(Source: Resource.org)

AGREEMENT LOC FOR THE
LINE OF COMMUNICATION ACROSS FRANCE

REQUEST FOR PROCUREMENT

AGREEMENT TO:
DIRECTION DES CARBURANTS
85, BLVD DU MONTPARNASSE
PARIS, FRANCE

WHEREAS, THE GOVERNMENTS OF THE APPROVED REPUBLIC OF FRANCE AND OF THE UNITED STATES OF AMERICA, HEREINAFTER REFERRED PURSUANT TO AUTHORITY TO RESPECTIVELY AS THE FRENCH GOVERNMENT CONTAINED IN PROCUREMENT AND THE US GOVERNMENT, HAVE ENTERED INTO CIRCULAR NR: 5, HQS USAREUR, INTER-GOVERNMENTAL AGREEMENTS, HEREINAFTER 3 MAY 1955: DEFINED FOR THE CONSTRUCTION, OPERATION AND MAINTENANCE OF A PIPELINE FROM THE VICINITY OF ST NAZAIRE TO THE METZ REGION, AND, HARRY W. JOHNSON, MAJOR GENERAL, USA

WHEREAS, THESE INTER-GOVERNMENTAL DEPUTY COMMANDER AGREEMENTS PROVIDE THAT SAID PIPE-LINE USAREUR, COM Z WILL BE CONSTRUCTED, MAINTAINED AND OPERATED BY SOCIETE POUR LE TRANSPORT DE PRODUITS PETROLIERS, PAR PIPE-LINE WITH MAIN OFFICE AT 12 RUE JEAN NICOT, PARIS, 7EME, FRANCE, (HEREINAFTER 220,562,000.- REFERRED TO AS TRAPIL), AND

WHEREAS, SAID INTER-GOVERNMENTAL AGREEMENTS FURTHER PROVIDE THAT TRAPIL WILL BE ENTITLED TO BE REIMBURSED FOR TOTAL 220,562,000.- GRAND TOTAL OF THIS ORDER: 220,562,000.-

INSPECTION POINT

INSPECTION WILL BE MADE BY

THE PETROLEUM DISTRIBUTION COMMAND
AT PIPE LINE SITE ACCTG CLASS: 2172020 781-7999 P2511-07 S91-
FRANCIS E. SCHULTZ, DAC 7754TH ARMY UNIT
CERTIFYING OFFICER APO 230, USAF
ALEXANDER PERRY, LT COL HQS USAREUR COM Z
CONTRACTING OFFICER APO 163, US ARMY
ANDRE MOGARAY INGENIEUR EN CHEF DU SERVICE SPECIAL DES
DEPOTS D-HYDROCARBURES EXPENDITURES

MADE FOR MAINTENANCE AND OPERATION OF THE PIPELINE PURSUANT TO THESE INTER-GOVERNMENTAL AGREEMENTS AND THAT SUCH REIMBURSEMENT WILL BE BASED ON THE PRINCIPLE OF NON-PROFIT; AND,

WHEREAS, A PREVIOUS LOC FORM 101, NO DA-91-608-EUC-730 DATED 7 FEBRUARY 1956 EXECUTED 4 APRIL 1956 AS AMENDED PROVIDED FOR THE TRANSFER OF CUSTODY OF THE PIPELINE TO TRAPIL IN APRIL 1956 AND FOR THE MAINTENANCE AND PRE-OPERATIONAL PLANNING UNTIL SUCH TIME AS THE PIPELINE COULD BE PLACED IN OPERATION, PREDICATED UPON THE COMPLETION OF THE US OPERATED TANK FARMS, AND,

WHEREAS, THE AFOREMENTIONED LOC FORM 101 EXPIRES UNDER ITS OWN TERMS UPON ISSUANCE OF THIS LOC FORM 101.

NOW THEREFORE, PURSUANT TO AND IN ACCORDANCE WITH THE AFOREMENTIONED INTER-GOVERNMENTAL AGREEMENTS, THE FOLLOWING IS AGREED TO:

1. THE PURPOSE OF THIS LOC FORM 101, ENTERED INTO PURSUANT TO THE AUTHORITY CONTAINED IN PARAGRAPH A. (6) SECTION 2304 TITLE 10 (1956) BY THE US GOVERNMENT, REPRESENTED BY THE CONTRACTING OFFICER AUTHORIZED TO EXECUTE THIS LOC FORM 101 AND THE FRENCH GOVERNMENT, REPRESENTED BY THE DIRECTION DES CARBURANTS, 85 BOULEVARD DU MONTPARNASSE, PARIS, FRANCE, HEREINAFTER REFERRED TO AS " DICA," IS TO INSURE THE CUSTODY, MAINTENANCE AND OPERATION OF THE PIPELINE, HEREINAFTER DEFINED, IN ACCORDANCE WITH THE PROVISIONS, TERMS, SPECIFICATIONS AND CONDITIONS CONTAINED HEREIN, WHICH WILL BE MADE A PART OF THE MARCHE TO BE CONCLUDED BETWEEN DICA AND TRAPIL PURSUANT TO THIS LOC FORM 101.

2. THIS LOC FORM 101 CONSISTS OF 20 PAGES; ANNEX "A," "SCHEDULE OF US GOVERNMENT-FURNISHED PROPERTY," CONSISTING OF 2 PAGES; ANNEX "B," "OPERATIONS AND MAINTENANCE SPECIFICATIONS," CONSISTING OF 7 PAGES; AND ANNEX "C," "PROCEDURE FOR CONTROL OF GOVERNMENT FURNISHED PROPERTY," CONSISTING OF 3 PAGES; AND INCLOSURE NO 1,"MANUAL FOR THE CONTROL OF US GOVERNMENT PROPERTY IN POSSESSION OF THE CONTRACTOR," CONSISTING OF 34 PAGES. THESE ANNEXES AND ALL THEIR PROVISIONS ARE HEREBY INCORPORATED IN THIS LOC FORM AND ARE MADE AN INTEGRAL PART THEREOF.

3. THE ESTIMATED TOTAL COST OF WORK TO BE PERFORMED UNDER THIS LOC FORM 101 UNTIL 30 JUNE 1957 INCLUSIVE IS TWO HUNDRED AND TWENTY MILLION FIVE HUNDRED AND SIXTY TWO THOUSAND FRENCH FRANCS (220,562,000 FFRS) AND CANNOT BE EXCEEDED UNLESS ADDITIONAL FUNDS ARE MADE AVAILABLE BY THE US GOVERNMENT. EACH TIME IT BECOMES APPARENT TO DICA THAT THE EXPENSES INCURRED BY TRAPIL HAVE CONSUMED 80 PERCENT OF THE FUNDS CURRENTLY CITED, DICA WILL PROMPTLY SO NOTIFY THE CONTRACTING OFFICER IN WRITING.

4. THIS AGREEMENT, LOC FORM 101, DA-91-600-EUC-205 SHALL BE SUBJECT TO THE WRITTEN APPROVAL OF THE COMMANDING GENERAL, USAREUR COMMUNICATIONS ZONE OR HIS AUTHORIZED REPRESENTATIVE AND SHALL NOT BE BINDING UNTIL SO APPROVED:

SPECIAL CONDITIONS

ARTICLE I - DEFINITIONS

(1) INTER-GOVERNMENTAL AGREEMENTS

AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF FRANCE REGARDING THE CONSTRUCTION, OPERATION AND MAINTENANCE OF A PIPELINE, DATED 30 JUNE 1953 (SECRET) AND, THE TECHNICAL AGREEMENT BETWEEN THE UNITED STATES ARMY AND THE CENTRAL LIAISON MISSION FOR ASSISTANCE TO THE ALLIED ARMIES REGARDING THE CONSTRUCTION, OPERATION AND MAINTENANCE OF A PIPELINE, DATED 30 JUNE 1953 (SECRET).

(2) CONTRACTING OFFICER

THE TERM "CONTRACTING OFFICER" MEANS THE PERSON EXECUTING THIS LOC FORM 101 ON BEHALF OF THE UNITED STATES GOVERNMENT AND ANY OFFICER OR CIVILIAN EMPLOYEE WHO IS PROPERLY DESIGNATED CONTRACTING OFFICER AND THE TERM INCLUDES THE AUTHORIZED REPRESENTATIVE OF THE CONTRACTING OFFICER ACTING WITHIN THE LIMITS OF HIS AUTHORITY.

(3) QM PDC

THE QUARTERMASTER PETROLEUM DISTRIBUTION COMMAND, 7870TH ARMY UNIT, IS THE UNITED STATES ARMY AGENCY RESPONSIBLE FOR THE EXERCISE OF MANAGEMENT CONTROL OVER THE WORK PERFORMED BY TRAPIL UNDER THIS LOC FORM 101. ITS HEADQUARTERS ARE LOCATED AT FONTAINEBLEAU, FRANCE.

(4) QM PDC TERMINAL DISTRICTS

SUBORDINATE ECHELONS OF THE QUARTERMASTER PETROLEUM DISTRIBUTION COMMAND RESPONSIBLE FOR THE QM PDC MISSION WITHIN FOUR DESIGNATED GEOGRAPHICAL DISTRICT AREAS. THE HEADQUARTERS OF THE FOUR DISTRICT ARE LOCATED AS FOLLOWS:

DONGES TERMINAL DISTRICT AT DONGES
MELUN TERMINAL DISTRICT AT LA FERTE-ALAIS
CHALONS TERMINAL DISTRICT AT CHALONS-SUR-MARNE
METZ TERMINAL DISTRICT AT ST BAUSSANT

(5) DICA (DIRECTION DES CARBURANTS)

THE AGENCY OF THE FRENCH GOVERNMENT IN THE MINISTRY OF INDUSTRY AND ENERGY CONCERNED WITH PETROLEUM PRODUCTS, AND DESIGNATED BY THE FRENCH GOVERNMENT AS ITS REPRESENTATIVE WITH RESPECT TO THIS LOC FORM 101.

(6) MCL (MISSION CENTRALE DE LIAISON POUR L-ASSISTANCE AUX ARMEES ALLIES)

THE AGENCY OF THE FRENCH GOVERNMENT DESIGNATED IN THE INTER-GOVERNMENTAL AGREEMENTS TO DEAL DIRECTLY WITH THE US ARMY REGARDING ADMINISTRATIVE AND FINANCIAL PROCEDURES.

(7) TRAPIL (SOCIETE POUR LE TRANSPORT DE PRODUITS PETROLIERS PAR PIPELINE)

THE CONTRACTOR WITH WHOM DICA WILL EXECUTE THE CONTRACT "(MARCHE)" ARISING FROM THIS LOC FORM 101.

(8) UNITED STATES (US) GOVERNMENT PROPERTY

ALL PROPERTY OWNED, DIRECTLY LEASED OR ACQUIRED BY THE US GOVERNMENT IS CLASSIFIED AS US GOVERNMENT PROPERTY. UNDER THIS LOC FORM 101 THIS INCLUDES BOTH US GOVERNMENT-FURNISHED PROPERTY, AND TRAPIL-ACQUIRED PROPERTY, WHICH ARE DEFINED AS FOLLOWS:

(A) US GOVERNMENT-FURNISHED PROPERTY IS PROPERTY IN THE POSSESSION OF OR ACQUIRED DIRECTLY BY THE US GOVERNMENT AND DELIVERED OR OTHERWISE MADE AVAILABLE TO TRAPIL; AND

(B) TRAPIL-ACQUIRED PROPERTY, OTHER THAN REAL PROPERTY, PROCURED OR OTHERWISE PROVIDED BY TRAPIL FOR THE PERFORMANCE OF THE WORK UNDER THIS LOC FORM 101, PURSUANT TO THE TERMS OF WHICH TITLE IS VESTED IN THE US GOVERNMENT.

THE TERM "PROVIDE" AS USED IN SUCH PHRASES AS "US GOVERNMENT" SHALL INCLUDE BOTH THE FURNISHING BY THE US GOVERNMENT AND THE ACQUISITION BY TRAPIL.

(9) WORK

PERFORMANCE OF THOSE FUNCTIONS AND SERVICES CALLED FOR BY THIS LOC FORM 101.

(10) PIPELINE (MAIN LINE)

THE MILITARY PIPELINE, INCLUDING THE HIGH PRESSURE PUMP STATIONS, ORIGINATING IN THE ST NAZAIRE AREA OF FRANCE AND EXTENDING EASTERLY TO THE METZ AREA IN THE VICINITY OF ST BAUSSANT, FRANCE. TERMINAL OR TANK FARMS INSTALLATIONS ARE NOT INCLUDED WITHIN THE MEANING OF THIS TERM.

(11) INTER-CONNECTING LINES

THE LOW PRESSURE PIPE LINES WHICH CONNECT THE TANK FARMS.

(12) EXTERNAL CORROSION PROTECTION

THE PAINTING, COATING AND WRAPPING OF THE PIPELINE AND APPURTENANCES AND THE CONTROL OF ELECTRIC CURRENT (CATHODIC PROTECTION) ENTERING, LEAVING, OR BEING DEVELOPED IN THE PIPELINE AND LOW PRESSURE LATERAL LINES.

(13) INHIBITOR

A CHEMICAL INJECTED INTO THE PIPELINE FOR THE CONTROL OF INTERNAL CORROSION.

(14) RIGHT OF WAY

A NARROW STRIP OF LAND PARALLEL TO AND INCLUDING THE PIPELINE, MADE AVAILABLE BY THE FRENCH GOVERNMENT FOR OPERATION AND MAINTENANCE.

(15) GROUND BED

A GROUP OF BURIED ELECTRODES USED IN CATHODIC PROTECTION SYSTEM FOR DISPERSING ELECTRIC CURRENT INTO THE GROUND.

(16) PRODUCT

ANY PETROLEUM DERIVATIVE THAT MAY BE MOVED THROUGH THE PIPE-LINE.

(17) INTERFACE

THE MIXTURE OCCURING BETWEEN ADJACENT PRODUCTS IN THE PIPE-LINE.

(18) GRAVITY CHECK

A SAMPLING PROCEDURE TO DETERMINE THE GRAVITY FOR PRODUCT IDENTIFICATION AND THE PROPER CONTROL OF INTERFACES.

(19) DISPATCHING

THE CENTRALIZED CONTROL OF PUMPING PROCEDURES AND VALVE LINE-UP FOR THE PROPER MOVEMENT OF PRODUCT THROUGH THE PIPELINE AND THE KEEPING OF NECESSARY RECORDS PERTAINING TO SUCH CONTROL.

(20) SCRAPER

A MECHANICAL DEVICE PUMPED THROUGH THE PIPELINE TO REMOVE FOREIGN MATTER.

(21) VALVE LINE-UP

THE SYNCHRONIZED OPENING OR CLOSING OF THE PROPER VALVES FOR THE ROUTING OF PRODUCT THROUGH INTENDED CHANNELS.

(22) WORKING TANK

ANY TANK BEING FILLED OR EMPTIED BY THE MAIN LINE STREAM, INCLUDING OPENING AND GAUGING.

(23) GAUGING

THE MEASURING AND SAMPLING OF PRODUCT IN A TANK TO DETERMINE QUANTITY AND QUALITY.

(24) STATION LOG

A TIME RECORD KEPT BY HIGH PRESSURE STATION PERSONNEL SHOWING ALL PERTINENT DATA RELATIVE TO THE OPERATION OF SAID STATION.

(25) PIPE LINE PATROLLING

THE CAREFUL, VISUAL INSPECTION OF THE GROUND ABOVE AND IMMEDIATELY ADJACENT TO THE BURIED PIPE AND OF ITS APPURTENANCES, TO ASCERTAIN AND REPORT ON THEIR CONDITION.

(26) SALVAGE

PROPERTY WHICH IS RECOVERED FOR FURTHER USE. IN ADDITION, THIS TERM INCLUDES PROPERTY WHICH BECAUSE OF ITS WORN, DAMAGED, DETERIORATED, OR INCOMPLETE CONDITION, OR SPECIALIZED NATURE, HAS NO REASONABLE PROSPECT OF SALE OR USE AS SERVICEABLE PROPERTY WITHOUT MAJOR REPAIRS OR ALTERATIONS BUT WHICH HAS SOME VALUE IN EXCESS OF ITS MATERIAL CONTENT.

(27) SCRAP

PROPERTY IN SUCH CONDITION THAT IT HAS NO REASONABLE PROSPECT OF BEING SOLD EXCEPT FOR ITS MATERIAL CONTENT.

ARTICLE II - PERIOD OF THIS LOC FORM 101

A. DICA SHALL REQUIRE TRAPIL TO BEGIN PERFORMANCE OF THE WORK AS FOLLOWS:

1. CONTINUE MAINTENANCE ON PROPERTY ALREADY IN THE CUSTODY OF TRAPIL AND BEGIN MAINTENANCE OF ADDITIONAL PROPERTY AT THE TIME IT IS DELIVERED INTO TRAPIL'S CUSTODY.

2. BEGIN OPERATIONS OR PARTIAL OPERATIONS UPON THE REQUEST OF THE CONTRACTING OFFICER.

B. THIS LOC FORM 101 SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL 30 JUNE 1957, UNLESS SOONER TERMINATED PURSUANT TO GENERAL PROVISION NO 13 THEREOF. IN NO INSTANCE WILL THE EFFECTIVE DATE OF SUCH TERMINATION BE LESS THAN 90 DAYS FROM THE DATE OF THE NOTICE OF TERMINATION.

C. THE US GOVERNMENT RESERVES THE RIGHT TO EXTEND, BY AMENDMENT THE DURATION OF THIS LOC FORM 101 FOR SUCH PERIOD OR PERIODS OF TIME AS ARE NECESSARY TO INSURE THE CONTINUOUS OPERATION OF THE PIPELINE.

ARTICLE III - USE OF FACILITIES

A. THE US GOVERNMENT WILL PROVIDE TRAPIL, THROUGH DICA, THE US GOVERNMENT PROPERTY LISTED IN ANNEX "A" AND IN ACCORDANCE WITH THE PROVISIONS OF SAID ANNEX "A."

B. THE US GOVERNMENT RESERVES THE RIGHT TO WITHDRAW ANY US GOVERNMENT-FURNISHED PROPERTY FROM TRAPIL WHENEVER THE CONTRACTING OFFICER DEEMS SUCH WITHDRAWAL TO BE IN THE BEST INTEREST OF THE US GOVERNMENT. SPECIAL PROVISIONS CONCERNING CUSTODY, PROTECTION, MAINTENANCE OF AND ACCOUNTING FOR US GOVERNMENT FURNISHED PROPERTY IN POSSESSION OF TRAPIL ARE CONTAINED IN ANNEX "C" HEREOF.

ARTICLE IV - SCOPE OF WORK

A. DICA SHALL, UNDER THE TERMS AND CONDITIONS HEREIN SET FORTH REQUIRE TRAPIL TO:

1. PERFORM ALL FUNCTIONS NECESSARY FOR THE OPERATION, MAINTENANCE, REPAIR, ALTERATIONS, REPLACEMENTS, ADDITIONS AND BETTERMENTS, ON THE MAIN HIGH PRESSURE PIPELINE, THE MAIN LINE HIGH PRESSURE PUMP STATIONS, AND ANY OTHER RELATED PROPERTY THAT MAY BE DELIVERED TO THE CUSTODY OF TRAPIL FOR SUCH PURPOSES. THE PROPERTY PRESENTLY SO DESIGNATED IS FURTHER DESCRIBED IN ANNEX "A."

2. PERFORM ALL FUNCTIONS NECESSARY FOR THE MAINTENANCE, REPAIR, ALTERATIONS, REPLACEMENTS, ADDITIONS AND BETTERMENTS IN COMPLIANCE WITH THE MAINTENANCE PROVISIONS OF ANNEX "B" ON THE:

(A) THE INTER-CONNECTING PIPELINE BETWEEN TANK FARMS AS FURTHER DESCRIBED IN ANNEX "A."

(B) THE PORTION OF THE 24 INCH SEA UNLOADING LINE FURTHER DESCRIBED IN ANNEX "A."

3. EXCEPT AS OTHERWISE PROVIDED IN ANNEX "A," HEREOF, FURNISH THE NECESSARY MANAGEMENT, SUPERVISION, TECHNICAL AND NON-TECHNICAL SERVICES, LABOR, ACCOUNTING, TRANSPORTATION, MATERIALS, ELECTRICITY, COMMUNICATIONS, FUELS, LUBRICANTS, WATER, SUPPLIES, TOOLS, EQUIPMENT, AND FACILITIES.

4. STORE AND PRESERVE SUPPLIES, MATERIALS, AND EQUIPMENT NECESSARY TO THE PROPER OPERATION AND MAINTENANCE FUNCTIONS.

5. PREPARE AND SUBMIT ALL REPORTS THAT MAY BE REQUIRED OR REQUESTED BY THE CONTRACTING OFFICER.

6. PREPARE AND FURNISH SUCH STUDIES AND MANUALS COVERING OPERATIONS, MAINTENANCE AND SECURITY, ETC., AS MAY FROM TIME TO TIME BE REQUESTED BY THE CONTRACTING OFFICER

7. RECRUIT AND TRAIN PERSONNEL DESTINED TO OPERATE THE PIPELINE SO THAT, AT THE TIME THE PIPELINE OR ANY SEGMENTS THEREOF BECOME OPERATIONAL, TRAINED PERSONNEL WILL BE AVAILABLE.

8. SECURE ALL NECESSARY PERMITS AND LICENSES.

B. DICA SHALL REQUIRE TRAPIL TO PERFORM THE WORK OUTLINED IN PARAGRAPH A OF THIS ARTICLE IN ACCORDANCE WITH ANNEX "B" HEREOF. WRITTEN APPROVAL OF THE CONTRACTING OFFICER MUST BE OBTAINED PRIOR TO TRAPIL'S PERFORMANCE OF THE MAINTENANCE, REPAIRS OR MODIFICATIONS OR OTHER WORK, AS PROVIDED IN ARTICLE V HEREOF.

C. DICA SHALL REQUIRE TRAPIL, IN THE EVENT OF URGENCY OR EMERGENCY, TO ASSIST IN THE MAINTENANCE, REPAIR OR ALTERATIONS WITHIN THE TANK FARMS.

ARTICLE V - PRIOR APPROVAL

A. 1. WHEREVER PRIOR APPROVAL OR AUTHORIZATION OF THE CONTRACTING OFFICER IS REQUIRED UNDER THE TERMS HEREOF, SUCH APPROVAL OR AUTHORIZATION MAY BE OBTAINED FOR ENTIRE PROGRAMS FOR WEEKLY, MONTHLY, OR LONGER PERIODS. APPROVAL OF SPECIFIC INDIVIDUAL ITEMS NEED NOT BE OBTAINED, IF SUCH ITEMS HAVE BEEN LISTED GENERALLY, BY CATEGORY IN AN APPROVED PROGRAM. APPROVAL OF THE PROGRAM WILL CONSTITUTE APPROVAL OF ALL INDIVIDUAL ITEMS IN THE PROGRAM NOT SPECIFICALLY EXEMPTED FROM SUCH APPROVAL.

2. THE CONTRACTING OFFICER WILL ANSWER SUCH REQUEST FOR APPROVAL WITHIN TEN (10) WORKING DAYS OF HIS RECEIPT OF SUCH REQUEST BY FORWARDING ONE OF THE FOLLOWING:

A. APPROVAL

B. DISAPPROVAL

C. INFORMATION AS TO THE DATE WHEN APPROVAL OR DISAPPROVAL WILL BE FORWARDED.

B. DICA SHALL AUTHORIZE TRAPIL TO CORRESPOND DIRECTLY WITH THE CONTRACTING OFFICER ON TECHNICAL QUESTIONS CONCERNING PROGRAMS FOR MAINTENANCE AND FOR OPERATION. ONCE SUCH PROGRAMS HAVE BEEN APPROVED BY THE CONTRACTING OFFICER THEY WILL BE BINDING ON TRAPIL WHICH ALONE WILL BE RESPONSIBLE FOR THEIR FULL AND ENTIRE EXECUTION. HOWEVER PROGRAMS MAY BE MODIFIED AT ANY TIME AT THE REQUEST OF EITHER PARTY.

C. IN THE EVENT OF A HAZARD WHICH AFFECTS OR THREATENS TO AFFECT PUBLIC ORDER, PRIVATE OR PUBLIC PROPERTY, OR THE SECURITY OF THE POPULATION, TRAPIL SHALL HAVE THE RIGHT TO TAKE, WITHOUT PRIOR APPROVAL, SUCH EMERGENCY MEASURES AS TRAPIL DEEMS NECESSARY TO ASSURE SECURITY, REGARDLESS OF COSTS. IN ADDITION IN CASE OF URGENCY, TRAPIL WILL HAVE THE RIGHT TO EFFECT ANY WORK, THE EXPENSES OF WHICH WILL NOT EXCEED AN AGGREGATE AMOUNT OF 175,000 FRENCH FRANCS, WITHOUT PRIOR APPROVAL OF THE CONTRACTING OFFICER. IN EITHER CASE, TRAPIL WILL BE REQUIRED TO REPORT ACTION TAKEN TO THE CONTRACTING OFFICER BY THE MOST EXPEDITIOUS MEANS OF COMMUNICATION AVAILABLE AND CONFIRM SUCH REPORT IN WRITING WITHIN TWENTY FOUR (24) HOURS.

D. IN THE EVENT OF DISAGREEMENT BETWEEN TRAPIL AND THE CONTRACTING OFFICER, CONCERNING ANY WORK PERFORMED OR MEASURES TAKEN, PURSUANT TO PARAGRAPH B AND C OF THIS ARTICLE, TRAPIL MAY REQUEST AND SHALL BE GIVEN WRITTEN CONFIRMATION OF THE CONTRACTING OFFICER'S DECISION. TRAPIL SHALL BE ENTITLED TO INVOKE THE PROVISIONS OF ARTICLE XV HEREOF. HOWEVER, PENDING FINAL SETTLEMENT OF SUCH DISPUTES, THE DECISION OF THE CONTRACTING OFFICER SHALL PREVAIL AND TRAPIL SHALL BE REQUIRED TO CONFORM THERETO.

E. IN ANY CASE WHERE TRAPIL CONSIDERS THAT COMPLIANCE WITH THE DECISION OF THE CONTRACTING OFFICER WOULD CONSTITUTE A RISK TO PUBLIC ORDER, THE GENERAL SECURITY, THE SECURITY OF THE POPULATION, OR WOULD BE AN ILLEGAL ACT, TRAPIL SHALL HAVE THE RIGHT TO APPRISE THE APPROPRIATE AGENCY OF THE FRENCH ADMINISTRATION OF SUCH DECISION ONLY IF THE FRENCH ADMINISTRATION HAS NOT OPPOSED SUCH DECISION WITHIN 48 HOURS AFTER RECEIPT OF SUCH INFORMATION. IN THE EVENT THE FRENCH ADMINISTRATION, IN THE LEGITIMATE EXERCISE OF ITS POLICE POWERS, OPPOSES THE CONTRACTING OFFICER'S DECISION AND PRESCRIBES A CERTAIN COURSE OF ACTION TO TRAPIL, THE LATTER'S OBLIGATION TO CONFORM THERETO IS RECOGNIZED AND COSTS INCURRED BY TRAPIL PURSUANT TO SUCH ACTION ARE FULLY REIMBURSABLE. THIS, HOWEVER, IS NOT TO BE CONSTRUED AS A WAIVER OF THE RIGHT OF THE US GOVERNMENT TO CHALLENGE, AT THE APPROPRIATE LEVEL, THE DECISION OF THE FRENCH ADMINISTRATION, IF THE US GOVERNMENT DEEMS SUCH DECISION TO BE IMPROPER UNDER FRENCH LAW, UNDER EXISTING GOVERNMENTAL AGREEMENTS OR UNDER PRACTICES RECOGNIZED IN INTERNATIONAL RELATIONS.

ARTICLE VI - PERSONNEL

A. DICA WILL ASSURE THAT:

1. A. TRAPIL PERSONNEL HAVING ACCESS TO CLASSIFIED DATA CONCERNING THE PIPELINE, EMPLOYED OR TO BE EMPLOYED ON THE WORK, WILL BE SUBJECT TO SCREENING BY THE SECURITY SERVICE OF THE FRENCH ARMED FORCES IN COOPERATION WITH THE APPROPRIATE US SECURITY SERVICE.

A. 1. B. TRAPIL WILL BE RESPONSIBLE TO ALERT IMMEDIATELY THE SECURITY SERVICE OF THE FRENCH ARMED FORCES REGARDING ANY ACT OR THREATENED ACT OF SABOTAGE OR WILLFUL MISCONDUCT REGARDING THE WORK OR PROPERTY IN THE CUSTODY OF TRAPIL.

C. IF AS A RESULT OF SABOTAGE OR WILLFUL MISCONDUCT OR THE THREAT OF SUCH ACTIONS THE SECURITY SERVICE REQUIRES CERTAIN MEASURES TO BE TAKEN, PARTICULARLY IN REGARD TO PERSONNEL, TRAPIL WILL COMPLY WITH SUCH REQUIREMENTS WITHOUT DELAY.

2. TRAPIL FURNISHES COMPETENT AND RESPONSIBLE EXECUTIVE PERSONNEL ACCEPTABLE TO THE CONTRACTING OFFICER TO TRAIN AND SUPERVISE ALL PERSONNEL HIRED BY TRAPIL TO PERFORM THE WORK.

3. TRAPIL FURNISHES WHEN AND AS REQUESTED BY THE CONTRACTING OFFICER THROUGH DICA; ANY PERTINENT INFORMATION WITH RESPECT TO ITS PERSONNEL.

4. TRAPIL FURNISHES PROMPTLY AND DIRECTLY TO THE CONTRACTING OFFICER ANY INFORMATION AS TO ACTUAL OR THREATENED STRIKES OR OTHER LABOR CONFLICTS.

5. TRAPIL MAINTAINS AN UP TO DATE DETAILED PROGRAM REGARDING THE PERSONNEL COMPLEMENT AND OR ORGANIZATION TRAPIL CONSIDERS NECESSARY FOR THE PERFORMANCE OF THE WORK. THE PROGRAM PREVIOUSLY ESTABLISHED BY TRAPIL CONTAINS AN ORGANIZATIONAL CHARGE OF CATEGORIES OF PERSONNEL, THE NUMBER OF PERSONNEL WITHIN EACH CATEGORY, THE SALARY-SCALE AND THE SALARIES WHICH TRAPIL PROPOSES TO PAY TO THE PERSONNEL DEEMED REQUIRED FOR THE WORK.

6. UPON APPROVAL BY THE CONTRACTING OFFICER OF ANY PERSONNEL CHANGES IN PROGRAM SUBMITTED BY TRAPIL IN ACCORDANCE WITH PARAGRAPH A.5. OF THIS ARTICLE, TRAPIL WILL FURNISH PERSONNEL IN CONFORMANCE WITH SUCH APPROVED PROGRAM.

TRAPIL FURNISHES FOR THE APPROVAL OF THE CONTRACTING OFFICER PROPOSALS FOR ANY ANTICIPATED CHANGES TO APPROVED PERSONNEL PROGRAMS, OR CHANGES IN PAYMENT OF PERSONNEL; HOWEVER, THE CONTRACTING OFFICER CANNOT WITHHOLD HIS APPROVAL OF CHANGES IN PAYMENT OF PERSONNEL ALREADY ON THE PAYROLL, IF SUCH CHANGES ARE DUE TO ANY OF THE FOLLOWING CIRCUMSTANCES AND WITHIN THE LIMITATIONS STATED IN THIS PARAGRAPH.

A. IF A CHANGE OCCURED IN THE OFFICIAL FRENCH GOVERNMENT COST OF LIVING INDEX FOR THE AREAS CONCERNED OR IN THE SCALE OF PAYMENT USED BY THE FRENCH PETROLEUM INDUSTRY AS A WHOLE, INCLUDING PRODUCTIVITY BONUSES IN CONSONANCE WITH PREVIOUS COMPANY PAYMENTS OR POLICIES, A PROPORTIONATE CHANGE MAY BE MADE IN PAYMENT TO PERSONNEL.

B. CHANGES REQUIRED BY MANDATORY FRENCH LEGISLATION.

C. CHANGES REQUIRED BY AGREEMENTS WITH TRADE UNIONS, PROVIDED SUCH AGREEMENTS ARE APPLICABLE TO ALL OTHER SIMILAR ACTIVITIES OF TRAPIL.

D. CHANGES DUE TO THE USUAL PROMOTION AND LONGEVITY COMPENSATION POLICIES OF TRAPIL AND INDUSTRY PRACTICES.

THIS LISTING IS NOT TO BE CONSTRUED AS PRECLUDING THE CONTRACTING OFFICER FROM APPROVING PROPOSED CHANGES IN PAYMENTS OTHER THAN THOSE LISTED IF HE JUDGES SUCH CHANGES TO BE REASONABLE.

B. UPON WRITTEN REQUEST OF THE CONTRACTING OFFICER TO DICA, DICA SHALL REQUIRE TRAPIL TO REMOVE FROM ANY WORK CALLED FOR UNDER THIS LOC FORM 101, ANY PERSON WHO HAS BEEN FOUND BY THE CONTRACTING OFFICER TO BE INCOMPETENT, INSUBORDINATE OR DISHONEST, OR WHOSE CONTINUED PRESENCE ON THE PIPELINE HE DEEMS TO BE CONTRARY TO THE BEST INTEREST OF THE US GOVERNMENT. THE CONTRACTING OFFICER WILL FURNISH DICA PERTINENT INFORMATION IN SUBSTANTIATION OF SUCH REQUEST, SO AS TO ENABLE DICA TO COMPLY THEREWITH AND, AT THE SAME TIME, CONFORM TO REQUIREMENTS OF APPLICABLE FRENCH LAW.

ARTICLE VII - PROCUREMENT

A. DICA WILL REQUIRE TRAPIL TO FURNISH FOR CONSIDERATION AND APPROVAL BY THE CONTRACTING OFFICER, A COMPLETE LIST OF EQUIPMENT, MATERIALS, SUPPLIES, FACILITIES AND SERVICES REQUIRED FOR PERFORMANCE OF THE WORK CONTAINING SUCH INFORMATION AS TO PURCHASE, RENTAL FROM THIRD PARTIES, OR RENTAL OF TRAPIL-OWNED EQUIPMENT AND FACILITIES. THIS INFORMATION SHALL INCLUDE, BUT NOT BE LIMITED TO DATA CONCERNING ESTIMATED COSTS, AVAILABILITY, PROPOSED USE, DELIVERY DATES AND A RECOMMENDATION AS TO WHAT TRAPIL DEEMS THE MOST ADVANTAGEOUS SOURCES. IN THE EVENT THE CONTRACTING OFFICER CONSIDERS THE RENTAL OF TRAPIL-OWNED EQUIPMENT AND FACILITIES TO BE IN THE BEST INTEREST OF THE US GOVERNMENT, THE RENTAL PRICE AGREED UPON WITH TRAPIL SHALL BE DEEMED TO REPRESENT THE PROPER AND GOVERNING "ALLOWABLE COSTS" FOR RENTAL OF SUCH EQUIPMENT AND FACILITIES AND SHALL BE REIMBURSED AS AN "AUTHORIZED EXPENDITURE."

B. NOTWITHSTANDING THE RECOMMENDATIONS OF TRAPIL WITH RESPECT TO SOURCES FOR SUCH OF THE EQUIPMENT, MATERIALS, SUPPLIES, FACILITIES AND SERVICES REFERRED TO IN PARAGRAPH A OF THIS ARTICLE, AS THE CONTRACTING OFFICER AGREES TO BE NECESSARY FOR THE WORK, THE LATTER MAY PROVIDE ALL OR PART OF THE SAME FROM US GOVERNMENT RESOURCES.

ARTICLE VIII - DRAWINGS AND MAPS

DICA WILL REQUIRE TRAPIL TO FURNISH, UPON REQUEST OF THE CONTRACTING OFFICER, DRAWINGS, PRINTS OR MAPS RELATING TO THE PROJECT, AND TO FURNISH ANY NEW OR ADDITIONAL DRAWINGS OR PRINTS OR MAPS THAT THE CONTRACTING OFFICER MAY REQUIRE FROM TIME TO TIME.

ARTICLE IX - INSPECTIONS

IN ACCORDANCE WITH THE AGREEMENT CONTAINED IN THE EXCHANGE OF LETTERS BETWEEN MCL AND HEADQUARTERS UNITED STATES EUROPEAN COMMAND, DATED 4 JUNE 1955 AND 1 JUNE 1955 RESPECTIVELY, GENERAL PROVISION NO 5 OF THIS LOC FORM 101 IS HEREBY DELETED AND THE FOLLOWING WILL APPLY WITH RESPECT TO INSPECTIONS:

A. THE FRENCH GOVERNMENT IS RELIEVED OF RESPONSIBILITY FOR QUALITATIVE AND QUANTITATIVE INSPECTIONS.

B. THE CONTRACTING OFFICER IS RESPONSIBLE FOR QUALITATIVE AND QUANTITATIVE INSPECTIONS AND MAY INSPECT AND TEST ANY OF THE SUPPLIES (WHICH TERM INCLUDES, BUT IS NOT LIMITED TO, RAW MATERIALS, COMPONENTS, INTERMEDIATE ASSEMBLIES, AND END PRODUCTS) AND SERVICES TO INSURE CONFORMITY WITH THE PROVISIONS OF THIS LOC FORM 101. A QUALIFIED REPRESENTATIVE OF TRAPIL WILL BE INVITED TO ATTEND SUCH INSPECTIONS.

C. INSPECTIONS AND TESTS MAY BE MADE AT SUCH TIMES AND PLACES AS MAY BE DETERMINED TO BE NECESSARY OR ADVISABLE BY EITHER TRAPIL OR THE CONTRACTING OFFICER.

D. IN CASE PERFORMANCE OF THE WORK BY TRAPIL IS FOUND TO BE UNSATISFACTORY BECAUSE OF DEFECTIVE MATERIAL OR WORKMANSHIP, OR IN ANY OTHER RESPECT NOT IN ACCORDANCE WITH THE SPECIFICATIONS, THE CONTRACTING OFFICER SHALL NOTIFY TRAPIL AND DICA IN WRITING THAT THE SERVICE, PRODUCT OR WORKMANSHIP IS NOT ACCEPTABLE TO THE UNITED STATES. DICA WILL TAKE ALL NECESSARY ACTION TO INSURE THAT DEFECTS ARE CORRECTED AS QUICKLY AS POSSIBLE. THE RESULTING COSTS WILL BE INCLUDED IN THE ITEMIZED EXPENDITURES TO BE REIMBURSED BY THE US GOVERNMENT, EXCEPT IF THE DEFICIENCIES FOUND ARE DUE TO WILLFUL MISCONDUCT OR LACK OF GOOD FAITH ON THE PART OF ANY OF THE DIRECTORS OR "CADRES" OF TRAPIL ENUMERATED IN THE LIST TO BE FURNISHED BY TRAPIL PURSUANT TO B OF ARTICLE X.

E. IF TRAPIL FAILS TO PROCEED PROMPTLY WITH THE CORRECTION OF THE DEFICIENCIES, THE CONTRACTING OFFICER MAY THROUGH DICA, CAUSE SUCH DEFICIENCIES TO BE CORRECTED BY ANY APPROPRIATE MEANS. THE COSTS RESULTING THEREFROM WILL BE CHARGED AS SPECIFIED IN PARAGRAPH D, OF THIS ARTICLE.

F. TRAPIL WILL BE REQUIRED BY DICA TO ESTABLISH AMD EXECUTE AN ADEQUATE INSPECTION SYSTEM COVERING THE PERFORMANCE OF THE WORK. COMPLETE RECORDS OF ALL INSPECTION SHALL BE MAINTAINED AND SHALL BE AVAILABLE TO THE CONTRACTING OFFICER FOR SUCH PERIODS AS ARE SPECIFIED IN C OF ARTICLE XIII OF THIS FORM 101.

ARTICLE X - LIABILITY OF TRAPIL

A. EXCEPT IN THE CASE OF WILLFUL MISCONDUCT OR LACK OF GOOD FAITH ON THE PART OF TRAPIL'S DIRECTORS OR "CADRES," TRAPIL WILL BE RELIEVED OF ALL RESPONSIBILITY EVEN IN THE CASES OF GROSS NEGLIGENCE, CONCERNING THE WORK CALLED FOR HEREIN OR REGARDING DAMAGE TO OR THEFT OF US GOVERNMENT PROPERTY IN THE POSSESSION OF TRAPIL. HOWEVER, WHEN DUE TO THE WILLFUL MISCONDUCT OR LACK OF GOOD FAITH ON THE PART OF ITS DIRECTORS OR "CADRES" ANY LIABILITY ARISES AGAINST TRAPIL, SUCH LIABILITY WILL BE PAYABLE SOLELY BY TRAPIL AND WILL NOT BE REIMBURSABLE BY THE US GOVERNMENT.

B. THE DIRECTORS AND "CADRES" FOR WHOSE ACTS TRAPIL WILL BEAR RESPONSIBILITIES MENTIONED UNDER PARAGRAPH A OF THIS ARTICLE, WILL BE ENUMERATED IN A LIST TO BE FURNISHED BY TRAPIL TO THE CONTRACTING OFFICER. ANY SUBSEQUENT CHANGES TO THIS LIST WILL BE FURNISHED THE CONTRACTING OFFICER IN WRITING.

C. AS TO CLAIMS OF THIRD PARTIES FOR DAMAGES ARISING FROM THE WORK CALLLED FOR HEREUNDER, TRAPIL SHALL BE REIMBURSED THE ACTUAL COSTS INCURRED IN SETTLEMENT OF THOSE FOR WHICH TRAPIL MAY BE HELD LEGALLY LIABLE, SUBJECT TO THE FOLLOWING PROVISIONS:

1. TRAPIL SHALL BE REQUIRED TO TAKE OUT SUCH INSURANCE AGAINST THIRD PARTY RISKS AS IS DECIDED UPON BY THE CONTRACTING OFFICER AND TRAPIL WILL BE REIMBURSED FOR THE COST OF THE PREMIUMS THEREOF.

2. TRAPIL MAY MAKE AMIABLE SETTLEMENTS OF THIRD PARTY DAMAGE CLAIMS NOT COVERED BY INSURANCE AND NOT IN EXCESS OF 35,000 FRENCH FRANCS AND SHALL BE REIMBURSED FOR THE COSTS OF SUCH SETTLEMENTS.

3. TRAPIL SHALL NOT ADMIT LIABILITY NOR OFFER AMIABLE SETTLEMENT OF THIRD PARTY DAMAGE CLAIMS NOT COVERED BY INSURANCE AND IN EXCESS OF 35,000 FRENCH FRANCS WITHOUT PRIOR CONSULTATION WITH THE CONTRACTING OFFICER.

4. THE CONTRACTING OFFICER MAY AT ANY TIME, BY WRITTEN NOTICE THROUGH DICA TO TRAPIL, REVISE UPWARD OR DOWNWARD THE AMOUNT OF 35,000 FRENCH FRANCS, ESTABLISHED IN 2 AND 3 OF THIS PARAGRAPH.

5. IN THE EVENT OF A LAWFUL ADJUDICATION FOR DAMAGES TO THIRD PARTIES, THE UNITED STATES GOVERNMENT WILL REIMBURSE THE FRENCH GOVERNMENT THE AMOUNT OVER AND ABOVE THAT COVERED BY INSURANCE.

D. IF, DURING THE PERIOD OF THIS LOC FORM 101, PETROLEUM PRODUCTS OWNED BY THE US GOVERNMENT, ARE STORED OR HANDLED IN ANY OF THE INSTALLATIONS PLACED IN TRAPIL'S CUSTODY, ANY LOSS OF SUCH PRODUCTS, FOR WHATEVER REASON, WILL NOT BE CHARGED TO TRAPIL, SUBJECT TO THE EXCEPTION CONTAINED IN PARAGRAPH A. OF THIS ARTICLE.

ARTICLE XI - PRINCIPLES APPLICABLE TO REIMBURSEMENT

A. TRAPIL WILL BE COMPLETELY REIMBURSED, WITHOUT PROFIT OR LOSS, FOR ANY AUTHORIZED EXPENDITURES COVERING ALLOWABLE COSTS INCURRED IN ACCORDANCE WITH THE PROVISIONS OF THIS LOC FORM 101.

B. COSTS INCURRED BY TRAPIL, IN ACCORDANCE WITH THE PRINCIPLE OF NON-PROFIT (WHICH IS INTERPRETED TO MEAN NO-PROFIT--- NO-LOSS) WILL BE REIMBURSED AS "AUTHORIZED EXPENDITURES," NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH C OF THIS ARTICLE PROVIDED THAT SUCH COSTS WERE INCURRED.

1. PURSUANT TO THE INTER-GOVERNMENTAL AGREEMENTS.

2. FURTHER PROVIDED THAT THEY ARE APPROVED BY DICA.

C. THE TERM "AUTHORIZED EXPENDITURES," AS USED IN PARAGRAPH A OF THIS ARTICLE, COVERS ONLY ,ALLOWABLE COSTS" AS DISTINGUISHED FROM "UNALLOWABLE COSTS."

1. "ALLOWABLE COSTS" ARE THOSE COSTS WHICH PERTAIN DIRECTLY OR INDIRECTLY TO THE PERFORMANCE OF THE WORK CALLED FOR BY THIS LOC FORM 101, AND SUCH OTHER COSTS AS ARE SPECIFICALLY APPROVED IN WRITING BY THE CONTRACTING OFFICER.

2. THE FOLLOWING ARE EXAMPLES OF "UNALLOWABLE COSTS: "

B. AMORTIZATION OF DEPRECIATION OF (1) UNREALIZED APPRECIATION OF VALUE OF ASSETS, OR (2) ASSETS FULLY AMORTIZED OR DEPRECIATED ON THE CONTRACTOR'S BOOKS OF ACCOUNT.

C. BAD DEBTS (INCLUDING EXPENSE OF COLLECTION) AND RESERVES FOR SUCH DEBTS.

C. 2. D. COMMISSIONS AND BONUSES (UNDER WHATEVER NAME) IN CONNECTION WITH OBTAINING OR NEGOTIATING A GOVERNMENT CONTRACT.

E. CONTINGENCY RESERVES. HOWEVER, TRAPIL HAS AN ESTABLISHED "EMPLOYEE DEPARTURE RESERVE" TO SATISFY REQUIREMENTS OF FRENCH LAW. CONTRIBUTIONS TO SUCH "EMPLOYEE DEPARTURE RESERVE" FUND FOR EMPLOYEES DIRECTLY OR INDIRECTLY INVOLVED IN WORK UNDER THIS LOC FORM 101 WILL BE ALLOWABLE COSTS.

F. CONTRIBUTIONS AND DONATIONS.

G. DIVIDEND PAYMENTS.

H. ENTERTAINMENT.

I. GENERAL RESEARCH, UNLESS SPECIFICALLY PROVIDED FOR ELSEWHERE IN THIS LOC FORM 101.

J. INTEREST ON BORROWINGS, BOND DISCOUNT AND EXPENSES, AND FINANCING CHARGES. HOWEVER IT IS AGREED TO ALLOW AS A PART OF OVERHEAD EXPENSES THE PROPORTIONATE SHARE OF INTEREST CHARGES ON THAT PORTION OF THE FUNDED DEBT INCURRED BY TRAPIL, PRIOR TO OR DURING THE EXECUTION OF THIS LOC FORM 101, FOR THE PURCHASE OF INSTALLED FIXED ASSETS AT THE MAIN OFFICE, PROVIDED THAT SUCH INSTALLED FIXED ASSETS ARE UTILIZED DIRECTLY OR INDIRECTLY IN CONNECTION WITH THE WORK.

K. LEGAL, ACCOUNTING AND CONSULTING SERVICES AND RELATED EXPENSES INCURRED IN CONNECTION WITH ORGANIZATION AND RE-ORGANIZATION, PROSECUTION OF PATENT INFRINGEMENT LITIGATION, DEFENSE OR ANTI-TRUST SUITS, AND THE PROSECUTION OF CLAIMS AGAINST THE UNITED STATES.

L. LOSSES FROM SALES OR EXCHANGES OF CAPITAL ASSETS, INCLUDING INVESTMENTS.

M. LOSSES NOT RELATED TO THIS LOC FORM 101.

N. SELLING AND DISTRIBUTION ACTIVITIES NOT RELATED TO THIS LOC FORM 101.

ARTICLE XII - PROCEDURES FOR REIMBURSEMENT

A. DICA WILL ASSURE THAT TRAPIL SUBMITS FOR THE CONSIDERATION AND APPROVAL OF THE CONTRACTING OFFICER THE FOLLOWING ESTIMATES OF EXPENSES, BROKEN DOWN BY MONTH, EXPECTED TO BE INCURRED BY TRAPIL IN THE PERFORMANCE OF THE WORK HEREUNDER:

1. AN INITIAL ESTIMATE TO COVER THE WHOLE PERIOD OF THIS LOC FORM 101.

2. AT THE TIME OF ANY EXTENSION OF THE DURATION OF THIS LOC FORM 101 BY AMENDMENT THERETO, AN ESTIMATE TO COVER THE WHOLE PERIOD OF SUCH EXTENDED DURATION.

3. WHENEVER, IN THE OPINION OF EITHER TRAPIL OR THE CONTRACTING OFFICER, CIRCUMSTANCES INDICATE THAT THE ESTIMATE COVERING ANY GIVEN MONTH IS NO LONGER ACCURATE, TRAPIL SHALL SUBMIT ON ITS OWN INITIATIVE OR AT THE REQUEST OF THE CONTRACTING OFFICER, A REVISED ESTIMATE, THIRTY (30) DAYS PRIOR TO THE MONTH TO BE COVERED BY THE REVISED ESTIMATE.

4. ALL ESTIMATES SHALL BE SUBMITTED IN THE SAME DETAIL AS PRESCRIBED IN PARAGRAPH C OF THIS ARTICLE.

B. 1. TRAPIL SHALL BE REQUIRED TO SUBMIT TO DICA INVOICES COVERING MONTHLY PERIODS, WITHIN 30 DAYS, (CALENDAR) AFTER THE END OF THE MONTH. THE AMOUNT INVOICED WILL BE SUBSTANTIATED BY DOCUMENTS SUCH AS INVOICES FROM SUPPLIERS, PAYROLL OF PERSONNEL, TRAVEL AUTHORIZATIONS, ETC. TRAPIL SHALL BE REQUIRED TO CERTIFY ON EACH ORIGINAL INVOICE: "I CERTIFY THAT THE ABOVE BILL IS CORRECT AND JUST AND THAT PAYMENT THEREFOR HAS NOT BEEN RECEIVED." AS REGARDS THE NUMBER OF COPIES OF INVOICES AND SUPPORTING DOCUMENTS DESCRIBED HEREIN WHICH MAY BE REQUIRED BY DICA FROM TRAPIL, THERE SHALL BE INCLUDED, THE REQUIREMENT OF FOUR COPIES WHICH SHALL BE FURNISHED THE CONTRACTING OFFICER THRU DICA. ONE OF THESE FOUR COPIES AND ITS SUPPORTING DOCUMENTS WILL BE COMPOSED OF ORIGINAL SIGNED INSTRUMENTS.

2. TWO COPIES OF THE INVOICES WITH SUPPORTING DOCUMENTS SUBMITTED TO DICA WILL SIMULTANEOUSLY BE SENT DIRECTLY TO HEADQUARTERS PETROLEUM DISTRIBUTION COMMAND AND SHALL SERVE THE PURPOSE OF ADVANCE INFORMATION IN ORDER TO REDUCE TO A MINIMUM THE TIME NEEDED FOR PROCESSING OF THE ORIGINAL INVOICE WHEN THIS ORIGINAL INVOICE IS TRANSMITTED TO THE CONTRACTING OFFICER BY DICA.

C. 1. TRAPIL SHALL BE REQUIRED TO SUBMIT INVOICES IN THE FOLLOWING MANNER:

A. DETAILED ITEMIZATION OF EXPENSE EXCLUSIVE OF TAXES FROM WHICH THE US GOVERNMENT IS EXEMPT;

B. DETAILED ITEMIZATION OF ALL TAXES (BY NUMBER, PERCENTAGE, AND AMOUNT) FROM WHICH THE US GOVERNMENT IS EXEMPT AND WHICH HAVE NOT BEEN INCLUDED IN THE COST CITED;

C. THE GROSS COST WHICH WOULD HAVE BEEN INVOICED, IF THE US GOVERNMENT HAD NOT BEEN EXEMPTED FROM PAYMENT OF THESE TAXES.

2. THE DETAILED ITEMIZATION PRESCRIBED BY PARAGRAPH C. 1. A. OF THIS ARTICLE SHALL BE AS FOLLOWS:

A. EXPENDITURES SHALL BE LISTED SEPARATELY FOR THE TRAPIL MAIN OFFICE AND EACH REGIONAL OFFICE.

B. TRAPIL'S EXPENDITURES RELATIVE TO PERSONNEL WORKING DIRECTLY AND FULL TIME ON THE PIPELINE OR SEGMENTS THEREOF. THESE EXPENDITURES WILL INCLUDE SALARIES, SOCIAL SECURITY CHARGES, PER DIEM, RENTAL ALLOWANCES (MONETARY CATEGORIES SET ACCORDING TO THE POSITION OR GRADE OF THE EMPLOYEE AND HOUSING CONDITIONS OF THE PARTICULAR AREA, IN CONSONANCE WITH THE POLICY OF TRAPIL AFFORDED TO ITS OTHER EMPLOYEES), AND OTHER GERMANE EXPENSES. THE METHOD USED BY TRAPIL TO COMPUTE THESE EXPENDITURES SHALL BE SUBMITTED FOR THE CONTRACTING OFFICER'S APPROVAL. IF SUCH APPROVAL IS GIVEN TO THE METHOD OF COMPUTATION, A BREAKDOWN OF ALL THE ELEMENTS CONTAINED IN SUCH EXPENDITURES WILL BE SHOWN ON THE INVOICE ONLY TO THE EXTENT REQUIRED BY THE CONTRACTING OFFICER.

C. 2. C. TRAPIL'S EXPENDITURES RELATIVE TO PERSONNEL OF THE MAIN OFFICE STAFF (WITH THE EXCEPTION OF MANAGEMENT PERSONNEL) WORKING FULL TIME OR AN APPRECIABLE AMOUNT OF TIME ON THE PERFORMANCE OF THE WORK.

D. AMOUNTS PAID TO SUPPLIERS FOR MATERIALS, SUPPLIES, EQUIPMENT AND SERVICES ACQUIRED BY TRAPIL FOR THE PERFORMANCE OF THE WORK. INVOICES RECEIVED FROM SUPPLIERS SHALL ITEMIZE ALL TAXES.

E. PREMIUMS FOR INSURANCE CARRIED PURSUANT TO MANDATORY FRENCH LAW OR APPROVED OR DIRECTED BY THE CONTRACTING OFFICER.

F. MISCELLANEOUS CHARGES AND GENERAL LOCAL EXPENSES OF TRAPIL'S REGIONAL OFFICES, INCLUDING BUT NOT LIMITED TO RENT, POSTAL EXPENSES, OFFICE SUPPLIES, COMMUNICATIONS AND UTILITIES.

G. EXPENDITURES MADE DIRECTLY BY THE MAIN OFFICE OF TRAPIL FOR WORK CALLED FOR BY THIS LOC FORM 101.

H. EXPENDITURES MADE, OTHER THAN PER DIEM, FOR TRAVEL OF PERSONNEL.

I. EXPENDITURES MADE FOR TRANSPORTATION OF MATERIALS, SUPPLIES AND EQUIPMENT.

J. EXPENDITURES MADE FOR MAINTENANCE, REPAIR AND CONSTRUCTION PROJECTS.

K. EXPENDITURES MADE FOR RENT OR RENTAL CHARGES FOR WAREHOUSES, WORKSHOPS, SITES AND SIMILAR FACILITIES.

L. THE PROPORTIONATE SHARE OF THE GENERAL EXPENSES OF THE MAIN OFFICE CHARGEABLE AGAINST THIS LOC FORM 101. THE COMPUTATION OF THESE EXPENDITURES WILL BE MADE IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH D. 3. OF THIS ARTICLE.

D. FOR THE COMPUTATION OF AMOUNTS INVOICED, THE FOLLOWING WILL APPLY:

1. IN RESPECT TO VEHICLES, TRAPIL IS ENTITLED TO REIMBURSEMENT FOR:

A. TRAPIL-OWNED VEHICLES: DEPRECIATION ON SUCH VEHICLES WILL BE ALLOWED AT A RATE IN ACCORDANCE WITH FRENCH INSURANCE PRACTICES. OPERATING COSTS WILL BE REIMBURSED PROVIDED THAT TRAPIL OBTAINS THE APPROVAL OF THE CONTRACTING OFFICER AS TO THE RATES AND METHODS OF COMPUTATIONS.

B. VEHICLES RENTED BY TRAPIL FOR COMMERCIAL FIRMS: RENTAL CHARGES INCURRED WILL BE REIMBURSED.

C. VEHICLES BELONGING TO TRAPIL EMPLOYEES: TRAPIL WILL BE REIMBURSED FOR ACTUAL COST PAID EMPLOYEES FOR THE USE OF SUCH VEHICLES, PROVIDED THAT TRAPIL OBTAINS THE APPROVAL OF THE CONTRACTING OFFICER OF THE RATES AND METHOD OF COMPUTATION OF SUCH COSTS.

2. THE RATES OF PAY AND ALLOWANCES FOR PERSONNEL EMPLOYED BY TRAPIL IN THE MAIN OFFICE WILL BE BASED ON INDEX CARDS WHICH ARE TO BE POSTED DAILY AT THE MAIN OFFICE AND WHICH SHALL SHOW THE TIME SPENT ON THE WORK UNDER THIS FORM 101 AS WELL AS THE TIME SPENT ON OTHER CONTRACTS OF TRAPIL. THE COMPUTATION OF THESE EXPENDITURES IS FURTHER GOVERNED BY THE PROVISIONS OF PARAGRAPH C. 2. B. OF THIS ARTICLE.

3. THE PROPORTIONATE SHARE OF THE MAIN OFFICE GENERAL OVERHEAD EXPENSES (INCLUDING SALARIES OF MANAGEMENT PERSONNEL IN THE MAIN OFFICE) CHARGEABLE TO THIS LOC FORM 101 SHALL, FOR THE PERIOD OF THIS LOC FORM 101, BE FIXED AT THE FOLLOWING PERCENTAGES, PROVIDED THAT SUCH PERCENTAGES ARE SUBSTANTIATED BY JUSTIFICATION ACCEPTABLE TO THE CONTRACTING OFFICER:

A. 46 PERCENT OF THE AMOUNT OF SALARIES PAID TO PERSONNEL WORKING DIRECTLY ON THE PIPELINE, ANY SEGMENTS THEREOF, OR IN TRAPIL'S REGIONAL OFFICES:

B. 63 PERCENT OF THE AMOUNT OF THE SALARIES PAID PERSONNEL OF THE MAIN OFFICE STAFF WHO ARE ENGATED FULL TIME OR AN APPRECIABLE AMOUNT OF TIME IN THE PERFORMANCE OF WORK PURSUANT TO THIS LOC FORM 101, AS DESCRIBED IN PARAGRAPH C. 2. C. OF THIS ARTICLE.

C. THE PERCENTAGE REFERRED TO IN A. AND B. OF THIS SUB-PARAGRAPH MAY BE REVISED AT THE REQUEST OF THE CONTRACTING OFFICER, DICA, OR TRAPIL ON 30 JUNE 1957 OR SOONER, IF IT IS DETERMINED UPON AUDIT THAT A PROFIT OR LOSS HAS RESULTED OR WILL RESULT THEREFROM. IF SUCH A DETERMINATION HAS BEEN MADE, A SUITABLE ADJUSTMENT WILL BE MADE IN SUBSEQUENT PAYMENTS TO COMPENSATE FOR SUCH PROFIT OR LOSS; HOWEVER, NO COMPENSATION FOR ANY LOSS CAN BE CLAIMED BY TRAPIL IF THE LATTER HAS FAILED TO SECURE THE CONTRACTING OFFICER'S APPROVAL FOR AN INCREASE OF THE ABOVE MENTIONED PERCENTAGES.

E. PROMPTLY UPON RECEIPT OF AN ORIGINAL MONTHLY INVOICE SUBMITTED IN ACCORDANCE WITH THIS ARTICLE, THE CONTRACTING OFFICER WILL ISSUE AN LOC FORM 102 COVERING 80 PERCENT OF THE APPROVED MONTHLY ESTIMATE REFERRED TO UNDER PARAGRAPH A. OF THIS ARTICLE, OR 80 PERCENT OF THE AMOUNT INVOICED, WHICHEVER IS LESS. AN LOC FORM 102 COVERING THE REMAINING AMOUNT WILL BE ISSUED BY THE CONTRACTING OFFICER UPON SATISFACTORY VERIFICATION BY HIM OF THE TOTAL AMOUNT OF THE INVOICE WITHIN A REASONABLE TIME.

ARTICLE XIII - RECORDS AND AUDIT

A. DICA WILL ASSURE THAT TRAPIL MAINTAINS BOOKS, RECORDS, DOCUMENTS AND OTHER EVIDENCE PERTAINING TO THE COST AND EXPENDITURES TO THE EXTENT AND IN SUCH DETAIL AS WILL PROPERLY REFLECT ALL COSTS AND EXPENSES, DIRECT AND INDIRECT, OF MANAGEMENT, SUPERVISION, LABOR, ACCOUNTING, MATERIALS, EQUIPMENT, SUPPLIES, RENTALS AND SERVICES AND OTHER COSTS AND EXPENSES OF WHATEVER NATURE, FOR WHICH PAYMENT IS CLAIMED. TRAPIL'S ACCOUNTING PROCEDURES AND PRACTICES SHALL BE SUBJECT TO THE APPROVAL OF THE CONTRACTING OFFICER, PROVIDED HOWEVER, THAT NO MATERIAL CHANGE WILL BE REQUIRED TO BE MADE IN TRAPIL'S PROCEDURES AND PRACTICES IF THEY CONFORM TO GENERALLY ACCEPTED ACCOUNTING PRACTICES AND THE COSTS AND EXPENSES PROPERLY APPLICABLE TO THIS LOC FORM 101 ARE READILY ASCERTAINABLE THEREFROM. UNITED STATES GOVERNMENT DESIGNATED AUDITORS SHALL HAVE THE RIGHT TO PARTICIPATE IN THE WORK PERFORMED BY THE AUDITORS DESIGNATED BY THE FRENCH GOVERNMENT TO EXAMINE AND INSPECT ALL APPLICABLE BOOKS OF ACCOUNTS, RECORDS, DOCUMENTS AND FILES MAINTAINED BY TRAPIL AND WHICH ARE PERTINENT TO THIS CONTRACT.

A. THIS UNITED STATES AUDITOR'S PARTICIPATION, WITHOUT IN ANY WAY LIMITING OR AFFECTING THE RESPONSIBILITIES OF FRENCH GOVERNMENT AUDITORS IN RESPECT TO THE MARCHE ARISING FROM THIS LOC FORM 101, IS DESIGNATED TO FACILITATE THE FLOW OF SUCH INFORMATION AS IS NECESSARY, FOR THE UNITED STATES GOVERNMENT AS A BASIS FOR REIMBURSING THE FRENCH GOVERNMENT.

B. WHEN VERIFICATION OF RECORDS IS MADE, EITHER UPON EXPIRATION OF THE LOC FORM 101 OR AT AN EARLIER TIME, AND A DETERMINATION IS MADE AS TO THE CORRECTNESS, PROPRIETY AND ALLOWABILITY OF THE COST INCURRED BY TRAPIL, AND SUCH DETERMINATION REVEALS EITHER A LOSS OR A PROFIT, SUCH LOSS OR PROFIT WILL BE COMPENSATED FOR EITHER BY ADDITIONAL REIMBURSEMENT TO TRAPIL OR BY REIMBURSEMENT FROM TRAPIL AS THE CASE MAY BE. IF TRAPIL IS CALLED UPON TO CONTINUE WORK FOR THE BENEFIT OF THE US GOVERNMENT, EITHER PURSUANT TO ANOTHER LOC FORM 101 OR PURSUANT TO A DIRECT CONTRACT, REIMBURSEMENT DUE THE US GOVERNMENT FROM TRAPIL MAY BE ACCOMPLISHED BY WITHHOLDING FROM PAYMENTS DUE TO TRAPIL UNDER ANY SUCH FUTURE CONTRACTS.

C. ANY INFORMATION OBTAINED FROM THE VERIFICATION OF THE BOOKS WILL BE TREATED AS CONFIDENTIAL BY ALL US PERSONNEL CONCERNED.

D. ALL RECORDS WHICH RELATE TO PERFORMANCE OF THE WORK SHALL BE RETAINED BY TRAPIL FOR A PERIOD OF NOT LESS THAN FIVE (5) YEARS FROM THE DATE OF COMPLETION OF THE WORK.

ARTICLE XIV - CHANGES

GENERAL PROVISION NO 4 OF THIS LOC FORM 101 IS DELETED AND THE FOLLOWING WILL APPLY IN LIEU THEREOF:

A. THE CONTRACTING OFFICER MAY AT ANY TIME BY WRITTEN ORDER THROUGH DICA MAKE CHANGES WITHIN THE GENERAL SCOPE OF THIS LOC FORM 101; IF SUCH CHANGES ARE ORDERED, CORRESPONDING AMENDMENTS TO THIS LOC FORM 101 SHALL BE MADE.

B. THE CONTRACTING OFFICER MAY AT ANY TIME REQUIRE CHANGES IN ANY PROGRAM SUBMITTED BY TRAPIL, EVEN THOUGH HE MAY HAVE PREVIOUSLY APPROVED SUCH PROGRAMS. TRAPIL SHALL BE REQUIRED TO CONFORM TO SUCH REQUESTED CHANGES IN PROGRAMS.

C. ANY DISAGREEMENT ARISING OVER CHANGES COVERED IN PARAGRAPH A. OR B. OF THIS ARTICLE SHALL BE HANDLED IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE XV HEREOF.

D. CHANGES ORDERED PURSUANT TO PARAGRAPH A. OR B. OF THIS ARTICLE WILL BE BINDING ON TRAPIL WITHIN THE LIMITS SPECIFIED BELOW. IF SUCH CHANGES EXCEED THESE LIMITS, THEY SHALL BE BINDING ON TRAPIL ONLY WITH THE LATTER'S CONSENT;

1. AN INCREASE OR DECREASE OF 20 PERCENT IN THE NUMBER OF PERSONNEL SPECIFIED IN APPROVED ESTIMATES;

2. AN INCREASE OR DECREASE OF 20 PERCENT IN THE AMOUNT SPECIFIED IN APPROVED ESTIMATES.

NOTWITHSTANDING THE PROVISIONS OF THIS PARAGRAPH, THE US GOVERNMENT RETURNS THE RIGHT TO TERMINATE THIS LOC FORM 101 PURSUANT TO GENERAL PROVISION NO 13 HEREOF.

ARTICLE XV - DISPUTES

IN THE EVENT A DISAGREEMENT CONCERNING THE PERFORMANCE OF THE WORK ARISES BETWEEN OR AMONG DICA, TRAPIL AND THE CONTRACTING OFFICER, AND SUCH DISAGREEMENT CANNOT BE SETTLED TO THE MUTUAL SATISFACTION OF THE PARTIES CONCERNED, THE PROCEDURES SET FORTH IN ARTICLE V "CONTROVERSIES" OF THE "AGREEMENT RELATING TO THE PROCUREMENT OF SUPPLIES, SERVICES, AND FACILITIES FROM THE FRENCH ECONOMY FOR OPERATION OF THE LINE OF COMMUNICATIONS ACROSS FRANCE," DATED 14 DECEMBER 1950 OR IN THE APPLICABLE PROVISION OF ANY SUBSEQUENTLY INTER-GOVERNMENTAL AGREEMENT SUPERSEDING THIS AGREEMENT, WILL APPLY. MORE SPECIFICALLY, IF EITHER DICA OR THE CONTRACTING OFFICER DETERMINES THAT THE DISAGREEMENT CANNOT BE SETTLED TO THEIR MUTUAL SATISFACTION BETWEEN THEM, THIS DETERMINATION WILL BE CONVEYED TO THE OTHER PARTY AND WITHIN 24 HOURS THEREAFTER DICA WILL INFORM THE CHIEF OF THE FRENCH CENTRAL LIAISON MISSION (MCL) AND THE CONTRACTING OFFICER WILL INFORM THE COMMANDING GENERAL, HQS USAREUR COMZ OF THE DISAGREEMENT, TOGETHER WITH PERTINENT INFORMATION AND DOCUMENTATION. PENDING A DECISION PURSUANT TO ARTICLE V,"CONTROVERSIES," OF THE "AGREEMENT RELATING TO THE PROCUREMENT OF SUPPLIES, SERVICES AND FACILITIES FROM THE FRENCH ECONOMY FOR OPERATION OF THE LINE OF COMMUNICATIONS ACROSS FRANCE," DATED 14 DECEMBER 1950 OR TO THE APPLICABLE PROVISION OF ANY SUBSEQUENT INTER-GOVERNMENTAL AGREEMENT SUPERSEDING THIS AGREEMENT, DICA SHALL REQUIRE TRAPIL TO PROCEED DILIGENTLY WITH THE PERFORMANCE OF THE WORK IN ACCORDANCE WITH THE INSTRUCTIONS OF THE CONTRACTING OFFICER, WITH THE SOLE EXCEPTION OF THE PROVISIONS OF PARAGRAPH E. OF ARTICLE V HEREOF.

ARTICLE XVI - DELAYS-DEFICIENCIES

TRAPIL SHALL BE HELD LIABLE FOR DELAYS AND DEFICIENCIES IN THE PERFORMANCE OF THE WORK ONLY IN THE CASE OF WILLFUL MISCONDUCT AND LACK OF GOOD FAITH ON THE PART OF ITS DIRECTORS OR "CADRES" AS ENUMERATED ON THE LIST FURNISHED PURSUANT TO PARAGRAPH B OF ARTICLE X HEREOF.

ARTICLE XVII - INSURANCE

A. TRAPIL SHALL BE REQUIRED TO INFORM THE CONTRACTING OFFICER OF ANY INSURANCE IN ADDITION TO THAT SPECIFICALLY PROVIDED FOR IN PARAGRAPH C OF ARTICLE X HEREOF, WHICH TRAPIL PROPOSES TO MAINTAIN IN CONNECTION WITH THE PERFORMANCE OF THE WORK, INCLUDING SUCH INSURANCE AS IS MANDATORY UNDER FRENCH LAW.

B. NO REIMBURSEMENT WILL BE MADE FOR THE COST OF ANY INSURANCE MAINTAINED EXCEPT FOR INSURANCE MANDATORY BY FRENCH LAW OR APPROVED BY THE CONTRACTING OFFICER.

ARTICLE XVIII - RIGHT OF ACCESS

DICA SHALL ASSURE THAT TRAPIL WILL GRANT ACCESS TO ANY AND ALL US GOVERNMENT PROPERTY IN CUSTODY OF TRAPIL TO ACCREDITED REPRESENTATIVES OF THE US GOVERNMENT AT ALL TIMES.

ARTICLE XIX - CLASSIFIED INFORMATION

OWING TO THE MILITARY SIGNIFICANCE OF THE PIPELINE SYSTEM, NEITHER DICA NOR TRAPIL WILL RELEASE ANY INFORMATION CONCERNING THE PIPELINE SYSTEM, IN WHOLE OR IN PART, TO THE PUBLIC, TO ANY UNAUTHORIZED AGENCY OF THE FRENCH OR US GOVERNMENTS, OR TO ANY EMPLOYEE, EXCEPT TO THOSE EMPLOYEES WHO HAVE BEEN CLEARED FOR ACCESS TO CLASSIFIED DATA AS PRESCRIBED IN ARTICLE VI AND THEN ONLY TO THE DEGREE NECESSARY FOR SUCH EMPLOYEES TO PERFORM THEIR DUTIES.

ARTICLE XX - INSTRUCTION MANUALS

DICA SHALL REQUIRE TRAPIL TO PREPARE AND RECOMMEND TO THE CONTRACTING OFFICER SUCH MAINTENANCE, OPERATIONS, SAFETY, AND OTHER MANUALS AS IT CONSIDERS NECESSARY FOR THE MAINTENANCE AND OPERATION OF THE PIPELINE AND HIGH PRESSURE PUMP STATIONS AND UPON APPROVAL THEREOF, TO OBTAIN SUFFICIENT QUANTITIES OF SUCH MANUALS TO EFFECT DISTRIBUTION TO AND INSURE COMPLIANCE THEREWITH BY ALL EMPLOYEES WHOSE FUNCTIONS ARE GOVERNED OR INFLUENCED THEREBY. COPIES OF SUCH MANUALS SHALL ALSO BE FURNISHED TO QUARTERMASTER PETROLEUM DISTRIBUTION COMMAND IN SUCH QUANTITIES AS MAY BE REQUIRED BY QUARTERMASTER PETROLEUM DISTRIBUTION COMMAND.

ANNEX "A"
SCHEDULE OF US GOVERNMENT-FURNISHED PROPERTY

A. THE US GOVERNMENT RESERVES THE RIGHT TO FURNISH THE PROPERTY ENUMERATED IN THE SPECIAL CONDITIONS, PARAGRAPH A-3 OF ARTICLE IV-SCOPE OF WORK.

B. PURSUANT TO THE TERMS OF THIS LOC FORM 101, THE US GOVERNMENT WILL HAVE DELIVERED TO TRAPIL THE MAIN HIGH PRESSURE PIPELINE, THE HIGH PRESSURE PUMP STATIONS AND THE INTER-CONNECTING LINES FOR CUSTODY AND MAINTENANCE THEREOF; PRIOR TO SUCH TIME AS THE PROPERTY WILL BE PLACED IN OPERATION THIS LOC FORM 101 IS PREDICATED ON THE UNDERSTANDING THAT, PURSUANT TO THE TERMS OF THE ,INTER-GOVERNMENTAL AGREEMENTS" TRAPIL WILL OPERATE AND MAINTAIN SAID PIPELINE AND HIGH PRESSURE PUMP STATIONS AS THEY ARE PLACED IN OPERATION. THE PROPERTY TO BE OPERATED AND MAINTAINED IS FURTHER DEFINED AS FOLLOWS:

1. THE HIGH PRESSURE WELDED STEEL PIPELINE (MAIN LINE) AND ITS APPURTENANCES:

A. DONGES TO LA FERTE ALAIS - 356.35 KILOMETERS (221.41 MILES) OF 12 3/4 INCHES OD.

B. LA FERTE ALAIS TO CHALONS SUR MARNE - 156.15 KILOMETERS (97.02 MILES) OF 12 3/4 INCHES OD.

C. CHALONS SUR MARNE TO METZ - 114.77 KILOMETERS (71.31 MILES) OF 10 3/4 INCHES OD.

2. EIGHT HIGH PRESSURE PUMP STATIONS (MAIN LINE STATIONS) AND ALL AUXILIARY EQUIPMENT AND APPURTENANCES WITHIN THE FENCED STATION SITES.

THESE STATION LOCATIONS ARE AS FOLLOWS:

STATIONS NUMBER 1, NU0MBER 5, AND NUMBER 7 ARE TERMINAL POINTS.

STATIONS NUMBER 2, NUMBER 3, NUMBER 4, NUMBER 6, AND NUMBER 8 ARE RELAY STATIONS.

3. THE PROPERTY TO BE MAINTAINED IS FURTHER DEFINED AS FOLLOWS:

A. THE INTER-CONNECTING PIPELINES TO THE FIRST CONNECTION WITHIN THE TANK FARM FENCE, INCLUDING THE 24 INCH TRANSFER LINE.

B. THE 24 INCH SEA LINE FROM THE MEAN LOW TIDE LINE, TO THE FIRST CONNECTION WITHIN THE LERAT TANK FARM FENCE LINE, INCLUDING THE SHORE VALVE BOX.

C. IT IS CONTEMPLATED THAT PRIOR TO, OR COINCIDENT WITH AND SUBSEQUENT TO THE DELIVERY OF THE PIPELINE TO TRAPIL, WHEN REQUIRED AND ACCORDING TO A SCHEDULE (TIMES, PLACES, AND INVENTORY) TO BE DETERMINED AND AGREED UPON, CERTAIN ADDITIONAL FACILITIES, SUPPLIES, MATERIALS, TOOLS AND EQUIPMENT, INCLUDING THOSE TO BE UTILIZED BY TRAPIL IN THEIR REGIONAL OFFICE AND WAREHOUSE/WORKSHOP AT FONTAINEBLEAU AND THEIR OFFICES OR WORKSHOPS IF ESTABLISHED AT OTHER LOCATIONS, MAY BE FURNISHED BY THE US GOVERNMENT TO TRAPIL UNDER THE CONDITIONS PRESCRIBED IN ANNEX "C" TO THIS LOC FORM 101.

D. THIS ANNEX "A" WILL BE AMENDED BY THE CONTRACTING OFFICER UPON ANY MAJOR ADDITION OR WITHDRAWAL OF US GOVERNMENT-FURNISHED PROPERTY AND, AT LEAST SEMI-ANNUALLY THEREAFTER, TO REFLECT SUCH ADDITIONS OR WITHDRAWALS EFFECTED DURING THE PRECEDING PERIOD.

ANNEX "B"
OPERATION AND MAINTENANCE SPECIFICATIONS

DICA WILL INCORPORATE THE FOLLOWING OPERATION AND MAINTENANCE SPECIFICATIONS INTO THEIR CONTRACT (MARCHE) WITH TRAPIL.

I - GENERAL

A. TRAPIL SHALL PERFORM ALL WORK UNDER THIS CONTRACT IN ACCORDANCE WITH THE ACCEPTED PRACTICES OF THE PETROLEUM PIPELINE INDUSTRY, AND TO THE SATISFACTION OF QM PDC:

1. INSOFAR AS PRACTICABLE, THE OPERATION AND MAINTENANCE OF ALL EQUIPMENT SHALL BE IN ACCORDANCE WITH THE MANUFACTURER'S RECOMMENDATIONS.

2. TRAPIL SHALL MAINTAIN THE PROPERTY IN A FIRST CLASS, SAFE, CLEAN, NEAT AND ORDERLY CONDITION.

MAINTENANCE IS INTENDED TO INCLUDE BOTH PREVENTIVE AND CORRECTIVE MEASURES NECESSARY TO MAKE CERTAIN THAT THE PIPELINE AND ALL EQUIPMENT IS FULLY OPERABLE ON DEMAND.

B. WORK PERFORMED BY TRAPIL UNDER THIS CONTRACT SHALL INCLUDE:

1. OPERATION AND MAINTENANCE OF THE MAIN LINE AND MAIN LINE PUMP STATIONS LISTED IN PARAGRAPH B - 1 AND 2 OF ANNEX "A."

2. MAINTENANCE OF LOW PRESSURE INTER-CONNECTING PIPELINES IN PARAGRAPH B - 3 OF ANNEX "A."

C. A JOINT INSPECTION OF ALL STATIONS AND PIPELINES UNDER THIS CONTRACT SHALL BE MADE BY REPRESENTATIVES OF TRAPIL AND QM PDC AT INTERVALS OF NOT MORE THAN SIX MONTHS, FOR THE PURPOSE OF ASSURING BOTH PARTIES TO THIS CONTRACT THAT THE PROPERTIES ARE BEING OPERATED AND MAINTAINED IN A SATISFACTORY MANNER. SPECIAL JOINT INSPECTIONS MAY BE MADE AT OTHER THAN THE STATED PERIOD, WHEN EITHER TRAPIL OR QM PDC REQUESTS SUCH AN INSPECTION BECAUSE OF UNUSUAL CONDITIONS EXISTING OR BELIEVED TO EXIST. QM PDC WILL NOTIFY TRAPIL IN WRITING OF ANY CONDITION REQUIRING REPAIR OR ALTERATION, AND ANY CONDITION REQUIRING MODIFICATION OF OPERATION OR MAINTENANCE PROCEDURES. TRAPIL SHALL, WITHOUT UNDUE DELAY, TAKE THE NECESSARY STEPS TO COMPLY WITH SUCH REQUESTS. IN THE EVENT TRAPIL DISAGREES WITH SUCH REQUEST AS PROPOSED BY QM PDC, TRAPIL MAY REQUEST A CONFERENCE WITH APPROPRIATE QM PDC OFFICIALS IN AN EFFORT TO RESOLVE SUCH DIFFERENCES. IF SUCH CONFERENCE DOES NOT RESOLVE THE DISAGREEMENT, SAID DISAGREEMENT MAY BE HANDLED AS PROVIDED IN ARTICLE XV, OF SPECIAL CONDITIONS.

II - SCHEDULING

A. MONTHLY ESTIMATED TIME SCHEDULES SHOWING TYPES AND QUANTITIES OF ALL PRODUCTS TO BE TRANSPORTED WILL BE PREPARED BY QM PDC AND FURNISHED TO THE TRAPIL DISPATCHING OFFICE TEN (10) DAYS PRIOR TO THE FIRST OF EACH CALENDAR MONTH.

B. THE SCHEDULE WILL REFLECT PROPER CONSIDERATION OF OPERATING LIMITATIONS AND DESIGN CAPACITIES OF THE PIPELINE SYSTEM AND WILL BE SUBJECT TO REVISION BY QM PDC AS NECESSARY.

C. THE SCHEDULE WILL BE REVIEWED AND COORDINATED BY REPRESENTATIVES OF TRAPIL AND QM PDC AT SUCH TIMES AS DEEMED NECESSARY BY QM PDC OR TRAPIL.

III - DISPATCHING

A. TRAPIL SHALL SELECT THE PROPER STATIONS AND PUMPS TO BE OPERATED, AND PRESSURE CONDITIONS. SUCH SELECTION SHALL BE IN ACCORDANCE WITH THE SCHEDULED DELIVERIES, MILITARY NECESSITY AND ECONOMIC USE OF FACILITIES.

B. NECESSARY DISPATCHING ORDERS SHALL BE TRANSMITTED TO THE PUMP STATIONS BY THE TRAPIL DISPATCHING OFFICE.

C. THE TRAPIL DISPATCHING OFFICE, SHALL, THROUGH PROPER AVAILABLE COMMUNICATIONS CHANNELS, PROMPTLY INFORM THE QM PDC TERMINAL DISTRICT HEADQUARTERS INVOLVED OF ANY DISPATCHING ORDER OR OTHER PERTINENT INFORMATION THAT MAY AFFECT THE RECEIPTS AND DELIVERIES WITHIN SAID QM PDC TERMINAL DISTRICT.

D. REGULAR HOURLY TELETYPE OR TELEPHONE REPORTS, AND INTERMEDIATE REPORTS OF IMPORTANT INCIDENTS, SHALL BE OBTAINED BY THE TRAPIL DISPATCHING OFFICE FROM EACH MANNED PUMP STATION. THESE REPORTS SHALL INCLUDE THE INFORMATION REQUIRED BY TRAPIL FOR PROPER DISPATCHING OF THE LINE, AND SUCH OTHER INFORMATION AS MAY BE REQUESTED BY QM PDC.

IV - GAUGING

A. QM PDC WILL FURNISH TRAPIL A SUFFICIENT NUMBER OF TANK VOLUME CALIBRATION TABLES.

B. ALL GAUGING OF PRODUCT IN TANKS SHALL BE IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY QM PDC.

C. OPENING AND CLOSING GAUGES - GAUGING OF WORKING TANKS SHALL BE DONE BY A REPRESENTATIVE OF QM PDC AND WITNESSED BY A REPRESENTATIVE OF TRAPIL. THE TWO REPRESENTATIVES SHALL AGREE TO THE CORRECTNESS OF THE DATA OBTAINED, AND SHALL SO INDICATE BY BOTH SIGNING A QM PDC GAUGING TICKET ON WHICH THE DATA IS RECORDED. THE QM PDC REPRESENTATIVE SHALL DELIVER ONE COPY OF THE GAUGING TICKET TO THE REPRESENTATIVE.

D. INTERMEDIATE GAUGES - NORMAL HOURLY GAUGING OF WORKING TANKS SHALL BE DONE BY TRAPIL AND MAY BE WITNESSED BY QM PDC. TRAPIL MAY DO ADDITIONAL INTERMEDIATE GAUGING OF WORKING TANKS AS DESIRED BY TRAPIL.

E. OTHER GAUGES - TRAPIL IS PROHIBITED FROM GAUGING ANY TANKS OTHER THAN WORKING TANKS WITHOUT PRIOR APPROVAL OF THE QM PDC TERMINAL DISTRICT HEADQUARTERS CONCERNED.

V - VALVE LINE-UP

A. QM PDC REPRESENTATIVES WILL BE RESPONSIBLE FOR AND WILL PERFORM ALL NECESSARY AND PROPER VALVE LINE-UP ON LINES WITHIN THE TANK FARMS. TRAPIL REPRESENTATIVES MAY WITNESS THE QM PDC VALVE LINE-UP THAT MAY AFFECT TRAPIL'S OPERATIONS.

B. TRAPIL REPRESENTATIVES SHALL BE RESPONSIBLE FOR AND WILL PERFORM ALL NECESSARY AND PROPER VALVE LINE-UP ON THE MAIN LINE AND IN THE HIGH PRESSURE PUMP STATION SITES. QM PDC REPRESENTATIVES MAY WITNESS ANY TRAPIL VALVE LINE-UP.

C. EACH REPRESENTATIVE WILL COORDINATE AND SYNCHRONIZE HIS ACTION WITH THE OTHER SO THAT THE VALVE LINE-UP IS ACCOMPLISHED IN ACCORDANCE WITH GOOD PRACTICE. THE USE OF SEALS OR LOCKS ON VALVES MAY BE REQUIRED BY QM PDC. IN THE EVENT EITHER SEALS OR LOCKS ARE USED, THE AFFIXING OR REMOVAL SHALL BE DONE IN THE PRESENCE OF BOTH REPRESENTATIVES. SEAL NUMBERS, AND THE TIME OF AFFIXING AND REMOVAL OF SEALS OR LOCKS, SHALL BE RECORDED BY BOTH REPRESENTATIVES.

D. WHEN PUMPING FROM A FLOATING ROOF TANK TO THE MAIN LINE, THE TANK SHALL NOT BE PUMPED BELOW THE POINT WHERE THE ROOF STARTS TO REST ON ITS SUPPORTS UNLESS SPECIAL PERMISSION IS OBTAINED FROM QM PDC.

E. THE SELECTION OF TANKS FOR OPERATION ON THE MAIN LINE WILL BE DETERMINED BY QM PDC.

VI - PUMP STATION LOGS

A. ALL HOURLY, DAILY AND OTHER NECESSARY PERIODIC INFORMATION WILL BE RECORDED ON STATION OPERATING LOG BY TRAPIL PUMP STATION PERSONNEL. THIS INFORMATION SHALL INCLUDE:

1. HOURLY INTAKE AND DISCHARGE PRESSURE READINGS.

2. HOURLY FLOW METER READINGS.

3. TIME AND AMOUNT OF UNUSUAL PRESSURE FLUCTUATIONS.

4. LINE TEMPERATURE AS REQUIRED AND THE TIME TAKEN.

5. GRAVITY READINGS AS REQUIRED AND THE TIME TAKEN.

6. TIME OF STARTING AND STOPPING OF EACH PUMP.

7. ENGINE SPEEDS.

8. DAILY FUEL CONSUMPTION.

9. DAILY LUBRICATING OIL CONSUMPTION AND CHANGES.

10. TIME OF SCRAPER LAUNCHINGS.

11. TIME OF SCRAPER ARRIVAL, ITS CONDITION AND DESCRIPTION OF FOREIGN MATTER REMOVED.

12. AMOUNT OF INHIBITOR INJECTED.

13. DESCRIPTION OF EQUIPMENT FAILURE AND THE TIME OCCURED.

14. TIME LINE PATROLS PASS THE STATION.

15. OTHER DATA AS MAY BE REQUESTED BY QM PDC.

VII - SCRAPERS

WHEN NECESSARY, MAIN LINE SCRAPERS SHALL BE RUN BY TRAPIL. RECORDS OF MAIN LINE SCRAPER RUNS SHALL BE MAINTAINED BY THE TRAPIL DISPATCHING OFFICE. QM PDC WILL DESIGNATE THE PRODUCT IN WHICH SCRAPERS MAY BE RUN.

VIII - INHIBITOR

A. PRIOR TO THE ACTUAL PUMPING OF PRODUCT INTO THE PIPELINE, OR SEGMENTS THEREOF, TRAPIL SHALL KEEP ALL SEGMENTS NOT IN OPERATION COMPLETELY FILLED WITH INHIBITED WATER AT A MINIMUM PRESSURE OF APPROXIMATELY 10 KILOGRAMS PER SQUARE CENTIMETER AT THE POINT OF THE SEGMENT'S HIGHEST ELEVATION.

1. THE EVENT OF A LEAK OR LOSS OF INHIBITED WATER FOR ANY REASON, TRAPIL SHALL INJECT ADDITIONAL INHIBITED WATER, SUBJECT TO THE APPROVAL OF QM PDC, AND THE AFORESAID MINIMUM PRESSURE RE-ESTABLISHED. TRAPIL SHALL FURNISH THE NECESSARY WATER INHIBITOR, AND PUMPING EQUIPMENT FOR SUCH REPLACEMENTS.

2. TRAPIL SHALL INSERT IN EACH SCRAPER TRAP A REPRESENTATIVE SAMPLE STRIP OF THE PIPE METAL IN ORDER TO PERMIT CONTROL OF INHIBITOR EFFECTIVENESS.

3. TRAPIL SHALL ARRANGE FOR THE SERVICES OF A QUALIFIED LABORATORY TO TEST THE METAL STRIPS AND REPRESENTATIVE SAMPLES OF INHIBITED WATER. PROCEDURES AND SCHEDULES OF SUCH TESTS SHALL BE SUBJECT TO THE APPROVAL OF QM PDC.

4. TRAPIL SHALL ARRANGE FOR THE DISPOSAL OF ALL INHIBITED WATER IN ACCORDANCE WITH ANY FRENCH LAWS AND REGULATIONS, AND SUBJECT TO THE APPROVAL OF QM PDC.

B. TRAPIL SHALL PROVIDE ADEQUATE PROTECTION AGAINST FREEZING FOR ALL EXPOSED ELEMENTS OF THE PIPELINE AND PUMP STATIONS.

C. DURING THE PUMPING OF PRODUCT, AN INTERNAL CORROSION INHIBITER SHALL BE INJECTED INTO THE PIPELINE BY TRAPIL. THE INJECTION PROCEDURE, SCHEDULES, AMOUNT AND KIND OF INHIBITOR SHALL BE APPROVED BY QM IDC.

IX - INTERFACES

A. ALL PROCEDURES AND OPERATIONS INVOLVING THE HANDLING OF INTERFACES IN THE MAIN LINE SHALL BE CAREFULLY COORDINATED BY TRAPIL WITH THE QM PDC HEADQUARTERS AND THE QM PDC TERMINAL DISTRICT HEADQUARTERS CONCERNED.

B. THE TRAPIL DISPATCHER SHALL ADVISE PERSONNEL AT EACH HIGH PRESSURE PUMP STATION CONCERNED OF THE ESTIMATED ARRIVAL TIME OF EACH INTERFACE. THIS INFORMATION SHALL BE FURNISHED SUFFICIENTLY IN ADVANCE TO PERMIT PUMP STATION PERSONNEL TO MAKE THE NECESSARY PREPARATIONS FOR MAKING A COMPLETE INTERFACIAL MIXTURE CHECK OF THE STREAM. THE INFORMATION FURNISHED TO THE PUMP STATION PERSONNEL SHALL BE REVISED AS NECESSARY TO REPRESENT THE LATEST DISPATCHING ESTIMATE BASED ON HOURLY PUMPING DATA.

C. GRAVITY CHECKS AT PUMP STATIONS WHERE THE STREAM IS TO BE SWITCHED SHALL BE MADE BY TRAPIL. THE PROCEDURE USED FOR THESE GRAVITY CHECKS SHALL MEET WITH THE APPROVAL OF QM PDC AND MAY BE WITNESSED BY QM PDC REPRESENTATIVES. AT PUMP STATIONS WHERE THE STREAM IS TO BE SWITCHED, THE GRAVITY CHECKS SHALL START SUFFICIENTLY IN ADVANCE OF THE EXPECTED ARRIVAL OF THE INTERFACE TO PERMIT THE OBTAINING OF A COMPLETE GRAVITY GRADIENT OF THE STREAM THROUGHOUT THE INTERFACE.

X - PIPELINE PATROL

THE ENTIRE PIPELINE WITHIN THE SCOPE OF THIS CONTRACT SHALL BE INSPECTED BY TRAPIL AT APPROXIMATELY SEVEN DAYS INTERVALS BY WALKING OR AERIAL PATROLS. IN THE EVENT THAT THERE IS A SUSPECTED LEAK, OR OTHER SERIOUS ABNORMAL CONDITION, TRAPIL SHALL MAKE ADDITIONAL OR SPECIAL PATROLS OVER THAT SEGMENT OF THE PIPELINE INVOLVED BY ANY MEANS AVAILABLE OR APPROPRIATE. GROUND PATROL MEN SHALL REPORT IN AT EACH PUMP STATION PASSED, AND SUCH REPORTS SHALL BE RELAYED TO THE TRAPIL DISPATCHING OFFICE. THE AERIAL PATROL MAN SHALL REPORT CONDITIONS THAT REQUIRE IMMEDIATE ATTENTION BY THE MOST EXPEDITIOUS MEANS TO TRAPIL PERSONNEL. UPON COMPLETION OF A FLIGHT, THE AERIAL PATROL MAN SHALL REPORT SUCH COMPLETION AND FINDINGS THROUGH PROPER AVAILABLE COMMUNICATIONS CHANNELS TO THE TRAPIL DISPATCHING OFFICE.

XI - EXTERNAL CORROSION PROJECTION

TRAPIL SHALL MAINTAIN THE PIPELINES AND ALL THEIR METAL APPURTENANCES, WITHIN THE SCOPE OF THIS CONTRACT, AGAINST EXTERNAL CORROSION AND DAMAGING ELECTRICAL CURRENTS. ANY REPLACEMENT PIPE SHALL BE COATED AND WRAPPED WITH MATERIAL EQUAL TO OR BETTER THAN THOSE USED DURING ORIGINAL CONSTRUCTION. TO MAINTAIN ADEQUATE CATHODIC PROTECTION THE FOLLOWING ACTIONS SHALL BE TAKEN BY TRAPIL:

A. INSPECT RECTIFIERS AND GROUND BEDS MONTHLY, OR OFTENER IF NECESSARY; MAKE NECESSARY ADJUSTMENT, OR REPLACEMENTS PROMPTLY.

B. MAKE POTENTIAL TESTS OVER THE PIPELINES AT SIX MONTHS INTERVALS. ADJUST OUTPUT OF RECTIFIERS TO PROPER LEVEL, OR MAKE OTHER CORRECTIONS AS NECESSARY.

C. PROCURE, INSTALL AND MAINTAIN ANY ADDITIONAL CATHODIC PROTECTION EQUIPMENT AS CHANGING CONDITIONS MAY REQUIRE.

D. MAKE JOINT SURVEYS WITH OWNERS OF OTHER STRUCTURES, SUCH AS PIPELINES, RAILROADS, POWER AND TELEPHONE INSTALLATIONS, WHICH MAY AFFECT CATHODIC PROTECTION. EXTEND SUCH COOPERATION AS MAY BE NECESSARY TO PROVIDE MUTUALLY SATISFACTORY RESULTS TO ALL PARTIES CONCERNED.

XII - RIGHT-OF-WAY

THE RIGHT-OF-WAY FOR THE PIPELINE SHALL BE MAINTAINED IN SUCH MANNER AS TO INSURE RELIABLE AND DEPENDABLE OPERATION, AND TO PROTECT INTERESTS OF THE PROPERTY OWNERS.

A. WHEREVER POSSIBLE, THE RIGHT-OF-WAY SHALL BE KEPT CLEARED OF BRUSH AND TREES TO A WIDTH OF APPROXIMATELY 10 MOTORS.

B. WHERE EROSION HAS OCCURED, OR BACKFILL HAS SETTLED, TRAPIL SHALL RESTORE THE TERRAIN TO ITS ORIGINAL CONDITION.

C. IN THE EVENT THAT A LEAK HAS OCCURRED CAUSING SPILLAGE OF PRODUCT, TRAPIL SHALL CLEAN UP THE PROPERTY TO THE FULLEST PRACTICABLE EXTENT. SPILLED PRODUCT SHALL BE RECOVERED OR DISPOSED OF AS DIRECTED BY QM PDC.

D. ALL ROAD CROSSING SHALL BE REGULARLY INSPECTED AND REPAIRED IF NECESSARY. SETTLEMENT OF BACKFILL ON ROADBED AND SHOULDERS SHALL BE REPAIRED PROMPTLY AND EFFECTIVELY, SO AS TO PREVENT DANGER TO VEHICULAR TRAFFIC.

E. IN THE EVENT OF ANY CONDITION WHICH MAY BE HAZARDOUS TO PEOPLE OR PROPERTY, TRAPIL SHALL IMMEDIATELY TAKE ALL STEPS NECESSARY TO PROTECT HUMAN LIFE AND PROPERTY BY PROVIDING GUARDS AROUND THE EFFECTED LOCATION, AND SECURING THE ASSISTANCE OF LOCAL POLICE IF NECESSARY.

F. TRAPIL SHALL MAKE THE LOCATION OF THE PIPELINE IN A MANNER SO THAT IT CAN BE IDENTIFIED AND FOLLOWED EASILY BY AUTHORIZED PERSONS ON THE GROUND OR BY THE AERIAL PATROL. THE PLAN OF MARKING SHALL INCLUDE A SYSTEM DESIGNATING DISTANCE FROM NUMBER 1 PUMP STATION (DONGES). THE METHODS OF MARKING SHALL BE SUBJECT TO THE APPROVAL OF QM PDC.

XIII - SUPPLIES

A. TRAPIL SHALL KEEP ON HAND A REASONABLE AND SUFFICIENT STOCK OF OPERATING SUPPLIES, MATERIALS, EQUIPMENT, SPARE PARTS AND REPAIR ITEMS TO MAKE CERTAIN THAT THE PIPELINE CAN FULFILL ITS INTENDED FUNCTION AT ALL TIMES.

B. TRAPIL SHALL PROPERLY STORE, SAFEGUARD, AND ACCOUNT FOR ALL SUPPLIES, MATERIALS AND EQUIPMENT IN THEIR CUSTODY.

C. TRAPIL SHALL SUBMIT WRITTEN MONTHLY REPORTS TO QM PDC ON SUCH ITEMS AS MAY BE DESIGNATED BY QM PDC. THESE REPORTS SHALL INCLUDE ITEM DESCRIPTIONS AND QUANTITIES UNDER THE FOLLOWING HEADINGS.

1. ON HAND AT THE BEGINNING OF THE MONTH.

2. RECEIVED DURING THE MONTH.

3. USED OR EXPENDED DURING THE MONTH.

4. ON HAND AT THE END OF THE MONTH.

5. ESTIMATE OF FUTURE REQUIREMENTS BY MONTHS.

XIV - REPORTS

TRAPIL SHALL MAKE, FOR THEIR OWN USE, VARIOUS OPERATION AND MAINTENANCE REPORTS WHICH ARE NECESSARY FOR GOOD SUPERVISION AND CONTROL. COPIES OF SUCH NORMAL REPORTS TRANSLATED INTO ENGLISH SHALL BE FURNISHED TO HEADQUARTERS, QM PDC, AS REQUIRED BY QM PDC. IN ADDITION, TRAPIL SHALL MAKE SUCH OTHER REPORTS AS MAY BE REQUESTED BY QM PDC.

ANNEX "C"
PROCEDURE FOR CONTROL OF US GOVERNMENT-FURNISHED PROPERTY

A FRENCH TRANSLATION OF THE US "MANUAL FOR CONTROL OF GOVERNMENT PROPERTY IN POSSESSION OF CONTRACTORS," IS ATTACHED HERETO AS INCLOSURE NO 1 TO THIS ANNEX "C" AND MADE A PART THEREOF. DICA WILL INSURE THAT TRAPIL COMPLIES WITH THOSE PROVISIONS OF SAID MANUAL WHICH SPECIFY THE DUTIES AND RESPONSIBILITIES OF CONTRACTORS.

FOR USE IN CONNECTION WITH THE WORK CALLED FOR BY THIS LOC FORM 101:

A. THE US GOVERNMENT SHALL DELIVER TO TRAPIL

- THE PROPERTY DESCRIBED IN THE "SCHEDULE OF US GOVERNMENT-FURNISHED PROPERTY," ANNEX "A," OF THIS LOC FORM 101.

- ANY INFORMATION REASONABLY NECESSARY TO TRAPIL FOR PERFORMANCE OF THE WORK.

THE PERFORMANCE DATES SET FORTH IN THE LOC FORM 101 ARE BASED UPON THE EXPECTATION THAT THE US GOVERNMENT-FURNISHED PROPERTY WILL BE DELIVERED TO TRAPIL IN GOOD OPERATING CONDITION ON EITHER THE DATES MENTIONED IN THE SCHEDULE OR IN SUFFICIENT TIME TO PERMIT TRAPIL TO BEGIN PERFORMANCE OF THE WORK WHEN SCHEDULED TO DO SO.

IN THE EVENT US GOVERNMENT-FURNISHED PROPERTY IS NOT DELIVERED IN DUE TIME THE CONTRACTING OFFICER SHALL, UPON TRAPIL'S WRITTEN REQUEST TO DICA, MAKE A DETERMINATION OF THE DELAY OCCASIONED TRAPIL THEREBY AND SHALL EQUITABLY ADJUST THE ESTIMATED COST OR PERFORMANCE DATES AS APPROPRIATE AND OTHER PROVISIONS AFFECTED BY SUCH DELAY IN ACCORDANCE WITH THE PROCEDURES PROVIDED FOR IN ARTICLE XIV HEREOF.

IN THE EVENT US GOVERNMENT-FURNISHED PROPERTY IS RECEIVED BY TRAPIL IN A CONDITION NOT SUITABLE FOR THE INTENDED USE, TRAPIL SHALL UPON RECEIPT THEREOF NOTIFY THE CONTRACTING OFFICER OF SUCH FACT AND AS DIRECTED BY HIM SHALL EITHER.

1. RETURN SUCH PROPERTY, OR OTHERWISE DISPOSE OF IT, AT THE EXPENSE OF THE US GOVERNMENT, OR

2. EFFECT NECESSARY REPAIRS OR MODIFICATIONS TO RENDER THE PROPERTY SUITABLE FOR USE.

UPON COMPLETION OF ACTION TAKEN PURSUANT TO EITHER SUBPARAGRAPH 1 OR 2 OF THIS PARAGRAPH, THE CONTRACTING OFFICER SHALL EQUITABLY ADJUST THE ESTIMATED COSTS OR PERFORMANCE DATES, AS APPROPRIATE, AND ANY OTHER PROVISION AFFECTED BY THE RETURN, DISPOSITION, REPAIR OF MODIFICATION, IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE XIV HEREOF. THESE PROVISIONS FOR ADJUSTMENT ARE EXCLUSIVE AND THE US GOVERNMENT SHALL NOT BE LIABLE TO SUIT FOR BREACH OF CONTRACT BY REASON OF ANY DELAY IN DELIVERY OF ANY US GOVERNMENT-FURNISHED PROPERTY OR DELIVERY OF SUCH PROPERTY IN A CONDITION NOT SUITABLE FOR ITS INTENDED USE.

B. 1. TITLE TO ALL PROPERTY FURNISHED BY THE US GOVERNMENT TO TRAPIL SHALL REMAIN IN THE US GOVERNMENT.

2. TITLE TO ALL PROPERTY ACQUIRED BY TRAPIL FOR USE IN PERFORMING THE WORK AND FOR WHICH TRAPIL IS TO BE REIMBURSED, SHALL PASS TO AND VEST IN THE US GOVERNMENT. THIS TRANSFER OF TITLE TO SUCH PROPERTY WILL OCCUR WHEN POSSESSION OF THE PROPERTY IS TAKEN BY TRAPIL.

C. TITLE TO ALL US GOVERNMENT-FURNISHED PROPERTY SHALL NOT BE AFFECTED BY THE INCORPORATION OR ATTACHMENT THEREOF TO ANY PROPERTY NOT OWNED BY THE US GOVERNMENT, NOR SHALL SUCH US GOVERNMENT-FURNISHED PROPERTY OR ANY PART THEREOF BE OR BECOME A FIXTURE OR LOSE ITS IDENTITY AS PERSONALITY BY REASON OF AFFIXATION TO REALTY.

D. DICA SHALL INSURE THAT TRAPIL SHALL MAINTAIN ADEQUATE PROPERTY CONTROL RECORDS IN ACCORDANCE WITH SOUND BUSINESS PRACTICE FOR US GOVERNMENT-FURNISHED PROPERTY AND SHALL EXERCISE GREAT CARE AS TO IDENTIFICATION AND MARKING THEREOF AS WELL AS CLASSIFICATION AND CONTROL SALVAGE AND SCRAP.

E. US GOVERNMENT-FURNISHED PROPERTY PROVIDED TO TRAPIL PURSUANT TO THE PROVISIONS OF THIS LOC FORM 101 SHALL BE USED ONLY IN THE PERFORMANCE OF THE WORK.

F. TRAPIL SHALL ESTABLISH, IN ACCORDANCE WITH SOUND INDUSTRIAL PRACTICE A PERMANENT PROGRAM FOR REPAIR, MAINTENANCE, PROTECTION AND PRESERVATION OF US GOVERNMENT-FURNISHED PROPERTY UP TO THE DATE TRAPIL DISPOSES OF SUCH PROPERTY IN ACCORDANCE WITH ANNEX.

G. NO SUBCONTRACTOR OF TRAPIL SHALL BE RELIEVED FROM LIABILITY FOR LOSS OR DESTRUCTION OF OR DAMAGE TO US GOVERNMENT-FURNISHED PROPERTY IN HIS POSSESSION OR CONTROL, EXCEPT TO THE EXTENT THAT THE SUBCONTRACT WITH THE PRIOR APPROVAL OF THE CONTRACTING OFFICER MAY PROVIDE FOR THE RELIEF OF THE SUBCONTRACTOR FROM SUCH LIABILITY. IN THE ABSENCE OF SUCH APPROVAL, THE SUBCONTRACT SHALL CONTAIN APPROPRIATE PROVISIONS REQUIRING THE RETURN OF A 11 US GOVERNMENT-FURNISHED PROPERTY IN AS GOOD CONDITION AS WHEN RECEIVED, EXCEPT FOR REASONABLE WEAR AND TEAR AND FOR THE UTILIZATION OF THE PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THIS LOC FORM 101.

H. 1. ALL REPAIRS AND REPLACEMENTS NECESSITATED BY DAMAGES OR DEFICIENCIES FOR WHICH TRAPIL IS RESPONSIBLE UNDER PARAGRAPH B OF ARTICLE X, HEREOF, SHALL BE EFFECTED BY THE LETTER AT ITS OWN EXPENSE.

2. IN THE EVENT OF ANY DAMAGE TO US GOVERNMENT-FURNISHED PROPERTY, TRAPIL SHALL TAKE ALL NECESSARY STEPS TO PROTECT THE US GOVERNMENT-FURNISHED PROPERTY FROM FURTHER DAMAGE; SEPARATE, AS MUCH AS POSSIBLE, THE DAMAGED FROM THE UNDAMAGED PROPERTY, AND PUT IT IN THE BEST POSSIBLE ORDER.

3. IN THE EVENT OF LOSS, DESTRUCTION OR DAMAGE, TRAPIL SHALL FURNISH TO DICA A STATEMENT OUTLINING:

I. THE IDENTITY OF THE US GOVERNMENT-FURNISHED PROPERTY INVOLVED;

II. THE DATE, HOUR, CAUSE, AND NATURE OF THE LOSS, DAMAGE OR DESTRUCTION;

III. IN CASE OF MUTUAL INTERESTS, THOSE WHICH AFFECT THE US GOVERNMENT;

IV. THE US INTEREST, IF ANY COVERED BY INSURANCE.

TRAPIL SHALL MAKE REPAIRS OR RENOVATIONS OF THE DAMAGED PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THIS LOC FORM 101.

4. IN THE EVENT TRAPIL IS IDEMNIFIED, REIMBURSED OR OTHERWISE COMPENSATED FOR ANY LOSS, DESTRUCTION OR DAMAGE TO US GOVERNMENT-FURNISHED PROPERTY, TRAPIL SHALL USE THE AMOUNT THEREOF TO REPAIR OR REPLACE THE PROPERTY DESTROYED, OR SHALL CREDIT THE US GOVERNMENT WITH THIS AMOUNT, ACCORDING TO THE INSTRUCTIONS GIVEN BY THE CONTRACTING OFFICER THROUGH DICA. NEITHER TRAPIL NOR DICA SHALL TAKE ANY ACTION WHICH WOULD PREJUDICE THE US GOVERNMENT'S RIGHT TO RECOVER AGAINST THIRD PARTIES, IN THE EVENT OF LOSS, DESTRUCTION OR DAMAGE TO US GOVERNMENT-FURNISHED PROPERTY.

5. UPON REQUEST OF THE CONTRACTING OFFICER AND AT THE EXPENSE OF THE US GOVERNMENT, TRAPIL SHALL FURNISH ALL ASSISTANCE AND COOPERATION IN OBTAINING RECOVERY INCLUDING THE EXECUTION OF THE DOCUMENTS NECESSARY IN THE PROSECUTION OF SUIT AND ASSIGNMENTS IN FAVOR OF THE US GOVERNMENT.

6. WHEN A SUBCONTRACTOR OF TRAPIL IS TO BE HELD LIABLE FOR LOSS, DESTRUCTION OR DAMAGE TO US GOVERNMENT-FURNISHED PROPERTY, TRAPIL WILL ASSIST IN DEFENDING THE INTERESTS OF THE US GOVERNMENT. 1 INCLOSURE:

FRENCH TRANSLATION OF US "MANUAL FOR CONTROL OF GOVERNMENT PROPERTY IN POSSESSION OF CONTRACTOR."

10 JUNE 1957
MODIFICATION NO 1

TO: DIRECTION DES CARBURANTS
85 BLVD DU MONTPARNASSE
PARIS, 6EME, FRANCE

THIS SUPPLEMENTAL AGREEMENT ENTERED INTO APPROVED PURSUANT TO AUTHORITY OF AN AGREEMENT -------- CONSUMATED BETWEEN THE GOVERNMENT OF THE PURSUANT TO AUTHORITY REPUBLIC OF FRANCE AND THE UNITED STATES AS CONTAINED IN USAREUR OF AMERICA DATED 30 JUNE 1953 (SECRET) PROCUREMENT CIRCULAR NO. 5, AND THE AUTHORITY OF TITLE 10 US CODE DATED 3 MAY 1955: 2304 (A) )6), BY THE UNITED STATES OF AMERICA HEREINAFTER REFERRED TO AS THE UNITED STATES GOVERNMENT REPRESENTED BY R. G. BUTLER THE CONTRACTING OFFICER AUTHORIZED TO MAJOR GENERAL, USA EXECUTE THIS AGREEMENT, AND THE FRENCH

DEPUTY COMMANDING GOVERNMENT REPRESENTED BY THE DIRECTION GENERAL DES CARBURANTS, 85 BLVD DU MONTPARNASSE PARIS, FRANCE.

GERMANY, FEDERAL REPUBLIC OF
24 JAN 1959
FLITE DOCUMENT NO. 7501457

AGREEMENT TRANSPORTATION OF PETROLEUM PRODUCTS THRU CERTAIN NATO PIPELINES LOCATED IN THE VICINITY OF ZWEIBRUCKEN, GERMANY

CONSIDERING THAT THE UNITED STATES GOVERNMENT DESIRES THAT CERTAIN NATO PIPELINES AND STORAGE LOCATED IN THE VICINITY OF ZWEIBRUCKEN, GERMANY, BE ACTIVATED, SO THAT THEY MAY BE AVAILABLE FOR THE TRANSPORTATION OF U.S. OWNED PETROLEUM PRODUCTS UNTIL SUCH TIME AS THE CENTRAL EUROPEAN OPERATING AGENCY DECIDES TO ASSUME ADMINISTRATIVE RESPONSIBILITY FOR THEIR OPERATION;

CONSIDERING THAT THE CENTRAL EUROPEAN PIPELINE POLICY COMMITTEE OF NATO ADOPTED A RESOLUTION, ON 25 SEPTEMBER 1957, ESTABLISHING THE PRINCIPLES WHICH WOULD GOVERN THE USE OF THESE PIPELINES AND STORAGE BY THE UNITED STATES GOVERNMENT, THE COMPLETE DETAILS OF WHICH RESOLUTION ARE CONTAINED IN NATO DOCUMENT AC/120-D/13 DATED 30 SEPTEMBER 1957;

CONSIDERING THAT THE UNITED STATES GOVERNMENT HAS CONCLUDED AN AGREEMENT WITH THE REPUBLIC OF FRANCE, COVERING THE OPERATION OF THAT SECTION OF THE NATO PIPELINE, WHICH LIES BETWEEN ST. BAUSSANT AND ZWEIBRUCKEN AND WITHIN THE TERRITORY OF FRANCE, AND WHICH TIES IN WITH THOSE NATO PIPELINES, WITHIN THE FEDERAL REPUBLIC OF GERMANY, THROUGH WHICH THE UNITED STATES GOVERNMENT DESIRES THAT U.S. OWNED PETROLEUM PRODUCTS BE TRANSPORTED;

CONSIDERING THAT THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY CAN ADMINISTER THE NATO OWNED PIPELINES AND RELATED STORAGE FACILITIES LOCATED ON ITS SOVEREIGN TERRITORY THROUGH THE PIPELINE OPERATING COMPANY, FERNLEITUNGS BETRIEBS GESELLSCHAFT, AND DECLARES ITSELF READY TO RECEIVE, TRANSPORT AND STORE THE QUANTITIES OF FUEL DESIRED BY THE U.S.;

CONSIDERING THAT THE UNITED STATES GOVERNMENT DOES NOT OBJECT TO THE STORAGE BY THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY OF 60,000 CUBIC METERS OF PETROLEUM PRODUCTS IN THE NATO STORAGE FACILITIES LOCATED AT NIEDERSTEDEN, ZWEIBRUCKEN AND BEDESBACH:

BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA, REPRESENTED BY THE COMMANDING GENERAL U.S. ARMY, COMMUNICATIONS ZONE, EUROPE, AND THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY, ON THE 24TH DAY OF JAN 1959, THE FOLLOWING AGREEMENT WAS REACHED:

THE FOLLOWING WORDS AS USED IN THE PRESENT AGREEMENT ARE UNDERSTOOD TO HAVE THE MEANINGS INDICATED BELOW:

(1) THE PIPELINE SYSTEM - THE THREE PIPELINES SITUATED RESPECTIVELY BETWEEN THE FOLLOWING POINTS:

(A) THE FRANCO-GERMAN FRONTIER (ON THE ST. BAUSSANT-ZWEIBRUCKEN PIPELINE) AND ZWEIBRUCKEN:

(B) ZWEIBRUCKEN AND BITBURG:

(C) ZWEIBRUCKEN AND BEDESBACH: TO INCLUDE THE THREE PIPELINES COMPRISING THE SO-CALLED "ZWEIBRUCKEN RING" AND THE PUMP STATIONS THEREON, WITH THE EXCEPTION OF THE U.S. OWNED PUMP STATION, AND THE NATO TANK FARMS LOCATED AT NIEDERSTEDEN, ZWEIBRUCKEN, AND BEDESBACH.

(2) PETROLEUM PRODUCTS - ANY PETROLEUM DERIVATIVE.

(3) QUANTITATIVE CHECKS - THE MEASURING OF PRODUCTS IN A STORAGE TANK, RAIL TANK CAR, TANK TRUCK, OR PIPELINE TO DETERMINE THE QUANTITY.

(4) QUALITATIVE CHECKS - THE TAKING OF SAMPLES OF PRODUCTS FROM PIPELINES, STORAGE TANKS, RAIL TANK CARS, OR TANK TRUCKS FOR THE PURPOSE OF PERFORMING ANALYSES THEREON.

(5) FACILITIES - BUILDINGS, STORAGE TANKS, PIPELINES, VALVES, PUMPS, MOTORS AND ALL OTHER INSTALLED EQUIPMENT REQUIRED FOR AND USED IN THE RECEIPT, STORAGE AND ISSUE OF PETROLEUM PRODUCTS.

(6) FERNLEITUNGS BETRIEBS GESELLSCHAFT - THE OPERATING COMPANY OF THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY, HEREINAFTER REFERRED TO AS FBG, LOCATED AT BENESISSTRASSE NO. 38, COLOGNE, OR ANY OTHER COMPETENT AGENCY OF THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY NOMINATED TO SERVE IN THE PLACE OF FBG.

(7) SOCIETE POUR LE TRANSPORT DE PRODUITS PETROLIERS PAR PIPELINE - THE FRENCH QUASI-GOVERNMENTAL PIPELINE OPERATING COMPANY, HEREINAFTER REFERRED TO AS TRAPIL, LOCATED AT 7-9 RUE LEON MORANE, PARIS 15E.

(8) FRENCH NATIONAL AGENCY - THE AGENCY OF THE FRENCH GOVERNMENT WHICH ACTS FOR THE III FRENCH NATO PIPELINE DIVISION.

(9) ALLOWABLE OPERATING COSTS - THOSE COSTS WHICH PERTAIN DIRECTLY OR INDIRECTLY TO THE TRANSPORTATION OF PETROLEUM PRODUCTS THROUGH THE FOLLOWING NATO PIPELINES:

(A) THE SEGMENT OF ST. BAUSSANT-ZWEIBRUCKEN PIPELINE FROM GERMAN-FRANCO FRONTIER TO ZWEIBRUCKEN.

(B) ZWEIBRUCKEN-BITBURG PIPELINE.

(C) ZWEIBRUCKEN-BEDESBACH PIPELINE. AND SUCH OTHER COSTS AS ARE SPECIFICALLY APPROVED IN WRITING BY THE GOVERNMENT OF THE UNITED STATES.

(1) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY, THROUGH HIS AGENT, FBG, OR ITS COMPETENT AGENCY, WILL RECEIVE INTO THE PIPELINE SYSTEM, AT THE FRANCO-GERMAN FRONTIER ON THE ST. BAUSSANT-ZWEIBRUCKEN NATO PIPELINE, PETROLEUM PRODUCTS BELONGING TO AND AS TENDERED BY THE UNITED STATES AND WILL TRANSPORT THESE PRODUCTS THROUGH THE PIPELINE SYSTEM TO SUCH DESTINATIONS AS DIRECTED OR INTO STORAGE TANKS, LOCATED IN THE PIPELINE SYSTEM, IN THE ABSENCE OF SPECIFIC INSTRUCTIONS.

(2) UPON NOTIFICATION BY THE COMPETENT AGENCY OF THE UNITED STATES, THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY, THROUGH HIS AGENT, FBG, WILL TRANSPORT THROUGH THE PIPELINE SYSTEM PETROLEUM PRODUCTS, BELONGING TO THE UNITED STATES AND HELD IN STORAGE TANKS LOCATED IN THE SYSTEM OR MADE AVAILABLE TO THE UNITED STATES BY THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY FROM ITS STOCKS, TO SUCH DESTINATIONS AS DIRECTED.

(1) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY WILL BE RESPONSIBLE:

(A) FOR THE OPERATION, MAINTENANCE, SECURITY AND SUPERVISION OF THE PIPELINE SYSTEM.

(B) FOR THE PROVISION OF ALL FACILITIES WITHIN THE PIPELINE SYSTEM REQUIRED TO ENABLE THE PROPER PERFORMANCE OF THIS AGREEMENT.

(C) FOR THE CONFORMITY OF THE PIPELINE SYSTEM WITH GERMAN SAFETY REQUIREMENTS.

(D) THAT PERSONNEL EMPLOYED BY FBG IN THE TRANSPORTATION AND STORAGE OF U.S. OWNED PETROLEUM PRODUCTS UNDER THE TERMS OF THIS AGREEMENT HAVE BEEN SUBJECTED TO SECURITY SCREENING.

(E) THAT FBG MAKES DESK SPACE AVAILABLE TO THE U.S. PERSONNEL WHO WILL BE REQUIRED FOR THE PURPOSES OF THIS AGREEMENT AT NIEDERSTEDEN AND ZWEIBRUCKEN.

(F) FOR COORDINATING THE OPERATION OF THE PIPELINE SYSTEM MOST CLOSELY WITH THE OPERATION OF THE DONGES-METZ PIPELINE SYSTEM OF THE UNITED STATES GOVERNMENT AND INSURING THAT FBG MAINTAINS CLOSE LIAISON WITH THE COMPETENT AGENCY OF THE UNITED STATES AND OF THE FRENCH NATIONAL AGENCY.

(G) THAT FBG MAINTAINS AT ZWEIBRUCKEN NOT ONLY THE STORAGE CAPACITY NECESSARY FOR THE NORMAL OPERATION OF THE PIPELINE BETWEEN ST. BAUSSANT AND THE GERMAN-FRENCH BORDER, THE PIPELINE SYSTEM, AND THE ZWEIBRUCKEN-GERMERSHEIM PIPELINE BUT SUFFICIENT ULLAGE TO PERMIT THE DISPLACEMENT OF THE CAPACITY OF THE ST. BAUSSANT-ZWEIBRUCKEN NATO PIPELINE. THIS CAPACITY IS APPROXIMATELY 7,000 CUBIC METERS OF PRODUCT AND ULLAGE MUST BE SO MAINTAINED THAT THIS QUANTITY OF EITHER MOGAS OR JP-4 CAN BE RECEIVED IMMEDIATELY IN AN EMERGENCY.

(H) THAT FBG IS PREPARED TO RECEIVE, WITH A MINIMUM OF DELAY, INTO THE PIPELINE SYSTEM, AT THE FRANCO-GERMAN FRONTIER ON THE ST. BAUSSANT-ZWEIBRUCKEN NATO PIPELINE, US OWNED PETROLEUM PRODUCTS TENDERED TO IT BY THE COMPETENT AGENCY OF THE UNITED STATES OR OF THE FRENCH NATIONAL AGENCY, AND EITHER TRANSPORTS THEM THROUGH THE PIPELINE SYSTEM TO THE DESTINATIONS DIRECTED OR PLACES THEM IN STORAGE IN THE PIPELINE SYSTEM IN THE ABSENCE OF SPECIFIC INSTRUCTIONS.

(I) THAT FBG TRANSPORTS PETROLEUM PRODUCTS, WHICH ARE HELD IN STORAGE OF THE PIPELINE SYSTEM FOR THE UNITED STATES GOVERNMENT OR MADE AVAILABLE TO THE UNITED STATES GOVERNMENT, TO THE DESTINATIONS DIRECTED.

(J) THAT FBG KEEPS THE COMPETENT AGENCIES OF THE UNITED STATES AND FRANCE FULLY INFORMED OF ITS PUMPING SCHEDULES AND ULLAGES AT TANK FARMS IN THE PIPELINE SYSTEM.

(K) THAT ALL PRODUCTS, PROCURED BY OR FOR THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY AND PLACED IN THE PIPELINE SYSTEM, ARE IDENTICAL IN SPECIFICATIONS WITH THOSE OF THE UNITED STATES WITH WHICH THEY ARE COMMINGLED.

(2) THE UNITED STATES GOVERNMENT WILL BE RESPONSIBLE:

(A) FOR THE CORRECT FUNCTIONING OF THE INSTALLATIONS ON THE DONGES-METZ PIPELINE AND ASSURING, THROUGH AN AGREEMENT WITH THE FRENCH GOVERNMENT, THE PROPER OPERATION OF THE SEGMENT OF THE ST. BAUSSANT-ZWEIBRUCKEN PIPELINE THAT IS SITUATED WITHIN THE TERRITORY OF FRANCE.

(B) FOR ANY ADDITIONAL COSTS, ON A NON-REIMBURSABLE BASIS, INVOLVED IN OPERATING THE DONGES-METZ PIPELINE DUE TO THE OPERATION OF THE PIPELINE SYSTEM.

(C) FOR PROVIDING TO FBG MONTHLY, ON OR ABOUT THE FIFTEENTH DAY OF EACH MONTH, ITS ESTIMATED REQUIREMENTS, BY QUANTITY AND PRODUCT, FOR TRANSPORTATION THROUGH THE PIPELINE SYSTEM DURING THE FOLLOWING MONTH. IN ADDITION, THE UNITED STATES GOVERNMENT AGREES TO PROVIDE FBG WITH A "FIRM" SCHEDULE BY WEDNESDAY OF EACH WEEK, COVERING ITS TRANSPORTATION REQUIREMENTS DURING THE FOLLOWING WEEK. FOR PLANNING PURPOSES, THE UNITED STATES GOVERNMENT MONTHLY REQUIREMENTS ARE ESTIMATED TO BE AS FOLLOWS:

ZWEIBRUCKEN-BITBURG PIPELINE - 24,000 CUBIC METERS PER MONTH, JP-4

ZWEIBRUCKEN-BEDESBACH PIPELINE - 11,200 CUBIC METERS PER MONTH, MOGAS

ZWEIBRUCKEN RING FOR TRANSSHIPMENT INTO U.S. ZWEIBRUCKEN-GERMERSHEIM PIPELINE - 26,500 CUBIC METERS PER MONTH, MOGAS

(D) THAT CHANGES TO ITS PUBLISHED "FIRM" SCHEDULES ARE HELD TO A MINIMUM.

(E) THAT FBG IS PROVIDED BY TRAPIL, BY WEDNESDAY OF EACH WEEK, THE PUMPING SCHEDULE FOR THE ST. BAUSSANT-ZWEIBRUCKEN NATO PIPELINE FOR THE FOLLOWING WEEK.

(F) THAT PETROLEUM PRODUCTS OF THE UNITED STATES GOVERNMENT TO BE TRANSPORTED THROUGH THE PIPELINE SYSTEM ARE TURNED OVER TO FBG WITH A MINIMUM OF DELAY.

(G) THAT PRODUCTS TENDERED TO FBG FOR TRANSPORTATION OR STORAGE IN THE PIPELINE SYSTEM ARE WITHIN THE "USE - LIMITS" OF THE APPLICABLE SPECIFICATIONS AND SUITABLE FOR COMMINGLING WITH SIMILAR PRODUCTS ALREADY IN THE PIPELINE SYSTEM.

(H) THAT U.S. PERSONNEL REQUIRED FOR THE PURPOSES OF THIS AGREEMENT ARE PROVIDED WITH APPROPRIATE DOCUMENTARY PROOF OF AUTHORITY AND IDENTIFICATION.

(3) JOINT RESPONSIBILITIES

(A) QUANTITATIVE AMOUNTS OF PRODUCT TENDERED TO FBG FOR TRANSPORTATION THROUGH THE PIPELINE SYSTEM WILL BE DETERMINED BY MUTUALLY AGREED GAUGES AT THE POINT OF DEPARTURE BY REPRESENTATIVES OF FBG AND THE COMPETENT AGENCY OF THE UNITED STATES GOVERNMENT. WHERE THE POINT OF DEPARTURE IS IN FRANCE, FBG WILL ACCEPT THE GAUGES OF THE FRENCH NATIONAL AGENCY AS ACCURATE, PROVIDED THEY ARE CERTIFIED BY THE COMPETENT AGENCY OF THE UNITED STATES GOVERNMENT. MUTUALLY AGREED GAUGES WILL ALSO BE TAKEN AT THE POINT OF RECEIPT OF PRODUCT, EITHER IN U.S. OWNED TANKAGE ON U.S. INSTALLATIONS OR IN TANKAGE LOCATED IN THE PIPELINE SYSTEM. LOSSES WILL BE ADJUSTED ACCORDING TO THE TERMS OF PARAGRAPHS (1) AND (2), ARTICLE IV.

(B) A DAY-BY-DAY ACCOUNT OF QUANTITIES TRANSPORTED THROUGH THE PIPELINE SYSTEM FOR THE U.S. WILL BE KEPT BY FBG AND A COPY FURNISHED TO THE COMPETENT AGENCY OF THE UNITED STATES GOVERNMENT. QUANTITATIVE AMOUNTS WILL BE MUTUALLY VERIFIED BETWEEN FBG AND REPRESENTATIVES OF THE COMPETENT U.S. AGENCY.

(C) QUALITATIVE CONTROLS WILL BE MAINTAINED BY SAMPLES TAKEN JOINTLY BY THE FBG AND REPRESENTATIVES OF THE COMPETENT AGENCY OF THE UNITED STATES GOVERNMENT. U.S. PETROLEUM LABORATORY FACILITIES WILL BE AVAILABLE FOR USE BY BOTH PARTIES.

(1) NORMAL LOSSES OF PETROLEUM PRODUCTS AMOUNTING TO NOT MORE THAN 0.25 PERCENT OF THE QUANTITY TRANSPORTED IN THE PIPELINE SYSTEM FOR THE UNITED STATES SHALL BE CHARGED TO THE UNITED STATES GOVERNMENT.

(2) LOSSES OF U.S. OWNED PETROLEUM PRODUCTS, EITHER IN QUALITY OR QUANTITY, WITH THE EXCEPTIONS OF THE LOSSES ANTICIPATED IN PARAGRAPH (1) OF THIS ARTICLE, WILL BE SETTLED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPHS 3 (A) AND 4 (C) OF NATO DOCUMENT AC/120-D/13, DATED 30 SEPTEMBER 1957, WHICH IS BINDING UPON THE PARTIES HERETO. IF IT CAN BE DETERMINED THAT SUCH LOSSES WERE OCCASIONED BY THE NEGLIGENCE OF FBG, THE UNITED STATES GOVERNMENT WILL BE REIMBURSED BY FBG, BUT THE FBG WILL BE ALLOWED TO INSURE ITSELF AGAINST LOSSES OF THIS TYPE.

(3) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY WILL BE RESPONSIBLE FOR ALL LOSSES OR DAMAGES TO THE PIPELINE SYSTEM AND ITS FACILITIES, ARISING OUT OF THE OPERATIONS CONDUCTED UNDER THE TERMS OF THIS AGREEMENT. THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY AGREES THAT ALL CLAIMS, THAT IT MAY HAVE FOR REIMBURSEMENT FOR SUCH LOSSES OR DAMAGES, SHALL BE SUBMITTED TO THE CENTRAL EUROPE OPERATING AGENCY FOR SETTLEMENT IN ACCORDANCE WITH RULES TO BE LAID DOWN BY THE CENTRAL EUROPE PIPELINE POLICY COMMITTEE.

(4) THE FBG WILL BE ALLOWED TO INSURE ITSELF AGAINST THE CLAIMS OF THIRD PARTIES FOR LOSSES OR DAMAGES ARISING OUT OF THE OPERATION OF THE PIPELINE SYSTEM.

(5) THE GOVERNMENT OF THE UNITED STATES SHALL NOT CLAIM INDEMNIFICATION FOR DELAYS IN TRANSPORTATION OR THE USE OF MORE EXPENSIVE MEANS OF TRANSPORTATION AS A RESULT OF HOSTILITIES, CIVIL DISTURBANCES, STRIKES, RIOTS OR ANY OTHER CAUSE BEYOND THE CONTROL OF THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY OR HIS AGENT, FBG.

(1) THE GOVERNMENT OF THE UNITED STATES WILL PAY TO THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY:

(A) A PROVISIONAL TARIFF OF .0042 CENTS PER U.S. GALLON PER MILE FOR EACH GALLON OF PETROLEUM PRODUCTS WHICH IS TRANSPORTED FOR THE U.S. THROUGH THE SECTION OF THE ST. BAUSSANT-ZWEIBRUCKEN PIPELINE WHICH LIES WITHIN THE TERRITORY OF THE FEDERAL REPUBLIC OF GERMANY AND WHICH IS RECEIVED INTO NATO STORAGE AT ZWEIBRUCKEN.

(B) A PROVISIONAL TARIFF OF .007 CENTS PER U.S. GALLON PER MILE FOR EACH GALLON OF PETROLEUM PRODUCTS WHICH IS TRANSPORTED FOR THE U.S. FROM NATO STORAGE AT ZWEIBRUCKEN TO:

(1) AIR BASES SITUATED ON THE ZWEIBRUCKEN-BITBURG PIPELINE.

(2) BEDESBACH TANK FARM.

(3) U.S. TANK FARMS AT HINTERWEIDENTHAL AND BELLHEIM UNTIL THE U.S. PUMP STATION AT WALHAUSEN IS OPERATIONAL, AT WHICH TIME THE RATE WILL APPLY ONLY FROM ZWEIBRUCKEN TO THE U.S. PUMP STATION AT WALHAUSEN.

(4) U.S. PUMP STATION AT WALHAUSEN FOR MOVEMENT THROUGH THE U.S. ZWEIBRUCKEN-GERMERSHEIM PIPELINE. IT IS AGREED THAT: ALL PRODUCTS DELIVERED TO HAHN, SPANGDAHLEM AND BITBURG AIR BASES WILL BE CONSIDERED AS FIRST BEING TRANSPORTED TO NATO STORAGE AT NIEDERSTEDEN AND THEN PUMPED BACK TO THESE AIR BASES; AND THE MILEAGES TO BE USED IN COMPUTING CHARGES ARE AS FOLLOWS:

FRANCO-GERMAN FRONTIER TO ZWEIBRUCKEN 2.81 MILES

ZWEIBRUCKEN TO LANDSTUHL 23.3 MILES

ZWEIBRUCKEN TO SEMBACH 36.2 MILES

ZWEIBRUCKEN TO HAHN 159.0 MILES

ZWEIBRUCKEN TO SPANGDAHLEM 129.3 MILES

ZWEIBRUCKEN TO BITBURG 124.4 MILES

ZWEIBRUCKEN TO BEDESBACH 29.0 MILES

ZWEIBRUCKEN TO WALHAUSEN (U.S. PUMP STATION) .672 MILES

ZWEIBRUCKEN TO HINTERWEIDENTHAL 16.3 MILES

ZWEIBRUCKEN TO BELLHEIM 45.6 MILES

ZWEIBRUCKEN TO RCAF ZWEIBRUCKEN AIR BASE 2.63 MILES

(C) A SERVICE CHARGE OF .034982 CENTS PER U.S. GALLON FOR ALL PRODUCTS SHIPPED FOR THE U.S. FROM NATO STORAGE AT EITHER NIEDERSTEDEN OR ZWEIBRUCKEN DIRECTLY TO:

(1) U.S. AIR FORCE OR RCAF AIR FORCE BASES LOCATED ON THE ZWEIBRUCKEN-BITBURG PIPELINE.

(2) BEDESBACH TANK FARM.

(3) U.S. PUMP STATION AT WALHAUSEN FOR MOVEMENT THROUGH THE U.S. ZWEIBRUCKEN-GERMERSHEIM PIPELINE.

(2) IT IS AGREED BY THE PARTIES HERETO THAT THE PROVISIONAL TARIFFS REFERRED TO IN PARAGRAPHS (1) )A) AND (1) )B) OF THIS ARTICLE ARE SUBJECT TO REVIEW AND ADJUSTMENT AT SUCH TIME AS CEOA BECOMES OPERATIONAL.

(3) ONLY ALLOWABLE OPERATING COSTS OF FBG, INCLUDING COST OF INSURANCE, REFERRED TO IN PARAGRAPHS (2) AND (4) OF ARTICLE IV, WHICH ARE PROPERLY CHARGEABLE TO THE OPERATION OF THE PIPELINE SYSTEM, MAY BE INCLUDED IN ESTABLISHING TARIFFS.

(4) ALL RESOURCES OF FBG, INCLUDING PERSONNEL AND EQUIPMENT, UTILIZED ON THE PIPELINE SYSTEM, WILL BE ACCOUNTED FOR SEPARATELY BY FBG FROM THOSE USED IN THE OPERATION AND MAINTENANCE OF THE UNITED STATES OWNED FACILITIES AT TANKLAGER BEDESBACH.

(5) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY OR HIS AGENT, FBG, WILL RENDER, MONTHLY TO THE COMPETENT AGENCY OF THE UNITED STATES GOVERNMENT, INVOICES COVERING THE COSTS OF TRANSPORTATION OF ALL PETROLEUM PRODUCTS MOVED THROUGH THE PIPELINE SYSTEM UNDER THE TERMS OF THIS AGREEMENT FOR THE U.S.

(6) PRODUCTS OF THE UNITED STATES GOVERNMENT, WHICH ARE PLACED IN STORAGE OF THE PIPELINE SYSTEM FOR FUTURE SHIPMENT TO DESTINATIONS AS DIRECTED BY THE COMPETENT AGENCY OF THE UNITED STATES, SHALL LOSE THEIR IDENTITY AS U.S. OWNED PRODUCTS, WHEN COMMINGLED WITH THOSE OF THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY. OWNERSHIP OF THE COMMINGLED PRODUCT SHALL BE IN THE RATIO OF THE TOTAL PRODUCT OWNED BY THE U.S. AND THE MINISTER OF DEFENSE, FEDERAL REPUBLIC OF GERMANY IN THE STORAGE AT THAT MOMENT.

(7) NEITHER THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY NOR HIS AGENT, FBG, WILL BE PERMITTED TO MAKE ANY PROFIT ON THE OPERATIONS CONDUCTED UNDER THE TERMS OF THIS AGREEMENT.

(1) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY WILL ASSURE THAT FBG MAINTAINS BOOKS, RECORDS, DOCUMENTS AND OTHER EVIDENCE PERTAINING TO THE COST OF OPERATIONS, AND EXPENDITURES THEREFOR, TO THE EXTENT AND IN SUCH DETAIL AS WILL PROPERLY REFLECT ALL COSTS AND EXPENSES, DIRECT AND INDIRECT, OF MANAGEMENT, SUPERVISION, LABOR, ACCOUNTING, MATERIALS, EQUIPMENT, SUPPLIES, RENTALS AND SERVICES AND OTHER COSTS AND EXPENSES OF ANY NATURE, THAT ARE INCLUDED IN ESTABLISHING THE TARIFFS CHARGED THE GOVERNMENT OF THE UNITED STATES FOR THE TRANSPORTATION OF PETROLEUM PRODUCTS THROUGH THE PIPELINE SYSTEM.

(2) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY WILL ASSURE THAT FBG MAINTAINS SUCH ACCOUNTING RECORDS FOR U.S. OWNED PETROLEUM PRODUCTS, EQUIPMENT AND FACILITIES WITHIN ITS CUSTODY, AS NECESSARY AND REQUIRED BY THE GOVERNMENT OF THE UNITED STATES.

(3) ALL DETERMINATIONS OF QUANTITY AND ALL INVENTORIES WILL BE BASED ON THE SYSTEM, AS APPLIED BY THE CUSTOMS AUTHORITIES OF THE FEDERAL REPUBLIC OF GERMANY, FOR THE MEASURING AND WEIGHING OF PETROLEUM PRODUCTS.

(4) ALL RECORDS, REQUIRED BY THE TERMS OF PARAGRAPHS (1) AND (2) OF THIS ARTICLE, WILL BE MAINTAINED BY FBG ON A CURRENT BASIS, AND BE SUBJECT TO AUDIT BY COMPETENT AGENCIES OF THE GOVERNMENT OF THE UNITED STATES.

(5) NO RECORDS PERTAINING TO THIS AGREEMENT WILL BE DESTROYED WITHOUT THE PRIOR APPROVAL OF THE GOVERNMENT OF THE UNITED STATES AND THE CENTRAL EUROPE PIPELINE ORGANIZATION.

(6) THE COMPETENT AGENCY OF THE GOVERNMENT OF THE UNITED STATES IS AUTHORIZED TO INSPECT ANY OPERATION PERFORMED FOR THE GOVERNMENT OF THE UNITED STATES AND CONDUCTED UNDER THE TERMS OF THIS AGREEMENT UPON NOTIFICATION OF THE LOCAL REPRESENTATIVES OF FBG.

(1) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY WILL GRANT ACCESS TO ANY AND ALL U.S. PROPERTY, INCLUDING PETROLEUM PRODUCTS, IN THE CUSTODY OF FBG TO ACCREDITED REPRESENTATIVES OF THE GOVERNMENT OF THE UNITED STATES.

(1) THE AGREEMENT ON TAX TREATMENT OF THE FORCES AND THEIR MEMBERS, AS STATED IN BONN CONVENTION, DATED 26 MAY 1952, AS AMENDED BY THE PARIS PROTOCOL, DATED 23 OCTOBER 1954, EFFECTIVE DATE 13 MAY 1955, APPLIES TO ALL TRANSACTIONS UNDER THE TERMS OF THIS AGREEMENT.

(2) THE AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE FEDERAL REPUBLIC OF GERMANY CONCERNING TAX RELIEF TO BE ACCORDED BY THE FEDERAL REPUBLIC TO UNITED STATES EXPENDITURES IN THE INTEREST OF THE COMMON DEFENSE, DATED 15 OCTOBER 1954 WITH AN EFFECTIVE DATE OF 8 NOVEMBER 1955, APPLIES TO ALL TRANSACTIONS UNDER THE TERMS OF THIS AGREEMENT.

(1) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY WILL PERMIT THE GOVERNMENT OF THE UNITED STATES OF AMERICA TO DRAW AT ANY TIME UPON THE FEDERAL REPUBLIC OF GERMANY'S PETROLEUM PRODUCTS, STORED IN THE PIPELINE SYSTEM, ON THE UNDERSTANDING THAT ALL WITHDRAWALS WILL BE REPAID IN KIND AND QUANTITY IN THE PIPELINE SYSTEM BY THE UNITED STATES GOVERNMENT.

(2) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY, IF REQUESTED BY THE GOVERNMENT OF THE UNITED STATES, WILL RECEIVE PETROLEUM PRODUCTS INTO THE PIPELINE SYSTEM AT ZWEIBRUCKEN FROM THE U.S. ZWEIBRUCKEN-GERMERSHEIM PIPELINE ON THE SAME TERMS AND CONDITIONS AS SET FORTH IN THIS AGREEMENT.

(3) THE MINISTER OF DEFENSE OF THE FEDERAL REPUBLIC OF GERMANY, IF REQUESTED, WILL NEGOTIATE WITH THE GOVERNMENT OF THE UNITED STATES FOR THE PERFORMANCE OF SUCH OTHER SERVICES AS THE LATTER MAY DESIRE, TO INCLUDE THE LOADING OF TANK CARS AND TANK TRUCKS, THE FILLING OF DRUMS, AND SIMILAR SERVICES AT TANK FARMS.

(1) ANY DISAGREEMENT, CONCERNING THE PERFORMANCE OF WORK WHICH IS WITHIN THE CAPABILITY OF FBG, BETWEEN THE OPERATING AGENCIES OF THE PARTIES HERETO, WHICH THEY CANNOT SETTLE TO THEIR MUTUAL SATISFACTION, WILL BE REFERRED WITHOUT DELAY TO THE RESPECTIVE GOVERNMENTAL REPRESENTATIVES OF THIS AGREEMENT FOR RESOLUTION, WHICH SHALL BE BINDING UPON BOTH THE OPERATING AGENCIES.

(1) ALL AMENDMENTS TO THIS AGREEMENT SHALL BE IN WRITING, AND WILL BECOME BINDING UPON THE PARTIES HERETO ONLY AFTER THEIR REPRESENTATIVES HAVE AGREED THERETO IN WRITING.

(1) THIS AGREEMENT SHALL BECOME EFFECTIVE UPON THE DATE OF ACCEPTANCE BY BOTH THE PARTIES HERETO AND WILL REMAIN IN EFFECT FOR A PERIOD OF ONE YEAR UNLESS THE CEOA DECIDES TO TAKE OVER RESPONSIBILITY FOR THE OPERATION OF THE PIPELINE SYSTEM IN THE INTERIM. IF CEOA HASN-T TAKEN OVER THE OPERATION PRIOR TO THE END OF THE YEAR, THE PARTIES HERETO WILL CONCLUDE A NEW AGREEMENT BASED UPON THE SAME TERMS AND CONDITIONS.

(1) THE GERMAN AND ENGLISH TEXTS OF THIS AGREEMENT POSSESS EQUAL VALIDITY. UNITED STATES OF AMERICA DER BUNDESMINISTER FUR VERTEIDIGUNG

IN VERTRETUNG DES STAATSSEKRETARS

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MAJ. GEN. E. J. O-NEILL DR HOLTZ -------------------------------------

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AGREEMENT TRANSPORTATION OF PETROLEUM PRODUCTS THROUGH CERTAIN NATO PIPELINES LOCATED IN THE VICINITY OF ZWEIBRUCKEN, GERMANY