount payable as liquidated damages under this Section 15.7 shall be
in addition to the liquidated damages payable under Sections 15.6, 15.5, 15.4
and 15.3.

15.8In no event shall Builder's aggregate liability for liquidated damages under
this Article exceed [***].

15.9The Parties agree that in the event of late Delivery, Owner shall suffer
damages that are difficult to ascertain, and the Parties acknowledge and agree
that liquidated damages in the amounts set forth herein are a reasonable
estimate of the anticipated damages that Owner may suffer as a result of delayed
Delivery and are not a penalty.  It is understood and agreed by and between
Builder and Owner that such reduction in the Contract Price for the liquidated
damages or payment of any balance in cash shall be in lieu of all other delay
damages available to Owner for the late Delivery of the Vessel under this
Agreement or at law or in equity (except for the injunctive relief set forth
Sections 6.6 and 25.11, if any, and shall be construed as liquidated damages and
as a waiver of any rights or remedies otherwise available for the failure to
timely complete the Vessel on or before the Delivery Date as such may be
adjusted.  Notwithstanding the foregoing, Owner specifically reserves its
equitable remedies for injunctive relief as contemplated by Sections 6.6 and
25.11.  Liquidated damages shall cease to accrue at such time that Builder
tenders Delivery to Owner of Vessel if construction of the Vessel is fully
completed in accordance with the Contract Documents except for minor items which
do not adversely affect the ability of the Vessel to be classed, registered, and
lawfully operated in the service for which it was constructed and which are
consented to by Owner, for which minor items consent shall not be unreasonably
withheld.

15.10In the event Builder shall not have delivered Vessel on or before one
hundred fifty-one (151) Days after its Delivery Date, Builder shall be in
default under this Agreement and in addition to the liquidated damages due,
Owner may at its option terminate this Agreement pursuant to Section 16.2.

Article 16DEFAULT AND TERMINATION

16.1The following events shall constitute events of default by Builder:

 

(a)

Builder fails to establish and maintain the Project Schedule as required by
Article 6 that would permit Owner to terminate the Agreement pursuant to Section
6.15;

- 43 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

 

(b)

Builder materially fails to execute or perform the Work in accordance with this
Agreement;

 

(c)

a Regulatory Authority advises in writing that it will withhold a certificate or
certification required for the operation of the Vessel or by the Contract
Documents, or impose an adverse limitation on the Vessel’s operations;

 

(d)

Builder materially disregards laws, ordinances, rules, regulations or orders of
any Regulatory Authority or other public authority with regard to a matter in
connection with the construction of the Vessel or the Work;

 

(e)

Owner Furnished Items, Owner's materials, supplies, and equipment identified
with the Vessel, or Materials are removed from Builder's Shipyard without
Owner's consent or are applied to a vessel not owned by Owner without Owner’s
express written consent;

 

(f)

Builder or any other Person files in any court a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver or trustee
of all or a portion of Builder's property, or an order of discharge of Builder
is ordered by any Court;

 

(g)

Builder makes an assignment for the benefit of creditors or petitions for or
enters into an agreement or agreements with its creditors, and by reason of any
of these events Builder's obligations under this Agreement are assigned to or
are to be or are performed by a Person other than Builder;

 

(h)

Builder fails to cause the removal of, or the posting of adequate security for
the removal of, any Liens, privileges, or security interests against the Vessel,
the Material, or Owner Furnished Items, except for those Liens, privileges, or
security interests created by Owner or Owner's subcontractors or vendors, or to
which Owner has consented, such consent not to be unreasonably withheld;

 

(i)

Delay in the construction or Delivery of the Vessel that would permit Owner to
terminate the Agreement pursuant to Section 6.18;

 

(j)

Builder fails to deliver to Owner the Bond or the Letter of Credit required by
this Agreement within the time required under Sections 13.1 and 13.2,
respectively; or

 

(k)

Builder fails to perform any other material obligation of Builder under this
Agreement.

16.2Upon the occurrence of an event of default set forth in Section 16.1, Owner,
by giving written notice of any such event to Builder, may terminate the
Agreement subject to the

- 44 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

following.  Such right of termination shall be in addition to and without
prejudice to, any other remedies Owner may have under this Agreement.  However,
except where termination occurs pursuant to Sections 6.15 (failure to establish
and maintain the Project Schedule), 13.4 (failure to provide the required
financial security), 14.12 (Force Majeure for one hundred twenty (120) Days or
more), or 15.10 (failure to deliver the Vessel on or before  one hundred fifty
one (151) Days after the Delivery Date,) no termination shall be effective if
Builder cures the noticed event of default within thirty (30) Days after receipt
of Owner's written notice.

16.3Upon Owner’s election to terminate the Agreement pursuant to Section 16.2,
Owner shall have the option to transport the Work in progress and Owner
Furnished Items pertaining to the Vessel from Builder's Shipyard to another
location, and complete the Work by such means as Owner deems fit, or dispose of
the Vessel in its incomplete state and retain all proceeds therefrom, subject to
the following terms:

 

(a)

In the event of the exercise of such option, upon Owner's termination of this
Agreement becoming effective pursuant to this Article, Builder will promptly
undertake, at its sole cost, to place all Work and Owner Furnished Items
pertaining to Vessel in a suitable condition for transportation to another
location.

 

(b)

Builder shall provide Owner access to such Work and Owner Furnished Items and
provide reasonable assistance to Owner in the removal from the Shipyard of any
Work completed to the date when the Work was discontinued, and shall allow Owner
and Owner's Representative continuing access to Builder's Shipyard and storage
areas for a period of thirty (30) Days following the effective date of
termination in order to remove the Work, any related Materials that have been
paid for by Owner, and Owner Furnished Items to another location.  

 

(c)

Owner shall be liable to pay to Builder only for those parts of the Work and
Materials incorporated into, supplied, or delivered to the Vessel or Owner by
Builder, less the amount of the Contract Price previously paid by Owner.

16.4In the event of a Builder’s default under Subsections 16.1(f) or 16.1(g), as
an alternative to Owner’s right to remove the Work from Builder’s Shipyard under
Section 16.3(a), Owner shall have the right to complete the Work, or portions of
the Work, at Builder’s Shipyard, including the right to continued access to and
use of Builder’s Shipyard and all equipment of the Builder in Builder’s Shipyard
as may be required by Owner to complete the Work, subject to the following
terms:

 

(a)

Such right to access to, and use of, Builder’s Shipyard and equipment shall
continue for not more than thirty (30) Days, exclusive of time permitted for the
removal of

- 45 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

 

the Work and Owner Furnished Items pursuant to Section 16.3, and delays
satisfying the standards for Permissible Delays pursuant to Article 14.

 

(b)

Owner shall be liable to pay to Builder only for those parts of the Work
incorporated into, supplied, or delivered to the Vessel by Builder, less the
amount of the Contract Price previously paid by Owner; and the continued use of
the Shipyard and the equipment pursuant to this Section shall be free of any
rent or any further charges.

 

(c)

During such continued use of the Shipyard and equipment, Owner shall be
responsible to comply with the requirements of Section 8.3 (compliance with
rules and regulations at the Shipyard), and Builder shall be responsible to
comply with the requirements of Sections 8.2 (provision of access to the
facilities) and 8.4 (provision of access to the Vessel).  

 

(d)

During such period of time as the Work remains at the Shipyard following
termination of the Agreement pursuant to Section 16.2, Owner shall be required
to maintain reasonable Builder’s Risk insurance naming Builder as an additional
assured, and shall further hold harmless and indemnify Builder against any
claims, liabilities, or damages caused by the negligence or wrongful act of
Owner or Owner’s subcontractors at the Shipyard.

16.5Prior to exercising its rights under Sections 16.3 or 16.4, Owner shall
consult with Builder to develop a course of action for the safe, efficient, and
cooperative coordination of the actions to be carried out.

16.6In the event that Owner elects to complete the Vessel pursuant to Section
16.3 or Section 16.4, Builder shall pay to Owner any additional direct costs
incurred by Owner to complete the Vessel, including any costs of relocation,
over and above the balance of the Contract Price, provided that Owner shall use
commercially reasonable efforts to mitigate any such additional costs incurred
to complete and relocate the Vessel, and subject to the limitations of Article
17.  

16.7In the event that Owner disposes of the Vessel pursuant to Section 16.3,
Builder shall pay to Owner the difference, if any, between the proceeds of such
disposition and the amounts paid by Owner to Builder, provided that Owner shall
carry out the disposition of the Vessel in its unfinished state in a
commercially reasonable manner, and subject to the limitations of Article
17.  Builder shall have the right to bid for the purchase of all items put on
sale or otherwise offered for disposal by the Owner.

16.8If Owner terminates the Agreement in accordance with terms of this
Agreement, Owner may call upon the Bonds, the Letter of Credit, or the Builder’s
Corporate Parent Guarantee

- 46 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

provided by Builder pursuant to Article 13 and may invoke all rights and
remedies available to it pursuant to the Bonds, the Letter of Credit, or the
Builder’s Corporate Parent Guarantee as applicable.

16.9Upon termination of this Agreement by Owner, Owner may, in its absolute
discretion, require Builder promptly to assign and/or deliver to Owner, to the
extent Builder is permitted to do so, all or any (in each of the following
cases, only as they directly relate to the Vessel): (a) bids or proposals;
(b) subcontracts; (c) construction plans; (d) Materials, tools and equipment (to
the extent paid for by Owner); (e) rental agreements; (f) Work, including the
Vessel (to the extent Owner has title to same in accordance with Section 22.1);
and (g) any other commitments directly related to the Vessel.  In the event of
any such assignments as required hereunder, Builder shall promptly execute and
deliver to Owner written assignments of the foregoing in a form reasonably
acceptable to Owner.

16.10The following events shall constitute events of default by Owner:

 

(a)

Owner shall fail to make any payment when required under this Agreement, and
such payment is not made within five (5) Working Days after Owner's receipt of
written notice of the failure of payment from Builder to Owner;

 

(b)

Owner or any other Person files in any court a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver or trustee
of all or a portion of Owner’s property, or an order of discharge of Owner is
ordered by any Court;

 

(c)

Owner makes an assignment for the benefit of creditors or petitions for or
enters into an agreement or agreements with its creditors, and by reason of any
of these events Owner's obligations under this Agreement are assigned to or are
to be or are performed by a Person other than Owner; or

 

(d)

Owner fails to perform any other material payment obligation of Owner under this
Agreement.

16.11If Owner fails to timely cure a payment default in accordance with Article
16.10(a), then Builder may in its absolute discretion, suspend or reschedule
progress of the Work (such right being in addition to any other right granted
hereunder or by operation of law) until such time as Builder receives the
overdue payment from Owner.

16.12Upon the occurrence of any event of default by Owner under Section 16.10,
Builder, upon thirty (30) Days’ written notice to Owner, may terminate this
Agreement.  However, during such thirty (30) Day notice period, Owner shall have
the absolute right to cure any such

- 47 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

default, in which case this Agreement shall not be terminated.  If such default
is not timely cured, Builder may, at its option, terminate the Agreement in
whole or in part, and may:

 

(a)

demand performance from Owner;

 

(b)

seek resolution of the payment default through the procedure set forth in
Article 25;

 

(c)

sell the Vessel in its then-present condition and location at a public auction
announced at least twenty (20) Days in advance in Lloyd’s List (print and
internet) provided written notice of the auction has been provided to Owner; or

 

(d)

complete the Vessel and sell it to a third party.

16.13The proceeds of the sale of the Vessel pursuant to Subsections 16.12(c) or
16.12(d), net of all expenses, shall be applied to any unpaid balance due and
owing to Builder.  The excess proceeds from any such auction or sale shall be
paid to Owner, without further set-off.  If the proceeds of the sale of the
Vessel pursuant to this Section, net of all expenses, are insufficient to pay
the outstanding balance due to Builder, then Builder may seek recovery of the
amount remaining outstanding in accordance with Article 25.

16.14Any delay by Owner or its representatives in providing to Builder or its
agents any Owner-supplied information, documents and/or goods or materials for
the construction of a Vessel shall not constitute a breach or default of this
Agreement by Owner but shall be covered instead by the appropriate provisions of
Article 14 relating to Permissible Delays.

Article 17LIMITATION OF DAMAGES

17.1Except as contemplated by Article 15 or as otherwise expressly provided
herein, neither Party shall be in any way liable to the other for any
incidental, consequential, or exemplary damages of any kind or nature,
including, but not limited to, loss of profits and loss of use of the Vessel,
delay or unavailability of the Shipyard or its facilities, storage of rejected
or unused materials, punitive damages, or similar claims arising from any cause
of action of any kind or nature, including but not limited to negligence, strict
liability, fault, contract, warranty, indemnification, or any other causes of
actions arising out of or in connection with or pertaining to this agreement or
a vessel constructed hereunder.  The waiver of incidental, consequential, and
exemplary damages as set forth herein is an essential condition of this
Agreement and each Party acknowledges that the other would not have entered into
this Agreement without such waiver of incidental and consequential damages.

17.2In no event shall Builder's total liability to Owner pursuant to this
Agreement or to anyone claiming by or through Owner, for any costs, claim,
judgment, demand, Lien, or loss

- 48 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

arising under this Agreement, and/or in negligence, contract, warranty, tort or
any other theory of liability, be greater in the aggregate than [***] percent
([***]%) of the Contract Price under this Agreement.  It is understood and
agreed that the aggregate amount of Builder's total liability hereunder is to be
secured by the Bonds, the Letter of Credit, and the Builder’s Corporate Parent
Guarantee required by Article 13.

17.3In no event shall the foregoing limitations of liability apply to any
third-party personal injury, property damage or pollution claims.

Article 18ASSIGNMENT OF THIS AGREEMENT

18.1This Agreement shall inure to the benefit of Builder and Owner and their
successors and assigns and shall be binding upon Builder and Owner and their
successors and assigns; provided that Builder shall not assign this Agreement or
any interest hereunder without the prior written consent of Owner, such consent
not to be unreasonably withheld.  Such limitation on assignment of this
Agreement is expressly intended to apply to any purported assignment of a
security interest in this Agreement.  Any purported assignment by Builder
without Owner’s prior written consent shall be null and void.  

18.2If Builder assigns its rights under this Agreement, Builder shall at all
times remain jointly and severally liable with the assignee under this Agreement
unless Owner agrees otherwise in writing.  

18.3Owner may at any time sell the Vessel and/or assign this Agreement, or its
rights hereunder upon written notice to Builder, but Owner shall at all times
remain jointly and severally liable under the Agreement unless Builder agrees
otherwise in writing.  Any such assignment by Owner shall not be grounds for
termination of this Agreement.

Article 19COMPLIANCE WITH LAWS

19.1Builder shall comply with all applicable laws, rules, regulations, and
requirements of any Regulatory Authorities that are in effect or that shall
become effective as to the Vessel, its construction, or Builder’s operations
during the term of this Agreement.

19.2Builder shall procure at its own expense such permits from the United States
and applicable State and local authorities in all jurisdictions in which Builder
is performing the Work as may be required or otherwise appropriate in connection
with beginning or carrying on the completion of the Work.

19.3Builder shall at all times comply with all United States, State, and local
laws in all jurisdictions in which Builder is performing the Work in any way
affecting the Work.  Any changes

- 49 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

in Coast Guard regulations or Classification Society Rules applicable to the
Vessel that have not previously been incorporated in the Contract Documents and
that affect the Work, the Delivery Date, or the Contract Price, may be the
subject of a Change Order pursuant to Section 7.8.

Article 20INTELLECTUAL PROPERTY

20.1Builder agrees to defend, at its own expense, any claim or action for actual
or alleged infringement (including contributory or vicarious infringement) of
any patent, copyright, trademark or other intellectual property right
(including, but not limited to, misappropriation of trade secrets) (such claims
or actions, collectively, “IP Claims”) brought by any third party against Owner
and/or any of Owner Group, as defined in Section 23.1, based upon the design
materials, processes, machinery and equipment supplied by Builder and embodied
in the Work.  

20.2Owner agrees to defend, at its own expense, any IP Claims brought by any
third party against Builder and/or any of the Builder Group, as defined in
Section 23.3, based upon the design materials, processes, machinery and
equipment supplied by Owner and embodied in the Work.

20.3Each Party further agrees to indemnify and hold harmless the other Party and
its respective Group from and against any and all liabilities, losses, costs,
damages, and expenses (including reasonable attorneys' fees) associated with any
such IP Claims incurred by the other Party and/or its respective Group.  

20.4Builder shall conduct and control the defense of any IP Claim or action
which Builder is required to defend under Section 20.1 and all negotiations for
its settlement or compromise, unless otherwise mutually agreed to in writing
between the Parties hereto.  

20.5Owner shall conduct and control the defense of any IP Claim or action which
Owner is required to defend under Section 20.2 and all negotiations for its
settlement or compromise, unless otherwise mutually agreed to in writing between
the Parties hereto.  

20.6Builder agrees to give Owner, and Owner agrees to give Builder, as
appropriate, prompt written notice of any written threat, warning or notice of
any such IP Claims or action.  

20.7If in any such suit so defended, all or any part of the Work (or any design
element, component, equipment or material thereof) that is supplied by a Party
is held to constitute an infringement or violation of any third party's
intellectual property rights and is enjoined, or if in respect of any claim of
infringement such Party deems it advisable to do so, such Party shall at its
sole option and absolute discretion take one or more of the following actions at
no additional cost to the other Party: (a) procure the right to continue the use
of the same without material interruption

- 50 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

for the other Party or (b) take back the infringing design element, component,
equipment or material and restore it with non-infringing design element,
component, equipment or material acceptable to the other Party at no additional
cost to the other Party.

20.8Owner represents and warrants that it owns, and will maintain during this
Agreement, sole and unencumbered ownership of the Design and any other Detailed
Construction Documentation prepared by or for Owner or its subcontractors in
connection with the Work, including all Intellectual Property rights necessary
to perform the Work contemplated herein and convey to Builder the limited rights
to the Design as specified in Article 5.4 and as otherwise contemplated by this
Agreement.

20.9Owner further represents and warrants to Builder that Owner's foregoing
ownership rights include rights embodied in any design element, component,
equipment or material and that Builder may peacefully enjoy such rights as
derived from Owner and granted to Builder as set forth in this Agreement.  This
warranty shall survive the termination of this Agreement.  Notwithstanding the
foregoing, however, if in any suit defended pursuant to this Article 20, all or
part of the Design (or any design element, component, equipment or material
thereof) is held to constitute an infringement or violation of any third party’s
intellectual property rights and is enjoined thereby impeding progress of the
Work, Owner agrees that any Days for which the progress of the Work is enjoined
shall constitute Permissible Delay.

20.10Builder acknowledges and agrees that the Design and the Intellectual
Property embodied in the Design and the Work is and shall remain Owner's sole
and unencumbered property.

Article 21NOTICES AND COMMUNICATIONS

21.1Any notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by either United States certified mail
(express delivery with signed receipt), facsimile, courier service with signed
receipt on delivery, hand delivery with signed receipt, or electronic mail if
receipt of such communication is confirmed in writing or by electronic mail from
all “to” addressees.  A notice shall be effective upon delivery.

21.2Notices hereunder shall be sent to the following Persons:

If to Owner:

GREAT LAKES DREDGE & DOCK, LLC.

2122 York Road

Oak Brook, Illinois 60523

Attention: Katie Mackie LaVoy

Senior Vice President, Chief Legal Officer, Chief Compliance Officer, and

- 51 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Corporate Secretary

Telephone: [***]

Email: [***]

 

with a copy to:

 

H. Allen Black III

Mills Black LLP

1215 19th Street, NW

Washington, DC  20036

Telephone:  + (202) 467-4182

Email: hablack@millsblack.com

 

If to Builder:

CONRAD SHIPYARD, L.L.C.

1501 Front Street

Morgan City, Louisiana 70380

Attention:  [***]

Title:  Executive Vice-President, Chief Operations Officer

Voice:  [***]

Fax: [***]

Email:  [***]

 

with copy to: 

  

[***]

Contracts Administrator/Corporate Counsel

P.O. Box 790

Morgan City, Louisiana 70381

Voice:  [***]

Fax: [***]

Email: [***]

 

21.3Notwithstanding any other provision of this Agreement, all final
authorizations and agreements concerning deductions from, additions to, or
modifications of the Vessel design or Specifications or any agreements that
concern changes in the Delivery Date of the Vessel and/or Contract Price of the
Vessel shall not be valid or binding on either Party unless signed by one of the
below designated representatives for each Party or their respective successors
in office:

OWNER:

 

 David S. Simonelli, President of Dredging

 

 

 

BUILDER:

 

  [***]

 

- 52 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

21.4Each Party agrees that at least one of its designated representatives will
be available for consultation during normal working hours.  The Parties further
agree that a Party may change its above-designated representatives upon ten
(10) Working Days’ prior written notice.

Article 22TITLE, SECURITY, AND WARRANTY OF TITLE

22.1Title in and to Vessel as it is constructed shall progressively vest, and
once vested shall in all events remain, in Owner, not Builder, as Vessel is
constructed.  

22.2Title to specific items of Major Equipment procured by Builder shall vest in
Owner free of any Liens of Builder or Builder’s creditors upon Owner’s payment
of supplier’s invoice for such items pursuant to Section 4.3.

22.3Title to all Major Equipment, Materials, parts, equipment, or other items
furnished by Builder in connection with the Work shall vest in Owner of when the
same is either (a) paid for by Owner pursuant to Section 4.3; (b) actually
installed or incorporated in the Work; or (c) delivered to the Shipyard or other
locations and identified with the Vessel or marked by Builder or Owner's
Representative as pertaining to the Vessel prior to incorporation into the Work,
whichever of (a), (b), or (c) occurs sooner.  

22.4Notwithstanding Sections 22.1 or 22.3, but subject to Section 22.2, Owner's
title to the Vessel, the Work, Materials, parts, and equipment shall be subject
to Builder’s possessory Lien for any outstanding payments due from Owner to
Builder under this Agreement as provided under applicable law.

22.5Title to all Owner Furnished Items shall at all times be vested in Owner
free and clear of any interest or claim of Builder.

22.6Notwithstanding the other provisions of this Article, Builder shall bear the
risk of loss of the Vessel, the Work, and all Materials, parts, and equipment
identified to the Vessel until the Vessel is completed and delivered to and
accepted by Owner pursuant to an executed Protocol of Delivery and Acceptance in
accordance with this Agreement.  

22.7If, notwithstanding the express provisions of this Article, Vessel or any of
the property to which Owner holds title as described in this Article, is for any
reason deemed by any court of competent jurisdiction not to be the property of,
and owned by, Owner, then Builder, to the extent it has any interest therein,
alternatively hereby grants a first priority security interest in the Vessel,
the Work, and all Materials, parts, and equipment identified to the Vessel in
favor of Owner.  The foregoing security interest granted hereby in the
alternative shall secure all of Builder's obligations to Owner under this
Agreement.  Owner shall have the right to file without

- 53 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

any further consent or signature of Builder one or more UCC-1 Financing
Statements against Builder covering the Vessel, the Work, and all Materials,
parts, and equipment identified to the Vessel, giving notice of its ownership
and/or its security interests therein.

22.8Immediately upon any property described in this Article becoming or being
deemed the property of Owner under the provisions of this Article, Builder shall
conspicuously mark or cause to be marked on the bow of Vessel, and also on all
such other property or its packaging, Builder's Hull Number for the Vessel.

22.9Builder shall use its best efforts to arrange its contractual arrangements
with all of its Subcontractors and Suppliers such that full effect will be given
to the title provisions of this Article and, without limiting the foregoing,
shall ensure that all property shall be supplied on the following conditions:

 

(a)

that the title to such property supplied by a Subcontractor or Supplier (whether
in the course of construction or completed and whether before or after delivery
to Builder) shall vest immediately in Builder (and thence, pursuant to Article
22.1, immediately in Owner), subject only to the Subcontractor's or Supplier's
possessory lien, if any, for any unpaid balance of the purchase price of such
property; and

 

(b)

that the Subcontractor or Supplier shall not, upon receipt by it of the purchase
price for such property, be entitled, as against Owner, to claim any title or
Lien therein by reason of obligations or liabilities of Builder to the
Subcontractor of Supplier in respect of any other deliveries made by the
Subcontractor or Supplier to Builder, or for any other reason.

22.10Builder warrants that it shall deliver the Vessel with clear title to
Owner, free and clear of all Liens and encumbrances.

22.11In the event of the filing or attaching of any Lien or encumbrances created
or suffered by or through Builder or any of its Subcontractors or Suppliers
against the Vessel before the Delivery Payment, Owner may, but shall not be
required to, satisfy the same out of any amount remaining to be paid to Builder
hereunder, except where Builder notifies Owner of a bona fide dispute between
Builder and such lienor.  When final payment is to be made under this Agreement,
as condition precedent thereto, Owner may, in its discretion, require that
Builder provide to Owner a statement certifying and indemnifying Owner against
any Liens or rights in rem of any kind against the Vessel or its respective
machinery, fittings, or equipment which relate to actions of Builder and
excluding any Liens or encumbrances created by Owner.

- 54 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

22.12In addition to and notwithstanding the foregoing, but subject to the
provisions contained in Section 22.4, Builder agrees to indemnify Owner, the
Vessel, and/or Materials identified to the Vessel, and hold them harmless from
and against all Liens and claims for labor, material, taxes, privileges and
licenses arising out of, in connection with, or resulting from the operations or
activities of Builder, its employees or agents or Subcontractors and the
employees or agents of their Subcontractors, and agrees to defend any such claim
asserted or suit brought against Owner, the Vessel, and/or Materials identified
to the Vessel, and to pay any judgment rendered in any such action, provided,
however, that Owner shall have the right, if it so elects, to participate at its
own expense in the defense of any such claims or suits, but such participation
shall not operate to affect Builder's liability and obligation hereunder.

Article 23INDEMNIFICATION

 

23.1BUILDER SHALL RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS OWNER, ITS
PARENT, OFFICERS, AGENTS, EMPLOYEES, SUBSIDIARIES, AFFILIATES, SUCCESSORS,
ASSIGNS, INSURERS, AND VESSELS (HEREINAFTER COLLECTIVELY REFERRED TO AS “OWNER
GROUP”) AGAINST ANY AND ALL LIABILITY, CLAIMS, DEMANDS, LOSSES, SUITS, LIENS,
CAUSES OF ACTION OF EVERY KIND AND CHARACTER AND THE COSTS THEREOF INCLUDING,
WITHOUT LIMITATION, COURT COSTS, ANY OTHER LITIGATION EXPENSES, ATTORNEYS FEES,
SETTLEMENTS AND JUDGMENTS, FOR PERSONAL INJURY (INCLUDING, BUT NOT LIMITED TO,
CLAIMS, DEMANDS, OR SUITS FOR BODILY INJURIES, EMOTIONAL AND PSYCHOLOGICAL
INJURIES, ILLNESSES, DISEASES, DEATH, LOSS OF SERVICES, LOSS OF SOCIETY,
DIMINISHED EARNINGS CAPACITY, MAINTENANCE AND CURE, WAGES, WORKER'S
COMPENSATION) OR PROPERTY LOSS OR DAMAGE WHICH IS BROUGHT AGAINST ANY MEMBER OF
OWNER GROUP BY ANY MEMBER OF BUILDER GROUP AND WHICH ARE ALLEGED TO ARISE OUT
OF, BE INCIDENT TO, ARISE IN CONNECTION WITH, OR RESULT FROM OCCURRENCES THAT
ARISE BEFORE DELIVERY.  BUILDER AGREES TO DEFEND AND INDEMNIFY OWNER GROUP
WHETHER THE SUIT OR CLAIMS ARE OCCASIONED, BROUGHT ABOUT, OR CAUSED IN WHOLE OR
IN PART BY THE NEGLIGENCE, FAULT OR STRICT LIABILITY (INCLUDING UNSEAWORTHINESS)
OF OWNER GROUP.  BUILDER ALSO AGREES TO INDEMNIFY OWNER GROUP FOR ALL COSTS,
EXPENSES, AND ATTORNEYS FEES EXPENDED BY OWNER GROUP IN THE ENFORCEMENT OF THIS
SECTION 23.1.

23.2BUILDER FURTHER REPRESENTS TO OWNER THAT THE SHIPYARD AND BUILDER'S OTHER
FACILITIES DO NOT HAVE ANY CONDITION OF POLLUTION

- 55 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

OR CONTAMINATION THAT COULD GIVE RISE TO LIABILITY OF OWNER GROUP FOR
REMEDIATION, CLEANUP, DAMAGES, PENALTIES, OR COSTS OF ANY KIND.  BUILDER AGREES
TO RELEASE, DEFEND, INDEMNIFY AND HOLD OWNER GROUP HARMLESS AGAINST AND IN
RESPECT OF ALL CLAIMS, LOSSES, LIABILITIES, REMEDIATION OR CLEAN-UP COSTS, OR
ANY FINES, PENALTIES, ASSESSMENTS, OR EXPENSES WHICH MAY BE IMPOSED UPON,
INCURRED BY, OR ASSESSED AGAINST ANY MEMBER OF OWNER GROUP BY ANY OTHER PARTY OR
PARTIES (INCLUDING, WITHOUT LIMITATION, A GOVERNMENTAL ENTITY), ARISING OUT OF,
IN CONNECTION WITH, OR RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING: (A) BUILDER'S BREACH OF ANY OF THE REPRESENTATIONS SET FORTH ABOVE IN
THIS SECTION; (B) ANY ENVIRONMENTAL POLLUTION OR CONDITION OF CONTAMINATION AT
THE SHIPYARD OR ANY OTHER OF BUILDER'S FACILITIES THAT MAY GIVE RISE TO
LIABILITY, EVEN IF NOT DISCOVERED UNTIL A LATER DATE.

23.3OWNER SHALL RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS BUILDER, ITS
PARENT, OFFICERS, AGENTS, EMPLOYEES, SUBSIDIARIES, SUBCONTRACTORS, AFFILIATES,
SUCCESSORS, ASSIGNS, INSURERS, AND VESSELS (HEREINAFTER AND BEFORE COLLECTIVELY
REFERRED TO AS “BUILDER GROUP”) AGAINST ANY AND ALL LIABILITY, CLAIMS, DEMANDS,
LOSSES, SUITS, LIENS, CAUSES OF ACTION OF EVERY KIND AND CHARACTER AND THE COSTS
THEREOF INCLUDING, WITHOUT LIMITATION, COURT COSTS, ANY OTHER LITIGATION
EXPENSES, ATTORNEYS FEES, SETTLEMENTS AND JUDGMENTS, FOR PERSONAL INJURY
(INCLUDING, BUT NOT LIMITED TO, CLAIMS, DEMANDS, OR SUITS FOR BODILY INJURIES,
EMOTIONAL AND PSYCHOLOGICAL INJURIES, ILLNESSES, DISEASES, DEATH, LOSS OF
SERVICES, LOSS OF SOCIETY, DIMINISHED EARNINGS CAPACITY, MAINTENANCE AND CURE,
WAGES, WORKER'S COMPENSATION) OR PROPERTY LOSS OR DAMAGE (EXCEPT FOR THE VESSEL,
THE MATERIALS OR THE WORK) WHICH IS BROUGHT AGAINST ANY MEMBER OF BUILDER GROUP
BY ANY MEMBER OF OWNER GROUP AND WHICH ARE ALLEGED TO ARISE OUT OF, BE INCIDENT
TO, ARISE IN CONNECTION WITH, OR RESULT FROM OCCURRENCES THAT ARISE BEFORE
DELIVERY.  OWNER AGREES TO DEFEND AND INDEMNIFY BUILDER GROUP WHETHER THE SUIT
OR CLAIMS ARE OCCASIONED, BROUGHT ABOUT, OR CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE, FAULT OR STRICT LIABILITY (INCLUDING UNSEAWORTHINESS) OF BUILDER
GROUP.  OWNER ALSO AGREES TO INDEMNIFY BUILDER GROUP FOR ALL COSTS, EXPENSES,
AND ATTORNEYS FEES EXPENDED BY BUILDER GROUP IN THE ENFORCEMENT OF THIS SECTION
23.2.

- 56 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

23.4The foregoing indemnity obligations shall also include reasonable attorneys'
fees, investigation costs and other costs and expenses incurred by the other
Party and/or its Indemnitees with respect to the matters described in this
Article.

23.5The indemnification provisions set forth in this Article shall survive the
termination of this Agreement.

Article 24TECHNICAL DISPUTES.

24.1The Parties agree that their mutual intent is to resolve any disagreements
regarding the design or construction of the Vessel through good faith
discussions; and to resolve such disputes promptly, efficiently, and reasonably.

24.2Any dispute between the Parties regarding the fitness of the design, plans,
or construction of the Vessel, its machinery and equipment, and/or regarding the
Materials and/or workmanship with regard to satisfaction of Classification
Society Rules or Regulatory Agency requirements (such disputes, “Approval
Disputes”) shall be determined by the Classification Society (acting with or by
its assigned surveyor).  The decision of the Classification Society as to such
matters shall be final, conclusive, and binding upon the Parties.

24.3Any other dispute regarding the Materials and/or workmanship in connection
with the Vessel, including interpretations of the Specifications (such disputes,
“Technical Disputes”), shall be referred to a jointly appointed surveyor (the
“Joint Surveyor”).  The decision of the Joint Surveyor as to such matters shall
be final, conclusive, and binding upon the Parties.  In the event that the
Parties cannot agree upon a Joint Surveyor, a Joint Surveyor will be appointed
by arbitrators appointed for that purpose in accordance with Article 25.  

24.4The costs of resolving any Approval Dispute or Technical Dispute, including
Classification Society charges, Joint Surveyor charges, and delays due to such
dispute, shall be for the account of the non-prevailing Party.  In the event
that both Parties prevail in part, the costs shall be split equally.

24.5The cost of any survey occasioned by a warranty claim, as well as the cost
of transporting service Persons and parts to the Vessel to make needed repairs
in connection with such warranty claim, shall be borne as follows:

 

(a)

by Owner in the event that the Classification Society concludes that the defect,
flaw, or repair is not covered by the express warranty described in this
Agreement; or

 

(b)

by Builder in the event that the Classification Society concludes that the
defect, flaw, or repair is covered by the express warranty described in this
Agreement.

- 57 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Article 25DISPUTE RESOLUTION AND LIMITATIONS PERIOD

25.1Approval Disputes and Technical Disputes shall be resolved in accordance
with Article 24.  Any dispute arising under or related to this Agreement not
resolved pursuant to Article 24 shall be resolved in accordance with this
Article.

25.2If any dispute or controversy between the Parties arises out of or in
connection with this Agreement, the Parties agree that they shall use their best
efforts to settle their differences by good faith consultations and
discussions.  

25.3If the Parties are unable to resolve the dispute within thirty (30) Days, or
such longer period as they mutually agree, either Party may call for mediation
of the dispute, with such mediation to be held in Houston, Texas or such other
location as may be mutually agreed, using a disinterested mediator agreeable to
both Parties, with the cost of such mediation shared equally by both Parties.

25.4Any dispute not otherwise resolved by mediation shall be settled by binding
arbitration under the Rules of the Society of Maritime Arbitrators, Inc. (the
“SMA Rules”) except as modified below or as otherwise agreed by the Parties,
with such arbitration to be held in New York, New York or such other location as
may be mutually agreed.

25.5Except for warranty claims subject to the notification requirements set
forth in Article 11, notice of any claim for relief of either Party against the
other for breach of any obligation or duty arising under this Agreement or
relating to the subject matter of this Agreement shall be given within three (3)
years after Delivery of the Vessel.  Failure to bring such claims within such
period shall result in such claims being barred and forever waived.

25.6Arbitration shall be commenced by either Party by written notice (a “Notice
of Arbitration”) to the other Party within thirty (30) Days after mediation is
conclusively terminated.  Such Notice of Arbitration shall state the issue to be
arbitrated and identify the Party’s appointed arbitrator.

25.7The other Party shall, by written notice within fifteen (15) Days after
receipt of the Notice of Arbitration, appoint a second arbitrator.  If the other
Party shall fail to appoint a second arbitrator within that time period, the
first appointed arbitrator shall serve as sole arbitrator of the dispute.  If
the other Party does timely appoint a second arbitrator, the two Party-appointed
arbitrators shall select a third arbitrator in accordance with the SMA
Rules.  The Party-appointed arbitrators shall jointly provide a written notice
of the selection of the third arbitrator to both Parties within five (5) Days
after such selection.  The selected third arbitrator shall serve as chairman of

- 58 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

the arbitration panel.  The arbitration panel shall hold an arbitration hearing
within thirty (30) Days after the appointment of the third arbitrator.  

25.8Qualifications of the Arbitrators.

 

(a)

An arbitrator may not have any direct or indirect financial or personal interest
in the outcome of the arbitration.

 

(b)

An arbitrator may not have acquired from an interested source detailed prior
knowledge of the matter in dispute.

 

(c)

An arbitrator may not have any close personal ties or business relations with
any one of the Parties to the arbitration, any affiliate or associated companies
of either of the Parties, any counsel for either of the Parties, or any
immediate family members of the foregoing Persons.

 

(d)

An arbitrator need not be a member of the Society of Maritime Arbitrators, Inc.,
but must have familiarity with vessel construction issues.  

25.9The arbitration panel shall render an award including a provision for
payment of costs and expenses of arbitration to be paid by one or more of the
Parties hereto, as the arbitration panel deems just.  The decision of the
arbitration panel shall be final and binding on the Parties hereto, and judgment
may be entered thereon in any court having jurisdiction.  

25.10Notwithstanding any contrary provisions in the SMA Rules, the arbitration
award shall be withheld from publication.

25.11Nothing in this Article shall be deemed to limit or otherwise restrict the
right of either Party to seek injunctive or other equitable relief in any court
of competent jurisdiction.

Article 26TAXES, DUTIES, AND TARIFFS

26.1Builder shall be responsible for and pay all taxes, assessments, duties, or
fees assessed against Builder, the Shipyard, or Builder’s other facilities as a
result of Builder’s performance under this Agreement, employment of workmen, and
procurement of Materials, supplies, equipment, or labor, including local, state,
and federal taxes, federal import duties, workers' compensation, social security
or old age benefits of any nature, unemployment tax, and any other similar
taxes, charges, assessments and contributions of any kind now or hereafter
payable in connection with the performance of the Work. Builder shall indemnify
and hold Owner harmless from any and all liability and expense by reason of
Builder's failure to pay such taxes, charges, assessments, and contributions.

- 59 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

26.2Owner shall be responsible for all taxes, duties, and documentation fees
arising from the purchase, sale, use, and documentation of the Vessel.  However,
Owner intends to avoid or minimize the imposition of any state sales or use or
other taxes with respect to the Vessel to the greatest extent lawfully
possible.  Builder agrees that it will not pay any such taxes, duties, or fees,
or concede any liability for the foregoing, without prior written notice to
Owner.  Owner may seek any lawfully available exemption(s), such as the
“removal” exemption, the “interstate or foreign commerce” exemption, the
“resale” exemption, or taking delivery of the Vessel in a location outside the
boundaries of the State of construction.  

26.3The Parties shall cooperate to optimize the tax treatment for all matters
within the scope of this Agreement, and shall provide each other with all such
documentation as may be reasonably requested to assist the requesting Party in
seeking lawful exemptions, exclusions, or reductions of taxation.

26.4In the event that any Materials procured for use in the Work are or shall
become subject to actual or potential tariff or duties, the Parties shall
individually and cooperatively take such actions as reasonably appropriate to
optimize the tariff and/or duty treatment of such Materials and to seek lawful
exemptions, exclusions, or reductions of tariffs and duties on such Materials.

Article 27CONTRACT INTERPRETATION

27.1The term “Contract Documents” means this Agreement, including the
Specifications attached in Exhibit B, the Contract Drawings, and all other
Exhibits hereto, as well as the Design, all Detailed Construction Documentation,
and all duly executed Change Orders.

27.2Contract guidance drawings and other drawings and documents furnished by
Owner to Builder not included within the defined Contract Documents are provided
for the assistance of Builder, but Owner makes no warranty or representations
regarding such materials.  Nothing herein is to be interpreted as limiting or
excusing Builder’s obligations under Sections 3.2 and 3.3.

27.3The intent of the Parties under the Contract Documents is for Builder to
build the Vessel in accordance with the Contract Documents for the respective
Contract Price and by the relevant Delivery Date.  The Contract Drawings and
Specifications are to be considered as cooperative.  All work necessary for the
execution of the Work, if shown on the Contract Drawings and not described in
the Specifications, or if shown in the Specifications and not described on the
Contract Drawings, shall be considered as a part of the Work and shall be
executed by Builder in the same manner and with the same character of material
as other portions of this Agreement without extra compensation.  If Builder
identifies any conflicts between the Specifications and the

- 60 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

Contract Drawings, then Builder shall consult with Owner to confirm the specific
arrangement or form required.

27.4If there are any conflicts or inconsistencies among the terms of this
Agreement and the Specifications, the terms of this Agreement shall take
precedence over the Specifications.  

27.5Except where expressly stipulated to the contrary, Builder shall provide and
pay for all services, labor, overtime labor, standby labor, methods, Materials
(including fuel, lubricating oils, hydraulic oils, greases, fresh water),
equipment, transportation, taxes, permits and fees and all other facilities and
services necessary to complete the Vessel for the Contract Price within the
Delivery Date.  Owner shall take over and pay for, at Builder's documented cost,
reasonable amounts of all stores remaining aboard the Vessel at the time of
Delivery, excluding fresh water, but including fuel oil, diesel oil, lubricating
oil, hydraulic oil, and greases.

Article 28PUBLICITY AND DISCLOSURES.

28.1Subject to Owner’s prior written approval, which approval shall not be
unreasonably withheld, Builder may use photographs of the Vessel during
construction and following Delivery in its promotional materials.

28.2Without limitation to the foregoing and subject to the Parties’ respective
intellectual property rights and business activities, the Parties agree to
cooperate with regard to the marketing of the Vessel, including hosting of
representatives of trade publications, appearances at public events, and similar
activities and events.  Nothing herein is intended to require either Party to
forego business activities or incur uncompensated expenses for the purposes of
marketing activities.

Article 29AUDITS

29.1Owner shall have the limited right to audit the construction, procurement,
and accounting records related to the construction of the Vessel under this
Agreement as may be reasonably necessary to enforce or protect Owner’s rights
under this Agreement with regard to claimed escalation and cost overruns or as
otherwise permitted herein.

29.2Such audits shall be conducted at Owner’s expense and upon reasonable notice
and upon reasonable terms and conditions.

Article 30MISCELLANEOUS 

30.1Entire Agreement.  This Agreement, which includes the Exhibits listed below,
all duly executed Change Orders (if any), and amendments or modifications to any
of the foregoing

- 61 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

or to this Agreement, constitutes the entire agreement between the Parties
relating to the subject matter hereof and supersedes any and all other prior
promises, correspondence, agreements, discussions, representations, and
understandings, whether oral or written.  No other agreements, promises,
correspondence, discussions, representations, or understandings, either express
or implied, unless expressly set forth herein, are binding between the Parties.

30.2Due Authority.  Each Party represents and warrants that its execution of
this Agreement is duly authorized by all necessary corporate actions and
resolutions.

30.3Binding Affect.  This Agreement shall be binding on and inure to the benefit
of the Parties and their heirs, legal representatives, executors, successors,
and permitted assigns.

30.4No Waivers.  Except with respect to the time limitations set forth in
Article 11 and Article 25 concerning warranty claims and dispute resolution
procedures, no delay or omission on the part of either Party in exercising or
enforcing any right hereunder shall operate or be construed as a waiver or bar
to enforcement of such right on that occasion or on any other or future
occasion, or a waiver or bar to enforcement of any other right or future right
of a Party hereunder on any other or future occasion.

30.5Severability.  Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.

30.6Headings.  The headings in this Agreement are inserted for convenience only
and are not to be considered in the construction or interpretation of the
provisions of this Agreement.

30.7Modification.  No change or modification of this Agreement shall be valid
unless in writing and signed by the Party against whom such change or
modification is sought to be enforced.

30.8Drafting.  This Agreement has been drafted and negotiated by both Parties,
each with advice of counsel.  For purposes of interpretation and enforcement,
this Agreement shall be considered to have been drafted jointly by the Parties.

30.9Duplicate Originals.  This Agreement may be executed in duplicate originals
and any true and complete copy shall be deemed an original for any purpose in
which an original might otherwise be required.  

30.10Counterparts.  This Agreement may be executed in counterparts, each of
which shall be effective only upon delivery to the other Party, and each of
which shall be taken to be one

- 62 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

and the same Agreement as if all the Parties had signed the same Agreement.  The
Parties may manually execute this Agreement, but each Party agrees that a
facsimile, PDF, or other electronic transmission of such signature shall be
deemed binding on each Party, and the Parties agree not to contest the validity
of this Agreement by reason of the fact that a manually executed copy has not
been delivered.

30.11Governing Law.  This Agreement and any disputes arising in connection
herewith shall be governed, without consideration of conflicts of law, by and
construed in accordance with the laws of the State of New York.  In no event
shall this Agreement be subject to or interpreted in accordance with the United
Nations Convention on Contracts for the International Sale of Goods.

30.12Confidentiality.  The Parties acknowledge and agree that certain
information relating to each of them that may be disclosed to or otherwise
acquired by the other in connection with this Agreement and the negotiations
leading up to its execution by the Parties, may constitute material,
confidential, and non-public information, which shall be governed by the mutual
Non-Disclosure Agreement existing between the Parties.  Except to the extent
required by law, neither Party will make any announcement or disclosure of the
fact that such discussions have occurred, or of the terms of this Agreement
without the other Party’s prior written consent, which consent shall not
unreasonably withheld.  It is acknowledged and understood by the Parties that
each Party shall be permitted to make press releases or other disclosure as may
be required by law in the reasonable opinion of each Party's Securities Counsel.

Execution Follows:

- 63 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their proper authorized representatives, thereunto duly authorized.

 

 

BUILDER

CONRAD SHIPYARD, L.L.C.

 

 

Dated:June 5, 2020

 

 

/s/ Cecil Hernandez

Name:Cecil Hernandez

Title: President

 

 

  

 

 

OWNER

GREAT LAKES DREDGE & DOCK COMPANY, LLC

 

 

Dated:June 5, 2020

 

 

 

/s/ Lasse Petterson

Name:Lasse Petterson

Title:Chief Executive Officer & President

  

 

 

 

 

 

 

 

 

 

 

 

 

 

- 64 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge

 

--------------------------------------------------------------------------------

Confidential Commercial InformationExecution Version

LIST OF EXHIBITS*

 

 

 

 

 

 

Exhibit A

  

Vessel Contract Price and Delivery Date

Exhibit B

  

Specifications

Exhibit C

  

[Intentionally Omitted]

Exhibit D

  

[Intentionally Omitted]

Exhibit E

  

Owner Furnished Items

Exhibit F-1

  

Form of Stage Completion Certificate

Exhibit F-2

  

Form of Builder's Invoice

Exhibit G-1

  

Form of Builder's Lien Release

Exhibit G-2

  

Form of Subcontractors' and Suppliers' Lien Release

Exhibit H

  

Form of Certificate of Completion and Delivery

Exhibit I

  

Form of Change Order

Exhibit J

  

Form of Owner's Warranty Notification to Builder

Exhibit K

  

Builder's Preliminary Schedule

Exhibit L-1

  

Form of Payment Bond

Exhibit L-2

  

Form of Performance Bond

Exhibit M

  

Form of Protocol of Delivery and Acceptance

Exhibit N

  

Form of Builder’s Corporate Parent Guarantee

Exhibit O

  

Time and Material Rates

Exhibit P

  

Form of Shipyard Contract Deficiency Report

Exhibit Q

  

Interim Installment and Stage of Completion Schedule

Exhibit R

 

Alternate Scope Proposals

 

*EXHIBITS HAVE BEEN OMITTED PURSUANT TO ITEM 601(a)(5) OF REGULATION S-K. THE
REGISTRANT AGREES TO FURNISH A COPY OF ANY SCHEDULE OR EXHIBIT TO THE SECURITIES
AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

- 65 -

 

GLDD – Conrad Vessel Construction Agreement

For Trailing Suction Hopper Dredge