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An Engineering, Procurement and Construction Agreement is an

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An Engineering, Procurement and Construction Agreement is an agreement between a
company and another company (engineering company) where the engineering company
is retained to provide engineering, procurement and construction services for a specific
project. This document contains a dispute resolution provision that requires the parties
to negotiate in good faith prior to submitting the dispute to arbitration. This document
can be customized to fit the needs of the drafting parties and includes opportunities for
optional language.
ENGINEERING, PROCUREMENT, AND
CONSTRUCTION AGREEMENT
THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION
AGREEMENT (hereinafter the “Agreement”), dated as of the __________ day of __________,
_____, between ________________________________ (hereinafter the “owner”) and
__________________ (hereinafter “Contractor”) hereinafter sometimes referred to as the
“Parties”.
RECITALS
WHEREAS, Owner desires to construct and operate ______________________
[DESCRIPTION OF PROJECT] (hereinafter the “Project”) and Contractor is willing and able to
perform design, engineering, and construction work to bring the Project into operation for
Owner pursuant to the terms, provisions and conditions set out in this Agreement;
AND WHEREAS Contractor designs, constructs and installs ________________
[DESCRIPTION OF WHAT IS TO BE INSTALLED] and as such is able to engineer and
construction the Project and all necessary ancillary systems to bring the Project into operation for
Owner;
AND WHEREAS Owner desires to engage Contractor to design, engineer and construct
the Project;
AND WHEREAS Contractor desires to provide such design, engineering and
construction work to Owner for the purposes of bringing the Project into operation at [SPECIFIC
LOCATION OF PROJECT] (hereinafter the “Site), pursuant to the terms, provisions and
conditions set out in this Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants set out
below, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Owner and Contractor hereby agree as follows:
ARTICLE 1
1.00
DEFINITIONS
1.01
Unless otherwise required by the context in which any term appears, capitalized
terms used in this Agreement shall have the meaning ascribed to them in this Article 1 and the
singular shall include the plural and vice versa.
“including” shall mean including, without limitation;
“herein, hereof and hereunder” shall mean this Agreement and not to any
particular section or subsection hereof;
(iii)
“Applicable Law” shall mean, with respect to any governmental authority, any
constitutional provision, law, statute, rule, regulation, ordinance, order, decree,
judgment, decision, certificate, injunction, registration, license, permit,
authorization, guideline, governmental approval, consent, or requirement of such
governmental authority, as construed from time to time by any governmental
authority;
(iv)
“Applicable Permits” shall mean each and every regional and local license,
authorization, certification, filing, recording, permit, or other approval with or of
any governmental authority, including, without limitation, each and every
environmental, construction, or operating permit and any agreement, consent, or
approval from or with any third party that is required by any Applicable Law or
that is otherwise necessary for the performance of the work or operation of the
Project;
(v)
“Contract Documents” shall mean this Agreement, and any schedules annexed
hereto, drawings, specifications, plans, calculations, models, and designs that
have been prepared by Contractor or any Subcontractor for the work to be
completed for the Project;
(vi)
“Contract Price” shall mean the sum payable to Contractor for performing the
work for the Project, as the same may be modified from time to time in
accordance with the terms hereof;
(vii) “Contractor” shall have the meaning set forth in the preamble;
(viii) “Dollar” shall mean the lawful currency of __________________ [COUNTRY];
(ix)
“Effective Date” shall mean the date on which this Agreement is executed by the
Parties;
(x)
“Equipment” shall mean all materials, supplies, apparatus, machinery,
equipment, parts, tools, components, instruments, and appliances that are used or
required by Contractor to complete the Project
(xi)
“Final Completion” shall mean satisfaction or waiver of all of the conditions for
completion of the Project;
(xii) “Force Majeure” shall mean, when used in connection with the performance of a
Party’ s obligations under this Agreement, any act or event (to the extent not
caused by such Party or its agents or employees) which is unforeseeable, or being
foreseeable, unavoidable and outside the control of the Party which invokes it,
and which renders said Party unable to comply (totally or partially) with its
obligations under this Agreement;
(xiii) “Governmental Authority” shall mean any national, autonomic, regional,
province, town, city, or municipal government, whether domestic or foreign, or
other administrative, regulatory or judicial body of any of the foregoing;
(xiv) “Hazardous Material” shall mean oil or petroleum and petroleum products,
asbestos and any asbestos containing materials, urea formaldehyde insulation,
lead paints, and coatings, and all of those chemicals, substances, materials,
controlled substances, objects, conditions, and waste or combinations thereof
(i)
(ii)
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which are now or become in the future listed, defined or regulated in any manner
by any federal, state or Applicable Law;
(xv) “Industry Standards” shall mean those standards of care and diligence normally
practiced by engineering, construction and installation firms in performing
services of a similar nature in jurisdictions in which the work for the Project will
be performed and in accordance with good engineering design practices,
Applicable Permits, specifications and processes recommended by the equipment
manufacturers, and other standards established for such work;
(xvi) “Party” shall mean, individually, each of the parties to this Agreement;
(xvii) “Person” shall mean any individual, corporation, partnership, company, joint
venture, association, trust, unincorporated organization, or Governmental
Authority; and
(xviii) “Subcontractor” shall mean any Person, other than Contractor and its suppliers,
retained by Contractor to perform any portion of the work for the Project.
ARTICLE 2
2.00
SCOPE OF WORK
2.01
Owner and Contractor hereby acknowledge and agree that Contractor shall
provide to Owner all professional design and engineering services, Equipment, supervision,
labor, material, tools, and construction Equipment and machinery and the Applicable Permits for
the Project, with the expect of any fees related thereto for the completion of the Project in
accordance with Industry Standards.
2.02
Owner and Contractor hereby acknowledge and agree that Contractor shall have
direct and sole control over the engineering, design, and construction means, methods,
techniques, and procedures for any and all work under this Agreement for completion of the
Project.
2.03
Owner and Contractor hereby acknowledge and agree that Contractor shall
perform any and all work for the Project in accordance with the express description provided by
Owner to the Contactor.
2.04
Owner and Contractor hereby acknowledge and agree that Contractor shall
perform all work for the Project in accordance with Industry Standards, Applicable Law, and
Applicable Permits. Contractor shall perform engineering and design services, using qualified
architects, engineers, and other professionals selected and paid for by Contractor, in each case as
are necessary to prepare all documents. All document shall be submitted by Contractor to Owner
for approval.
2.05
Owner and Contractor hereby acknowledge and agree that Contractor, at its own
expense, shall obtain, and shall file any documents required to obtain any necessary Applicable
Permits on a timely basis.
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2.06
Owner and Contractor hereby acknowledge and agree that Contractor shall pay
for all taxes, fees and costs in order to obtain the Applicable Permits for which Contractor is
responsible.
2.07
Owner and Contractor hereby acknowledge and agree that Contractor at its
expense, shall purchase, transport, deliver, inspect to the extent it deems necessary, and construct
and install all Equipment necessary or useful in order to complete the Project in a manner
consistent with Industry Standards.
2.08
Owner and Contractor hereby acknowledge and agree that Contractor shall use
commercially reasonable efforts to maintain standard manufacturer’ s and supplier’ s warranties
for the Equipment.
2.09
Owner and Contractor hereby acknowledge and agree that Contractor shall
provide to Owner any and all copies of operational and maintenance manuals for the completed
Project. Contractor shall provide the drafts and the final version of the operational and
maintenance manual on or before the completion date of the Project.
2.10
Owner and Contractor hereby acknowledge and agree that once the Project is
complete, Contractor shall remove debris, unused equipment, and surplus materials from the
work site where the Project is located.
2.11
Owner and Contractor hereby acknowledge and agree that Owner will be solely
responsible for obtaining any subsidies, rebates or other incentives that may be available from
any Governmental Authority in connection with the Project.
2.12
Owner and Contractor hereby acknowledge and agree that Contractor shall not
perform any work or activity beyond the scope of the work, as defined in this Agreement, unless
agreed to by the Parties in writing.
2.13
Owner and Contractor hereby acknowledge and agree that Contractor shall not be
responsible for any environmental liabilities relating to the site where the work to be performed
for the Project is done, except for such pollution, toxic emissions, and other Hazardous Materials
as are caused by Contractor during construction of the Project, however, that Contractor shall be
required to comply with all applicable environmental laws and regulations during construction of
the Project.
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ARTICLE 3
3.00
SAFETY AND SECURITY
3.01
Contractor shall develop a comprehensive safety plan to establish and maintain
appropriate safety rules and procedures in connection with the performance of this Agreement.
Such safety rules and procedures shall require, among other things that Contractor and Owner
satisfy any safety requirements of the insurers for the Project. Contractor shall provide to Owner
its proposed safety plan no later than __________ [AMOUNT IN WORDS] (___ [AMOUNT IN
NUMERALS]) days prior to the start of construction of the Project. The Parties shall use their
good faith efforts to finalize the Safety Plan no later than __________ [AMOUNT IN WORDS]
(___ [AMOUNT IN NUMERALS]) days prior to the start of construction of the Project.
3.02
Contractor shall establish appropriate security measures to maintain the security
of the work site and protect the work in progress. The security plan shall comply with all
requirements of the insurers for the Project, shall address the reasonable concerns of Owner and
shall, at a minimum require that Contractor shall cause to be erected (as required by the nature
and activities of the surrounding areas) temporary chain link fencing, and temporary security
lighting to secure the site. Contractor shall provide to Owner its proposed security plan no later
than __________ [AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) days following
the date of this Agreement. The Parties shall use their good faith efforts to finalize the security
plan no later than __________ [AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS])
days following the date of this Agreement.
ARTICLE 4
4.00
LIENS
4.01
Contractor shall be responsible to see that all equipment and materials
incorporated into the work for the Project that are purchased by Contractor or by any
Subcontractor to the Project shall not be subject to any chattel mortgage, conditional sales
contract, or security agreement under which an interest or lien is retained; provided, however,
that such equipment and materials may be subject to the security interest of the vendor, to secure
the payment of the purchase price of the affected equipment and materials, so long as such
security interest is terminable upon payment in full and Contractor causes good title to such
equipment and materials, free and clear of such security interest to be conveyed to Owner on or
before the date of the final payment to Contractor. Contractor shall, as a condition precedent to
payment, provide lien waivers to Owner before final payment is required to be made by Owner
to Contractor.
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ARTICLE 5
5.00
INTELLECTUAL PROPERTY
5.01
Contractor shall, at its sole expense, pay or use reasonable efforts to ensure that its
subcontractors and suppliers pay all royalties, license fees, or other costs incident to their use in
the performance of the work for the Project, of any invention, design, process, product, or device
that is the subject of patent rights or copyrights held by any third parties.
ARTICLE 6
6.00
INSPECTIONS AND DEFECTIVE WORK
6.01
Contractor shall communicate regularly with Owner regarding weekly/monthly_
inspection of the completed portions of the work done by Contractor for conformity with the
specifications and for freedom from defects. Contractor shall accompany Owner on such
inspections as necessary under the circumstances.
6.02
In the event that Owner notifies Contractor of defective work that has the
potential to have a material impact on the cost of the work for the Project or the Project schedule
or indicates a systemic problem with any piece of Equipment, any portion of the work, or the
performance of any major equipment supplier or subcontractor, Contractor shall within
__________ [AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) business days notify
and provide relevant information to Owner. Such information shall include the nature and extent
of the problem, the cost and delay associated with the defective work, and the steps that
Contractor is taking to remedy the defective performance, including any remedies that they are
pursuing under the applicable contract.
ARTICLE 7
7.00
RIGHTS AND RESPONSIBILITIES
7.01
Owner shall require employees and agents to abide by all rules applicable to the
site, including but not limited to rules pertaining to safety, security procedures or requirements,
and designated entrances.
7.02
Owner shall reasonably cooperate with Contractor and provide any other
assistance reasonably necessary to enable Contractor to perform its work as required hereunder.
7.03
Owner shall provide adequate temporary construction easements and permanent
easements for the Project and any necessary support facilities for the Project.
7.04
Owner shall at all times promptly respond, including making appropriate
representatives available with decision-making authority, to any reasonable requests by
Contractor for meetings, for review and comments regarding relevant documents provided to
Contractor for review and comment.
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7.05
Owner shall take all actions reasonably requested by Contractor to assist
Contractor in obtaining any authorizations for the Project.
7.06
Owner _shall not unreasonably withhold its support from other actions
reasonably requested by Contractor to promote the timely completion of the Project or to
promote the completion of the Project within the Project budget.
7.07
In addition to Contractor’s responsibilities under this Agreement, Owner shall
have the following responsibilities with respect to the Project:
(i)
Owner will take all actions necessary to obtain the financing it needs to
enable it to satisfy its payment obligations under this Agreement;
(ii)
At any time from the execution of this Agreement to __________
[AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) years after
the completion date, Contractor (or an Affiliate of Contractor duly
designated as the custodian of Contractor’s books and records) shall, upon
reasonable prior notice from Owner with respect to the subject matter,
provide a designated representative of Owner during normal business
hours with such reasonable access to Contractor’s books and records as is
reasonably necessary to enable the person providing notice to review
Contractor’s costs incorporated into the cost of the work for the Project
and Contractor’s calculation thereof. Such review shall be at the cost and
expense of the person(s) conducting the review. In conducting such
review, the person(s) reviewing such books and records shall follow
reasonable security procedures designed to protect against the release of
trade secrets and other confidential information;
(iii)
Owner and its agents and employees shall, upon reasonable prior notice to
Contractor and subject to adherence to the safety procedures and other
procedures and requirements applicable to the work site (including
without limitation, and such procedures and requirements established in
connection with any insurance coverage obtained in connection with the
Project), have access to inspect all work; provided, however, that any
inspection of the work shall be conducted at a reasonable time and in a
manner that does not delay or increase the cost of the work by disrupting
the work. Contractor shall have the right to condition such inspection
upon the persons conducting the inspection observing procedures to
preserve the safety and security of the site and to comply with any
applicable requirements of Project insurers. Notwithstanding any review
or inspection by the state of the work, Contractor shall not be relieved of
its responsibility for the design, construction, and performance of the
Project as expressly set forth in this Agreement solely by virtue of the
inspection or review
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7.08
Owner, on behalf of Contractor shall apply for and obtain all necessary
authorizations for the construction and operation of the Project that are required.
ARTICLE 8
8.00
COST OF WORK AND PAYMENTS
8.01
The sum that Owner is obligated to pay to Contractor for completion of the work
for the Project shall be the sum of __________ [AMOUNT IN WORDS] Dollars ($_________
[AMOUNT IN NUMERALS]) (hereinafter the “Consideration”), subject to any adjustments the
Parties hereto may agree in writing.
8.02
The items which are not covered by the Consideration payment to Contractor by
Owner are any incremental costs of the work resulting from uninsured Force Majeure, which, at
Owner’s election, may be shared equally with Contractor, in which case, termination for a Force
Majeure Event because of the shared costs shall not be permitted or any increase or decrease in
the cost of the work resulting from the additional requirements or reallocation of the cost of the
work.
8.03
Owner shall pay to Contractor installment payments in the amount of
__________ [AMOUNT IN WORDS] Dollars ($_________ [AMOUNT IN NUMERALS]) on
the __________ [ORDINAL AMOUNT IN WORDS] (___ [ORDINAL AMOUNT IN
NUMERALS]) day of each and every month by way of certified check, bank draft, credit card,
wire transfer or direct deposit.
8.04
Contractor will pay any and all actual reasonable interest costs incurred by
Contractor to advance funds for payments to any subcontractors.
ARTICLE 9
9.00
INDEMNIFICATION
9.01
Each Party (the “Indemnifier”) agrees to indemnify, defend and hold harmless, to
the fullest extent allowed by law, the other Party (the “Indemnified Party”) and its respective
officers, employees, agents and representatives in respect of any claim, loss, cost, expense,
liability, fine, penalty, interest, payment, and/or damage (including attorney and other
professional fees and disbursements) (hereinafter referred to as a “Claim”) directly or indirectly
incurred by or asserted against the Indemnified Party relating to, arising out of, resulting from or
in any way connected with:
(a)
any breach of, or any incorrectness in, any of the representations and
warranties made by the Indemnifier under this Agreement or under any
other agreement, certificate or instrument executed and delivered pursuant
to this Agreement;
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(b)
any breach of or any non-fulfillment of any agreement on the part of the
Indemnifier under this Agreement or under any other agreement,
certificate or instrument executed and delivered pursuant to this
Agreement, including any construction contracts, including the failure on
the part of the Indemnifier to make any payment when due hereunder or
thereunder.
9.02
Owner agrees to indemnify, defend and hold harmless, to the fullest extent
allowed by law, Contractor and its respective officers, employees, agents and representatives in
respect of any claim, loss, cost, expense, liability, fine, penalty, interest, payment and/or damage
(including attorney and other professional fees and disbursements) hereinafter referred to as the
“Claim” directly or indirectly incurred by or asserted against Contractor relating to or arising out
of or resulting from or in any way connected with the work performed for the Project.
9.03
The amount of any Claim submitted under Article 9.01 as damages or by way of
indemnification shall bear interest from and including the date any Indemnifier is required to
make payment in respect thereof at the prime rate of __________ [AMOUNT IN WORDS]
percent (__% [AMOUNT IN NUMERALS]per annum interest calculated from and including
such date to but excluding the date reimbursement of such Claim by the Indemnifier is made, and
the amount of such interest shall be deemed to be part of such Claim.
ARTCILE 10
10.00
DISPUTE RESOLUTION
10.01
The Parties hereby commit to good faith negotiations for a period of __________
[AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) days from the date of notice by
one Party to another that there is a dispute between the Parties arising out of or relating to the
validity, construction, meaning, performance or effect of or the rights and liabilities of the Parties
hereto with respect to this Agreement (the “Dispute”), prior to referring the dispute to arbitration.
If after the __________ [AMOUNT IN WORDS]-day negotiation period, the Dispute persists,
the Dispute shall be determined by arbitration pursuant to _______________________ [INSERT
NAME OF STATE/PROVINCE ACT RELEVANT AND APPLICABLE TO ARBITRATION]
(hereinafter “the Act”)by a panel of three (3) arbitrators, one to be appointed by each disputing
Party within __________ [AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS])
Business Days after the end of such __________ [AMOUNT IN WORDS]-day negotiation
period, and a third to be appointed within __________ [AMOUNT IN WORDS] (___
[AMOUNT IN NUMERALS])
Business Days thereafter by the two arbitrators appointed by
the Parties. If one of the Parties fails to appoint their arbitrator within such __________
[AMOUNT IN WORDS]-Business Day period, the arbitrator which has been appointed shall
conduct the arbitration with no right for the other Party to subsequently appoint its arbitrator.
The award rendered by the arbitrator or arbitrators shall be final and binding and not subject to
appeal. The arbitrator or arbitrators shall be empowered to determine all questions of law and
fact, shall have all powers of the Act. and may grant interim injunctive relief. The prevailing
Party shall be entitled as part of the arbitration award to the reasonable costs and expenses
(including legal fees and disbursements) of investigating, preparing and pursuing such claim or
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defense, and the Party enforcing an award shall be entitled to reasonable costs and expenses
(including legal fees and disbursements) incurred in connection therewith.
ARTICLE 11
11.00
GENERAL PROVISIONS
11.01
Except as otherwise set out herein, the Parties shall be responsible for their own
legal and other expenses incurred in connection with the negotiation, preparation, execution,
delivery, and performance of this Agreement.
11.02
Notices
(a)
Any notice, certificate, consent, determination, or other communication
required or permitted to be given or made under this Agreement shall be in
writing and shall be effectively given and made if (i) delivered personally,
(ii) sent by prepaid courier service or mail, or (iii) sent prepaid by fax or
other similar means of electronic communication, in each case to the
following addresses:
________________________ [OWNER]
________________________ [OWNER’S ADDRESS]
Fax: ________________________
_______________
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With a copy to:
________________________ [OWNER’S ATTORNEY]
________________________ [OWNER’S ATTORNEY’S ADDRESS]
Fax: ________________________
________________________ [OPERATOR]
________________________ [OPERATOR’S ADDRESS]
Fax: ________________________
With a copy to:
________________________ [OPERATOR’S ATTORNEY]
________________________ [OPERATOR’S ATTORNEY’S ADDRESS]
Fax: ________________________
(b)
11.04
Any such communication so given or made shall be deemed to have been
given or made and to have been received on the day of delivery if
delivered, or on the day of faxing or sending by other means of recorded
electronic communication, provided that such day in either event is a
Business Day and the communication is so delivered, faxed or sent prior
to 4:30 p.m. on such day. Otherwise, such communication shall be deemed
to have been given and made and to have been received on the next
following Business Day. Any such communication sent by mail shall be
deemed to have been given and made and to have been received on the
fifth Business Day following the mailing thereof; provided however that
no such communication shall be mailed during any actual or apprehended
disruption of postal services. Any such communication given or made in
any other manner shall be deemed to have been given or made and to have
been received only upon actual receipt.
(c)
Any Party may from time to time change its address by notice to the other
Parties given in the manner provided by this Section.
Time shall be of the essence of this Agreement in all respects.
11.05
Each Party shall, promptly do, execute, deliver, or cause to be done, executed, and
delivered all further acts, documents and things in connection with this Agreement that the other
Parties may require, for the purposes of giving effect to this Agreement.
11.06
This Agreement shall enure to the benefit of, and be binding on, the Parties and
their respective successors and permitted assigns. No Party may assign or transfer, whether
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absolutely, by way of security or otherwise, all or any part of its respective rights or obligations
under this Agreement without the prior written consent of all of the other Parties.
11.07
This Agreement (together with all other agreements or documents executed by the
Parties contemplated by this Agreement) constitutes the entire integrated agreement between the
Parties pertaining to the subject matter of this Agreement and such other agreements and
documents and supersedes all prior agreements, understandings, negotiations, and discussions,
whether oral or written including, without limitation, any confidentiality agreements which may
have been entered into among the Parties prior to the date hereof. There are no conditions,
warranties, representations, or other agreements among the Parties in connection with the subject
matter of this Agreement (whether oral or written, express or implied, statutory or otherwise)
except as specifically set out in this Agreement or in such other agreements and documents.
11.08
A waiver of any default, breach or non-compliance under this Agreement is not
effective unless in writing and signed by the Party to be bound by the waiver. No waiver shall be
inferred from or implied by any failure to act or delay in acting by a Party in respect of any
default, breach or non-observance or by anything done or omitted to be done by the other Parties.
The waiver by a Party of any default, breach or non-compliance under this Agreement shall not
operate as a waiver of that Party's rights under this Agreement in respect of any continuing or
subsequent default, breach or non-observance (whether of the same or any other nature).
11.09
Any provision of this Agreement which, as it may relate to a Party, that is
prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the
extent of such prohibition or unenforceability and shall be severed from the balance of this
Agreement, all without affecting the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
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11.10
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which taken together shall be deemed to constitute
one and the same instrument. Counterparts may be executed either in original or faxed form and
the Parties adopt any signatures received by a receiving fax machine as original signatures of the
Parties; provided, however, that any Party providing its signature in such manner shall promptly
forward to the other Parties an original of the signed copy of this Agreement which was so faxed.
11.11
This Agreement shall be governed by and construed in accordance with the laws
of the Province/State of ________________ and the laws of __________ [COUNTRY]
applicable in that Province/State and shall be treated, in all respects, as a valid contract.
11.12
Any reference in this Agreement to the consent of a Party shall be deemed to refer
to the prior written consent of a duly authorized representative of such Party.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement.
DATED at ___________, ____________, this _________day of ____________, _
(_____________________)
Per:
Name:
Title:
I have authority to bind the Company.
(CONTRACTOR)
Per:
Name:
Title:
I have authority to bind the Company.
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__.
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