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Teppco Partners - Owner & Contractor Agreement - Eagleton
AGREEMENT BETWEEN
OWNER AND CONTRACTOR
(STIPULATED SUM)
between
TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP
AND
EAGLETON ENGINEERING COMPANY
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TABLE OF CONTENTS
SECTION 1 DEFINED TERMS; INTERPRETATION..........................................................................1
1.1 DEFINITIONS................................................................................................1
1.2 REFERENCES, GENDER, NUMBER.................................................................................1
1.3 INTERPRETATION.............................................................................................2
SECTION 2 INDEPENDENT CONTRACTOR.................................................................................2
2.1 INDEPENDENT CONTRACTOR STATUS..............................................................................2
2.2 CONTRACTOR RESPONSIBLE FOR MEANS; METHODS AND PROCEDURES...................................................2
2.3 CONTRACTOR'S EMPLOYEES NOT OWNER'S EMPLOYEES...............................................................2
2.4 NO ENTITLEMENT TO OWNER'S EMPLOYEE BENEFITS................................................................3
SECTION 3 DESIGN, CONSTRUCTION AND PERFORMANCE REQUIREMENTS.......................................................3
3.1 DESIGN AND ENGINEERING SERVICES............................................................................3
3.2 DESCRIPTION OF AND OBLIGATION TO CONSTRUCT PROJECT.........................................................3
3.3 PERFORMANCE REQUIREMENTS...................................................................................4
3.4 COMPLETION REQUIREMENTS....................................................................................4
SECTION 4 CONTRACT DOCUMENTS AND INTERPRETIVE RULES...............................................................5
4.1 CONTRACT DOCUMENTS.........................................................................................5
4.2 DOCUMENTS AT PROJECT SITE..................................................................................5
4.3 INTERPRETIVE RULES AND RESOLUTION OF CONFLICTS AMONG CONTRACT DOCUMENTS....................................5
SECTION 5 ACQUISITION OF RIGHTS-OF-WAY............................................................................6
5.1 OBLIGATION TO ACQUIRE RIGHTS-OF-WAY........................................................................6
5.2 RIGHTS-OF-WAY TO BE ACQUIRED BY EASEMENT...................................................................7
5.3 RIGHTS-OF-WAY TO BE ACQUIRED BY PERMIT.....................................................................7
5.4 CONDEMNATION...............................................................................................7
5.5 DUE DILIGENCE..............................................................................................7
5.6 RIGHTS-OF-WAY COSTS AND EXPENSES...........................................................................8
5.7 RIGHTS-OF-WAY ON FINA AND OWNER PROPERTY...................................................................8
5.8 COMMON CARRIER.............................................................................................8
SECTION 6 THE WORK AND CHANGES IN THE WORK........................................................................8
6.1 THE WORK...................................................................................................8
6.2 TITLE TO THE WORK AND RISK OF LOSS.........................................................................9
6.3 STANDARDS FOR MATERIALS....................................................................................9
6.4 CHANGES IN THE WORK........................................................................................9
SECTION 7 CONTRACTOR'S GENERAL DUTIES, STATUS, REPRESENTATIONS AND WARRANTIES....................................10
7.1 CONTRACTOR'S GENERAL OBLIGATIONS..........................................................................10
7.2 PROJECT SCHEDULE..........................................................................................10
7.3 CHECKING MATERIALS........................................................................................11
7.4 PAYMENT OF CLAIMS.........................................................................................11
7.5 PAYMENT OF TAXES..........................................................................................12
7.6 CONTRACTOR'S CHIEF INSPECTOR..............................................................................12
7.7 PERMITS, FEES, NOTICES, TESTS AND INSPECTIONS.............................................................12
7.8 COMPLIANCE WITH LAWS......................................................................................12
7.9 SAFETY AND SECURITY.......................................................................................12
7.10 CLEANING UP..............................................................................................13
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7.11 NON-CONFORMING WORK......................................................................................14
7.12 AS-BUILT SURVEYS AND RECORD DRAWINGS.....................................................................14
7.13 AS-BUILT DOCUMENTATION...................................................................................14
7.14 CERTAIN OBLIGATIONS OF CONTRACTOR FOLLOWING COMPLETION...................................................14
7.15 CERTAIN REPRESENTATIONS..................................................................................15
7.16 CONTRACTOR'S OBLIGATIONS.................................................................................15
SECTION 8 COMMENCEMENT AND COMPLETION............................................................................16
8.1 COMMENCEMENT OF WORK......................................................................................16
8.2 COMPLETION................................................................................................16
8.3 LIQUIDATED DAMAGES AND COMPLETION BONUS...................................................................16
8.4 FORCE MAJEURE.............................................................................................17
8.5 OWNER'S OBLIGATIONS.......................................................................................18
8.6 TIME OF THE ESSENCE.......................................................................................19
SECTION 9 CONTRACT SUM...........................................................................................19
9.1 CONTRACT SUM..............................................................................................19
9.2 UNIT PRICES...............................................................................................19
SECTION 10 SUBCONTRACTS AND OTHER AGREEMENTS.....................................................................19
10.1 OBLIGATION TO SUBCONTRACT................................................................................19
10.2 RIGHT TO SUBCONTRACT.....................................................................................19
10.3 SUBCONTRACTOR RELATIONS..................................................................................19
10.4 SUBCONTRACTOR AND SUPPLIERS WARRANTIES...................................................................20
SECTION 11 APPLICATIONS FOR PAYMENT..............................................................................20
11.1 APPLICATIONS FOR PAYMENT.................................................................................20
11.2 RETAINAGE................................................................................................21
11.3 OWNER'S RIGHT TO WITHHOLD APPROVAL.......................................................................21
SECTION 12 PAYMENTS TO CONTRACTOR................................................................................21
12.1 OWNER'S REVIEW AND OBLIGATION TO FUND....................................................................21
12.2 FINAL PAYMENT............................................................................................22
12.3 NO WAIVER OF DEFECTS.....................................................................................22
12.4 OWNER NOT REQUIRED TO SEE TO PROPER APPLICATION OF PAYMENTS..............................................22
12.5 OWNER'S LIMITED RIGHT TO PAY SUBCONTRACTORS DIRECTLY.....................................................22
SECTION 13 ACCOUNTING RECORDS....................................................................................22
SECTION 14 INSURANCE.............................................................................................23
14.1 CONTRACTOR'S INSURANCE...................................................................................23
14.2 TERM OF INSURANCE, CERTIFICATES AND ENDORSEMENTS.........................................................24
14.3 VENDOR'S/SUBCONTRACTOR'S INSURANCE.......................................................................24
14.4 VIOLATION OF POLICY CONDITIONS...........................................................................24
14.5 WAIVER OF CLAIMS.........................................................................................24
14.6 CORPORATE GUARANTEE......................................................................................25
SECTION 15 INDEMNITY.............................................................................................25
15.1 CONTRACTOR INDEMNITY.....................................................................................25
15.2 OWNER INDEMNITY..........................................................................................26
15.3 OTHER PROVISIONS; SURVIVAL...............................................................................26
SECTION 16 TERMINATION, STOPPAGE OF WORK, OWNER'S RIGHT TO CARRY OUT WORK........................................26
16.1 TERMINATION BY OWNER WITH CAUSE..........................................................................26
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16.3 TERMINATION BY CONTRACTOR WITH CAUSE.....................................................................27
16.2 OWNER'S RIGHTS UPON TERMINATION OF AGREEMENT.............................................................28
16.4 STOPPAGE OF WORK.........................................................................................28
16.5 OWNER'S RIGHT TO CARRY OUT THE WORK......................................................................29
SECTION 17 OWNERSHIP OF DOCUMENTS AND PATENT INFRINGEMENT........................................................29
17.1 OWNERSHIP OF DOCUMENTS...................................................................................29
17.2 DELIVERY OF WORK PRODUCT.................................................................................30
17.3 PATENT INFRINGEMENT......................................................................................30
17.4 SPECIFIC ENFORCEMENT.....................................................................................30
SECTION 18 ADDITIONAL RIGHTS AND OBLIGATIONS.....................................................................30
18.1 RIGHT TO LET ADDITIONAL CONTRACTS........................................................................31
18.2 OWNER'S RIGHT TO ACCESS WORK.............................................................................31
18.3 WETLANDS.................................................................................................31
SECTION 19 MISCELLANEOUS PROVISIONS..............................................................................31
19.1 ENTIRE AGREEMENT.........................................................................................32
19.2 CONTROLLING LAW..........................................................................................32
19.3 NON-WAIVER...............................................................................................32
19.4 NON-INVALIDITY...........................................................................................32
19.5 NOTICES..................................................................................................32
19.6 UNDEFINED TERMS..........................................................................................32
19.7 ATTORNEYS FEES...........................................................................................32
19.8 ASSIGNMENT...............................................................................................32
19.9 CONTRACTOR AUTHORITY.....................................................................................33
19.10 OWNER AUTHORITY.........................................................................................33
19.11 EXHIBITS................................................................................................33
19.12 WAIVER OF JURY TRIAL....................................................................................33
APPENDIX A.......................................................................................................34
LIST OF EXHIBITS.................................................................................................38
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
(STIPULATED SUM)
THIS AGREEMENT BETWEEN OWNER AND CONTRACTOR (STIPULATED SUM) (this "Agreement") made and entered into on this 4th day of February 1999, by and between TE Products Pipeline Company, Limited Partnership, a Delaware limited partnership ("Owner"), and Eagleton Engineering Company, a Texas corporation ("Contractor");
WITNESSETH:
WHEREAS, Owner intends to engage a qualified engineer and contractor to design and construct, on a turnkey all inclusive basis, (i) a 12-inch diameter bidirectional pipeline system to transport propylene from Port Arthur, Texas to Mont Belvieu, Texas, (ii) a 12 inch diameter bidirectional pipeline system to transport ethylene between Port Arthur, Texas and Mont Belvieu, Texas, (iii) a 12 inch diameter bidirectional pipeline system to transport natural gasoline between Port Arthur, Texas and Mont Belvieu, Texas, and (iv) a 12-inch diameter unidirectional ethylene pipeline lateral with meter to Union Carbide's plant near Port Arthur, Texas; and
WHEREAS, Contractor has represented to Owner that Contractor has both the real estate, engineering and construction skills and expertise to acquire all necessary rights-of-way and to design and construct such pipeline systems to the performance standards set forth in this Agreement and otherwise in accordance with the terms and requirements set forth in this Agreement; and
WHEREAS, based on the foregoing representations and the other representations hereinafter set forth, Owner desires to engage Contractor, and Contractor desires to accept Owner's engagement, to acquire all necessary rights-of-way and to design and construct such pipeline systems to the performance standards set forth in this Agreement and to perform all other obligations set forth in this Agreement.
NOW THEREFORE, based on the foregoing premises and the covenants, promises, representations and warranties set forth in this Agreement, Owner and Contractor agree as follows:
SECTION I DEFINED TERMS; INTERPRETATION
1.1 Definitions. Unless the context otherwise requires, the respective terms defined in Appendix A attached hereto and incorporated herein shall, when used in this Agreement, have the respective meanings specified in Appendix A, with each such definition of a term being equally applicable to the singular and the plural forms of the term so defined.
1.2 References. Gender, Number. All references in this Agreement to a "Section," "subsection", "Appendix" or "Exhibit" shall be to a Section, subsection, Appendix or Exhibit of this Agreement, unless the context requires otherwise. Unless the context otherwise requires, the
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words "this Agreement," "hereof," "hereunder," "herein," "hereby," or words of similar import shall refer to this Agreement as a whole and not to a particular Section, subsection, Appendix, Exhibit, clause or other subdivision hereof. Whenever the context requires, the words used herein shall include the masculine, feminine and neuter gender, and the singular and the plural.
1.3 Interpretation. It is expressly agreed that this Agreement shall not be construed against any Party, and no consideration shall be given or presumption made, on the basis of who drafted this Agreement or any particular provision hereof or who supplied the form of this Agreement. Each Party agrees that this Agreement has been purposefully drawn and correctly reflects its understanding of the transaction that this Agreement contemplates. In construing this Agreement:
(a) Examples shall not be construed to limit, expressly or by implication, the matter they illustrate;
(b) The word "included" and its derivatives means "includes, but is not limited to" and corresponding derivative expressions;
(c) A defined term has its defined meaning throughout this Agreement, regardless of whether it appears before or after the place where it is defined; and
(d) The headings and titles herein are for convenience only and shall have no significance in the interpretation hereof.
SECTION 2 INDEPENDENT CONTRACTOR
2.1 Independent Contractor Status. Owner hereby engages Contractor as an independent contractor, and Contractor hereby accepts Owner's engagement as an independent contractor, to perform all of the obligations of Contractor specified in this Agreement.
2.2 Contractor Responsible for Means, Methods and Procedures. It is expressly understood and agreed that in the performance of its obligations under this Agreement, Contractor is and shall at all times be an independent contractor and is and shall be solely responsible for the means, methods and procedures by which to perform its obligations under this Agreement. Contractor, as an independent contractor, shall be solely responsible for its employees and equipment. Except as contemplated by Section 5, neither Contractor nor its employees shall at any time represent to any third party that Contractor or any of its employees is the agent, representative, employee or servant of Owner.
2.3 Contractor's Employees not Owner's Employees. Under no circumstances shall Contractor's employees be considered employees of Owner, and Contractor shall take all steps necessary to ensure that Contractor's employees are not employees of Owner. Contractor acknowledges that Owner will not make any payments on behalf of Contractor or Contractor's employees for the purposes of the Federal Insurance Contribution Act, the Social Security Act or the Federal Unemployment Tax Act. Contractor further acknowledges that Contractor is
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responsible for its employees and for all self employment taxes, federal income taxes and any other taxes (as well as the filing of all returns relating thereto) which are to be paid in respect of, or withheld from amounts payable to Contractor's employees.
2.4 No Entitlement to Owner's Employee Benefits. Contractor agrees and understands that Contractor and Contractor's employees shall not be considered employees of Owner with respect to employee benefits paid by Owner to its employees.
SECTION 3 DESIGN, CONSTRUCTION AND PERFORMANCE REQUIREMENTS
3.1 Design and Engineering Services. In addition to Contractor's construction obligations under this Agreement and the Contract Documents, Contractor shall provide all design and engineering services needed to fully define the Pipeline Systems and to cause the Pipeline Systems, as designed and engineered, to comply with the Completion Requirements and to operate in accordance with the Performance Requirements. Such design and engineering services shall include but not be limited to the services described in Exhibit 3.1 attached hereto. All such services shall be performed in accordance with the Project Schedule.
3.2 Description of and Obligation to Construct Project. Subject to the terms and conditions of this Agreement, Contractor hereby agrees to construct, fabricate, install and erect, on a turnkey all inclusive basis, three pipeline systems (the "Pipeline Systems") and certain ancillary facilities conforming to the requirements of this Agreement and all other Contract Documents, as follows:
(i) A 12.75 inch outside diameter ANSI 900 bidirectional pipeline (the "Propylene Pipeline") approximately 66 miles in length, terminating immediately inside the southwest corner property line of the Port Arthur Plant and the property line of the Mont Belvieu South Terminal, to be used to transport propylene from Port Arthur, Texas to Mont Belvieu, Texas along the route described in Exhibit 3.2(a), or deviations therefrom approved by Owner in accordance with subsection 5.1. Such pipeline system will include meter facilities at each end and shall be designed in accordance with the Piping Flow Diagram found in Exhibit 3.2(b-1) and general isometric layouts found in Exhibits 3.2(c-1) and 3.2(c-2); and
(ii) A 12.75 inch outside diameter ANSI 900 bidirectional pipeline (the "Ethylene Pipeline") approximately 66 miles in length, terminating immediately inside the southwest corner property line of the Port Arthur Plant and the property line of the Mont Belvieu South Terminal, to be used to transport ethylene between Port Arthur, Texas, and Mont Belvieu, Texas, along the route described in Exhibit 3.2(a) or deviations therefrom approved by Owner in accordance with subsection 5.1, and shall include a 12.75 inch outside diameter pipeline lateral with meter that ties into Union Carbide's Port Arthur plant facility. Such pipeline system will include meter facilities at each end and shall be designed in accordance with the Piping Flow Diagram found in Exhibit 3.2(b-2) and general isometric layouts found in Exhibits 3.2(c-1) and 3.2(c-3); and
(iii) A 12.75 inch outside diameter ANSI 900 bidirectional pipeline (the "Natural Gasoline Pipeline") approximately 66 miles in length, terminating immediately inside the
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southwest corner property line of the Port Arthur Plant and the property line of the Mont Belvieu South Terminal, used to transport natural gasoline between Mont Belvieu, Texas, and Port Arthur, Texas along the route described in Exhibit 3.2(a) or deviations therefrom approved by Owner in accordance with subsection 5.1. Such pipeline system will include meter facilities at each end and shall be designed in accordance with the Piping Flow Diagram found in Exhibit 3.2(b-3) and general isometric layout found in Exhibit 3.2(c-1) and Exhibit 3.2(c-4); and
(iv) All other components and installations required by the Contract Documents or as necessary to cause the Pipeline Systems to be completed in accordance with the Completion Requirements and to operate and perform in accordance with the Performance Requirements.
The Propylene Pipeline, Ethylene Pipeline and Natural Gasoline Pipeline will conform to and be designed, engineered, fabricated, constructed and installed in accordance with the requirements of the Contract Documents, including the requirements of Exhibit 3.2(d) respectively, and all Applicable Laws. The Pipeline Systems together with all such other components, installations and interests described in this subsection 3.2, as more fully described above and in the Contract Documents, are herein sometimes referred to as the "Project".
3.3 Performance Requirements.
(a) The Propylene Pipeline, Ethylene Pipeline and Natural Gasoline Pipeline will be designed, engineered and constructed to meet the performance criteria set forth in Exhibits 3.2(b-1), 3.2(b-2), 3.2(b-3), 3.2(c-1), 3.2(c-2), 3.2 (c-3), 3.2(c-4) and 3.2(d).
(b) The Pipeline Systems, when completed, will be capable of operating in accordance with all Applicable Laws and all performance and operational requirements set forth in this Agreement.
(c) Contractor shall require each equipment vendor to design its equipment in accordance with Applicable Laws and to warrant that such equipment, when installed and operated in accordance with the equipment specifications, will operate in accordance with Applicable Laws and all performance and operational requirements set forth in this Agreement.
The requirements set forth in paragraphs (a), (b) and (c) preceding are herein collectively referred to as the "Performance Requirements".
3.4 Completion Requirements.
(a) Upon completion of construction of the Pipeline Systems, Contractor shall test the Pipeline Systems in accordance with and in satisfaction of the acceptance testing procedures and requirements set forth in Exhibit 3.4(a). In addition to the notice requirements set forth in paragraph (d) of subsection 7.7, Contractor shall give Owner not less than 4 days notice prior to such tests. Contractor shall provide to Owner certified copies of the results of any such test as soon as practicable after its completion.
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(b) Contractor shall complete the Project and perform the Work in a good and workmanlike manner, and in accordance with the Contract Documents, all Applicable Laws and normal industry standards applicable to the construction of the Project or performance of the Work (including ANSI/ASME B31.4, Liquid Transportation Systems for Hydrocarbons, Liquid Petroleum Gas, Anhydrous Ammonia and Alcohols).
The requirements (including the passing of the tests set forth in Exhibit 3.4(a)) set forth in paragraphs (a) and (b) preceding are herein collectively referred to as the "Completion Requirements". Any Work not completed in accordance with the Completion Requirements or not capable of being operated in accordance with the Performance Requirements will be considered defective and Owner shall have the right to require such defective Work to be corrected in accordance with subsection 7.11(a).
SECTION 4 CONTRACT DOCUMENTS AND INTERPRETIVE RULES
4.1 Contract Documents. The "Contract Documents" shall collectively mean and consist of (i) this Agreement, including all Exhibits, (ii) the Drawings and Specifications, (iii) the waivers executed and delivered by Contractor pursuant to subsection 12.2, (iv) the Parent Guaranty and (v) all Change Orders. The Contract Documents represent the entire and integrated agreement between the Parties and supersede prior negotiations, representations or agreements, written or oral.
4.2 Documents at Project Site. Contractor shall maintain at its office at the Project Site, for Owner's benefit and review, one record copy of the Drawings and Specifications, Change Orders and other modifications to the Contract Documents, in good order, and marked currently to record changes and selections made during construction. Promptly after execution of the Contract Documents, Contractor shall prepare an initial set of drawings and specification for the Project for Owner's review and comment. After receipt of Owner's comments, Contractor shall promptly prepare the final Drawings and Specifications incorporating such comments, to the extent such comments will not cause a failure to meet the Completion Requirements and Performance Requirements. By submission of the final Drawings and Specifications to the Owner, Contractor represents and warrants to Owner that the Project can be constructed and installed in accordance with the Drawings and Specifications to meet or exceed the Completion Requirements and the Performance Requirements.
4.3 Interpretive Rules and Resolution of Conflicts Among Contract Documents.
(a) Unless otherwise stated in the Contract Documents, words which have generally recognized technical or construction industry meanings are used in the Contract Documents in accordance with such recognized meanings.
(b) Large-scaled drawings shall control over smaller-scaled drawings, figured dimensions on the drawings shall control over scaled dimensions and noted materials shall control over graphic representations. Notwithstanding the foregoing provisions, where a conflict exists
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within or between parts of the Contract Documents, or between the Contract Documents and Applicable Laws, or between Applicable Laws themselves, the more stringent or higher quality requirements shall apply.
(c) Where "as shown," "as indicated," "as detailed," or words of similar import are used, it shall be understood that reference to the Drawings and Specifications is made unless otherwise stated.
(d) As used in the Contract Documents, "provide" shall be understood to mean "provide complete in place," that is, to furnish, fabricate, deliver, install, and erect, including all materials, services, and expenses necessary to complete in place, ready for operation or use. The use of the term "as required" means as prescribed by the Contract Documents. The use of the term "as necessary" in the Contract Documents means all action essential to the completion of the Work or applicable portion thereof. The use of the term "day" in the Contract Documents means calendar day. The use of the term "holiday" in the Contract Documents means any day recognized by national banks in Houston, Texas as a holiday.
(e) In the interest of brevity, the Contract Documents frequently omit modifying words such as "all" and "any" and articles such as "the" and "all," but the fact that a modifier or an article is absent from one statement and appears in another is not intended to affect the interpretations of such statement.
(f) Whenever a notice time period or approval time period appears in the Contract Documents and such time period ends on a Saturday, Sunday or holiday, such time period shall be extended to the next Business Day.
SECTION 5 ACQUISITION OF RIGHTS-OF-WAY
5.1 Obligation to Acquire Rights-of-Way.
(a) Contractor shall use its Best Efforts necessary to obtain valid and enforceable easements and permits (separately and collectively referred to as "Rights-of-Way") along the anticipated route of the Pipeline Systems described in Exhibit 3.2(a) (such anticipated route, the "Projected Pipeline Rights-of-Way"). Should Owner object to a pipeline route or right-of-way intended to be used by Contractor, Owner will be responsible for any additional costs in obtaining the alternative Rights-of-Way plus all increases in associated costs for materials, construction and engineering services. Owner and Contractor shall execute a Change Order with respect to such alternative Rights-of-Way and additional or increased costs in accordance with subsection 6.4.
(b) Contractor shall perform a title search of 20 years or to the last conveyance, whichever is greater, on each property through which Contractor will obtain Rights-of-Way. Contractor in the performance of its obligations under this Section 5 shall use experienced right-of-way agents that are licensed or registered with the Texas Real Estate Commission.
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5.2 Rights-of-Way to be Acquired by Easement. All Rights-of-Way shall be acquired by easement except as provided in subsections 5.3 and 5.4. Each such easement shall be granted by the landowner to Owner upon the form of easement attached hereto as Exhibit 5.2 or such modified form as is approved by Owner. Contractor shall use its Best Efforts to secure free assignability of any such easement.
5.3 Rights-of-Way to be Acquired by Permit. Contractor shall acquire permits where necessary. Contractor shall obtain title data supporting each permit, if privately owned property is involved. Owner shall have an opportunity to participate in the meetings between Contractor and permitting agencies or companies. Owner shall review and approve any application, agreement and permit submitted to an agency or landowner regarding the acquisition of any Rights-of-Way. Contractor shall consult with Owner regarding issues of concern or objections raised by any governmental agency or landowner regarding the issuance of a permit. Contractor and Owner shall collectively identify alternatives and planning contingencies regarding any issues concerning the permitting process. All permits or agreements shall, if reasonably possible, be acquired as perpetual or paid up term. Contractor shall use its Best Efforts to secure free assignability of any such permit.
5.4 Condemnation. In the event that Contractor, after exercising its Best Efforts, is unable to acquire any Rights-of-Way from a landowner, Contractor shall fully advise Owner of the situation and furnish to Owner the following information:
(1) The terms and monetary consideration that landowner has last advised Contractor would be acceptable;
(2) The terms and monetary consideration that Contractor made to landowner as the last offer; and
(3) If Owner elects to condemn any property, a condemnation appraisal for the proposed Rights-of-Way performed by a qualified third party appraiser.
Based on the information furnished by Contractor, Owner shall make the decision whether to accept the landowner's terms and monetary consideration demands, or to exercise Owner's right of eminent domain to condemn the landowner's property for the easement. In the event Owner elects to proceed with such condemnation action, Contractor shall subject to subsection 5.6 be responsible for all costs and expenses, including but not limited to attorneys' and appraisers fees, associated with the condemnation action and any award to the landowner as a result thereof. Notwithstanding the foregoing sentence, Owner shall be responsible for all costs and expenses in any condemnation action, including attorneys' fees, associated with Owner establishing its right of eminent domain as a common carrier under Vernon's Ann. Civ. St. art. 6132a-1 Sec. 1.09(c).
5.5 Due Diligence. Prior to the acquisition of any portion of the Pipeline Rights-of-Way, Contractor shall perform such due diligence as is necessary to determine that such portion of the Pipeline Rights-of-Way will not be subordinate to any mortgage,
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deed of trust or other security agreement, or if such portion of the Pipeline Rights-of-Way will be subordinate to a mortgage, deed of trust or other security agreement, Contractor will make Best Efforts to obtain a subordination agreement from the holder of such mortgage, deed of trust or other security agreement.
5.6 Rights-of-Way Costs and Expenses. Subject to the penultimate and last sentences of subsection 5.1(a) and the last sentence of subsection 5.4, Contractor shall be responsible for all Rights-of-Way Costs and Expenses up to and including $16.6 million, which includes $471,000 as a lump sum amount for post-construction activities, subject to reduction pursuant to the provisions of subsection 5.7. All Rights-of-Way Costs and Expenses in excess of $16.6 million shall be the responsibility of Owner. The method of payment of easement consideration and damage consideration shall be subject to the mutual agreement of Owner and Contractor.
5.7 Rights-of-Way on Fina and Owner Property. The monetary level of $16.6 million set forth in subsection 5.6 and the Contract Sum shall both be reduced by an amount determined by multiplying $1,500 times the number of Rods that the Pipeline System is located on property owned by Owner, Fina or any affiliate of either and for which Contractor does not have to pay for any easements or permits to cross such property other than de minimis amounts to Fina or its affiliates.
5.8 Common Carrier. Owner shall promptly make all appropriate T-4 filings and any other filings with the Commission with respect to its intention to operate as a common carrier pipeline, and furnish Contractor with copies of same. In addition, it shall be Owner's sole decision to exercise any eminent domain powers to obtain Rights-of-Way. Where Owner does decide to initiate a condemnation proceeding, Owner will effect the quick take procedures available under Applicable Laws.
SECTION 6 THE WORK AND CHANGES IN THE WORK
6.1 The Work. Contractor shall provide and/or perform the "Work", which means (i) all materials, systems, equipment and other installations becoming a part of the Project pursuant to the Contract Documents (sometimes collectively referred to as "Materials"), (ii) all other materials, supplies, apparatus, implements, tools, equipment, sanitary facilities and other facilities not included in part (i) preceding and necessary in the construction of the Project, (iii) all labor, supervision, transportatio...
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