Exhibit 10.9
BETWEEN
AND
XXXXX, INC. (“DESIGN-BUILDER”)
March 16, 2006
* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
TABLE OF CONTENTS
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Article 1 |
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Definitions, Rules of Interpretation |
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1 |
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1.1 |
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Rules of Construction |
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1 |
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1.2 |
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Defined Terms |
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2 |
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Article 2 |
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The Project |
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6 |
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2.1 |
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Services to be Performed |
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6 |
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2.2 |
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Extent of Agreement |
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6 |
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2.3 |
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Conflicting Provisions |
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6 |
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Article 3 |
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Design-Builder Responsibilities |
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7 |
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3.1 |
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Design-Builder’s Services in General |
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7 |
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3.2 |
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Design Development and Service |
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7 |
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3.3 |
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Standard of Care |
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8 |
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3.4 |
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Government Approvals and Permits |
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9 |
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3.5 |
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Subcontractors |
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9 |
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3.6 |
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Maintenance of Site |
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9 |
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3.7 |
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Project Safety |
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9 |
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3.8 |
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Submission of Reports |
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10 |
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3.9 |
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Training |
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10 |
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Article 4 |
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Owner’s Responsibilities |
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11 |
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4.1 |
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Duty to Cooperate |
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11 |
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4.2 |
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Furnishing of Services and Information |
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11 |
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4.3 |
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Financial Information; Cooperation with Lenders; Failure to Obtain Financial Closing |
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12 |
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4.4 |
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Owner’s Representative |
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12 |
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4.5 |
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Government Approvals and Permits |
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13 |
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4.6 |
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Owner’s Separate Contractors |
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13 |
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4.7 |
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Security |
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13 |
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Article 5 |
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Ownership of Work Product; Risk of Loss |
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13 |
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5.1 |
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Work Product |
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13 |
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5.2 |
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Owner’s Limited License Upon Payment in Full |
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13 |
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5.3 |
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Owner’s Limited License Upon Owner’s Termination for Convenience or Design-Builder’s |
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Election to Terminate |
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14 |
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5.4 |
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Owner’s Limited License Upon Design-Builder’s Default |
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15 |
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5.5 |
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Owner’s Indemnification for Use of Work Product |
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15 |
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5.6 |
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Risk of Loss |
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15 |
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Article 6 |
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Commencement and Completion of the Project |
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15 |
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6.1 |
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Work Schedule |
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15 |
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6.2 |
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Phase I and Phase II Engineering |
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16 |
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6.3 |
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Notice to Proceed; Commencement |
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16 |
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i
Table of Contents
(continued)
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6.4 |
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Project Start-Up and Testing |
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16 |
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6.5 |
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Substantial Completion |
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17 |
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6.6 |
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Final Completion |
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18 |
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6.7 |
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Additional Labor |
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19 |
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6.8 |
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Post-Completion Support |
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19 |
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Article 7 |
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Performance Testing and Liquidated Damages |
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20 |
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7.1 |
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Performance Guarantee |
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20 |
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7.2 |
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Performance Testing |
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20 |
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7.3 |
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Liquidated Damages |
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21 |
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7.4 |
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Bonds and Other Performance Security |
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21 |
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Article 8 |
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Warranties |
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22 |
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8.1 |
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Design-Builder Warranty |
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22 |
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8.2 |
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Correction of Defective Work |
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23 |
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8.3 |
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Warranty Period Not Limitation to Owner’s Rights |
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23 |
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Article 9 |
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Contract Price |
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23 |
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9.1 |
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Contract Price |
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23 |
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9.2 |
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Effect of Construction Cost Index Increase on Contract Price |
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24 |
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Article 10 |
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Payment Procedures |
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24 |
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10.1 |
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Payment at Financial Closing |
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24 |
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10.2 |
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Progress Payments |
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24 |
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10.3 |
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Final Payment |
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26 |
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10.4 |
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Failure to Pay Amounts Due |
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26 |
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10.5 |
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Design-Builder’s Payment Obligations |
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26 |
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10.6 |
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Record Keeping and Finance Controls |
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26 |
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Article 11 |
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Hazardous Conditions and Differing Site Conditions |
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26 |
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11.1 |
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Hazardous Conditions |
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26 |
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11.2 |
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Differing Site Conditions; Inspection |
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27 |
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Article 12 |
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Force Majeure; Change in Legal Requirements |
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28 |
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12.1 |
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Force Majeure Event |
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28 |
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12.2 |
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Effect of Force Majeure Event |
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28 |
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12.3 |
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Change in Legal Requirements |
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29 |
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12.4 |
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Time Impact and Availability |
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29 |
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Article 13 |
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Changes to the Contract Price and Scheduled Completion Dates |
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29 |
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13.1 |
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Change Orders |
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29 |
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13.2 |
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Contract Price Adjustments |
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30 |
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13.3 |
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Emergencies |
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30 |
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13.4 |
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Requests for Contract Adjustments and Relief |
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31 |
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Article 14 |
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Indemnity |
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31 |
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14.1 |
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Tax Claim Indemnification |
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31 |
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ii
Table of Contents
(continued)
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Page |
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14.2 |
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Payment Claim Indemnification |
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31 |
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14.3 |
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Design Builder’s General Indemnification |
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31 |
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14.4 |
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Owner’s General Indemnification |
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32 |
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14.5 |
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Patent and Copyright Infringement |
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32 |
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Article 15 |
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Stop Work; Termination for Cause |
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33 |
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15.1 |
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Owner’s Right to Stop Work |
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33 |
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15.2 |
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Owner’s Right to Perform and Terminate for Cause |
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33 |
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15.3 |
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Owner’s Right to Terminate for Convenience |
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35 |
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15.4 |
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Design-Builder’s Right to Stop Work |
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35 |
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15.5 |
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Design-Builder’s Right to Terminate for Cause |
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35 |
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15.6 |
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Bankruptcy of Owner or Design-Builder |
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36 |
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15.7 |
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Lenders’ Right to Cure |
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37 |
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Article 16 |
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Representatives of the Parties |
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37 |
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16.1 |
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Designation of Owner’s Representatives |
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37 |
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16.2 |
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Designation of Design-Builder’s Representatives |
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37 |
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Article 17 |
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Insurance |
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38 |
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17.1 |
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Insurance |
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38 |
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17.2 |
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Design-Builder’s Insurance Requirements |
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39 |
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17.3 |
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Owner’s Liability Insurance |
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40 |
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17.4 |
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Owner’s Property Insurance |
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40 |
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17.5 |
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Coordination with Loan Documents |
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41 |
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Article 18 |
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Representations and Warranties |
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42 |
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18.1 |
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Design-Builder and Owner Representations and Warranties |
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42 |
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18.2 |
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Design-Builder Representations and Warranties |
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42 |
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Article 19 |
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Dispute Resolution |
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42 |
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19.1 |
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Dispute Avoidance and Mediation |
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42 |
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19.2 |
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Arbitration |
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43 |
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19.3 |
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Duty to Continue Performance |
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43 |
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19.4 |
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Consequential Damages |
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43 |
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Article 20 |
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Confidentiality of Shared Information |
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44 |
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20.1 |
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Non-Disclosure Obligation |
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44 |
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20.2 |
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Publicity and Advertising |
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44 |
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20.3 |
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Term of Obligation |
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44 |
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Article 21 |
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Miscellaneous |
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45 |
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21.1 |
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Assignment |
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45 |
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21.2 |
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Successors |
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45 |
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21.3 |
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Governing Law |
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45 |
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21.4 |
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Severability |
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45 |
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21.5 |
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No Waiver |
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45 |
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iii
Table of Contents
(continued)
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Page |
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21.6 |
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Headings |
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45 |
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21.7 |
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Notice |
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45 |
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21.8 |
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No Privity with Design Consultant/Subcontractors |
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46 |
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21.9 |
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Amendments |
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46 |
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21.10 |
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Entire Agreement |
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47 |
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21.11 |
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Third-Party Beneficiaries |
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47 |
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21.12 |
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Counterparts |
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47 |
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21.13 |
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Survival |
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47 |
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EXHIBIT A — Performance Guarantee Criteria |
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A-1 |
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EXHIBIT B — General Project Scope |
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B-1 |
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EXHIBIT C — Owner’s Responsibilities |
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C-1 |
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EXHIBIT D — ICM License Agreement |
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D-1 |
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EXHIBIT E — Schedule of Values |
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E-1 |
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EXHIBIT F — Form of Progress Report |
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F-1 |
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EXHIBIT G — Required Permits |
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G-1 |
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EXHIBIT H — Form of Performance Bond |
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H-1 |
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EXHIBIT I — Form of Payment Bond |
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I-1 |
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EXHIBIT J — Work Schedule |
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J-1 |
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EXHIBIT K — Preliminary Construction Documents |
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K-1 |
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EXHIBIT L — Draw (Payment) Schedule |
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L-1 |
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EXHIBIT M — Construction Permit |
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M-1 |
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EXHIBIT N — Phase I and Phase II Engineering Services Agreement |
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N-1 |
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iv
LUMP SUM DESIGN-BUILD CONTRACT
This LUMP SUM DESIGN-BUILD CONTRACT (the “
Agreement”) is made as of March 16, 2006,
(the “
Effective Date”) by and between
Advanced BioEnergy, LLC, a Delaware Limited Liability
Company (the “
Owner”) and Xxxxx, Inc., a
Minnesota corporation (the
“
Design-Builder”).
A. The Owner desires to develop, construct, own and operate a one hundred (100) million
gallons per year (“MGY”) dry grind ethanol production facility located at Fairmont,
Nebraska (the “Plant”); and
B. Design-Builder desires to provide design, engineering, procurement and construction
services for the Plant.
Article 1
Definitions; Rules of Interpretation
1.1 Rules of Construction. The capitalized terms listed in this Article shall have the
meanings set forth herein whenever the terms appear in this Agreement, whether in the singular or
the plural or in the present or past tense. Other terms used in this Agreement but not listed in
this Article shall have meanings as commonly used in the English language and, where applicable, in
generally accepted construction and design-build standards of the fuel ethanol industry in the
Midwest United States. Words not otherwise defined herein that have well known and generally
accepted technical or trade meanings are used herein in accordance with such recognized meanings.
In addition, the following rules of interpretation shall apply:
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(a) |
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The masculine shall include the feminine and neuter. |
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(b) |
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References to “Articles,” “Sections,” “Schedules,” or “Exhibits” shall be to
Articles, Sections, Schedules or Exhibits of this Agreement. |
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(c) |
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This Agreement was negotiated and prepared by each of the Parties with the
advice and participation of counsel. The Parties have agreed to the wording of this
Agreement and none of the provisions hereof shall be construed against one Party on the
ground that such Party is the author of this Agreement or any part hereof. |
1.2 Defined Terms. In addition to definitions appearing elsewhere in this Agreement, the
following terms have the following meanings:
AAA is defined in Section 19.1.
Agreement is defined in the Preamble.
Air Emissions Tester means a third party entity engaged by Owner meeting all required state and
federal requirements for such testing entities, to conduct air emissions testing of the Plant in
accordance with Exhibit A.
Applicable Law means
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(a) |
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any and all laws, legislation, statutes, codes, acts, rules, regulations,
ordinances, treaties or other similar legal requirements enacted, issued or promulgated
by a Governmental Authority; |
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(b) |
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any and all orders, judgments, writs, decrees, injunctions, Governmental
Approvals or other decisions of a Governmental Authority; and |
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(c) |
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any and all legally binding announcements, directives or published practices or
interpretations, regarding any of the foregoing in (a) or (b) of this definition,
enacted, issued or promulgated by a Governmental Authority; |
to the extent, for each of the foregoing in (a), (b) and (c) of this definition, applicable to or
binding upon (i) a Party, its affiliates, its shareholders, its members, it partners or their
respective representatives, to the extent any such person is engaged in activities related to the
Project; or (ii) the property of a Party, its affiliates, its shareholders, its members, its
partners or their respective representatives, to the extent such property is used in connection
with the Project or an activity related to the Project.
Application for Payment is defined in Section 10.2.1.
As Built Plans is defined in Section 5.2.
Bankrupt Party is defined in Section 15.6.1.
Baseline Index is defined in Section 9.2.1.
Change Order is defined in Section 13.1.1.
CCI is defined in Section 9.2.
Certificate of Substantial Completion is defined in Section 6.5.3
Construction Documents is defined in Section 3.2.2.
Contract Documents is defined in Section 2.2.
Contract Price is defined in Section 9.1.
Damages is defined in Section 14.3.1.
2
Day or Days shall mean calendar days unless otherwise specifically noted in the Contract Documents.
Design-Builder is defined in the Preamble.
Design-Builder’s Representative is defined in Section 16.2.
Design-Builder’s Senior Representative is defined in Section 16.2.
Design Consultant is a qualified, licensed design professional that is not an employee of
Design-Builder, but is retained by Design-Builder, or employed or retained by anyone under contract
with Design-Builder or Subcontractor, to furnish design services required under the Contract
Documents.
Differing Site Conditions is defined in Section 11.2.1.
Early Completion Bonus is defined in Section 6.5.4.
Effective Date is defined in the Preamble.
Final Application for Payment is defined in Section 10.3.
Final Completion is defined in Section 6.6.2.
Final Completion Date is the date that is 90 Days after the Substantial Completion Date.
Final Payment is defined in Section 10.3.
Financial Closing means the execution of the Financing Documents by all the parties thereto, and
the fulfillment of all conditions precedent thereunder necessary to permit the advance of funds to
pay amounts due under this Agreement.
Financing Documents means the final loan documents with the lender or lenders providing financing
for the construction or term financing of the Plant.
Force Majeure Event is defined in Section 12.1.
Governmental Approvals are any material authorizations or permissions issued or granted by any
Governmental Authority to the Project, its Owner, the Design-Builder, Subcontractors and their
affiliates in connection with any activity related to the Project.
Governmental Authority means any federal, state, local or municipal governmental body; any
governmental, quasi-governmental, regulatory or administrative agency, commission, body or other
authority exercising or entitled to exercise any administrative, executive, judicial, legislative,
policy, regulatory or taxing authority or power; or any court or governmental tribunal; in each
case having jurisdiction over the Owner, the Design-Builder, the Project, or the Site.
3
Hazardous Conditions are any materials, wastes, substances and chemicals deemed to be hazardous
under applicable Legal Requirements, or the handling, storage, remediation, or disposal of which
are regulated by applicable Legal Requirements.
ICM is defined in Section 5.2.1.
ICM License Agreement means the license agreement to be executed between Owner and ICM, Inc.,
substantially in the form attached hereto as Exhibit D.
Indemnified Parties is defined in Section 5.2.
Independent Engineer means Owner’s and Lenders’ independent engineer.
Legal Requirements or Laws are all applicable federal, state and local statutes, laws, codes,
ordinances, rules, regulations, judicial decisions, orders, decrees plans, injunctions, permits,
tariffs, governmental agreements and governmental restrictions, whether now or hereafter in effect,
of any government or quasi-government entity having jurisdiction over the Project or Site, the
practices involved in the Project or Site, or any Work, including any consensus standards for
materials, products, systems, and services established by ASTM International, any successor
organization thereto, or any Governmental Authority.
Lenders means the lenders that are party to the Financing Documents.
Lenders’ Agent means an agent or agents acting on behalf of the Lenders.
Manufacturer’s Warranty shall mean a warranty provided by the original manufacturer or vendor of
equipment used by Design-Builder in the Plant.
MGY is defined in the Recitals.
Notice to Proceed is defined in Section 6.3.
Oversight Items is defined in Section 4.3.
Owner is defined in the Preamble.
Owner Indemnified Parties is defined in Section 14.3.1.
Owner Milestones is defined in Section 4.2.1.
Owner’s Representative is defined in Section 16.1.
Owner’s Senior Representative is defined in Section 16.1.
Pass Through Warranties mean any warranties provided to Design-Builder by a Subcontractor which are
assigned to Owner.
Pay Period means, with respect to a given Application for Payment or Progress Report, the one month
period following the last day of the previous Pay Period to which the immediately prior Application
for Payment or Progress Report is applied; provided that the initial Pay Period shall
4
commence on the date of delivery of the Notice to Proceed and end on the 24th day of the
calendar month during which the Notice to Proceed is issued.
Payment Bond is defined in Section 7.4.2.
Performance Bond is defined in Section 7.4.1.
Performance Guarantee Criteria means the criteria listed in Exhibit A.
Performance Tests is defined in Section 7.2.1.
Phase I is defined in Exhibit C.
Phase II is defined in Exhibit C.
Plant is defined in the Recitals.
Preliminary Construction Documents is defined in Section 3.2.1.
Progress Report is defined in Section 3.8.
Project is defined in Section 2.1.
Project Scope is defined in Exhibit B.
Punch List is defined in Section 6.5.3.
Qualified Independent Expert means an expert retained by Owner and approved by Design-Builder
pursuant to Section 11.1.2.
Safety Representative is defined in Section 3.7.1.
Schedule of Values is defined in Section 10.2.5.
Scheduled Substantial Completion Date is defined in Section 6.5.1.
Site is the land or premises on which the Project is located.
Subcontractor is any person or entity retained by Design-Builder, or by any person or entity
retained directly or indirectly by Design-Builder, in each case as an independent contractor to
perform a portion of the Work and shall include materialmen and suppliers.
Substantial Completion is defined in Section 6.5.2.
Work is defined in Section 3.1.
Work Product is defined in Section 5.1.
Work Schedule is defined in Section 6.1.
5
Article 2
The Project
2.1 Services to be Performed. Pursuant to this Agreement, Design-Builder shall perform all
work and services in connection with the engineering, design, procurement, construction startup,
testing and training for the operation and maintenance of the Plant, and provide all material,
equipment, tools and labor necessary to complete the Plant in accordance with the terms of this
Agreement. The Plant, together with all equipment, labor, services and materials furnished
hereunder is defined as the “Project.”
2.2 Extent of Agreement. This Agreement consists of the following documents, and all
exhibits, schedules, appendices and attachments hereto and thereto (collectively, the “Contract
Documents”):
2.2.1 All written modifications, amendments and change orders to this Agreement.
2.2.2 This Agreement, including all exhibits and attachments, executed by Owner and
Design-Builder, including those below:
List of Exhibits
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Exhibit A
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Performance Guarantee Criteria |
Exhibit B
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General Project Scope |
Exhibit C
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Owner’s Responsibilities |
Exhibit D
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ICM License Agreement |
Exhibit E
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Schedule of Values |
Exhibit F
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Progress Report |
Exhibit G
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Permits Required |
Exhibit H
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Form of Performance Bond |
Exhibit I
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Form of Payment Bond |
Exhibit J
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Work Schedule |
Exhibit K
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Preliminary Construction Documents |
Exhibit L
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Draw (Payment) Schedule |
Exhibit M
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Construction Permit |
Exhibit N
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Phase I and Phase II Engineering Services Agreement |
2.2.3 Preliminary Construction Documents prepared by Design-Builder pursuant to Section 3.2.1
and the Construction Documents to be prepared by Design-Builder pursuant to Section 3.2.2 shall be
incorporated in this Agreement.
2.3 Conflicting Provisions. In the event of any conflict or inconsistency between the body of
this Agreement and any Exhibit or
Schedule hereto, the terms and provisions of this Agreement, as amended from time to time,
shall prevail and be given priority. Subject to the
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foregoing, the several documents and
instruments forming part of this Agreement are to be taken as mutually explanatory of one another
and in the case of ambiguities or discrepancies within or between such parts the same shall be
explained and interpreted, if possible, in a manner which gives effect to each part and which
avoids or minimizes conflicts among such parts. No oral representations or other agreements have
been made by the parties except as specifically stated in the Contract Documents.
Article 3
Design-Builder Responsibilities
3.1 Design-Builder’s Services in General. Except for services and information to be provided
by Owner and specifically set forth in Article 4 and Exhibit C, Design-Builder shall perform or
cause to be performed all design, engineering, procurement, construction services, supervision,
labor, inspection, testing, start-up, material, equipment, machinery, temporary utilities and other
temporary facilities to complete construction of the Project consistent with the Contract Documents
(the “Work”). All design and engineering and construction services and other Work of the
Design-Builder shall be performed in accordance with (i) the Project Scope as set forth in Exhibit
B, (ii) the Construction Documents, (iii) all Legal Requirements, and (iv) generally accepted
construction and design-build standards of the fuel ethanol industry in the Midwest United States.
Any design and engineering or other professional service to be performed pursuant to this
Agreement, which under Applicable Law must be performed by licensed personnel, shall be performed
by licensed personnel as required by Law. The enumeration of specific duties and obligations to be
performed by the Design-Builder under the Contract Documents shall not be construed to limit in any
way the general undertakings of the Design-Builder as set forth herein. Design-Builder’s
Representative shall be reasonably available to Owner and shall have the necessary expertise and
experience required to supervise the Work. Design-Builder’s Representative shall communicate
regularly with Owner and shall be vested with the authority to act on behalf of Design-Builder.
3.2 Design Development and Services.
3.2.1 As of the Effective Date, but in no event later than thirty (30) Days from the Effective
Date, Design-Builder has or shall have provided to Owner the following documents, and any other
documents reasonably agreed to by Design-Builder and Owner as applying to the conceptual design of
the Project and required to apply for the construction air permit or completion of the Site layout
in cooperation with Owner’s rail engineer (collectively, the “Preliminary Construction
Documents”), which shall be consistent with the Project Scope and once approved by Owner, shall
be part of this Agreement:
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major equipment lists, with sizes; |
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process flow diagram; |
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process design criteria and/or process description; and |
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Site layout. |
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Owner shall have thirty (30) Days from the date it receives the Preliminary Construction Documents
to review and approve such documents. The Preliminary Construction Documents shall establish
performance standards for the completed Project and identify components required to meet those
performance standards. Any changes to the Preliminary Construction Documents shall be subject to
the prior review and approval by Owner, such approval not to be unreasonably withheld or delayed.
3.2.2 Where required by Law, Design-Builder shall provide through qualified, licensed design
professionals employed by Design-Builder, or procured from qualified, independent licensed Design
Consultants, the necessary design services, including architectural, engineering and other design
professional services, for the preparation of the required drawings, specifications and other
design submittals required to permit construction of the Work in accordance with this Agreement and
the Preliminary Construction Documents (such drawings, specifications and design submittals
collectively and together with the Preliminary Construction Documents, the “Construction
Documents”). To the extent not prohibited by Legal Requirements, Design-Builder may prepare
Construction Documents for a portion of the Work to permit construction to proceed on that portion
of the Work prior to completion of the Construction Documents for the entire Work.
3.2.3 Construction of the Plant shall be consistent with the Construction Documents.
3.2.4 Design-Builder shall maintain a current, complete set of drawings and specifications at
the Site. Owner shall have the right to review such drawings and specifications. Owner and
Independent Engineer may not make copies of the available drawings and specifications without
Design-Builder’s written permission, and, granted such permission, may only do so to the extent
such drawings and specifications directly pertain to the Plant; provided however that, pursuant to
Section 5.1 of this Agreement, Design-Builder retains ownership of and property interests in any
drawing or specifications made available and/or copied.
3.2.5 Except as provided elsewhere in this Agreement, it is understood and agreed that review,
comment and/or approval by Owner (or its designees) or Independent Engineer of any documents or
submittals that Design-Builder is required to submit to Owner (or its designees) or Independent
Engineer hereunder for their review, comment and/or approval (including without limitation the
Preliminary Construction Documents pursuant to Section 3.2.1 hereof or other Construction Documents
pursuant to Sections 3.2.2 and 3.2.4 hereof) shall not relieve or release Design-Builder from any
of its duties, obligations or liabilities provided for under the terms of this Agreement or
transfer any design liability from Design-Builder to Owner.
3.3 Standard of Care. All services performed by the Design-Builder and its Subcontractors
pursuant to the Construction Documents shall be performed in accordance with the standard of care
and skill generally accepted in the fuel ethanol industry in the Midwest United States during the
relevant time period or in accordance with any of the practices, methods and acts that in the
exercise of reasonable
judgment in light of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at a reasonable cost consistent with good business
practices, safety and expedition. This standard of care is not intended to be limited to the
optimum practice, method or act to the exclusion of all others, but rather to be acceptable
practices, methods or acts generally accepted in the construction and
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design-build standards of the
fuel ethanol industry in the Midwest United States. Design-Builder and its Subcontractors shall
perform all construction activities efficiently and with the requisite expertise, skill,
competence, resources and care to satisfy the requirements of the Contract Documents and all
applicable Legal Requirements. Design-Builder shall at all times exercise complete and exclusive
control over the means, methods, sequences and techniques of construction.
3.4 Government Approvals and Permits. Except as identified in Exhibit C and, with respect to
items identified as Owner’s responsibility, in Exhibit G (which items shall be obtained by Owner
pursuant to Section 4.5), Design-Builder shall obtain and pay for all necessary permits, approvals,
licenses, government charges and inspection fees required for the prosecution of the Work by any
government or quasi-government entity having jurisdiction over the Project. Design-Builder shall
provide reasonable assistance to Owner in obtaining those permits, approvals and licenses that are
Owner’s responsibility.
3.5 Subcontractors.
3.5.1 Design-Builder may subcontract portions of the Work in accordance with the terms hereof.
3.5.2 Design-Builder assumes responsibility to Owner for the proper performance of the Work of
Subcontractors and any acts and omissions in connection with such performance. Nothing in the
Contract Documents is intended or deemed to create any legal or contractual relationship between
Owner and any Subcontractor, including but not limited to any third-party beneficiary rights.
3.5.3 Design-Builder shall coordinate the activities of all of Design-Builder’s
Subcontractors. If Owner performs other work on the Project or at the Site with separate
contractors under Owner’s control, Design-Builder agrees to reasonably cooperate and coordinate its
activities with those separate contractors so that the Project can be completed in an orderly and
coordinated manner without unreasonable disruption.
3.5.4 Design-Builder shall ensure that each subcontract with a Subcontractor is assignable to
Owner without consent of the Subcontractor or any other person or entity in the event that
Design-Builder shall be in an uncured default or terminated with cause under the terms of this
Agreement.
3.6 Maintenance of Site. Design-Builder shall keep the Site reasonably free from debris,
trash and construction wastes to permit Design-Builder to perform its construction services
efficiently, safely and without interfering with the use of adjacent land areas. Upon Substantial
Completion of the Work, or portion of the Work, as applicable, Design-Builder shall remove all
debris, trash, construction wastes,
materials, equipment, machinery and tools arising from the Work or applicable portions thereof
to permit Owner to occupy the Project for its intended use.
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3.7 Project Safety.
3.7.1 Design-Builder recognizes the importance of performing the Work in a safe manner so as
to prevent damage, injury or loss to (i) any individuals at the Site, whether working or visiting,
(ii) the Work, including materials and equipment incorporated into the Work or stored on-Site or
off-Site, and (iii) any other property at the Site or adjacent thereto. Design-Builder assumes
responsibility for implementing and monitoring all safety precautions and programs related to the
performance of the Work. Design-Builder shall, prior to commencing construction, designate a
representative (the “Safety Representative”) with the necessary qualifications and
experience to supervise the implementation and monitoring of all safety precautions and programs
related to the Work. Unless otherwise required by the Contract Documents, Design-Builder’s Safety
Representative shall be an individual stationed at the Site who may have responsibilities on the
Project in addition to safety. The Safety Representative shall make routine daily inspections of
the Site and shall hold weekly safety meetings with Design-Builder’s personnel, Subcontractors and
others as applicable.
3.7.2 Design-Builder and Subcontractors shall comply with all Legal Requirements relating to
safety, as well as any Owner-specific safety requirements set forth in the Contract Documents;
provided, that such Owner-specific requirements do not violate any applicable Legal Requirement.
As promptly as practicable, Design-Builder will report in writing any safety-related injury, loss,
damage or accident arising from the Work to Owner’s Representative and, to the extent mandated by
Legal Requirements, to all government or quasi-government authorities having jurisdiction over
safety-related matters involving the Project or the Work.
3.7.3 Design-Builder’s responsibility for safety under this Section 3.7 is not intended in any
way to relieve Subcontractors of their own contractual and legal obligations and responsibility for
(i) complying with all Legal Requirements, including those related to health and safety matters,
and (ii) taking all necessary measures to implement and monitor all safety precautions and programs
to guard against injury, losses, damages or accidents resulting from their performance of the Work.
3.8 Submission of Reports. Design-Builder shall provide Owner with regular communication
regarding the progress (“Progress Report”) and any revisions to the drawings and
specifications of the Work, including whether (i) the Work is proceeding according to schedule,
(ii) discrepancies, conflicts, or ambiguities exist in the Contract Documents that require
resolution, (iii) health and safety issues exist in connection with the Work, and (iv) other items
require resolution so as not to jeopardize Design-Builder’s ability to complete the Work for the
Contract Price and within the contract time(s). Progress Reports shall be in the form of Exhibit F
attached hereto.
3.9 Training. At a mutually agreed time prior to start-up, Design-Builder shall provide two
(2) weeks of training at a plant in Xxxxxxx, Kansas (or other location) for all of Owner’s
employees required for the operation and maintenance of the Plant in accordance with all design
specifications therefor contained in the Contract Documents
and necessary in order to maintain the Performance Guarantee Criteria, including operators,
laboratory personnel, general, plant and maintenance managers. Other personnel of Owner may receive
such off-site training by separate arrangement between Owner and Design-Builder and as time is
available. All training personnel and costs associated with such training personnel, including
labor and all training materials will be provided to Owner within the Contract Price at no
additional cost. Owner will
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be responsible for all travel and expenses of their employees and the
Owner will pay all wages and all other expenses for their personnel during the training. The
training services will include training on computers, laboratory procedures, field operating
procedures, and overall plant section performance expectations. Prior to the start-up training,
Design-Builder shall provide Owner training manuals and operating manuals and other documents
reasonably necessary for the start-up process.
Article 4
Owner’s Responsibilities
4.1 Duty to Cooperate.
4.1.1 Owner shall, throughout the performance of the Work, cooperate with Design-Builder and
perform its responsibilities, obligations and services in a timely manner to facilitate
Design-Builder’s timely and efficient performance of the Work and so as not to delay or interfere
with Design-Builder’s performance of its obligations under the Contract Documents.
4.1.2 Owner shall provide timely review and approval of Preliminary Construction Documents
subject to Section 3.2.1.
4.1.3 Owner shall pay all reasonable costs incurred by Design-Builder for frost removal so
that winter construction can proceed. Such costs may include but are not limited to, equipment
costs, equipment rental costs, sheltering costs, special material costs, fuel costs and associated
labor costs. Owner acknowledges and agrees that such costs are in addition to, and not included
in, the Contract Price.
4.2 Furnishing of Services and Information.
4.2.1 Prior to the issuance of the Notice to Proceed, Owner shall provide to Design-Builder,
at Owner’s own cost and expense, for Design-Builder’s information and use, the following, all of
which Design-Builder is entitled to rely upon in performing the Work:
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surveys describing the property, boundaries, topography and
reference points for use during construction, including existing service and
utility lines; |
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geotechnical studies describing subsurface conditions including
soil borings, and other surveys describing other latent or concealed physical
conditions at the Site; |
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temporary and permanent easements, zoning and other
requirements and encumbrances affecting land use, or necessary to permit the
proper design and construction of the Project and enable Design-Builder to perform the
Work; |
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A legal description of the Site; |
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to the extent available, as-built and record drawings of any
existing structures at the Site; and |
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environmental studies, reports and impact statements describing
the environmental conditions, including Hazardous Conditions, in existence at
the Site. |
4.2.2 Owner shall provide to Design-Builder all Owner’s deliverables under Exhibit C pursuant
to the owner’s milestones listed in Exhibit J. Such deliverables shall be provided, at Owner’s own
cost and expense, for Design-Builder’s information and use. Design-Builder is entitled to rely
upon such deliverables in performing the Work.
4.2.3 Owner is responsible for securing and executing all necessary agreements with adjacent
land or property owners that are necessary to enable Design-Builder to perform the Work and that
have been identified and notified in writing by Design-Builder to Owner prior to the Effective
Date. Owner is further responsible for all costs, including attorneys’ fees, incurred in securing
these necessary agreements.
4.3 Financial Information; Cooperation with Lenders; Failure to Obtain Financial Closing.
Design-Builder acknowledges that Owner is seeking financing for the Project. Design-Builder agrees
to cooperate with Owner in good faith in order to satisfy the requirements of Owners’ financing
arrangements, including, where appropriate, the execution and delivery of documents or instruments
necessary to accommodate the Financial Closing. Owner agrees to pay all documented costs incurred
by Design-Builder incurred prior to and at Financial Closing, and thereafter during the term of
this Agreement, in connection with satisfying the requirements of Owners’ financing arrangements
including all documented attorney’s fees. Design-Builder and Owner also acknowledge that the
Lenders, as a condition to providing financing for the Plant, shall require Owner to provide the
Independent Engineer with certain participation and review rights with respect to Design-Builder’s
performance of the Work. Design-Builder acknowledges and agrees that such participation and review
rights shall consist of the right to (i) enter the Site and inspect the Work upon reasonable notice
to Design-Builder; (ii) attend all start-up and testing procedures; and (iii) review and approve
such other items for which Owner is required by Lenders to obtain the concurrence, opinion or a
certificate of the Independent Engineer or the Lenders pursuant to the Financing Documents which
items do not alter the rights or impose additional obligations on Design-Builder (collectively, the
“Oversight Items”). Nothing in this Section 4.3 shall be deemed to require Design-Builder
to agree to any amendments to this Agreement that would adversely affect Design-Builder’s risks,
rights or obligations under this Agreement. Upon Financial Closing, Owner shall promptly provide
to Design-Builder an officer’s certificate certifying that Financial Closing has occurred and such
Owner’s officer’s certificate shall constitute evidence satisfactory to Design-Builder that Owner
has adequate funds available and committed to fulfill its obligations under the
Contract Documents for all purposes hereunder. Owner must obtain Financial Closing prior to
issuing the Notice to Proceed.
4.4 Owner’s Representative. Owner’s Representative, as set forth in Section 16.1 hereof,
shall be responsible for providing Owner-supplied information and approvals in a timely manner to
permit Design-Builder to fulfill its obligations under the Contract Documents. Owner’s
Representative shall also provide Design-Builder with prompt notice if it observes any
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failure on
the part of Design-Builder to fulfill its contractual obligations, including any errors, omissions
or defects in the performance of the Work. Owner’s Representative shall be vested with the
authority to act on behalf of Owner and Design-Builder shall be entitled to rely on written
communication from Owner’s Representative with respect to a Project matter.
4.5 Government Approvals and Permits. Owner shall obtain and pay for all necessary
Governmental Approvals required by Law, including permits, approvals, licenses, government charges
and inspection fees set forth in Exhibit C and, to the extent identified as Owner’s responsibility,
Exhibit G. Owner shall provide reasonable assistance to Design-Builder in obtaining those permits,
approvals and licenses that are Design-Builder’s responsibility pursuant to Exhibits G and Section
3.4.
4.6 Owner’s Separate Contractors. Owner is responsible for all work, including such work
listed on Exhibit C, performed on the Project or at the Site by separate contractors under Owner’s
control. Owner shall contractually require its separate contractors to cooperate with, and
coordinate their activities so as not to interfere with, Design-Builder in order to enable
Design-Builder to timely complete the Work consistent with the Contract Documents.
4.7 Security.
4.7.1 Owner shall be responsible for Site security (including fencing, alarm systems, security
guarding services and the like) at all times during the term of this Agreement to prevent
vandalism, theft and danger to the Project, the Site, and personnel. Owner shall coordinate and
supervise ingress and egress from the Site so as to minimize disruption to the Work.
4.7.2 Design-Builder shall at all times conduct its operations in a manner to minimize the
risk of loss, theft, or damage by vandalism, sabotage, or any other means. Design-Builder shall
continuously inspect all Work, materials, and equipment to discover and determine any conditions
that might involve such risks and shall be solely responsible for discovery, determination, and
correction of any such conditions.
Article 5
Ownership of Work Product; Risk of Loss
5.1 Work Product. All drawings, specifications, calculations, data, notes and other
materials and documents, including electronic data furnished by Design-Builder to Owner under this
Agreement (“Work Product”) shall be
instruments of service and Design-Builder shall retain the ownership and property interests
therein, including the copyrights thereto.
5.2 Owner’s Limited License Upon Payment in Full. Upon Owner’s payment in full for all Work
performed under the Contract Documents, Design-Builder shall grant Owner a limited license to use
the Work Product in connection with Owner’s occupancy and repair of the Plant. Design-Builder
acknowledges and agrees that the limited license to use the Work Product granted hereby shall
provide Owner sufficient rights in and to the Work Product as shall be necessary for Owner to
operate and maintain the Plant and shall include any Pass Through Warranties in connection
therewith. Design-Builder shall provide Owner with a copy of the
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plans of the Plant, as built,
(the “As Built Plans”) conditioned on Owner’s express understanding that its use of the
Work Product and its acceptance of the As Built Plans is at Owner’s sole risk and without liability
or legal exposure to Design-Builder or anyone working by or through Design-Builder, including
Design Consultants of any tier (collectively the “Indemnified Parties”); provided, however,
that any performance guarantees, and warranties (of equipment or otherwise) shall remain in effect
according to the terms of this Agreement.
5.2.1 Owner shall be entitled to use the Work Product solely for purposes relating to the
Plant, but shall not be entitled to use the Work Product for any other purposes whatsoever,
including without limitation, expansion of the Plant. Notwithstanding the foregoing sentence,
Owner shall be entitled to use the Work Product for the operation, maintenance and repair of the
plant including the interconnection of, but not the design of, any future expansions to the Plant.
The limited license granted to Owner under Sections 5.2, 5.3 or 5.4 to use the Work Product shall
be limited by and construed according to the same terms contained in the ICM License Agreement
between Owner and ICM, Inc., attached hereto as Exhibit D and incorporated herein by reference
thereto, except (i) references in such ICM License Agreement to ICM and Proprietary Property shall
refer to Design-Builder and Work Product, respectively, (ii) the Laws of the State of
Minnesota
shall govern such limited license, and (iii) the dispute resolution provisions contained in Article
19 hereof shall apply to any breach or threatened breach of Owner’s duties or obligations under
such limited license, except that Design-Builder shall have the right to seek injunctive relief in
a court of competent jurisdiction against Owner or its Representatives for any such breach or
threatened breach. Design-Builder is utilizing certain proprietary property and information of
ICM, Inc., a Kansas corporation (“
ICM”), in the design and construction of the Project, and
Design-Builder may incorporate proprietary property and information of ICM into the Work Product.
Owner’s use of the proprietary property and information of ICM shall be governed by the terms and
provisions of the License Agreement between Owner and ICM, attached hereto as Exhibit D, to be
executed by such parties in connection with the execution of this Agreement. This paragraph also
applies to Articles 5.3 and 5.4 below.
5.3 Owner’s Limited License Upon Owner’s Termination for Convenience or Design-Builder’s
Election to Terminate. If Owner terminates the Project for its convenience as set forth in
Section 15.3 hereof, or if Design-Builder elects to terminate this Agreement in accordance with
Section 15.5, Design-Builder shall, upon Owner’s payment in full of the amounts due Design-Builder
under this
Agreement, grant Owner a limited license to use the Work Product to complete the Plant and
subsequently occupy and repair the Plant, subject to the following:
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Use of the Work Product is at Owner’s sole risk without liability or legal
exposure to any Indemnified Party; provided, however, that any Pass Through Warranties
regarding equipment or express warranties regarding equipment provided by this
Agreement shall remain in effect according to their terms; and |
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If the termination for convenience is by Owner in accordance with Section 15.3
hereof, or if Design-Builder elects to terminate this Agreement in accordance with
Section 15.5, then Owner agrees to pay Design-Builder the additional sum of Two Million
Five Hundred Thousand Dollars ($2,500,000.00) as compensation for the limited right to
use the Work Product completed “as is” on the date of termination in accordance with
this Article 5. |
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5.4 Owner’s Limited License Upon Design-Builder’s Default. If this Agreement is terminated
due to Design-Builder’s default pursuant to Section 15.2 and (i) it is adjudged that Design-Builder
was in default, and (ii) Owner has fully satisfied all of its obligations under the Contract
Documents through the time of Design-Builder’s default, then Design-Builder shall grant Owner a
limited license to use the Work Product in connection with Owner’s completion and occupancy and
repair of the Plant. This limited license is conditioned on Owner’s express agreement that its use
of the Work Product is at Owner’s sole risk without liability or legal exposure to any Indemnified
Party; provided, however, that any Pass Through Warranties regarding equipment or express
warranties regarding equipment provided by this Agreement shall remain in effect according to their
terms. This limited license grants Owner the ability to repair the Plant at Owner’s discretion.
5.5 Owner’s Indemnification for Use of Work Product. If Owner uses the Work Product or Plant
under any of the circumstances identified in this Article 5, to the fullest extent allowed by Law,
Owner shall defend, indemnify and hold harmless the Indemnified Parties from and against any and
all claims, damages, liabilities, losses and expenses, including attorneys’ fees, arising out of or
resulting from the use of the Work Product and Plant; provided, however, that any Pass Through
Warranties regarding equipment or express warranties regarding equipment provided by this Agreement
shall remain in effect according to their terms.
5.6 Risk of Loss. Design-Builder shall have no liability for a physical loss of or damage to
the Work unless such loss or damage is caused by Design-Builder or someone acting under its
direction or control. Design-Builder shall not be liable for physical loss of or damage to the Work
where such loss or damage is caused by the willful misconduct or gross negligence of Owner’s
employees or third parties who are not Subcontractors. Design-Builder shall have no liability for
losses or damages for which insurance coverage under this Agreement is available to Owner; in such
circumstances, Design Builder’s liability for losses and damages as described in this Section 5.6
shall be limited to losses or damages which exceed insurance coverage available to the Owner.
Article 6
6.1 Work Schedule. The preliminary schedule for the execution of the Work is attached as
Exhibit J hereto (the “
Work Schedule”). The final schedule for execution of the Work shall
be provided within thirty (30) Days after receipt of the Notice to Proceed. The Work Schedule
provides the scheduled dates for the commencement and completion of the various stages of Work,
including the dates when Owner’s obligations are required to be complete to enable Design-Builder
to achieve the contract time(s). The Work Schedule shall be revised as required by conditions and
progress of the Work but such revisions shall not relieve Design-Builder of its obligations to
complete the Work within the contract time(s), unless such revisions to the Work Schedule are
required as a result of any delay in the completion of Owner’s obligations or as a result of a
Force Majeure Event. In such event, the Work Schedule shall be revised to provide, without
penalty to Design-Builder, a Day-for-Day extension of the contract time(s) for completion of the
Work for each Day during which Owner’s failure to complete its obligations or a Force Majeure Event
causes such delay.
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6.2 Phase I and Phase II Engineering. Owner and Design-Builder have entered into that certain
Phase I and Phase II Engineering Services Agreement dated November 4, 2005, and attached hereto as
Exhibit N. The Phase I and Phase II Engineering Services Agreement provides for Design-builder to
commence work on the Phase I and Phase II engineering for the Project as set forth therein. Owner
has agreed to pay Design-Builder Ninety-two Thousand Five Hundred Dollars ($92,500.00) for such
engineering services pursuant to the terms of that agreement, the full amount of which shall be
included in and credited to the Contract Price. Notwithstanding the foregoing sentence, if a
Notice to Proceed is not issued pursuant to Section 6.3, or Financial Closing is not obtained
pursuant to Section 4.3, then Design-Builder shall keep the full amount paid under the Phase I and
Phase II Engineering Services Agreement as compensation for the services provided thereunder.
6.3 Notice to Proceed; Commencement. The Work shall commence within five (5) Days of
Design-Builder’s receipt of Owner’s written valid notice to proceed (“
Notice to Proceed”)
unless the parties mutually agree otherwise in writing. The parties agree that a valid Owner’s
Notice to Proceed cannot be given until: [*] Owner and
Design-Builder mutually agree that time is of the essence with respect to the dates and times set
forth in the Contract Documents. Design-Builder must receive a valid Owner’s Notice to Proceed
within one hundred and eighty (180) Days of the Effective Date; otherwise, this Agreement may be
terminated, at Design-Builder’s sole option. If Design-Builder chooses to terminate this Agreement
pursuant to its right under the immediately preceding sentence, then Design-Builder shall have no
further obligations hereunder.
6.3.1 Notice to Proceed shall be delivered by Owner to Design-Builder pursuant to the notice
requirements set forth in Section 21.7 hereof, with a copy to:
Xxxxx Inc.
000 X. Xxxxxxx 000
P.O. Box 159
Granite Falls, MN 56241
Attention: Xxxxx Xxxx
Fax: (000) 000-0000
6.4 Project Start-Up and Testing. Owner shall provide, at Owner’s cost, equipment, tools,
instruments and materials necessary for Owner to comply with its obligations under Exhibit C, raw
materials, consumables and personnel, necessary for start-up and testing of
* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
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the Plant, and
Design-Builder shall provide supervision, standard and special test instruments, tools, equipment
and materials required to perform component and equipment checkout and testing, initial start-up,
operations supervision and corrective maintenance of all permanent Plant equipment within the scope
of the Work. Notwithstanding the foregoing sentence, Design-Builder shall be responsible for raw
materials and consumables to the extent such amounts provided by Owner are destroyed or damaged (as
opposed to consumed in the ordinary course of start-up and testing) by Design-Builder or its
personnel during start-up and testing. Design-Builder shall supervise and direct Owner’s personnel
who shall participate in the start-up activities with Design-Builder’s personnel to become familiar
with all aspects of the Plant. Owner and the Independent Engineer may witness start-up and testing
activities. Performance testing will be conducted in accordance with the provisions of Section 7.2
hereof.
6.5.1 Substantial Completion of the entire Work shall be achieved no later than Four Hundred
Eighty-five (485) Days after the date of the Notice to Proceed, subject to adjustment in accordance
with the Contract Documents hereof (the “Scheduled Substantial Completion Date”).
6.5.2 “Substantial Completion” shall be deemed to occur on the date on which the Work
is sufficiently complete that the Plant is ready to grind the first batch of corn for producing
ethanol and begin operation for its intended use as a 100 MGY dry grind ethanol production
facility. No production capacity is guaranteed on the Substantial Completion date, but the Plant
shall be largely completed as of that date and the Owner can occupy and use the Plant for its
intended purposes.
6.5.3 Procedures. Design-Builder shall notify Owner in writing when it believes Substantial
Completion has been achieved with respect to the Work. Within five (5) Days of Owner’s receipt of
Design-Builder’s notice, Owner and Design-Builder will jointly inspect such Work to verify that it
is substantially complete in accordance with the requirements of the Contract Documents. If such
Work is deemed substantially complete, Design-Builder shall prepare and issue and Owner shall
approve in writing, which approval shall not be unreasonably withheld, a “
Certificate of
Substantial Completion” for the Work that will set forth (i) the date of Substantial
Completion, (ii) the remaining items of Work that have to be completed before Final Payment
(“
Punch List”), (iii) provisions (to the extent not already provided in this Agreement)
establishing Owner’s and Design-Builder’s responsibility for the Project’s security, maintenance,
utilities and insurance pending Final Payment, and (iv) an acknowledgment that warranties with
respect to the Work commence on the date of Substantial Completion, except as may otherwise be
noted in the Certificate of Substantial Completion. Upon Substantial Completion of the entire Work
and satisfaction of the Performance Guarantee Criteria listed in Exhibit A, Owner shall release to
Design-Builder all retained amounts relating, as applicable, to the entire Work or completed
portion of the Work, less an amount equal to One Hundred and Fifty Percent (150%) of the reasonable
value of all remaining or incomplete items of Work as noted in the Certificate of Substantial
Completion, and less an amount equal to the value of any Subcontractor lien waivers not yet
obtained.
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Owner, at its option, may use a portion of the Work prior to
completion of the entire Work; provided, that (i) a Certificate of Substantial
completion |
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has been issued for the portion of Work addressing the items set
forth in Section 6.5.3 above, (ii) Design-Builder and Owner have, to the extent
required, obtained the consent of their sureties and insurers and the
appropriate government authorities having jurisdiction over the Project, and
(iii) Owner and Design-Builder agree that Owner’s use or occupancy will not
interfere with Design-Builder’s completion of the remaining Work in accordance
with the Contract Documents. |
6.5.4 Early Completion Bonus. If Substantial Completion is attained within Four Hundred
Eighty-five (485) Days after the date of the Notice to Proceed, Owner shall pay Design-Builder at
the time of Final Payment under Section 10.3 hereof an early completion bonus (“
Early
Completion Bonus”) of [*] Dollars ($[*]) per Day for each Day that Substantial
Completion occurred in advance of the Scheduled Substantial Completion Date up to a maximum Early
Completion Bonus of [*] Dollars ($[*]).
6.5.5 In all events, payment of said bonus, if applicable, at the time of Final Payment is
subject to release of funds by senior lender. If senior lender does not allow release of funds at
the time of Final Payment to pay said early completion bonus in full, any unpaid balance shall be
converted to an unsecured promissory note payable by Owner to Design-Builder, accruing interest at
Ten Percent (10%). On each anniversary of the note, any unpaid accrued interest shall be converted
to principal and shall accrue interest as principal thereafter. Owner shall pay said promissory
note as soon as allowed by senior lender; in any event, the note, plus accrued interest, shall be
paid in full before Owner pays or makes any distributions to or for the benefit of its owners
(shareholders, members, partners, etc.). All payments shall be applied first to accrued interest
and then to principal.
6.6.1 Final Completion of the Work shall be achieved within Ninety (90) Days after the date of
Substantial Completion.
6.6.2 “Final Completion” shall be achieved when the Owner reasonably determines that
the following conditions have been met:
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Substantial Completion has been achieved; |
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any outstanding amounts owed by Design-Builder to Owner have
been paid in full; |
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(c) |
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the items identified on the Punch List have been completed by
Design-Builder; |
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clean-up of the Site has been completed; |
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(e) |
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all permits required to have been obtained by Design-Builder
have been obtained; |
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the information in Section 6.6.4 has been provided to Owner; |
* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
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certificates of insurance confirming that required coverages
will remain in effect consistent with the requirements of the Contract
Documents have been obtained; |
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release and waiver of all claims and liens from Design-Builder and Subcontractors have
been provided; and |
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the Performance Tests have been successfully completed. |
6.6.3 After receipt of a Final Application for Payment from Design-Builder, Owner shall make
Final Payment in accordance with Section 10.3, less an amount equal to the value of any
Subcontractor lien waivers not yet obtained.
6.6.4 At the time of submission of its Final Application for Payment, Design-Builder shall
provide the following information:
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an affidavit that there are no claims, obligations or liens
outstanding or unsatisfied for labor, services, material, equipment, taxes or
other items performed, furnished or incurred for or in connection with the Work
which will in any way affect Owner’s interests; |
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a general release executed by Design-Builder waiving, upon
receipt of final payment by Design-Builder, all claims for payment, additional
compensation, or damages for delay, except those previously made to Owner in
writing and remaining unsettled at the time of Final Payment
provided such general release shall not waive defenses to claims that may be
asserted by Owner after payment or claims arising after payment; |
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consent of Design-Builder’s surety, if any, to Final Payment;
and |
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(d) |
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a hard copy of the As Built Plans; provided, however, that such
plans will remain the Work Product of the Design-Builder and subject in all
respects to Article 5. |
6.6.5 Upon making Final Payment, Owner waives all claims against Design-Builder except claims
relating to (i) Design-Builder’s failure to satisfy its payment obligations, (ii) Design-Builder’s
failure to complete the Work consistent with the Contract Documents, including defects appearing
within one year after Substantial Completion, and (iii) the terms of any warranties required by the
Contract Documents.
6.7 Additional Labor. Design-Builder shall include, at no additional cost to Owner, four (4)
sixty (60)-hour work weeks.
6.8 Post Completion Support. Adequate personnel to complete all Work within the Work Schedule
will be maintained on-Site by Design-Builder or a Subcontractor until Final Completion has been
achieved. In addition to prosecuting the Work until Final Completion has been achieved,
Design-Builder or its Subcontractor will provide one month of on-Site operational support for
Owner’s personnel after successful completion of the Performance Tests and, from the date of
Substantial Completion, will provide six (6) months of off-Site technical
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and operating procedure
support by telephone and other electronic data transmission and communication.
Article 7
7.1 Performance Guarantee. The Design-Builder guarantees that the Plant will meet the
performance criteria listed in Exhibit A (the “
Performance Guarantee Criteria”) during a
performance test conducted and concluded pursuant to the terms hereof not later than Ninety (90)
Days after the date of Substantial Completion. If there is a performance shortfall, Design-Builder
will pay all design and construction costs associated with making the necessary corrections.
Design-Builder retains the right to use its sole discretion in determining the method (which shall
be in accordance with generally accepted construction and design-build standards of the fuel
ethanol industry in the Midwest United States) to remedy any performance related issues.
7.1.1 If Owner, for whatever reason, prevents Design-Builder from demonstrating the
Performance Guarantee Criteria within thirty (30) Days of Design-Builder’s notice that the Plant is
ready for Performance Testing, then Design-Builder shall be excused from demonstrating compliance
with the Performance Guarantee Criteria during such period of time that Design-Builder is prevented
from demonstrating compliance with the Performance Guarantee Criteria; provided however that
Design-Builder will be deemed to have fulfilled all of
its obligations to demonstrate that the Plant meets the Performance Guarantee Criteria should
such period of time during which Design-Builder is prevented from demonstrating the Performance
Criteria exceed thirty (30) Days or extend beyond Final Completion.
7.2.1 The Design-Builder shall direct and supervise the tests and, if necessary, the retests
of the Plant using Design-Builder’s supervisory personnel and the Air Emissions Tester shall
conduct the air emissions test, in each case, in accordance with the testing procedures set forth
in Exhibit A (the “Performance Tests”), to demonstrate, at a minimum, compliance with the
Performance Guarantee Criteria. Design-Builder shall cooperate with the Air Emissions Tester to
facilitate performance of all air emissions tests. Design-Builder shall not be held responsible
for the actions of Owner’s employees and third parties involved in the Performance Testing.
7.2.2 No later than thirty (30) Days prior to the earlier of the Scheduled Substantial
Completion Date or Substantial Completion, Design-Builder shall provide to Owner for review a
detailed testing plan for the Performance Tests (other than for air emissions). Owner and
Design-Builder shall agree upon a testing plan that shall be consistent with the Performance Test
Protocol contained in Exhibit A hereto. After such agreement has been reached, Design-Builder
shall notify the Owner five (5) business days prior to the date Design-Builder intends to commence
the Performance Tests and shall notify the Owner upon commencement of the Performance Tests. Owner
and Independent Engineer each have the right to witness all testing, including the Performance
Tests and any equipment testing, whether at the Site or at the Subcontractor’s or equipment
supplier’s premises during the course of this
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7.2.3 Design-Builder shall provide to Owner a performance test report (excluding results from
air emissions testing), including all applicable test data, calculations and certificates
indicating the results of the Performance Tests and, within five (5) business days of Owner’s
receipt of such results, Owner and Design-Builder will jointly inspect such Work and review the
results of the Performance Tests to verify that the Performance Guarantee Criteria have been met.
If Owner reasonably determines that the Performance Guarantee Criteria have not been met, Owner
shall notify Design-Builder the reasons why Owner determined that the Performance Guarantee
Criteria have not been met and Design-Builder shall promptly take such action or perform such
additional work as will achieve the Performance Guarantee Criteria and shall issue to the Owner
another notice in accordance with Section 7.2.2; provided however that if the notice relates to a
retest, the notice may be provided no less than two (2) business days prior to the Performance
Tests. Such procedure shall be repeated as necessary until Owner verifies that the Performance
Guarantee Criteria have been met.
7.3.1 Design-Builder understands that if Final Completion is not attained by the Final
Completion Date, Owner will suffer damages which are difficult to determine and accurately specify.
Design-Builder agrees that if Final Completion is not attained by the end of the Final Completion
Date, Design-Builder shall pay Owner [*] Dollars ($[*]) as liquidated damages,
and not as a penalty, for each Day that Final Completion extends beyond the Final Completion Date.
Owner, at its discretion, may elect to offset any such liquidated damages from any retainage.
Liquidated damages shall be paid by Design-Builder by the 15th Day of the month
following the month in which the liquidated damages were incurred. The liquidated damages provided
herein shall be in lieu of all liability for any and all extra costs, losses, loss of profits,
expenses, claims, penalties and any other damages, whether special or consequential, and of
whatsoever nature incurred by Owner which are occasioned solely by any delay in achieving Final
Completion.
7.3.3 Design-Builder shall not be liable for liquidated damages during any period of time for
which an extension of the Scheduled Substantial Completion Date and/or Final Completion Date is
available pursuant to Article 12.
7.4.1 On or prior to the date of Financial Closing, if requested by Owner, the Design-Builder
shall deliver to Owner a bond substantially in the form attached as Exhibit H (the “Performance
Bond”) in an initial amount equivalent to the Contract Price. Owner shall pay on
* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
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the date of
Financial Closing all costs of obtaining such bond, plus pay Design-Builder a fee of 7.5% for
obtaining such bond, such fee to be calculated by multiplying 7.5% times the cost of the
Performance Bond. Any amounts payable to the surety due to Design-Builder’s default under this
Agreement or the Performance Bond shall be for the account of Design-Builder.
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Design-Builder shall post additional bonds or security (which
must be in form and substance satisfactory to Owner and the Lenders) or shall
increase the amount of the Performance Bond by the amount of any increases to
the Contract Price; provided, however, that Owner shall pay all costs of
obtaining such bonds or security, plus pay Design-Builder a fee of 7.5% for
obtaining such bonds or security, such fee to be calculated by multiplying 7.5%
times the cost of the bonds or security. |
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The Performance Bond shall secure the Design-Builder’s
obligations to complete the Work in accordance with this Agreement. |
7.4.2 On or prior to the date of Financial Closing, if requested by Owner, the Design-Builder
shall deliver to Owner a bond substantially in the form attached as Exhibit I (the “Payment
Bond”) in an initial amount equivalent to the Contract Price. Owner shall pay on the date of
Financial Closing all costs of obtaining such bond, plus pay Design-Builder a fee of 7.5% for
obtaining such bond, such fee to be calculated by multiplying 7.5% times the cost of the
Payment Bond but any amounts payable to the surety due to Design-Builder’s default under this
Agreement or the Payment Bond shall be for the account of Design-Builder.
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Design-Builder shall post additional bonds or security (which
must be in form and substance reasonably satisfactory to Owner and the Lenders)
or shall increase the amount of the Payment Bond by the amount of any increase
to the Contract Price. |
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(b) |
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The Payment Bond shall secure the Design-Builder’s obligations
to pay its Subcontractors, vendors and suppliers. |
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The Payment Bond shall provide the conditions upon which
Subcontractors, vendors and suppliers may draw upon such Payment Bond following
Design-Builder’s failure to pay amounts due such Subcontractors, vendors and
suppliers. |
Article 8
8.1 Design-Builder Warranty. Design-Builder warrants to Owner that the construction,
including all materials and equipment furnished as part of the construction, shall be new, of good
quality, in conformance with the Contract Documents and all Legal Requirements, free of defects in
materials and workmanship. Design-Builder’s warranty obligation excludes defects caused by abuse,
alterations, or failure to maintain the Work by persons other than Design-Builder or anyone for
whose acts Design-Builder may be liable. Nothing in this warranty is intended to limit any
Manufacturer’s Warranty which provides Owner with greater warranty
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rights than set forth in this
Section 8.1 or the Contract Documents. Design-Builder will provide to Owner all manufacturers’ and
Subcontractors’ warranties upon the earlier of Substantial Completion or termination of this
Agreement. Owner’s failure to comply with all Operating Procedures shall void those guarantees,
representations and warranties, whether expressed or implied, that were given by Design-Builder to
Owner, concerning the performance of the Plant that are reasonably determined by Design-Builder to
be affected by such failure. If Design-Builder reasonably determines that all damage caused by
such failure can be repaired and Owner makes all repairs needed to correct such damage, as
reasonably determined by Design-Builder, all guarantees, representations and warranties shall be
reinstated for the remaining term thereof, if any, from the date of the repair.
8.2.1 Design-Builder agrees to correct any Work that is found to not be in conformance with
the Contract Documents, including that part of the Work subject to Section 8.1, within a period of
one year from the date of Substantial Completion of the Work; provided that such one-year period
shall be extended one Day for any part of the Work that is found to be not in conformance with the
Contract Documents for each Day that such part of the Work is not
operating in conformity with the Contract Documents, including any time during which any part
of the Work is repaired or replaced pursuant to this Article 8.
8.2.2 Design-Builder shall, within seven (7) Days of receipt of written notice from Owner that
the Work is not in conformance with the Contract Documents, take meaningful steps to commence
correction of such nonconforming Work, including the correction, removal or replacement of the
nonconforming Work and correction or replacement of any Work damaged by such nonconforming Work.
If Design-Builder fails to commence the necessary steps within such seven (7) Day period or fails
to continue to perform such steps through completion, Owner, in addition to any other remedies
provided under the Contract Documents, may provide Design-Builder with written notice that Owner
will commence or assume correction of such nonconforming Work and repair of such damaged Work with
its own resources. If, following such written notice, Owner performs such corrective and repair
Work, Design-Builder shall be responsible for all reasonable costs incurred by Owner in performing
the correction. If the nonconforming Work creates an emergency requiring an immediate response,
the seven (7) Day periods identified herein shall be inapplicable and Design-Builder shall
immediately correct, remove or replace the nonconforming Work.
8.3 Warranty Period Not Limitation to Owner’s Rights. The one-year period referenced in
Section 8.2 above applies only to Design-Builder’s obligation to correct nonconforming Work and is
not intended to constitute a period of limitations for any other rights or remedies Owner may have
regarding Design-Builder’s other obligations under the Contract Documents.
Article 9
9.1 Contract Price. As full consideration to Design-Builder for full and complete performance
of the Work and all costs incurred in connection therewith, Owner shall pay
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Design-Builder in
accordance with the terms of Article 10, the sum of Ninety-eight Million Dollars ($98,000,000.00)
(“Contract Price”), subject to adjustments made in accordance with Articles 12.4 and 13.
The Contract Price does not include the water pre-treatment system and the fire protection system
which shall be provided by Design-Builder pursuant to a separate side-letter agreement executed by
Owner and Design-Builder at Design-Builder’s standard time plus material rates during the relevant
time period and at the relevant locale. Owner acknowledges that it has taken no action which would
impose a union labor or prevailing wage requirement on Design-Builder, Owner or the Project. The
Parties acknowledge and agree that if after the date hereof, an Owner’s action, a change in
Applicable Law or a Governmental Authority acting pursuant to a change in Applicable Law shall
require Design-Builder to employ union labor or compensate labor at prevailing wages, the Contract
Price shall be adjusted upwards to include any increased costs associated with such labor or wages.
9.2 Effect of Construction Cost Index Increase on Contract Price. If Notice to Proceed is
not received by June 30, 2006, the Contract Price shall be adjusted to reflect any increase in the
Construction Cost Index published by Engineering News-Record Magazine
(“
CCI”) over the Baseline Index established in Section 9.2.1. If Notice to Proceed is
not received by June 30, 2006 and the CCI increases over the Baseline Index, between the Effective
Date and the date on which a Notice to Proceed is given to Design-Builder, Design-Builder shall
notify Owner in writing that it is adjusting the Contract Price.
9.2.1 The Baseline Index for this Agreement shall be 7660.29 (“Baseline
Index”).
9.2.2 In the event that Notice to Proceed is not received by June 30, 2006 and the CCI
as of the date on which the Notice to Proceed is given increases over the Baseline Index,
the Contract Price shall be increased by a percentage amount equal thereto.
Article 10
10.1 Payment at Financial Closing. As part of the Contract Price, Owner shall pay
Design-Builder Eight Million Dollars ($8,000,000.00) as soon as allowed by its organizational
documents and any other agreements or Laws and at the latest, at Financial Closing, as a
mobilization fee. The Eight Million Dollars ($8,000,000.00) mobilization fee payment shall be
subject to retainage as provided by Section 10.2.7.
10.2.1 Application for Payment. On or before the twenty-fifth (25
th) Day of each
month beginning with the first month following the Notice to Proceed, Design-Builder shall submit
to Owner its request for payment for all Work performed and not paid for during the previous Pay
Period (the “
Application for Payment”). Design-Builder shall submit to Owner, along with
each Application for Payment, signed lien waivers received from Subcontractors and suppliers for
the Work included in the Application for Payment submitted for the immediately preceding Pay Period
and for which payment has been received.
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10.2.2 The Application for Payment shall constitute Design-Builder’s representation that the
Work has been performed consistent with the Contract Documents and has progressed to the point
indicated in the Application for Payment. The Parties agree that the work completed at the Site
and the comparison of the Application for Payment against the work schedule, the Schedule of
Values, and the Progress Report shall provide sufficient substantiation of the accuracy of the
Application for Payment and that no additional documentation will be provided to Owner or to
Independent Engineer in support of an Application for Payment. Title to the Work shall pass to
Owner free and clear of all claims, liens, encumbrances, and security interests upon
Design-Builder’s receipt of payment therefor.
10.2.3 Within fifteen (15) Days after Owner’s receipt of each properly submitted Application
for Payment, Owner shall pay Design-Builder all amounts properly due, but in each case less the
total of payments previously made, and less amounts properly withheld under this Agreement.
10.2.4 The Application for Payment may request payment for equipment and materials not yet
incorporated into the Project; provided that (i) Owner is satisfied that the equipment and
materials are suitably stored at either the Site or another acceptable location, (ii) the equipment
and materials are protected by suitable insurance, and (iii) upon payment, Owner will receive the
equipment and materials free and clear of all liens and encumbrances except for liens of the
Lenders and other liens and encumbrances permitted under the Financing Documents.
10.2.5 Schedule of Values. Attached as Exhibit E is the “
Schedule of Values” for all
of the Work. The Schedule of Values (i) subdivides the Work into its respective parts, (ii)
includes values for all items comprising the Work, and (iii) serves as the basis for monthly
progress payments made to Design-Builder throughout the Work.
10.2.6 Withholding of Payments. On or before the date set forth in Section 10.2.3, Owner
shall pay Design-Builder all amounts properly due. If Owner determines that Design-Builder is not
entitled to all or part of an Application for Payment, it will notify Design-Builder in writing at
least five (5) Days prior to the date payment is due. The notice shall indicate the specific
amounts Owner intends to withhold, the reasons and contractual basis for the withholding, and the
specific measures Design-Builder must take to rectify Owner’s concerns. Design-Builder and Owner
will attempt to resolve Owner’s concerns prior to the date payment is due. If the Parties cannot
resolve such concerns, Design-Builder may pursue its rights under the Contract Documents, including
those under Article 19. Notwithstanding anything to the contrary in the Contract Documents, Owner
shall pay Design-Builder all undisputed amounts in an Application for Payment within the times
required by the Agreement.
10.2.7 Retainage on Progress Payments. Owner will retain ten percent (10%) of each payment up
to a maximum of $4,900,000.00. Once $4,900,000.00 has been retained, in total, Owner will not
retain any additional amounts from any subsequent payments. Owner will also reasonably consider
reducing retainage for Subcontractors completing their work early in the Project. Upon Substantial
Completion of the entire Work pursuant to Section 6.5, Owner shall release to Design-Builder all
retained amounts relating, as applicable, to the entire Work, less an amount equal to the
reasonable value of all remaining or incomplete items of Work and less an amount equal to the value
of any Subcontractor lien waivers not yet
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obtained, as noted in the Certificate of Substantial
Completion, provided that such payment shall only be made if Design-Builder has met the Performance
Guarantee Criteria listed in Exhibit A.
10.3 Final Payment. Design-Builder shall deliver to Owner a request for final payment (the
“
Final Application for Payment”) when Final Completion has been achieved in accordance with
Section 6.6. Owner shall make final payment within thirty (30) Days after Owner’s receipt of the
Final Application for Payment (“
Final Payment”).
10.4.1 Interest. Payments which are due and unpaid by Owner to Design-Builder, whether
progress payments or Final Payment, shall bear interest at the rate of eighteen percent (18%) per
annum, or the maximum rate allowed by Law.
10.4.2 Right to Suspend Work. If Owner fails to pay Design-Builder any undisputed amount that
becomes due, Design-Builder, in addition to all other remedies provided in the Contract Documents,
may stop Work pursuant to Section 15.4 hereof. All payments properly due and unpaid shall bear
interest at the rate set forth in Section 10.4.1.
10.5 Design-Builder’s Payment Obligations. Design-Builder will pay Design Consultants and
Subcontractors, in accordance with its contractual obligations to such parties, all the amounts
Design-Builder has received from Owner on account of their work. Design-Builder will impose
similar requirements on Design Consultants and Subcontractors to pay those parties with whom they
have contracted. Design-Builder will indemnify and defend Owner against any claims for payment and
mechanic’s liens as set forth in Section 14.2 hereof.
10.6 Record Keeping and Finance Controls. With respect to changes in the Work performed on a
cost basis by Design-Builder pursuant to the Contract Documents, Design-Builder shall keep full and
detailed accounts and exercise such controls as may be necessary for proper financial management,
using accounting and control systems in accordance with generally accepted accounting principles
and as may be provided in the Contract Documents. During the performance of the Work and for a
period of three (3) years after Final Payment, Owner and Owner’s accountants shall be afforded
access from time to time, upon reasonable notice, to Design-Builder’s records, books,
correspondence, receipts, subcontracts, purchase orders, vouchers, memoranda and other data
relating to changes in the Work performed on a cost basis in accordance with the Contract
Documents, all of which Design-Builder shall preserve for a period of three (3) years after Final
Payment.
Article 11
11.1.1 Unless otherwise expressly provided in the Contract Documents to be part of the Work,
Design-Builder is not responsible for any Hazardous Conditions encountered at the Site. Upon
encountering any Hazardous Conditions, Design-Builder will stop Work immediately in the affected
area and as promptly as practicable notify Owner and, if Design-
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Builder is specifically required to
do so by Legal Requirements, all government or quasi-government entities with jurisdiction over the
Project or Site. Design-Builder shall not remove, remediate or handle in any way (except in case
of emergency) any Hazardous Conditions encountered at the Site without prior written approval of
Owner.
11.1.2 Upon receiving notice of the presence of suspected Hazardous Conditions, Owner shall
take the necessary measures required to ensure that the Hazardous Conditions are remediated or
rendered harmless. Such necessary measures shall include Owner retaining Qualified Independent
Experts to (i) ascertain whether Hazardous Conditions have actually been encountered, and, if they
have been encountered, (ii) prescribe the remedial measures that Owner is required under applicable
Legal Requirements to take with respect to
such Hazardous Conditions in order for the Work to proceed. Owner’s choice of such Qualified
Independent Experts shall be subject to the prior approval of Design-Builder, which approval shall
not be unreasonably withheld or delayed.
11.1.3 Design-Builder shall be obligated to resume Work at the affected area of the Project
only after Owner’s Qualified Independent Expert provides it with written certification that (i) the
Hazardous Conditions have been removed or rendered harmless, and (ii) all necessary approvals have
been obtained from all government entities having jurisdiction over the Project or Site and a
remediation plan has been undertaken permitting the Work to proceed.
11.1.4 Design-Builder will be entitled, in accordance with this Article 11, to an adjustment
in its Contract Price and/or contract time(s) to the extent Design-Builder’s cost and/or time of
performance have been adversely impacted by the presence of Hazardous Conditions, provided that
such Hazardous Materials were not introduced to the Site by Design-Builder, Subcontractors or
anyone for whose acts they may be liable.
11.1.5 To the fullest extent permitted by Law, Owner shall indemnify, defend and hold harmless
Design-Builder, Design Consultants, Subcontractors, anyone employed directly or indirectly for any
of them, and their officers, directors, employees and agents, from and against any and all claims,
losses, damages, liabilities and expenses, including attorneys’ fees and expenses, arising out of
or resulting from the presence, removal or remediation of Hazardous Conditions at the Site.
11.1.6 Notwithstanding the preceding provisions of this Section 11.1, Owner is not responsible
for Hazardous Conditions introduced to the Site by Design-Builder, Subcontractors or anyone for
whose acts they may be liable. Design-Builder shall indemnify, defend and hold harmless Owner and
Owner’s officers, directors, employees and agents from and against all claims, losses, damages,
liabilities and expenses, including attorneys’ fees and expenses, arising out of or resulting from
those Hazardous Conditions introduced to the Site by Design-Builder, Subcontractors or anyone for
whose acts they may be liable.
11.2.1 Concealed or latent physical conditions or subsurface conditions at the Site that (i)
differ from the conditions indicated in the Contract Documents, or (ii) are of an unusual nature,
differing from the conditions ordinarily encountered and generally recognized as inherent in the
Work are collectively referred to herein as “Differing Site Conditions.” If
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Design-Builder
encounters a Differing Site Condition, Design-Builder will be entitled to an adjustment in the
Contract Price and/or contract time(s) to the extent Design-Builder’s cost and/or time of
performance are adversely impacted by the Differing Site Condition.
11.2.2 Upon encountering a Differing Site Condition, Design-Builder shall provide prompt
written notice to Owner of such condition, which notice shall not be later than fourteen (14)
business days after such condition has been encountered. Design-Builder shall, to the extent
reasonably possible, provide such notice before the Differing Site Condition has been substantially
disturbed or altered.
Article 12
12.1 Force Majeure Event. Shall mean a cause or event beyond the reasonable control of, and
without the fault or negligence of a Party claiming Force Majeure, including, without limitation,
an emergency, floods, earthquakes, hurricanes, tornadoes, adverse weather conditions not reasonably
anticipated or acts of God; sabotage; vandalism beyond that which could reasonably be prevented by
a Party claiming Force Majeure; terrorism; war; riots; fire; explosion; blockades; insurrection;
strike; slow down or labor disruptions (even if such difficulties could be resolved by conceding to
the demands of a labor group); economic hardship or delay in the delivery of materials or equipment
that is beyond the control of a Party claiming Force Majeure, and action or failure to take action
by any Governmental Authority after the Effective Date (including the adoption or change in any
rule or regulation or environmental constraints lawfully imposed by such Governmental Authority),
but only if such requirements, actions, or failures to act prevent or delay performance; and
inability, despite due diligence, to obtain any licenses, permits, or approvals required by any
Governmental Authority (any such event, a “
Force Majeure Event”).
12.2 Effect of Force Majeure Event. Neither party shall be considered in default in the
performance of any of the obligations contained in the Contract Documents, except for the Owners or
the Design-Builder’s obligations to pay money (including but not limited to, Progress Payments and
payments of liquidated damages which become due and payable with respect to the period prior to the
occurrence of the Force Majeure Event), when and to the extent the failure of performance shall be
caused by a Force Majeure Event. If either party is rendered wholly or partly unable to perform
its obligations under the Contract Documents because of a Force Majeure Event, such party will be
excused from performance affected by the Force Majeure Event to the extent and for the period of
time so affected; provided that:
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(a) |
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the nonperforming party, within forty-eight (48) hours after
the nonperforming party actually becomes aware of the occurrence and impact of
the Force Majeure Event, gives the other party written notice describing the
event or circumstance in detail, including an estimation of its expected
duration and probable impact on the performance of the affected party’s
obligations hereunder, and continues to furnish timely regular reports with
respect thereto during the continuation of and upon the termination of the
Force Majeure Event; |
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(b) |
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the suspension of performance is of no greater scope and of no
longer duration than is reasonably required by the Force Majeure Event; |
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the obligations of either party that arose before the
occurrence causing the suspension of performance and the performance that is
not prevented by the occurrence, shall not be excused as a result of such
occurrence; |
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(d) |
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the nonperforming party uses its best efforts to remedy its
inability to perform and mitigate the effect of such event and resumes its
performance at the earliest practical time after cessation of such occurrence
or until such time that performance is practicable; |
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(e) |
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when the nonperforming party is able to resume performance of
its obligations under the Contract Documents, that party shall give the other
party written notice to that effect; and |
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(f) |
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Design-Builder shall be entitled to a Day for Day time
extension for those events set forth in Section 12.1 to the extent the
occurrence of such event delayed Design-Builder’s performance of its
obligations under this Agreement. |
12.3 Change in Legal Requirements. The Contract Price and/or the contract time(s) shall be
adjusted to compensate Design-Builder for the effects of any changes to the Legal Requirements that
occur after the date of this Agreement and as a result of such change, the performance of the Work
is adversely affected. Such effects may include, without limitation, revisions Design-Builder is
required to make to the Construction Documents because of changes in Legal Requirements.
12.4 Time Impact And Availability. If the Design-Builder is delayed at any time in the
commencement or progress of the Work due to a delay in the delivery of, or unavailability of,
essential materials to the Project as a result of a Force Majeure Event, the Design-Builder shall
be entitled to an equitable extension of the Contract Time on a day-for-day basis equal to such
delay. The Owner and Design-Builder shall undertake reasonable steps to mitigate the effect of
such delays. Notwithstanding any other provision to the contrary, the Design-Builder shall not be
liable to the Owner for any expenses, losses or damages arising from a delay, or unavailability of,
essential materials to the Project as a result of a Force Majeure Event.
Article 13
Changes to the Contract Price and Scheduled Completion Dates
13.1 Change Orders.
13.1.1 A change order (“Change Order”) is a written instrument issued after execution
of this Agreement signed by Owner and Design-Builder, stating their agreement upon all of the
following:
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(a) |
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the scope of the change in the Work; |
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(b) |
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the amount of the adjustment to the Contract Price; and |
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(c) |
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the extent of the adjustment to the contract time(s). |
13.1.2 All changes in the Work authorized by an applicable Change Order shall be performed
under the applicable conditions of the Contract Documents. Owner and Design-Builder shall
negotiate in good faith and as expeditiously as possible the appropriate adjustments for such
changes. Prior to incurring any costs with respect to estimating services, design services and any
other services involved in the preparation of the proposed revisions to the Contract Documents,
Design-Builder must obtain the written approval of Owner for such costs.
13.1.3 If Owner requests a proposal for a change in the Work from Design-Builder and
subsequently elects not to proceed with the change, a Change Order shall be issued to reimburse
Design-Builder for reasonable costs incurred for estimating services, design services and any other
services involved in the preparation of proposed revisions to the Contract Documents; provided that
such costs were previously approved by Owner pursuant to Section 13.1.2.
13.2 Contract Price Adjustments.
13.2.1 The increase or decrease in Contract Price resulting from a change in the Work shall be
a mutually accepted lump sum, properly itemized and supported by sufficient substantiating data to
permit evaluation by Owner.
13.2.2 If Owner and Design-Builder disagree upon whether Design-Builder is entitled to be paid
for any services required by Owner, or if there are any other disagreements over the scope of Work
or proposed changes to the Work, Owner and Design-Builder shall resolve the disagreement pursuant
to Article 19 hereof. As part of the negotiation process, Design-Builder shall furnish Owner with
a good faith estimate of the costs to perform the disputed services in accordance with Owner’s
interpretations. If the Parties are unable to agree and Owner expects Design-Builder to perform
the services in accordance with Owner’s interpretations, Design-Builder shall proceed to perform
the disputed services, conditioned upon Owner issuing a written order to Design-Builder (i)
directing Design-Builder to proceed, and (ii) specifying Owner’s interpretation of the services
that are to be performed. If this occurs, Design-Builder shall be entitled to submit in its
Applications for Payment an amount equal to fifty percent (50%) of its reasonable estimated direct
cost to perform the services, and Owner agrees to pay such amounts, with the express understanding
that (x) such payment by Owner does not prejudice Owner’s right to argue that it has no
responsibility to pay for such services, and (y) receipt of such payment by Design-Builder does not
prejudice Design-Builder’s right to seek full payment of the disputed services if Owner’s order is
deemed to be a change to the Work.
13.3 Emergencies. In any emergency affecting the safety of persons and/or property,
Design-Builder shall act, at its discretion, to prevent threatened damage, injury or loss and shall
notify the Owner as soon as practicable and in any event within forty-eight (48) hours after
Design-Builder becomes aware of the emergency. The notice to Owner shall describe the emergency in
detail, including a reasonable estimation of its expected duration and impact, if
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any, on the
performance of Design-Builder’s obligations hereunder. Any change in the Contract Price and/or the
contract time(s) on account of emergency work shall be determined as provided in this Article 13.
13.4 Requests for Contract Adjustments and Relief. If either Design-Builder or Owner
believes that it is entitled to relief against the other for any event arising out of or related to
the Work or Project, such party shall provide written notice to the other party of the basis for
its claim for relief. Such notice shall, if possible, be made prior to incurring any cost or
expense and in accordance with the notice requirements contained in Section 21.7. In the absence
of any specific notice requirement, written notice shall be given within a reasonable time, not to
exceed twenty-one (21) Days, after the occurrence giving rise to the claim for relief or after the
claiming party reasonably should have recognized the event or condition giving rise to the request,
whichever is later. Such notice shall include sufficient information to advise the other party of
the circumstances giving rise to the claim for relief, the specific contractual adjustment or
relief requested and the basis of such request.
Article 14
14.1 Tax Claim Indemnification. If, in accordance with Owner’s direction, an exemption for
all or part of the Work is claimed for taxes, Owner shall indemnify, defend and hold harmless
Design-Builder from and against any liability, penalty, interest, fine, tax assessment, attorneys’
fees or other expenses or costs incurred by Design-Builder as a result of any action taken by
Design-Builder in accordance with Owner’s directive.
14.2 Payment Claim Indemnification. To the extent Design-Builder has received payment for
the Work, Design-Builder shall indemnify, defend and hold harmless Owner Indemnified Parties from
any claims or mechanic’s liens brought against Owner Indemnified Parties or against the Project as
a result of the failure of Design-Builder, or those for whose acts it is responsible, to pay for
any services, materials, labor, equipment, taxes or other items or obligations furnished or
incurred for or in connection with the Work. Within three (3) business days of receiving written
notice from Owner that such a claim or mechanic’s lien has been filed, Design-Builder shall
commence to take the steps necessary to discharge such claim or lien, including, if necessary, the
furnishing of a mechanic’s xxxx xxxx. If Design-Builder fails to do so, Owner will have the right
to discharge the claim or lien and hold Design-Builder liable for costs and expenses incurred,
including attorneys’ fees.
14.3.1 Design-Builder, to the fullest extent permitted by Law, shall indemnify, hold harmless
and defend Owner, Lenders, Lenders’ Agent, and their successors, assigns, officers, directors,
employees and agents (“Owner Indemnified Parties”) from and against any and all losses,
costs, damages, injuries, liabilities, claims, demands, penalties, interest and causes of action,
including without limitation attorney’s fees (collectively, the “Damages”) for bodily
injury, sickness or death, and property damage or destruction (other than to the Work itself) to
the extent resulting from the negligent or intentionally wrongful acts or from omissions
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of Design-Builder, Design Consultants, Subcontractors, anyone employed directly or indirectly
by any of them or anyone for whose acts any of them may be liable.
14.3.2 If an employee of Design-Builder, Design Consultants, Subcontractors, anyone employed
directly or indirectly by any of them or anyone for whose acts any of them may be liable has a
claim against Owner Indemnified Parties, Design-Builder’s indemnity obligation set forth in Section
14.3.1 above shall not be limited by any limitation on the amount of damages, compensation or
benefits payable by or for Design-Builder, Design Consultants, Subcontractors, or other entity
under any employee benefit acts, including workers’ compensation or disability acts.
14.3.3 Without limiting the generality of Section 14.3.1 hereof, Design-Builder shall fully
indemnify, save harmless and defend the Owner Indemnified Parties from and against any and all
Damages in favor of any governmental authority or other third party to the extent caused by (a)
failure of Design-Builder or any Subcontractor to comply with Legal Requirements as required by
this Agreement, or (b) failure of Design-Builder or any Subcontractor to properly administer and
pay any taxes or fees required to be paid by Design-Builder under this Agreement.
14.3.4 Nothing in the Design-Builder’s General Indemnification contained in this Section 14.3
shall be read to limit in any way any entitlement Design-Builder shall have to insurance coverage
under any insurance policy, including any insurance policy required by either Party under this
Agreement.
14.4 Owner’s General Indemnification. Owner, to the fullest extent permitted by Law, shall
indemnify, hold harmless and defend Design-Builder and any of Design-Builder’s officers, directors,
employees, or agents from and against claims, losses, damages, liabilities, including attorneys’
fees and expenses, for bodily injury, sickness or death, and property damage or destruction (other
than to the Work itself) to the extent resulting from the negligent acts or intentionally wrongful
acts or from omissions of Owner, its officers, directors, employees, agents, or anyone for whose
acts any of them may be liable.
14.4.1 Without limiting the generality of Section 14.4 hereof, Owner shall fully indemnify,
save harmless and defend the Design-Builder and any of Design-Builder’s officers, directors,
employees, or agents from and against any and all Damages in favor of any governmental authority or
other third party to the extent caused by (a) failure of Owner or any of Owner’s agents to comply
with Legal Requirements as required by this Agreement, or (b) failure of Owner or Owner’s agents to
properly administer and pay any taxes or fees required to be paid by Owner under this Agreement.
14.4.2 Nothing in the Owner’s General Indemnification contained in this Section 14.4 shall be
read to limit in any way any entitlement Design-Builder shall have to insurance coverage under any
insurance policy, including any insurance policy required by either Party under this Agreement.
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14.5.1 Design-Builder shall indemnify, hold harmless and defend Owner Indemnified Parties from
and against any and all Damages based on any claim that the Work, the Work Product, or any part
thereof, or the operation or use of the Work or any part thereof, constitutes infringement of any
United States or foreign patent, copyright or other intellectual property, now or hereafter issued.
Owner shall give prompt written notice to Design-Builder of any such action or proceeding and will
reasonably provide authority, information and assistance in the defense of same. Design-Builder
shall indemnify and hold harmless Owner Indemnified Parties from and against all damages and costs,
including but not limited to, attorneys’ fees and expenses awarded against Owner or Design-Builder
in any such action or proceeding.
14.5.2 If Owner is enjoined from the operation or use of the Work, Work Product, the Project,
or any part thereof, as the result of any patent or copyright suit, claim, or proceeding,
Design-Builder shall at its sole expense take reasonable steps to procure the right to operate or
use the Work, Work Product or the Project. If Design-Builder cannot so procure such right within a
reasonable time, Design-Builder shall promptly, at Design-Builder’s option and at Design-Builder’s
expense, (i) modify the Work or Work Product so as to avoid infringement of any such patent or
copyright or (ii) replace the Work or Work Product with Work or Work Product that does not infringe
or violate any such patent, copyright, trade secret, proprietary right, confidential information or
intellectual property right.
14.5.3 Sections 14.5.1 and 14.5.2 above shall not be applicable to any suit, claim or
proceeding based on infringement or violation of a patent or copyright (i) relating solely to a
particular process or product of a particular manufacturer specified by Owner and not offered or
recommended by Design-Builder to Owner, or (ii) arising from modifications to the Work by Owner or
its agents after acceptance of the Work, or (iii) relating to the operation or use of the Work by
the Owner in a manner not permitted by this Agreement or the ICM License Agreement. If the suit,
claim or proceeding is based upon events set forth in the preceding sentence, Owner shall defend,
indemnify and hold harmless Design-Builder to the same extent Design-Builder is obligated to
defend, indemnify and hold harmless Owner in Section 14.5.1 above.
Article 15
15.1 Owner’s Right to Stop Work. Owner may, without cause and for its convenience, order
Design-Builder in writing to stop and suspend the Work. Such suspension shall not exceed sixty
(60) consecutive Days or aggregate more than ninety (90) Days during the duration of the Project.
Design-Builder is entitled to seek an adjustment of the Contract Price and/or the contract time(s)
if its cost or time to perform the Work has been adversely impacted by any suspension or stoppage
of work by Owner.
15.2.1 If Design-Builder persistently fails to: (i) provide a sufficient number of skilled
workers; (ii) supply the materials required by the Contract Documents; (iii) comply with applicable
Legal Requirements; (iv) timely pay, without cause, Design Consultants or Subcontractors; (v)
perform the Work with promptness and diligence to ensure that the Work is
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completed by the contract
time(s), as such times may be adjusted in accordance with this Agreement; or (vi) perform material
obligations under the Contract Documents; then Owner, in addition to any other rights and remedies
provided in the Contract Documents or by law or equity, shall have the rights set forth in Sections
15.2.2 and 15.2.3 below.
15.2.2 Upon the occurrence of an event set forth in Section 15.2.1 above, Owner may provide
written notice to Design-Builder that it intends to terminate the Agreement unless the problem
cited is cured, or commenced to be cured within seven (7) Days of Design-Builder’s receipt of such
notice. If Design-Builder fails to cure, or reasonably commence to cure such problem and
thereafter diligently pursue such cure to completion, then Owner may give a second written notice
to Design-Builder of its intent to terminate following an additional seven (7) Day period. If
Design-Builder, within such second seven (7) Day period, fails to cure, or reasonably commence to
cure such problem and thereafter diligently pursue such cure to completion, then Owner may declare
the Agreement terminated for default by providing written notice to Design-Builder of such
declaration. If (i) the insurance coverage required by Design-Builder pursuant Article 17 hereof
is suspended or cancelled without Design-Builder providing immediate replacement coverage (and, in
any case, within fourteen (14) Days of the occurrence thereof) meeting the requirements specified
in Section 17 hereof; (ii) a default occurs under the Performance Bond or the Payment Bond, or the
Performance Bond or Payment Bond is revoked or terminated and such Performance Bond or the Payment
Bond is not immediately replaced (and, in any case, within fourteen (14) Days of the occurrence
thereof) by Design-Builder with a Performance Bond or a Payment Bond providing at least the same
level of coverage in a form and from a surety acceptable to Owner and Lenders, or the surety under
the Performance Bond or Payment Bond institutes or has instituted against it a case under the
United States Bankruptcy Code; (iii) Design-Builder purports to make an assignment of this
Agreement in breach of the provisions of Section 21.1 hereof, or (iv) any representation or
warranty made by Design-Builder under Section 18.1 hereof was false or materially misleading when
made, then Owner may terminate this Agreement upon written notice to Design-Builder.
15.2.3 Upon declaring the Agreement terminated pursuant to Section 15.2.2 above, Owner may
enter upon the premises and take possession, for the purpose of completing the Work, of all
materials, equipment, scaffolds, tools, appliances and other items thereon, which have been
purchased for the performance of the Work, all of which Design-Builder hereby transfers, assigns
and sets over to Owner for such purpose, and to employ any person or persons to complete the Work
and provide all of the required labor, services, materials, equipment and other items. In the
event of such termination, Design-Builder shall not be entitled to receive any further payments
under the Contract Documents until the Work shall be finally completed in accordance with the
Contract Documents. At such time, if the unpaid balance of the Contract Price exceeds the cost and
expense incurred by Owner in completing the Work, Design-Builder will be paid promptly by Owner for
Work performed prior to its default. If Owner’s cost and expense of completing the Work exceeds
the unpaid balance of the Contract Price, then Design-Builder shall be obligated to promptly pay
the difference to Owner. Such costs and expense shall include not only the cost of completing the
Work, but also losses, damages, costs and expenses, including attorneys’ fees and expenses,
incurred by Owner in connection with the re-
procurement and defense of claims arising from Design-Builder’s default, subject to the waiver
of consequential damages set forth in Section 19.4 hereof.
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15.2.4 If Owner improperly terminates the Agreement for cause, the termination for cause will
be converted to a termination for convenience in accordance with the provisions of Section 15.3.
15.3.1 Upon ten (10) Days’ written notice to Design-Builder, Owner may, for its convenience
and without cause, elect to terminate this Agreement. In such event, Owner shall pay
Design-Builder for the following:
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(a) |
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to the extent not already paid, all Work executed, and for
proven loss, cost or expense in connection with the Work; |
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(b) |
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the reasonable costs and expenses attributable to such
termination, including demobilization costs; |
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(c) |
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amounts due in settlement of terminated contracts with
Subcontractors and Design Consultants; |
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(d) |
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overhead and profit margin in the amount of fifteen percent
(15%) on the sum of items (a) and (b) above; and |
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(e) |
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all retainage withheld by Owner on account of Work that has
been completed in accordance with the Contract Documents. |
15.3.2 If Owner terminates this Agreement pursuant to this Section 15.3 and proceeds to design
and construct the Project through its employees, agents or third parties, Owner’s rights to use the
Work Product shall be as set forth in Section 5.3.
15.4.1 Design-Builder may, in addition to any other rights afforded under the Contract
Documents or at Law, stop work for Owner’s failure to pay amounts properly due under
Design-Builder’s Application for Payment.
15.4.2 If any of the events set forth in Section 15.4.1 above occur, Design-Builder has the
right to stop work by providing written notice to Owner that Design-Builder will stop work unless
such event is cured within seven (7) Days from Owner’s receipt of Design-Builder’s notice. If Owner
fails to cure or reasonably commence to cure such problem and thereafter diligently pursue such
cure to completion, then Design-Builder may give a second written notice to Owner of its intent to
stop work within an additional seven (7) Day period. If Owner, within such second seven (7) Day
period, fails to cure, or reasonably commence to cure such problem and thereafter diligently pursue
such cure to completion, then Design-Builder may stop work. In such case, Design-Builder shall be
entitled to make a claim for adjustment to the
Contract Price and contract time(s) to the extent it has been adversely impacted by such
stoppage.
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15.5.1 Design-Builder, in addition to any other rights and remedies provided in the Contract
Documents or by Law, may terminate the Agreement for cause for the following reasons:
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(a) |
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The Work has been stopped for sixty (60) consecutive Days, or
more than ninety (90) Days during the duration of the Project, because of court
order, any government authority having jurisdiction over the Work, or orders by
Owner under Section 15.1 hereof, provided that such stoppages are not due to
the acts or omissions of Design-Builder, Design Consultant and their respective
officers, agents, employees, Subcontractors or any other person for whose acts
the Design-Builder may be liable under Law.. |
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(b) |
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Owner’s failure to provide Design-Builder with any information,
permits or approvals that are Owner’s responsibility under the Contract
Documents which result in the Work being stopped for sixty (60) consecutive
Days, or more than ninety (90) Days during the duration of the Project, even
though Owner has not ordered Design-Builder in writing to stop and suspend the
Work pursuant to Section 15.1 hereof. |
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(c) |
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Owner fails to meet its obligations under Exhibit C and such
failure results in the Work being stopped for sixty (60) consecutive Days, or
more than ninety (90) Days during the duration of the Project even though Owner
has not ordered Design-Builder in writing to stop and suspend the Work pursuant
to Section 15.1 hereof. |
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(d) |
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Owner’s failure to cure the problems set forth in Section
15.4.1 above within seven (7) Days after Design-Builder has stopped the Work. |
15.5.2 Upon the occurrence of an event set forth in Section 15.5.1 above, Design-Builder may
elect to terminate this Agreement by providing written notice to Owner that it intends to terminate
the Agreement unless the problem cited is cured within seven (7) Days of Owner’s receipt of such
notice. If Owner fails to cure, or reasonably commence to cure, such problem, then Design-Builder
may give a second written notice to Owner of its intent to terminate within an additional seven (7)
Day period. If Owner, within such second seven (7) Day period, fails to cure such problem, then
Design-Builder may declare the Agreement terminated for default by providing written notice to
Owner of such declaration. In such case, Design-Builder shall be entitled to recover in the same
manner as if Owner had terminated the Agreement for its convenience under Section 15.3.
15.6.1 If either Owner or Design-Builder institutes or has instituted against it a case under
the United States Bankruptcy Code (such party being referred to as the “Bankrupt
Party”), such event may impair or frustrate the Bankrupt Party’s ability to perform
its obligations under the Contract Documents. Accordingly, should such event occur:
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(a) |
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The Bankrupt Party, its trustee or other successor, shall
furnish, upon request of the non-Bankrupt Party, adequate assurance of the
ability of the Bankrupt Party to perform all future obligations under the
Contract Documents, which assurances shall be provided within ten (10) Days
after receiving notice of the request; and |
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(b) |
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The Bankrupt Party shall file an appropriate action within the
bankruptcy court to seek assumption or rejection of the Agreement within sixty
(60) Days of the institution of the bankruptcy filing and shall diligently
prosecute such action. |
15.6.2 If the Bankrupt Party fails to comply with its foregoing obligations, the non-Bankrupt
Party shall be entitled to request the bankruptcy court to reject the Agreement, declare the
Agreement terminated and pursue any other recourse available to the non-Bankrupt Party under this
Article 15.
15.6.3 The rights and remedies under this Section 15.6 shall not be deemed to limit the
ability of the non-Bankrupt Party to seek any other rights and remedies provided by the Contract
Documents or by Law, including its ability to seek relief from any automatic stays under the United
States Bankruptcy Code or the right of Design-Builder to stop Work under any applicable provision
of this Agreement.
15.7 Lenders’ Right to Cure. At any time after the occurrence of any event set forth in
Section 15.4.1 or Section 15.5.1, the Lenders shall have the right, but not the obligation, to cure
such default on behalf of Owner.
Article 16
16.1 Designation of Owner’s Representatives. Owner designates the individual listed below
as its senior representative (“
Owner’s Senior Representative”), which individual has the
authority and responsibility for avoiding and resolving disputes under Article 19:
[Owner’s Representative
Title
Address
Telephone:
Facsimile:]
Owner designates the individual listed below as its representative (“Owner’s
Representative”), which individual has the authority and responsibility set forth in Section
4.4:
[Owner’s Senior Representative
Title
Address
Telephone:
Facsimile:]
16.2 Designation of Design-Builder’s Representatives. Design-Builder designates the
individual listed below as its senior representative (“Design-Builder’s Senior
Representative”), which individual has the authority and responsibility for avoiding and
resolving disputes under Article 19:
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Xxxxxx “Xxx” Xxxxx
CEO and President
000 X. Xxxxxxx 000
X.X. Xxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Design-Builder designates the individual listed below as its representative
(“Design-Builder’s Representative”), which individual has the authority and
responsibility set forth in Section 3.1:
Xxxxx Xxxxx
Chief Operating Officer
000 X. Xxxxxxx 000
X.X. Xxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Article 17
17.1 Insurance. Design-Builder shall procure and maintain in force through the Final
Completion Date the following insurance coverages with the policy limits indicated, and otherwise
in compliance with the provisions of this Agreement:
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Commercial General Liability: |
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General Aggregate
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Products-Comp/Op AGG |
|
$ |
2,000,000 |
|
Personal & Adv Injury |
|
$ |
1,000,000 |
|
Each Occurrence |
|
$ |
1,000,000 |
|
Fire Damage (Any one fire) |
|
$ |
50,000 |
|
Med Exp (Any one person) |
|
$ |
5,000 |
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Automobile Liability: |
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Combined Single Limit
Each Occurrence |
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$ |
1,000,000 |
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Excess Liability — Umbrella Form: |
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Each Occurrence |
|
$ |
20,000,000 |
|
Aggregate |
|
$ |
20,000,000 |
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Workers’ Compensation |
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Statutory limits as required by the state in which the Work is performed.
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Employers’ Liability: |
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Each Accident |
|
$ |
1,000,000 |
|
Disease-Policy Limit |
|
$ |
1,000,000 |
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Disease-Each Employee |
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$ |
1,000,000 |
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Professional Errors and Omissions |
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Per Claim |
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$ |
5,000,000 |
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Annual |
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$ |
5,000,000 |
|
17.2 Design-Builder’s Insurance Requirements.
17.2.1 Design-Builder is responsible for procuring and maintaining from insurance companies
authorized to do business in the state in which the Project is located, and with the minimum rating
set forth below, the following insurance coverages for certain claims which may arise from or out
of the performance of the Work and obligations under the Contract Documents:
|
(a) |
|
coverage for claims arising under workers’ compensation,
disability and other similar employee benefit Laws applicable to the Work; |
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(b) |
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coverage for claims by Design-Builder’s employees for bodily
injury, sickness, disease, or death; |
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(c) |
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coverage for claims by any person other than Design-Builder’s
employees for bodily injury, sickness, disease, or death; |
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(d) |
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coverage for usual personal injury liability claims for damages
sustained by a person as a direct or indirect result of Design-Builder’s
employment of the person, or sustained by any other person; |
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(e) |
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coverage for claims for damages (other than to the Work)
because of injury to or destruction of tangible property, including loss of
use; |
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(f) |
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coverage for claims of damages because of personal injury or
death, or property damage resulting from ownership, use and maintenance of any
motor vehicle; and |
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(g) |
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coverage for contractual liability claims arising out of
Design-Builder’s obligations under Section 14.2. |
17.2.2 Design-Builder’s liability insurance required by this Section 17.2 shall be written for
the coverage amounts set forth in Section 17.1 and shall include completed operations insurance for
the period of time set forth in the Agreement.
17.2.3 Design-Builder’s liability insurance set forth in Sections 17.2.1 (a) through (g) above
shall specifically delete any design-build or similar exclusions that could compromise coverages
because of the design-build delivery of the Project.
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17.2.4 To the extent Owner requires Design-Builder or any Design Consultant to provide
professional liability insurance for claims arising from the negligent performance of design
services by Design-Builder or the Design Consultant, the coverage limits, duration and other
specifics of such insurance shall be as set forth in the Agreement. Any professional liability
shall specifically delete any design-build or similar exclusions that could compromise coverages
because of the design-build delivery of the Project. Such policies shall be provided prior to the
commencement of any design services hereunder.
17.2.5 Prior to commencing any construction services hereunder, Design-Builder shall provide
Owner with certificates evidencing that (i) all insurance obligations required by the Contract
Documents are in full force and in effect and will remain in effect for the duration required by
the Contract Documents and (ii) no insurance coverage required hereunder will be canceled, renewal
refused, or changed unless at least thirty (30) Days prior written notice is given to Owner.
17.3 Owner’s Liability Insurance. Owner shall procure and maintain from insurance companies
authorized to do business in the state in which the Project is located such liability insurance to
protect Owner from claims which may arise from the performance of Owner’s obligations under the
Contract Documents or Owner’s conduct during the course of the Project. The general and
professional liability insurance obtained by Owner shall name Design-Builder, Design Consultants,
Subcontractors, the Lenders and Lenders’ Agent as additional insureds, without application of
deductible, retention or retrospective premiums as to the additional insureds.
17.4.1 Unless otherwise provided in the Contract Documents, Owner shall procure from insurance
companies authorized to do business in the state in which the Project is located, and maintain
through Final Completion, property insurance upon the entire Project in a minimum amount equal to
the full insurable value of the Project, including professional fees, overtime premiums and all
other expenses incurred to replace or repair the insured property. The property insurance obtained
by Owner shall include as additional insureds the interests of Owner,
Design-Builder, Design Consultants, Subcontractors, the Lenders and Lenders’ Agent and shall
insure against the perils of fire and extended coverage, theft, vandalism, malicious mischief,
collapse, flood, earthquake, debris removal and other perils or causes of loss as called for in the
Contract Documents and without application of any deductible, retention or retrospective premium.
Owner shall maintain coverage equal to or in excess of the value of each of Design-Builder’s,
Design Consultants’, and Subcontractors’ property on the Site. The property insurance shall
include physical loss or damage to the Work, including materials and equipment in transit, at the
Site or at another location as may be indicated in Design-Builder’s Application for Payment and
approved by Owner.
17.4.2 Unless the Contract Documents provide otherwise, Owner shall procure and maintain
boiler and machinery insurance that will include as additional insureds the Owner, Design-Builder,
Design Consultants, and Subcontractors, in an amount not less than Contract Price and without
application of any deductible, retention or retrospective premium as to the additional insureds.
Owner shall maintain coverage equal to or in excess of the value of
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each of Design-Builder’s,
Design Consultants’, and Subcontractors’ interest or investment in boiler or machinery equipment on
the Site.
17.4.3 Prior to Design-Builder commencing any Work, Owner shall obtain a builder’s risk
insurance policy naming Owner as the insured, with Design-Builder, Design Consultants and
Subcontractors as additional insureds, in an amount not less than the Contract Price and without
application of deductible, retention or retrospective premium as to the additional insureds.
17.4.4 Owner shall also obtain, prior to Design-Builder commencing any Work, terrorism
coverage as described by the Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, 116 Stat.
2322 (2002) or any successor act or renewing act for the period during which the Terrorism Risk
Insurance Act or any successor act or renewing act is in effect.
17.4.5 Prior to Design-Builder commencing any Work, Owner shall provide Design-Builder with
copies of the insurance certificates reflecting coverages required under this Section 17.4
evidencing that (i) all Owner’s insurance obligations required by the Contract Documents are in
full force and in effect and will remain in effect until Design-Builder has completed all of the
Work and has received Final Payment from Owner, and (ii) no insurance coverage will be canceled,
renewal refused, or changed unless at least thirty (30) Days prior written notice is given to
Design-Builder. Owner’s property insurance shall not lapse or be cancelled if Owner occupies a
portion of the Work pursuant to Section 6.5.3. Promptly after Owner’s receipt thereof, Owner shall
be required to provide Design-Builder with copies of all insurance polices to which Design-Builder,
Design Consultants, and Subcontractors are named as additional insureds. In the event Owner
replaces insurance providers for any policy required under this Section, revises policy coverages,
or otherwise modifies any applicable insurance policy in any way, owner shall provide
Design-Builder, for its review or possession as provided under this Section 17.4.5, the certificate
of insurance and a copy of such new, revised or modified policy when available.
17.4.6 Any loss covered under Owner’s property insurance shall be adjusted with Owner and
Design-Builder and made payable to both of them as trustees for the insureds as their interests may
appear, subject to any applicable mortgage clause. All insurance proceeds
received as a result of any loss will be placed in a separate account and distributed in
accordance with such agreement as the interested parties may reach. Any disagreement concerning
the distribution of any proceeds will be resolved in accordance with Article 19 hereof.
17.4.7 Owner and Design-Builder waive against each other and Owner’s separate contracts,
Design Consultants, Subcontractors, agents and employees of each and all of them all damages
covered by property insurance provided herein, except such rights as they may have to the proceeds
of such insurance. Design-Builder and Owner shall, where appropriate, require similar waivers of
subrogation from Owner’s separate contractors, Design Consultants Subcontractors, and insurance
providers and shall require each of them to include similar waivers in their contracts or policies.
17.5 Coordination with Loan Documents. Notwithstanding anything herein to the contrary, all
provisions relating to insurance and insurance proceeds shall be conformed to the requirements of
the Lenders in connection with any financing.
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Article 18
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(i) |
|
it is duly organized, validly existing and in good standing under the Laws of
its formation and has all requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby; |
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(ii) |
|
this Agreement has been duly executed and delivered by such party and
constitutes the legal, valid and binding obligations of such party, enforceable against
such party in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or similar Laws affecting creditor’s
rights or by general equitable principles; |
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(iii) |
|
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby do not and will not conflict with or violate
(a) the certificate of incorporation or bylaws or equivalent organizational documents
of such party, or (b) any Law applicable to such party and other than the permits
listed on Exhibit G, such execution, delivery and performance of this Agreement does
not require any governmental approval; and |
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|
(iv) |
|
there is no action pending or, to the knowledge of such party, threatened,
which would hinder, modify, delay or otherwise adversely affect such party’s ability to
perform its obligations under the Contract Documents. |
Article 19
19.1 Dispute Avoidance and Mediation. The Parties are fully committed to working with each
other throughout the Project and agree to communicate regularly with each other at all times so as
to avoid or minimize disputes or disagreements. If disputes or disagreements do arise,
Design-Builder and Owner each commit to resolving such disputes or disagreements in an amicable,
professional and expeditious manner so as to avoid unnecessary losses, delays and disruptions to
the Work.
Design-Builder and Owner will first attempt to resolve disputes or disagreements at the field level
through discussions between Design-Builder’s Representative and Owner’s Representative.
If a dispute or disagreement cannot be resolved through Design-Builder’s Representative and Owner’s
Representative, Design-Builder’s Senior Representative and Owner’s Senior
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Representative, upon the
request of either party, shall meet as soon as conveniently possible, but in no case later than
thirty (30) Days after such a request is made, to attempt to resolve such dispute or disagreement.
Prior to any meetings between the Senior Representatives, the Parties will exchange relevant
information that will assist the Parties in resolving their dispute or disagreement.
If, after meeting, the Senior Representatives determine that the dispute or disagreement cannot be
resolved on terms satisfactory to both Parties, the Parties shall submit the dispute or
disagreement to non-binding mediation. The mediation shall be conducted in Minneapolis,
Minnesota
by a mutually agreeable impartial mediator, or if the Parties cannot so agree, a mediator
designated by the American Arbitration Association (“
AAA”) pursuant to its Construction
Industry Arbitration Rules and Mediation Procedures. The mediation will be governed by and
conducted pursuant to a mediation agreement negotiated by the Parties or, if the Parties cannot so
agree, by procedures established by the mediator.
19.2 Arbitration. Any claims, disputes or controversies between the Parties arising out of or
relating to the Agreement, or the breach thereof, which have not been resolved in accordance with
the procedures set forth in Section 19.1 above shall be decided by arbitration to be conducted in
Minneapolis,
Minnesota in accordance with the Construction Industry Arbitration Rules and Mediation
Procedures of the AAA then in effect, unless the Parties mutually agree otherwise.
The award of the arbitrator(s) shall be final and binding upon the Parties without the right of
appeal to the courts. Judgment may be entered upon it in accordance with Applicable Law by any
court having jurisdiction thereof.
Design-Builder and Owner expressly agree that any arbitration pursuant to this Section 19.2 may be
joined or consolidated with any arbitration involving any other person or entity (i) necessary
to resolve the claim, dispute or controversy, or (ii) substantially involved in or affected by such
claim, dispute or controversy. Both Design-Builder and Owner will include appropriate provisions
in all contracts they execute with other parties in connection with the Project to require such
joinder or consolidation.
The prevailing party in any arbitration, or any other final, binding dispute proceeding upon which
the Parties may agree, shall be entitled to recover from the other party reasonable attorneys’ fees
and expenses incurred by the prevailing party.
19.3 Duty to Continue Performance. Unless provided to the contrary in the Contract Documents,
Design-Builder shall continue to perform the Work and Owner shall continue to satisfy its payment
obligations to Design-Builder, pending the final resolution of any dispute or disagreement between
Design-Builder and Owner.
19.4.1 Notwithstanding anything herein to the contrary (except as set forth in Section 19.4.2
below), neither Design-Builder nor Owner shall be liable to the other for any consequential losses
or damages, whether arising in contract, warranty, tort (including negligence), strict liability or
otherwise, including but not limited to, losses of use, profits,
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business, reputation or financing,
except that Design-Builder does not waive any such damages resulting from or arising out of any
breach of Owner’s duties and obligations under the limited license granted by Design-Builder to
Owner pursuant to Article 5.
19.4.2 The consequential damages limitation set forth in Section 19.4.1 above is not intended
to affect the payment of liquidated damages, if any, set forth in Section 7.3 of the Agreement,
which both Parties recognize has been established, in part, to reimburse Owner for some damages
that might otherwise be deemed to be consequential.
Article 20
20.1 Non-Disclosure Obligation. Except as required by court order, subpoena, or Applicable
Law, neither party shall disclose to third parties any confidential or proprietary information
regarding the other party’s business affairs, finances, technology, processes, plans or
installations, product information, know-how, or other information that is received from the other
party pursuant to this Agreement or the parties’ relationship prior thereto or is developed
pursuant to this Agreement, without the express written consent of the other party, which consent
shall not be unreasonably withheld. The Parties shall at all times use their respective reasonable
efforts to keep all information regarding the terms and conditions of this Agreement confidential
and shall disclose such information to third persons only as reasonably required for the permitting
of the Project; financing the development, construction, ownership, operation and maintenance of
the Plant; or as reasonably required by either party for performing its obligations hereunder and
if prior to such disclosure, the disclosing party informs such third persons of the existence of this confidentiality
obligation and only if such third persons agree to maintain the confidentiality of any information
received. This Article 20 shall not apply to information that was already in the possession of one
party prior to receipt from the other, that is now or hereafter becomes a part of the public domain
through no fault of the party wishing to disclose, or that corresponds in substance to information
heretofore or hereafter furnished by third parties without restriction on disclosure.
20.2 Publicity and Advertising. Neither Owner nor Design-Builder shall make or permit any
of their subcontractors, agents, or vendors to make any external announcement or publication,
release any photographs or information concerning the Project or any part thereof, or make any
other type of communication to any member of the public, press, business entity, or any official
body which names the other Party unless prior written consent is obtained from the other Party,
which consent shall not be unreasonably withheld.
20.3 Term of Obligation. The confidentiality obligations of the Parties pursuant to this
Article 20 shall survive the expiration or other termination of this Agreement for a period of two
(2) years.
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Article 21
21.1 Assignment This Agreement shall be binding upon, shall inure to the benefit of, and may
be performed by, the successors and permitted assigns of the Parties, except that neither
Design-Builder nor Owner shall, without the written consent of the other, assign or transfer this
Agreement or any of the Contract Documents. Design-Builder’s subcontracting portions of the Work
in accordance with this Agreement shall not be deemed to be an assignment of this Agreement. Owner
may assign all of its rights and obligations under the Contract Documents to its Lenders or
Lenders’ Agent as collateral security in connection with Owner obtaining or arranging any financing
for the Project; provided, however, Owner shall deliver, at least ten (10) Days prior to any such
assignment, to Design-Builder (i) written notice of such assignment and (ii) a copy of the
instrument of assignment. The Lenders or Lenders’ Agent may assign the Contract Documents or their
rights under the Contract Documents, including without limitation in connection with any
foreclosure or other enforcement of their security interest. Design-Builder shall execute, if
requested, a consent to assignment for the benefit of the Lenders and/or the Lenders’ Agent,
provided that with respect to any such assignments such assignee demonstrates to Design-Builder’s
satisfaction that it has the capability to fulfill Owner’s obligations under this Agreement.
21.2 Successors. Design-Builder and Owner intend that the provisions of the Contract
Documents are binding upon the Parties, their employees, agents, heirs, successors and assigns.
21.3 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with, the substantive laws of the state of
Minnesota, without regard to the conflict of
laws provisions thereof.
21.4 Severability. If any provision or any part of a provision of the Contract Documents
shall be finally determined to be superseded, invalid, illegal, or otherwise unenforceable pursuant
to any applicable Legal Requirements, such determination shall not impair or otherwise affect the
validity, legality, or enforceability of the remaining provision or parts of the provision of the
Contract Documents, which shall remain in full force and effect as if the unenforceable provision
or part were deleted.
21.5 No Waiver. The failure of either Design-Builder or Owner to insist, in any one or more
instances, on the performance of any of the obligations required by the other under the Contract
Documents shall not be construed as a waiver or relinquishment of such obligation or right with
respect to future performance.
21.6 Headings. The table of contents and the headings used in this Agreement or any other
Contract Document, are for ease of reference only and shall not in any way be construed to limit,
define, extend, describe, alter, or otherwise affect the scope or the meaning of any provision of
this Agreement.
21.7 Notice. Whenever the Contract Documents require that notice be provided to a party,
notice shall be delivered in writing to such party at the address listed below. Notice will be
deemed to have been validly given if delivered (i) in person to the individual intended to
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receive
such notice, (ii) by registered or by certified mail, postage prepaid to the address indicated in
the Agreement within four (4) Days after being sent, or (iii) by facsimile, by the time stated in a
machine-generated confirmation that notice was received at the facsimile number of the intended
recipient.
If to Design-Builder, to:
Xxxxx, Inc.
000 X. Xxxxxxx 000
P. O. Xxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx, Inc.
000 X. Xxxxxxx 000
P. O. Xxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Fax: (000) 000-0000
and a copy to:
Xxxxx, Inc.
000 X. Xxxxxxx 000
P. O. Xxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
If to Owner, to:
[Owner Contact]
[Address]
and
Lender’s Agent at the address provided for Lender’s Agent to Design-Builder by Owner
by notice within five Days following the Financial Closing.
21.9 Amendments. The Contract Documents may not be changed, altered, or amended in any way
except in writing signed by a duly authorized representative of each party.
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21.10 Entire Agreement. This Agreement consists of the terms and conditions set forth herein,
as well as the Exhibits hereto, which are incorporated by reference herein and made a part hereof.
This Agreement sets forth the full and complete understanding of the Parties as of the Effective
Date with respect to the subject matter hereof.
21.11 Third-Party Beneficiaries. Except as expressly provided herein, this Agreement is
intended to be solely for the benefit of the Owner, the Design-Builder and permitted assigns, and
is not intended to and shall not confer any rights or benefits on any person not a signatory
hereto.
21.12 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall be deemed one and the same Agreement,
and may be executed and delivered by facsimile signature, which shall be considered an original.
21.13 Survival. Notwithstanding any provisions herein to the contrary, the Work Product
provisions set forth in Article 5 and the indemnity obligations set forth herein shall survive (in
full force) the expiration or termination of this Agreement, and shall continue to apply to the
Parties to this Agreement even after termination of this Agreement or the transfer of such Party’s
interest in this Agreement.
[The next page is the signature page.]
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OWNER:
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DESIGN-BUILDER: |
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Advanced BioEnergy, LLC
(Name of Owner)
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Xxxxx, Inc.
(Name of Design-Builder)
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/s/ Xxxxx X. Xxxxxxxxxx III
(Signature)
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/s/ Xxx Xxxxx
(Signature)
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Xxxxx X. Xxxxxxxxxx III
(Printed Name)
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Xxxxxx “Xxx” Xxxxx
(Printed Name)
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CEO and President
(Title)
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Date: 3/16/06
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Date: 3/20/06 |
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EXHIBIT A
Performance Guarantee Criteria
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Criteria |
|
Specification |
|
Testing Statement |
|
Documentation |
Plant Capacity –
fuel grade ethanol
|
|
Operate at a rate
of 100 million
gallons per year of
denatured fuel
grade ethanol
meeting the
specifications of
ASTM 4806 based on
353 days of
operation per
calendar year and
4.76% denaturant.
|
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Seven day
performance test
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Production records
and a written
report by
Design-Builder. |
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Dried Distillers
Grains with
Solubles (DDGS)
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Dry all DDGS to
produce 11%
moisture DDGS
|
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Seven day
performance test
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Production records
and written
analysis by
Design-Builder. |
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Corn to Ethanol
Conversion ratio;
Corn must be #2
Yellow or better,
54.6#/bushel min.,
16% or less
moisture, zero
aflatoxin tolerance
|
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Not be less than
2.80 denatured
gallons of ethanol
per bushel (56#) of
ground corn
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As determined by
meter readings
during a seven day
performance test.
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Production records
and written
analysis by
Design-Builder. |
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Electrical Energy
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[*] kWh per
denatured gallon of
fuel grade ethanol.
(less
CO2
plant and chiller
and water supply
and treatment)
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As determined by
meter readings
during a seven day
performance test.
|
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Production records
and written
analysis by
Design-Builder. |
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Natural Gas
|
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Shall not exceed
[*] Btu per
denatured gallon of
fuel grade ethanol
and 100% of all DDG
with syrup to 11%
moisture.
(This Performance
Criteria relates to
production of |
|
As determined by
meter readings
during a seven day
performance test.
|
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Production records
and written
analysis by
Design-Builder. |
* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
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A-1
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Criteria |
|
Specification |
|
Testing Statement |
|
Documentation |
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ethanol and
excludes any
natural gas usage
that may occur for
drying corn).
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Process Water
Discharge
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Zero gallons under
normal operations
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Process discharge
meter
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Control System
reports |
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Air Emissions
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Must meet the
requirements
prescribed as of
the date hereof by
the State of
Nebraska Department
of Environmental
Quality, Air
Quality Division
for a synthetic
minor source.
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Must meet the
requirements as
prescribed in the
Construction Permit
attached hereto as
Exhibit M as
revised by
Design-Builder.
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Written report by
Owner’s Air
Emission Tester. |
DISCLAIMER: Owner’s failure to materially comply with the operating procedures issued by ICM,
Inc./Xxxxx, Inc. shall void all performance guaranties and warranties set forth in this
Design-Build Agreement.
Owner understands that the startup of the plant requires resources and cooperation of the Owner,
vendors and other suppliers to the project. Design-Builder disclaims any liability and Owner
indemnifies Design-Builder for non-attainment of the Performance Guarantee Criteria directly or
indirectly caused by material non-performance or negligence of third parties not retained by
Design-Builder.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
A-2
EXHIBIT B
General Project Scope
Construct a 100 million-gallon per year (MGY) dry mill fuel ethanol plant near Fairmont, Nebraska.
The plant will grind approximately 35.8 million bushels of corn per year to produce approximately
100 MGY of denatured fuel ethanol. The plant will also produce approximately 321,000 tons per year
of 11% moisture dried distillers grains with solubles (DDGS), and approximately 285,700 tons per
year of raw carbon dioxide (CO2) gas.
Delivered corn will be dumped in the receiving building. The receiving building will have two
truck grain receiving bays and a rail receiving bay, including an underground conveyor from the
rail pit to the second truck receiving bay both of which share a common receiving leg. The truck
driver will drive onto the pitless scale located near the administration building, be weighed and
sampled, then drive to the receiving building, dump the grain, then proceed back to the pitless
scale and obtain a final weight ticket from the scale operator. Two independent 15,000-bushel legs
will lift the corn to one of two 500,000 – bushel concrete storage bins. A dust collection system
will be installed on the grain receiving system to limit particulate emissions as described in the
Air Quality Permit application.
Ground corn will be mixed in a slurry tank, routed through a pressure vessel and steam flashed off
in a flash vessel. Cooked mash will continue through liquefaction tanks and into one of the
fermenters. Simultaneously, propagated yeast will be added to the mash as the fermenter is
filling. After batch fermentation is complete, the beer will be pumped to the beer well and then
to the beer column to vaporize the alcohol from the mash.
Alcohol streams are dehydrated in the rectifier column, the side stripper and the molecular sieve
system. Two hundred proof alcohol is pumped to the tank farm day tank and blended with five
percent natural gasoline as the product is being pumped into one of two 1,500,000 gallon final
storage tanks. Loading facilities for truck and rail cars will be provided. Tank farm tanks
include: one tank for 190 proof storage, one tank for 200 proof storage, one tank for denaturant
storage and two 1,500,000 gallon tanks for denatured ethanol storage.
Corn mash from the beer stripper is dewatered in the centrifuge(s). Wet cake from the
centrifuge(s) is conveyed to the natural gas driven DDGS dryer system. Wet cake is conveyed from
the centrifuges to the dryer(s) where the water is removed from the cake and the product is dried
to 11% moisture. A modified wet or wet cake pad is located along side the DDGS dryer building to
divert modified wet or wet cake to the pad when necessary or for limited production of modified wet
or wet cake for sales. Water in the thin stillage is evaporated and recycled by the
Bio-Methanation system. Syrup is added to the wet cake entering the dryer(s). DDGS is cooled and
conveyed to flat storage in the DDGS storage building. Shipping is accomplished by scooping and
pushing the product with a front-end loader into an in-floor conveyor system. The DDGS load out
pit has capacity for approximately one semi-trailer load. DDGS is weighed as it is loaded for
shipment through a bulk-weigh system.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
B-1
Fresh water for the boilers, cooking, cooling tower and other processes will be obtained from the
Owner supplied water pretreatment system. Boiler water conditioned in regenerative softeners will
be pumped through a deaerator scrubber and into a deaerator tank. Appropriate boiler chemicals
will be added as preheated water is sent to the boiler.
Steam energy will be provided by two Thermal Oxidizer (TO) driven boiler systems utilizing a high
percentage of condensate return to a condensate receiver tank.
The TO/Heat Recovery Steam Generator is used to thermally oxidize the exhaust gasses from the
Dryers. This process will be used to reduce VOCs and particulates that are in the dryer exhaust
and ensure compliance with environmental regulations. The energy required to complete the thermal
oxidization will be provided by natural gas.
The process will be cooled by circulating water through heat exchangers, a chiller, and a cooling
tower.
The design includes a compressed air system consisting of air compressor(s), a receiver tank,
pre-filter, coalescing filter, and double air dryer(s).
The design also incorporates the use of a clean-in-place (CIP) system for cleaning xxxx,
fermentation, distillation, evaporation, centrifuges, and other systems. Fifty percent caustic
soda is received by truck and stored in a tank.
Under normal operating circumstances, the plant will not have any wastewater discharges that have
been in contact with corn, corn mash, cleaning system, or contact process water. An ICM/Phoenix
Bio-Methanator will reduce the BOD in process water allowing complete reuse within the plant. The
plant will have blowdown discharges from the cooling tower and may have water discharge from any
water pre-treatment processes. Owner shall provide on-site connection to sanitary sewer or septic
system.
Most plant processes are computer controlled by a Siemens/Xxxxx APACS distributed control system
with graphical user interface and three workstations. The control room control console will have
dual monitors to facilitate operator interface between two graphics screens at the same time.
Additional programmable logic controllers (PLCs) will control certain process equipment. Design
Builder provides lab equipment.
The cooking system requires the use of anhydrous ammonia, and other systems require the use of
sulfuric acid. Therefore, a storage tank for ammonia and a storage tank for acid will be on site
to provide the quantities necessary. The ammonia storage requires that plant management implement
and enforce a Process Safety Management (PSM) program. The plant design may require additional
programs to ensure safety and to satisfy regulatory authorities.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
B-2
EXHIBIT C
Owner’s Responsibilities
The Owner shall perform and provide the permits, authorizations, services and construction as
specifically described hereafter:
1) |
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Land and Grading — Owner shall provide a site near Fairmont, Nebraska. Owner shall obtain
all legal authority to use the site for its intended purpose and perform technical due
diligence to allow Design-Builder to perform including, but not limited to, proper zoning
approvals, building permits, elevation restrictions, soil tests, and water tests. The site
shall be rough graded per Design-Builder specifications and be +/- three inches of final grade
including the rough grading for Site roadways. The site soils shall be modified as required
to provide a minimum allowable soil bearing pressure as described in Table 1. |
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Other items to be provided by the Owner include, but are not limited to, the following: initial
site survey (boundary and topographic) as required by the Design-Builder, layout of the property
corners including two construction benchmarks, Soil Borings and subsequent Geotechnical Report
describing recommendation for Roads, foundations and if required, soil
stabilization/remediation, land disturbance permit, erosion control permit, site grading as
described above with minimum soil standards, placement of erosion control measures, plant access
road from a county, state or federal road designed to meet local county road standards, plant
storm and sanitary sewers, fire water system with hydrants and plant water main branches taken
from the system to be within five feet of the designated building locations, all tanks, motors
and other equipment associated with or necessary to operate the fire water loop and associated
systems, plant roads as specified and designed for the permanent elevations and effective depth,
“construction” grading plan as drawn (including site retention pond), plant water well and
associated permit(s). Owner shall also provide the final grading, seeding, and mulching, and
the site fencing at the site. |
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Owner is encouraged to obtain preliminary designs/information and estimates of the cost of
performing all Owner required permits and services as stated in this Exhibit C. Specifically,
the cost of the fire water systems (including associated fire water pumps, required tank,
building (if required), sprinklers, and all other equipment and materials associated with the
fire water delivery systems) is estimated being in excess of $2,000,000. The requirements of
each state and the decisions of each Owner will increase or decrease the actual cost.Owner shall
prepare site according to Design-Builder’s engineering plans provided for the site work under
the Phase I and Phase II Engineering Agreement. |
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2) |
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Permits - Owner shall obtain all Operating Permits including, but not limited to, air quality
permits, in a timely manner to allow construction and startup of the plant as scheduled by
Design-Builder. |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
C-1
3) |
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Storm Water Runoff Permit — Owner shall obtain the construction storm-water runoff permit and
permanent storm-water runoff permit. Design-Builder shall obtain the erosion control/land
disturbance permit. |
4) |
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Nebraska Pollutant Elimination Discharge Permit — Owner shall obtain a permit to discharge
cooling tower water, boiler blowdown water, reverse osmosis (“R.O.”) reject water, and any
other waste water directly to a designated waterway or other location. If required by item 8
below, Owner will secure appropriate permits for emergency process water discharges. |
5) |
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Natural Gas Supply and Service Agreement — Continuous supply of natural gas of at least 3.2
billion cubic feet per year, at a minimum rate of 450 — 550 MCF per hour and at a minimum
pressure of 75 — 200 psig at the plant site. Pressure reducing stations must be located so as
to provide stable pressure at the point of use. Owner shall provide all gas piping to the use
points and supply meters and regulators to provide burner tip pressures as specified by
Design-Builder. Owner shall also supply a digital flowmeter on-site with appropriate output
for monitoring by the plant’s computer control system. |
6) |
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Temporary Electrical Service — Owner shall secure electrical service to supply a minimum 750
KW of 3 phase, 480/277 volt electrical power during construction. Owner shall procure,
install, and maintain temporary service to up to three 3 phase, 480/277 volt temporary service
transformers located throughout the site. The transformer sizing, locations, and underground
electrical feed routing layout are to be determined jointly by the Owner, the Design-Builder
and the energy supplier. Design-Builder shall pay energy demand and usage charges up to
Substantial Completion. |
7) |
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Permanent Electrical Service — (1) Owner is responsible to secure continuous service from an
energy supplier to serve the facility. The service from the energy supplier shall be of
sufficient size to provide at a minimum 12.5 MW of electrical capacity to the site. (2) The
Owner is responsible for procurement, installation and maintenance of the site supply and
distribution system, including but not limited to the required substation and all associated
distribution lines. An on-site digital meter is also to be supplied for monitoring of
electrical usage. (3) The responsibility of the Design-Builder starts at the secondary
electrical terminals of the site distribution system transformers that have been installed by
Owner (i.e., the 480 volt terminals for the process building transformers; the 480 volt
terminals for the energy center transformers; the 480 volt terminals for the grains
transformer; the 480 volt terminals for the pumphouse transformer; and the 4160 volt terminals
for the chiller transformer; and the 4160 volt terminals of the thermal oxidizer transformer).
(4) The site distribution system requirements, layout, and meters are to be determined
jointly by the Owner, the Design-Builder and the energy supplier. |
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Design-Builder will be providing soft start motor controllers for all motors greater than 150
horsepower and where demanded by process requirements. Owner is encouraged to discuss with its
electrical supplier whether additional soft start motor controllers are advisable for this
facility and such can be added, with any increased cost being an Owner’s cost. |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
C-2
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Design-Builder will provide power factor correction to 0.92 lagging at plant nameplate capacity.
Owner is encouraged to discuss with its electrical service supplier any requirements for power
factor correction above 0.92 lagging. Additional power factor correction can be added with any
increased cost being an Owner’s cost. |
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8) |
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Water Supply, Service Agreement, and Pre-Treatment System — Owner shall supply on-site
process xxxxx or other water source that is capable of providing a quantity of raw water
satisfying the needs of the Plant. Owner should consider providing a redundant water supply
source. Design-Builder shall provide the standard zeolite water softener system for boiler
feedwater polishing. Owner will supply one process fresh water supply line terminating within
five (5) feet of the point of entry designated by Design-Builder, and one potable supply line
terminating within five (5) feet of the process building and to the administration building at
a point of entry designated by administration building contractor. |
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Owner shall pay for a water pre-treatment system to be designed and constructed by
Design-Builder and to be integrated into the Plant. The pre-treatment system will be designed
to provide the Plant with the quantity and quality of raw and treated water needed to supply the
Plant’s process needs. The water pre-treatment system design will also consider and recommend to
Owner equipment required to meet the discharge requirements under the Plant’s wastewater
discharge permit. Owner is to execute side-letter agreements as necessary for the design and
construction of such water pre-treatment system. Design-Builder shall recover costs for the
design and construction of such system from the Owner at Design-Builder’s standard time plus
material rates during the relevant time period and at the relevant locale. A side-letter
agreement between Owner and Design-Builder shall be executed by Owner and Design-Builder to
compensate Design-Builder, at Design-Builder’s standard time plus materials rates during the
relevant time period and at the relevant locale, for any costs and expenses related to such
water pre-treatment system. |
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9) |
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Wastewater Discharge System, Permits and/or Service Agreement — Owner to provide discharge
piping, septic tank and drainfield system or connect to municipal system as required for the
sanitary sewer requirements of the Plant. These provisions shall comply with all federal,
state, and local regulations, including any permitting issues. |
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10) |
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Roads and Utilities — Owner shall provide and maintain the ditches and permanent roads,
including the gravel, pavement or concrete, with the roads passing standard compaction tests.
(Design-Builder will maintain aggregate construction roads during construction of the Plant
and will return to original pre-construction condition prior to Owner completing final grade
and surfacing.) |
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Except as otherwise specifically stated herein the Owner shall install all utilities so that
they are within five (5) feet of the designated building/structure locations. |
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11) |
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Administration Building — The administration building — one story free standing, office
computer system, telephone system, office copier and fax machine and office furniture and any
other office equipment and personal property for the administration building shall be the |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
C-3
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sole and absolute cost and responsibility of Owner and Design-Builder shall have no
responsibility in regards thereto. |
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12) |
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Maintenance and Power Equipment — The maintenance and power equipment as described in Table 2
and any other maintenance and power equipment as required by the plant or desired by Owner
shall be the sole and absolute cost and responsibility of Owner and Design-Builder shall have
no responsibility in regards thereto. |
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13) |
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Railroads — Owner is responsible for any costs associated with the railroads including, but
not limited to, all rail design and engineering and construction and Design-Builder shall have
no responsibility in regards thereto. Owner shall supply drawings and Phase II redline
drawings to Design-Builder. |
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14) |
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Drawings — Owner shall supply drawings to Design-Builder of items supplied under items 11)
and 13) and also supply Phase II redline drawings. |
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15) |
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Fire Protection System — Fire Protection System requirements vary by governmental
requirements per location and by insurance carrier requirements. Owner is responsible to
provide the required fire protection system for the Plant. This may include storage tanks,
pumps, underground fire water mains, fire hydrants, foam or water monitor valves, sprinkler
systems, smoke and heat detection, deluge systems, or other provisions as required by
governmental codes or Owner’s insurance carrier’s fire protection criteria. |
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Owner shall pay for a Fire Protection System to be designed and constructed by Design-Builder
and to be integrated into the Plant. The Fire Protection System shall be designed and
constructed to meet the governmental and insurance requirements. Owner is to execute
side-letter agreements as necessary for the design and construction of such Fire Protection
System. Design-Builder shall recover costs for the design and construction of such system from
Owner at Design-Builder’s standard time plus material rates during the relevant time period and
at the relevant locale. A side-letter agreement between Owner and Design-Builder shall be
executed by Owner and Design-Builder to compensate Design-Builder, at Design-Builder’s standard
time plus materials rates during the relevant time period and at the relevant locale, for any
costs and expenses related to such Fire Protection System. |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
C-4
Table 1 Minimum Soil Bearing Pressure – Responsibility of Owner
** Subject to revision based on detailed design and engineering.
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Required Allowable Soil Bearing |
Description |
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Pressure (pounds per square foot) |
Grain Storage Silos |
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7,000 |
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DDGS Storage Silos |
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5,000 |
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Xxxx Water Tank |
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4,500 |
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Methanator Feed Tank |
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4,500 |
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Liquefaction Tank #1 |
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3,500 |
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Liquefaction Tank #2 |
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3,500 |
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Fermentation Tank #1 |
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5,000 |
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Fermentation Tank #2 |
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5,000 |
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Fermentation Tank #3 |
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5,000 |
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Fermentation Tank #4 |
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5,000 |
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Fermentation Tank #5 |
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5,000 |
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Fermentation Tank #6 |
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5,000 |
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Fermentation Tank #7 |
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5,000 |
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Beerwell |
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5,000 |
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Whole Stillage Tank |
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4,500 |
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Thin Stillage Tank |
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4,500 |
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Syrup Tank |
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4,500 |
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190 Proof Day Tank |
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3,000 |
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200 Proof Day Tank |
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3,000 |
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Denaturant Tank |
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3,000 |
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Fire Water Tank |
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3,000 |
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Denatured Ethanol Tank #1 |
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3,000 |
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Denatured Ethanol Tank #2 |
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3,000 |
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Distillation Mat Foundation |
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4,500 |
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All Other Areas |
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3,000 |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
C-5
Table 2 Maintenance and Power Equipment — Responsibility of Owner
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Description |
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Additional Description |
Spare Parts
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Spare parts
Parts bins
Misc. materials, supplies and equipment |
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Shop supplies and equipment
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One shop welder
One portable gas welder
One plasma torch
One acetylene torch
One set of power tools
Two sets of hand tools with tool boxes
Carts and dollies
Hoists (except centrifuge overhead crane)
Shop tables
Maintenance office furnishings & supplies
Fire Extinguishers
Reference books
Safety manuals
Safety cabinets & supplies, etc.
Safety showers as required |
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Rolling stock
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Used 1 1/2 yard front end loader
New Skid loader
Used Fork lift
Used Scissors lift, 30 foot
Used Pickup truck
Track Mobile |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
C-6
EXHIBIT D
ICM License Agreement
THIS LICENSE AGREEMENT (this “License Agreement”) is entered into and made effective as of the
13th day of March, 2006 (“Effective Date”) by and between Advanced BioEnergy, LLC, a
Delaware Limited Liability Company (“OWNER”), and ICM, Inc., a Kansas corporation (“ICM”).
1. Upon substantial completion of the Plant by Xxxxx pursuant to the terms of the Contract or,
if later, payment by OWNER of all amounts due and owing to Xxxxx under the Contract, ICM grants
to OWNER a perpetual limited license to use the Proprietary Property (hereinafter defined)
solely in connection with the ownership, operation, maintenance and repair of the Plant, subject
to the limitations provided herein (the “Purpose”).
2. The “Proprietary Property” means, without limitation, documents, Operating Procedures
(hereinafter defined), materials and other information that are furnished by ICM to OWNER in
connection with the Purpose, whether orally, visually, in writing, or by any other means,
whether tangible or intangible, directly or indirectly (including, without limitation, through
Xxxxx) and in whatever form or medium including, without limitation, the design, arrangement,
configuration, and specifications of (i) the combinations of distillation, evaporation, and
alcohol dehydration equipment (including, but not limited to, pumps, vessels, tanks, heat
exchangers, piping, valves and associated electronic control equipment) and all documents
supporting those combinations; (ii) the combination of the distillers grain drying (DGD), and
heat recovery steam generation (HRSG) equipment (including, but not limited to, pumps, vessels,
tanks, heat exchangers, piping and associated electronic control equipment) and all documents
supporting those combinations; and (iii) the computer system, known as the distributed control
system (DCS and/or PLC) (including, but not limited to, the software configuration, programming,
parameters, set points, alarm points, ranges, graphical interface, and system hardware
connections) and all documents supporting that system. The “Operating Procedures” means, without
limitation, the process equipment and specifications manuals, standards of quality, service
protocols, data collection methods, construction specifications, training methods, engineering
standards and any other information prescribed by ICM from time to time concerning the Purpose.
Proprietary Property shall not include any information or materials that OWNER can demonstrate
by clear and convincing written evidence: (i) was lawfully in the possession of OWNER prior to
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ADVANCED BIOENERGY, LLC
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Xxxxx 00, 0000 |
X-0
disclosure by ICM or Xxxxx; (ii) was in the public domain prior to disclosure by ICM or Xxxxx;
(iii) was disclosed to OWNER by a third party other than Xxxxx having the legal right to possess
and disclose such information or materials; or (iv) after disclosure by ICM or Xxxxx comes into
the public domain through no fault of OWNER or its members, directors, officers, employees,
agents, contractors, consultants or other representatives (hereinafter collectively referred to
as “Representatives”). Information and materials shall not be deemed to be in the public domain
merely because such information is embraced by more general disclosures in the public domain,
and any combination of features shall not be deemed to be within the foregoing exceptions merely
because individual features are in the public domain if the combination itself and its
principles of operation are not in the public domain.
3. OWNER shall not use the Proprietary Property for any purpose other than the Purpose. OWNER
shall not use the Proprietary Property in connection with any expansion or enlargement of the
Plant. ICM and its Representatives shall have the express right at any time to enter upon the
premises of the Plant to inspect the Plant and its operation to ensure that OWNER is complying
with the terms of this License Agreement.
4. OWNER’s failure to materially comply with the Operating Procedures shall void all guarantees,
representations and warranties, whether expressed or implied, if any, that were given by ICM to
OWNER, directly or indirectly through Xxxxx, concerning the performance of the Plant that ICM
reasonably determines are materially affected by OWNER’s failure to materially comply with such
Operating Procedures. OWNER agrees to indemnify, defend and hold harmless ICM, Xxxxx and their
respective Representatives from any and all losses, damages and expenses including, without
limitation, reasonable attorneys’ fees resulting from, relating to or arising out of Owner’s or
its Representatives’ (a) failure to materially comply with the Operating Procedures or (b)
negligent use of the Proprietary Property.
5. Any and all modifications to the Proprietary Property by OWNER or its Representatives shall
be the property of ICM. OWNER shall promptly notify ICM of any such modification and OWNER
agrees to assign all right, title and interest in such modification to ICM; provided, however,
OWNER shall retain the right, at no cost, to use such modification in connection with the
Purpose.
6. ICM has the exclusive right and interest in and to the Proprietary Property and the goodwill
associated therewith. OWNER will not, directly or indirectly, contest ICM’s ownership of the
Proprietary Property. OWNER’s use of the Proprietary Property does not give OWNER any ownership
interest or other interest in or to the Proprietary Property except for the limited license
granted to OWNER herein. Goodwill created by the operation of the plant and all financial
benefits therefrom shall be the property of the Owner.
7. OWNER shall pay no license fee or royalty to ICM for OWNER’s use of the Proprietary Property
pursuant to this License Agreement, the consideration for the perpetual limited license granted
herein is included in the amounts payable by OWNER to Xxxxx for the construction of the Plant
under the Contract.
8. OWNER may not assign the perpetual limited license granted herein, in whole or in
part, without the prior written consent of ICM, which will not be unreasonably withheld or
delayed. Prior to any assignment, OWNER shall obtain from such assignee a written instrument,
in form and substance reasonably acceptable to ICM, agreeing to be bound by all the terms and
provisions of this License Agreement. Any assignment of this License Agreement shall not
release OWNER from (i) its duties and obligations hereunder concerning the disclosure and use of
the Proprietary Property by OWNER or its Representatives, or (ii) damages to ICM resulting from,
or arising out of, a breach of such duties
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ADVANCED BIOENERGY, LLC
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Xxxxx 00, 0000 |
X-0
or obligations by OWNER or its Representatives. ICM may assign its right, title and interest in
the Proprietary Property, in whole or part, subject to the limited license granted herein.
9. The Proprietary Property is confidential and proprietary. OWNER shall keep the Proprietary
Property confidential and shall use all reasonable efforts to maintain the Proprietary Property
as secret and confidential for the sole use of OWNER and its Representatives for the Purpose.
OWNER shall retain all Proprietary Property at its principal place of business and/or the Plant.
OWNER shall not at any time without ICM’s prior written consent, copy, duplicate, record, or
otherwise reproduce the Proprietary Property, in whole or in part, or otherwise make the same
available to any unauthorized person provided, OWNER shall be permitted to copy, duplicate or
otherwise reproduce the Proprietary Property in whole or in part in connection with, and to the
extent it is necessary and essential for, the Purpose so long as all such copies, duplicates or
reproductions are kept at its principal place of business and/or the Plant and are treated the
same as any other Proprietary Property. OWNER shall not disclose the Proprietary Property
except to its Representatives who are directly involved with the Purpose, and even then only to
such extent as is necessary and essential for such Representative’s involvement. OWNER shall
inform such Representatives of the confidential and proprietary nature of such information and,
if requested by ICM, OWNER shall obtain from such Representative a written instrument, in form
and substance reasonably acceptable to ICM, agreeing to be bound by all of the terms and
provisions of this License Agreement to the same extent as OWNER. OWNER shall make all
reasonable efforts to safeguard the Proprietary Property from disclosure by its Representatives
to anyone other than permitted hereby. OWNER shall notify ICM immediately upon discovery of any
unauthorized use or disclosure of the Proprietary Property, or any other breach of this License
Agreement by OWNER or its Representatives, and shall cooperate with ICM in every reasonable way
to help ICM regain possession of the Proprietary Property and prevent its further unauthorized
use or disclosure. In the event that OWNER or its Representatives are required by law
to disclose the Proprietary Property, OWNER shall provide ICM with prompt written notice of same
so that ICM may seek a protective order or other appropriate remedy. In the event that such
protective order or other appropriate remedy is not obtained, OWNER or its Representatives will
furnish only that portion of the Proprietary Property which in the reasonable opinion of its or
their legal counsel is legally required and will exercise its reasonable efforts to obtain
reliable assurance that the Proprietary Property so disclosed will be accorded confidential
treatment.
10. OWNER agrees to indemnify ICM for any and all damages (including, without limitation,
reasonable attorneys’ fees) arising out of or resulting from any unauthorized disclosure or use
of the Proprietary Property by OWNER or its Representatives. OWNER agrees that ICM would be
irreparably damaged by reason of a violation of the provisions contained herein and that any
remedy at law for a breach of such provisions would be inadequate. OWNER agrees that ICM shall
be entitled to seek injunctive or other equitable relief in a court of competent jurisdiction
against OWNER or its Representatives for any unauthorized disclosure or use of the Proprietary
Property without the necessity of proving actual monetary loss or posting any bond. It is
expressly understood that the remedy described herein shall not be the exclusive remedy of ICM
for any breach of such covenants, and ICM shall be entitled to seek such other relief or remedy,
at law or in equity, to which it may be entitled as a consequence of any breach of such duties
or obligations.
11. The duties and obligations of OWNER under this License Agreement, and all provisions
relating to the enforcement of such duties and obligations shall survive and remain in full
force and effect notwithstanding any termination or expiration of the Contract or this License
Agreement.
12. ICM may terminate this License Agreement upon written notice to OWNER if OWNER willfully or
wantonly (a) uses the Proprietary Property for any purpose, or (b) discloses the Proprietary
Property to anyone, in each case other than permitted herein. Upon termination of this License
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ADVANCED BIOENERGY, LLC
|
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Xxxxx 00, 0000 |
X-0
Agreement, OWNER shall cease using the Proprietary Property for any purpose (including the
Purpose) and, upon request by ICM, shall promptly return to ICM all documents or other materials
in OWNER’s or its Representatives’ possession that contain Proprietary Property in whatever
format, whether written or electronic, including any and all copies or reproductions of the
Proprietary Property. OWNER shall permanently delete all such Proprietary Property from its
computer hard drives and any other electronic storage medium (including any backup or archive
system). OWNER shall deliver to ICM a written certificate which certifies that all electronic
copies or reproductions of the Proprietary Property have been permanently deleted.
13. The laws of the State of Kansas, United States of America (or US), shall govern the validity
of the provisions contained herein, the construction of such provisions, and the interpretation
of the rights and duties of the parties. Any legal action brought to enforce or construe the
provisions of this License Agreement shall be brought in the federal or state courts located in
Wichita, Kansas, and the parties agree to and hereby submit to the exclusive jurisdiction of
such courts and agree that they will not invoke the doctrine of forum non conveniens or other
similar defenses in any such action brought in such courts. Notwithstanding the foregoing,
nothing in this License Agreement will affect any right ICM may otherwise have to bring any
action or proceeding relating to this License Agreement against OWNER or its properties in the
courts of any jurisdiction.
14. OWNER hereby agrees to waive all claims against ICM and ICM’s Representatives for any
consequential damages that may arise out of or relate to this License Agreement, the Contract or
the Proprietary Property whether arising in contract, warranty, tort (including negligence),
strict liability or otherwise, including but not limited to losses of use, profits, business,
reputation or financing. OWNER further agrees that the aggregate recovery of OWNER and Xxxxx
(and everyone claiming by or through OWNER and Xxxxx), as a whole, against ICM and ICM’s
Representatives, collectively, for any and all claims that arise out of, relate to or result
from this License Agreement, the Proprietary Property or the Contract, whether arising in
contract, warranty, tort (including negligence), strict liability or otherwise, shall
not exceed One Million US Dollars ($1,000,000).
15. The terms and conditions of this License Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede any prior understandings,
agreements or representations by or between the parties, written or oral. Any rule of
construction to the effect that any ambiguity is to be resolved against the drafting party shall
not be applicable in the interpretation of this License Agreement. This License Agreement may
not be modified or amended at any time without the written consent of the parties.
16. All notices, requests, demands, reports, statements or other communications (herein referred
to collectively as “Notices”) required to be given hereunder or relating to this License
Agreement shall be in writing and shall be deemed to have been duly given if transmitted by
personal delivery or mailed by certified mail, return receipt requested, postage prepaid, to the
address of the party as set forth below. Any such Notice shall be deemed to be delivered and
received as of the date so delivered, if delivered personally, or as of the third business day
following the day sent, if sent by certified mail. Any party may, at any time, designate a
different address to which Notices shall be directed by providing written notice in the manner
set forth in this paragraph.
17. In the event that any of the terms, conditions, covenants or agreements contained in this
License Agreement, or the application of any thereof, shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, such term, condition, covenant or
agreement shall be deemed void ab initio and shall be deemed severed from this License
Agreement. In such event, and except if such determination by a court of competent jurisdiction
materially changes the rights, benefits and obligations of the parties under this License
Agreement, the remaining provisions of this License
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
D-4
Agreement shall remain unchanged unaffected and unimpaired thereby and, to the extent possible,
such remaining provisions shall be construed such that the purpose of this License Agreement and
the intent of the parties can be achieved in a lawful manner.
18. The duties and obligations herein contained shall bind, and the benefits and advantages
shall inure to, the respective successors and permitted assigns of the parties hereto.
19. The waiver by any party hereto of the breach of any term, covenant, agreement or condition
herein contained shall not be deemed a waiver of any subsequent breach of the same or any other
term, covenant, agreement or condition herein, nor shall any custom, practice or course of
dealings arising among the parties hereto in the administration hereof be construed as a waiver
or diminution of the right of any party hereto to insist upon the strict performance by any
other party of the terms, covenants, agreement and conditions herein contained.
20. In this License Agreement, where applicable, (i) references to the singular shall include
the plural and references to the plural shall include the singular, and (ii) references to the
male, female, or neuter gender shall include references to all other such genders where the
context so requires.
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OWNER:
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ICM: |
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Advanced BioEnergy, LLC
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ICM, Inc. |
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By: /s/ Xxxxx X. Xxxxxxxxxx III
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By: /s/ Xxxx Xxxxxx Griend |
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Title: Chairman
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Title: CEO |
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Date Signed: 3/16/06
|
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Date Signed: 3/24/06 |
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Address for giving notices:
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Address for giving notices: |
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000 X. 0xx Xx
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000 X Xxxxx Xxxxxx |
Xxxxxx, XX 00000
|
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Xxxxxxx, XX 00000 |
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ADVANCED BIOENERGY, LLC
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Xxxxx 00, 0000 |
X-0
EXHIBIT E
Schedule of Values
ADVANCED BIO-ENERGY, LLC
Fairmount, NE
100 MGY Dry Grind Ethanol Plant
|
|
|
|
|
|
1
|
|
MOBILIZATION
|
|
$ |
[*] |
2
|
|
ENGINEERING
|
|
$ |
[*] |
3
|
|
GENERAL CONDITIONS
|
|
$ |
[*] |
4
|
|
SITEWORK
|
|
$ |
[*] |
5
|
|
CONCRETE
|
|
$ |
[*] |
6
|
|
MASONRY / ARCHITECTURAL
|
|
$ |
[*] |
7
|
|
STRUCTURAL STEEL-MISC. METALS
|
|
$ |
[*] |
8
|
|
PRE-ENGINEERED BUILDINGS
|
|
$ |
[*] |
9
|
|
GRAIN HANDLING SYSTEM
|
|
$ |
[*] |
10
|
|
PROCESS TANKS & VESSELS
|
|
$ |
[*] |
11
|
|
FIELD ERECTED TANKS
|
|
$ |
[*] |
12
|
|
HEAT EXCHANGERS
|
|
$ |
[*] |
13
|
|
PROCESS EQUIPMENT
|
|
$ |
[*] |
14
|
|
CENTRIFUGES
|
|
$ |
[*] |
15
|
|
CHILLER
|
|
$ |
[*] |
16
|
|
TRUCK SCALES & PROBE
|
|
$ |
[*] |
17
|
|
ETHANOL LOADOUT & FLARE SYSTEM
|
|
$ |
[*] |
18
|
|
COOLING TOWER
|
|
$ |
[*] |
19
|
|
DRYER SYSTEM
|
|
$ |
[*] |
20
|
|
THERMAL OXIDIZER
|
|
$ |
[*] |
21
|
|
METHANATOR
|
|
$ |
[*] |
22
|
|
PROCESS PIPING & VALVES
|
|
$ |
[*] |
23
|
|
PAINTING
|
|
$ |
[*] |
24
|
|
INSULATION
|
|
$ |
[*] |
25
|
|
PLUMBING & HVAC
|
|
$ |
[*] |
26
|
|
ELECTRICAL
|
|
$ |
[*] |
27
|
|
START-UP
|
|
$ |
[*] |
28
|
|
DEMOBILIZATION
|
|
$ |
[*] |
29
|
|
|
|
$ |
[*] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$ |
98,000,000 |
* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
E-1
EXHIBIT F
Progress Report (Example)
A. |
|
Project Overview — Brief description of project including plant capacity, major contractors
(if applicable), completion dates (including Substantial Completion, Final Completion Date,
estimated performance testing start, etc.), etc. Should also include progress reporting
period. |
B. |
|
Project Status — Divided into engineering, construction, and Owner responsibilities as well
as a summary describing project status as a whole. Subsections include: |
B1 — Engineering — Current month progress and status as compared to plan, 1-month look
ahead/goals, issues being worked, critical path activities, and statement regarding support of
construction activities.
B2 — Construction — Current month progress and status as compared to plan, 1-month look
ahead/goals, issues being worked, critical path activities, procurement activities (if applicable),
subcontracting activities (if applicable), and statement regarding completion of owner
responsibilities as it relates to Design-Builder completion of work schedule. In addition, it
should include:
A. Site Work and Utilities — Owner Responsibility
|
1. |
|
Plant Fire Water Loop — 98% Complete. |
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|
2. |
|
Railroad: Rail ties on tracks A and B are up to Rail Load out; tracks C and D are
installed past DDG building to rail car storage area. Tracks A and B to be complete when
Grains building is complete. |
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|
3. |
|
Power Company is 100% complete on permanent power. |
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4. |
|
Gas line to plant has commenced, gas to be on site by Oct. 21. |
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5. |
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City water main from main entrance to tank is installed, awaiting word from City. |
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6. |
|
Road work has started at main entrance and Admin. Area, final grading has started in
these areas as well. |
B. Grains Storage & Handling
|
1. |
|
Grains receiving building is 95% complete. |
|
|
2. |
|
Continuing to installing all miscellaneous ladders and platforms for collectors and bag
houses. Continuing to install dust collection system for Grains receiving. |
|
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3. |
|
Electrical is right behind installing conduit and wire to equipment. |
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4. |
|
Pit area 95% complete. |
|
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5. |
|
Continue to install main legs for Grain to Silos. |
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6. |
|
HVAC equipment on site, yet to be installed. |
C. Energy Building
|
1. |
|
99% of Equipment installed. |
|
|
2. |
|
Electrical nearly 94% complete. Have started bumping motors and conveyors for rotation. |
|
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3. |
|
Steel 100% complete. |
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4. |
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All end walls are complete with siding. Half of the roof is installed. |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
F-1
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5. |
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Mechanical piping is at 30% complete. |
|
|
6. |
|
All RO equipment is installed. All totes are installed. Tubing to Boiler and DA has
started. Electrical completing installation for power and controls to RO equipment. |
D. Process / Fermentation Building
|
1. |
|
99% of the Equipment is installed. |
|
|
2. |
|
Piping is 98% complete. |
|
|
3. |
|
Vinyl Composite tile 70% complete. Ceramic tile to bathrooms is complete. |
|
|
4. |
|
HVAC equipment installation is complete. Final tie ins for office area, server room and
maintenance room continuing. |
E. Distillation and Evap Area
|
1. |
|
Mechanical is about 98% complete. Complete small bore piping where needed.
|
|
|
2. |
|
Electrical is behind Mechanical installing instruments and wiring. |
F. Tank Farm
|
1. |
|
Mechanical is 98% complete, waiting on Specialty items to arrive for installation.
|
|
|
2. |
|
All pumps have been installed and piping is complete to and from. |
|
|
3. |
|
Electrical continuing installation of cable tray, 95% of instruments are installed,
wire is about 85% complete. |
G. Chiller — Cooling Tower
|
1. |
|
Chiller Building —Overhead doors have been completed. |
|
|
2. |
|
Cooling Tower erection is 100% complete. |
|
|
3. |
|
HVAC unit on site, yet to be installed. |
B3 — Commissioning and Start-up — Activities related to commissioning and start-up including
training completed, turnover packages completed, status of testing procedures, etc.
B4 — Total Project — Overall project status, including critical path activities.
C — Health and Safety — Summary including number of craft, number of first aid cases, number of
recordable cases, and number of lost time accidents. If applicable, safety programs implemented at
site, etc.
D — Schedule — Including most recent updated schedule accompanied with schedule overview,
comparison to baseline, and critical path activities. The schedule should correspond to
application for payment.
E — Financial — Including total of invoices submitted to date as well as change orders submitted
and status.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
F-2
EXHIBIT G
Required Permits
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Responsibility for |
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Assistance in |
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No. |
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Type of Application/Permit |
|
Obtaining Permit |
|
Preparation |
|
Notes |
1
|
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Underground Utility
Locating Service
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Design-Builder/Owner
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Notification
service for
underground work. |
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2
|
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Septic Tank & Drain Field
Permit
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Owner |
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3
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Railroad Permit/Approval
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Owner
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Design-Builder |
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4
|
|
Archeological Survey
|
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Owner |
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0
|
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Xxxxxxx Xxxxxx Permit
|
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Owner
|
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State Department of
Transportation or
County |
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6
|
|
Building Permits
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|
Design-Builder |
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Mechanical
|
|
Design-Builder |
|
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Electrical
|
|
Design-Builder |
|
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Structures
|
|
Design-Builder |
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7
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Construction Air Permit
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Owner
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Design-Builder |
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8
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Construction Permit
|
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Owner
|
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Design-Builder |
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9
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Operations Permit
|
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Owner
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Design-Builder |
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10
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Wastewater Permit
|
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Owner
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Design-Builder |
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11
|
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Water Appropriation Permit
|
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Owner
|
|
Design-Builder |
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12
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Fire Protection
|
|
Owner
|
|
Design-Builder |
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13
|
|
Above Ground Storage Tank
Permit
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Design-Builder |
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14
|
|
TTB Permit
|
|
Owner |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
G-1
EXHIBIT H
PERFORMANCE BOND
The American Institute of Architects,
AIA Document No. A312 (December, 1984 Edition)
Any singular reference to Contractor, Surety, Owner or other
party shall be considered plural where applicable.
|
|
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CONTRACTOR (Name and Address):
|
|
Amount: [Amount] |
Xxxxx, Inc.
|
|
Description (Name and Location): |
P. O. Box 159
|
|
[Project Name and Location] |
Xxxxxxx Xxxxx, XX 00000
|
|
OWNER (Name and Address): |
CONSTRUCTION CONTRACT
|
|
[Owner Name/Address] |
Date:
|
|
SURETY (Name and Principal Place of |
|
|
Business): [Name/Place of Business] |
BOND# |
|
|
Date (Not earlier than Construction Contract Date): |
|
|
Amount: |
|
|
Modifications to this Bond: o None
|
|
o See Page 2 |
CONTCONTRACTOR AS PRINCIPAL
|
|
SURETY |
Company: (Corporate Seal)
|
|
Company: (Corporate Seal) |
Xxxxx, Inc. |
|
|
|
|
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|
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Signature:
|
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|
|
|
Signature: |
|
|
|
|
|
|
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|
|
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Name and Title: |
|
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|
Name and Title: |
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|
(Any additional signatures appear an page 2.) |
|
|
(FOR INFORMATION Only- Name, Address and Telephone)
|
|
OWNER’S REPRESENTATIVE (Architect, Engineer or other party): |
AGENT or BROKER: |
|
|
1. The Contractor and the Surety, jointly and severally, bind themselves, their heirs,
executors, administrators, successors and assigns to the Owner for the performance of the
Construction Contract, which is incorporated herein by reference.
2. If the Contractor performs the Construction Contract, the Surety and the Contractor shall have
no obligation under this Bond, except to participate in conferences as provided in Subparagraph
3.1.
3. If there is no Owner Default, the Surety’s obligation under this Bond shall arise after:
3.1 The Owner has notified the Contractor and the Surety at its address described in Paragraph 10
below that the Owner is considering declaring a Contractor Default and has requested and attempted
to arrange a conference with the Contractor and the Surety to be held not later than fifteen days
after receipt of such notice to discuss methods of performing the Construction Contract. If the
Owner, the Contractor and the Surety agree, the Contractor shall be allowed a reasonable time to
perform the Construction Contract, but such an agreement shall not waive the Owner’s right, if any,
subsequently to declare a Contractor Default; and
3.2 The Owner has declared a Contractor Default and formally terminated the Contractor’s right to
complete the contract. Such Contractor Default shall not be declared earlier than twenty days
after the Contractor and Surety have received notice as provided in Subparagraph 3.1; and
3.3 The Owner has agreed to pay the Balance of the Contract Price to the Surety in accordance with
the terms of the Construction Contract or to a contractor selected to perform the Construction
Contract in accordance with the terms of the contract with the Owner.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
H-1
4. When the Owner has satisfied the conditions of Paragraph 3, the Surety shall promptly and at the
Surety’s expense take one of the following actions:
4.1 Arrange for the Contractor with consent of the Owner, to perform and complete the Construction
Contract; or
4.2 Undertake to perform and complete the Construction Contract itself, through its agents or
through independent contractors; or
4.3 Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner for a
contract for performance and completion of the Construction Contract, arrange for a contract to be
prepared for execution by the Owner and the contractor selected with the Owner’s concurrence, to be
secured with performance and payment bonds executed by a qualified surety equivalent to the bonds
issued on the Construction Contract, and pay to the Owner the amount of damages as described in
Paragraph 6 in excess of the Balance of the Contract Price incurred by the Owner resulting from the
Contractor’s default; or
4.4 Waive its right to perform and complete, arrange for completion, or obtain a new contractor and
with reasonable promptness under the circumstances:
.1 After investigation, determine the amount for which it may be liable to the Owner
and, as soon as practicable after the amount is determined, tender payment therefor to the
Owner; or
.2 Deny liability in whole or in part and notify the Owner citing reasons therefor.
5. If the Surety does not proceed as provided in Paragraph 4 with reasonable promptness, the Surety
shall be deemed to be in default on this Bond fifteen days after receipt of an additional written
notice from the Owner to the Surety demanding that the Surety perform its Obligations under this
Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety
proceeds as provided in Subparagraph 4.4, and the Owner refuses the payment tendered or the Surety
has denied liability, in whole or in part, without further notice the Owner shall be entitled to
enforce any remedy available to the Owner.
6. After the Owner has terminated the Contractor’s right to complete the Construction Contract, and
if the Surety elects to act under Subparagraph 4.1, 4.2, or 4.3 above, then the responsibilities of
the Surety to the Owner shall not be greater than those of the Contractor under the Construction
Contract, and the responsibilities of the Owner to the Surety shall not be greater than those of
the Owner under the Construction Contract. To the limit of the amount of this Bond, but subject to
commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on
the Construction Contract, the Surety is obligated without duplication for:
6.1 The responsibilities of the Contractor for correction of defective work and completion of the
Construction Contract;
6.2 Additional legal design professional and delay costs resulting from the Contractor’s Default,
and resulting from the actions or failure to act of the Surety under Paragraph 4; and
6.3 Liquidated damages, or if no liquidated damages are specified in the Construction Contract,
actual damages caused by delayed performance or non-performance of the Contractor.
7. The Surety shall not be liable to the Owner or others for obligations of the Contractor that are
unrelated to the Construction Contract and the Balance of the Contract Price shall not be reduced
or set off on account of any such unrelated obligations. No right of action shall accrue
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
H-2
on this
Bond to any person or entity other than the Owner or its heirs, executors, administrators or
successors.
8. The Surety hereby waives notice of any change, including changes of time, to the Construction
Contract or to related subcontracts, purchase orders and other obligations.
9. Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent
jurisdiction in the location in which the work or part of the work is located and shall be
instituted within two years after Contractor Default or within two years after the Contractor
ceased working or within two years after the Surety refuses or fails to perform its obligations
under this Bond, whichever occurs first. If the provisions of this Paragraph are void or
prohibited by law, the minimum period of limitation available to sureties as a defense in the
jurisdiction of the suit shall be applicable.
10. Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address
shown on the signature page.
11. When this Bond has been furnished to comply with a statutory or other legal requirement in the
location where the construction was to be performed, any provision in this Bond conflicting with
said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming to
such statutory or other legal requirement shall be deemed incorporated herein. The intent is that
this Bond shall be construed as a statutory bond and not as a common law bond.
12. DEFINITIONS
12.1 Balance of the Contract Price: The total amount payable by the Owner to the Contractor under
the Construction Contract after all proper adjustments have been made, including allowance to the
Contractor of any amounts received or to be received by the Owner in settlement of insurance or
other claims for damages to which the Contractor is entitled, reduced by all valid and proper
payments made to or on behalf of the Contractor under the Construction Contract.
12.2 Construction Contract: The agreement between the Owner and the Contractor identified on the
signature page, including all Contract Documents and changes thereto.
12.3 Contractor Default: Failure of the Contractor, which has neither been remedied nor waived, to
perform or otherwise to comply with the terms of the Construction Contract.
12.4 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the
Contractor as required by the Construction Contract or to perform and complete or comply with the
other terms thereof.
MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:
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This
bond is subject to the attached Dual Obligee Rider dated |
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(Space is provided below for additional signatures of added parties other than those appearing
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CONTRACTOR AS PRINCIPAL |
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Name and Title: |
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(Corporate Seal) |
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Signature: |
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Company: |
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Address: |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
H-3
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SURETY |
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Name and Title: |
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(Corporate Seal) |
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Signature: |
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Company: |
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Address: |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
H-4
(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)
TO BE ATTACHED TO AND FORM PART OF Performance and Payment Bond NO. , dated concurrently
with the execution of this Rider, issued by the
,
a corporation, as surety, on behalf of Xxxxx, Inc., as Principal, and in favor of , as Obligee.
IT IS HEREBY UNDERSTOOD AND AGREED that the above described bond(s) are hereby amended to
include the following paragraph:
Notwithstanding anything contained herein to the contrary, there shall be no
liability on the part of the Principal or Surety under this bond to the Obligees, or
either of them, unless the Obligees, or either of them, shall make payments to the
Principal or to the Surety in case it arranges for completion of the Contract upon
default of the Principal, strictly in accordance with the terms of said Contract as
to payments, and shall perform all the other obligations required to be performed
under said Contract at the time and in the manner therein set forth.
IT IS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held to
change, alter or vary the terms of the above described bond(s) except as hereinbefore set forth.
SIGNED, SEALED AND DATED this ___ day of , 200_.
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Xxxxx, Inc. |
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(Contractor) |
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By: |
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[ ] |
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(Surety) |
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By: |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
H-5
EXHIBIT I
PAYMENT BOND
The American Institute of Architects,
AIA Document No. A312 (December, 1984 Edition)
Any singular reference to Contractor, Surety, Owner or other
party shall be considered plural where applicable.
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CONTRACTOR (Name and Address):
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SURETY (Name and Principal Place of Business): |
Xxxxx, Inc. |
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P. O. Xxx 000 |
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Xxxxxxx Xxxxx, XX 00000 |
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OWNER (Name and Address): |
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[NAME AND ADDRESS] |
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CONSTRUCTION CONTRACT |
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Date: |
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Amount: |
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Description (Name and Location): |
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BOND # |
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Date (Not earlier than Construction |
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Contract Date): |
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Amount: |
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Modifications to this Bond: o None o See Page 2 |
CONTRACTOR AS PRINCIPAL SURETY |
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Company: (Corporate Seal) Company: (Corporate Seal) |
Xxxxx, Inc. |
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Signature:
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Signature: |
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Name and Title:
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Name and Title: |
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(Any additional signatures appear an page 2.)
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(FOR INFORMATION Only—Name, Address and Telephone)
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OWNER’S REPRESENTATIVE (Architect, Engineer or other party): |
AGENT or BROKER: |
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1. The Contractor and the Surety, jointly and severally, bind themselves, their heirs,
executors, administrators, successors and assigns to the Owner to pay for labor, materials and
equipment furnished for use in the performance of the Construction Contract, which is incorporated
herein by reference.
2. With respect to the Owner, this obligation shall be null and void if the Contractor:
2.1 Promptly makes payment, directly or indirectly, for all sums due Claimants, and
2.2 Defends, indemnifies and holds harmless the Owner from claims, demands, liens or suits by
any person or entity whose claim, demand, lien or suit is for the payment for labor, materials or
equipment furnished for use in the performance of the Construction Contract, provided the Owner has
promptly notified the Contractor and the Surety (at the address described in Paragraph 12) of any
claims; demands, liens or suits and tendered
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
I-1
defense of such claims, demands, liens or suits to the Contractor and the Surety, and provided
there is no Owner Default.
3. With respect to Claimants, this obligation shall be null and void if the Contractor
promptly makes payment, directly or Indirectly, for all sums due.
4. The Surety shall have no obligation to Claimants under this Bond until:
4.1 Claimants who are employed by or have a direct contract with the Contractor have given
notice to the Surety (at the address described in Paragraph 12) and sent a copy, or notice thereof,
to the owner, stating that a claim is being made under this Bond and, with substantial accuracy,
the amount of the claim.
4.2 Claimants who do not have a direct contract with the Contractor:
4.2.1 Have furnished written notice to the Contractor and sent a copy, or notice
thereof, to the Owner, within 90 days after having last performed labor or last furnished
materials or equipment included in the claim stating, with substantial accuracy, the amount
of the claim and the name of the party to whom the materials were furnished or supplied or
for whom the labor was done or performed; and
4.2.2 Have either received a rejection in whole or in part from the Contractor, or not
received within 30 days of furnishing the above notice any communication from the Contractor
by which the Contractor has indicated the claim will be paid directly or Indirectly; and
4.2.3 Not having been paid within the above 30 days, have sent a written notice to the
Surety (at the address described in Paragraph 12) and sent a copy, or notice thereof, to the
Owner, stating that a claim is being made under this Bond and enclosing a copy of the
previous written notice furnished to the Contractor.
5. If a notice required by Paragraph 4 is given by the Owner to the Contractor or to the
Surety that is sufficient compliance.
6. When the Claimant has satisfied the conditions of Paragraph 4, the Surety shall promptly
and at the Surety’s expense take the following actions:
6.1 Send an answer to the Claimant, with a copy to the Owner, within 45 days after receipt of
the claim, stating the amounts that are undisputed and the basis for challenging any amounts that
are disputed.
6.2 Pay or arrange for payment of any undisputed amounts.
7. The Surety’s total obligation shall not exceed the amount of this Bond, and the amount of
this Bond shall be credited for any payments made in good faith by the Surety.
8. Amounts owed by the Owner to the Contractor under the Construction Contract shall be used
for the performance of the Construction
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
I-2
Contract and to satisfy claims, if any, under any Construction Performance Bond. By the
Contractor furnishing and the Owner accepting this Bond, they agree that all funds earned by the
Contractor in the performance of the Construction Contract are dedicated to satisfy obligations of
the Contractor and the Surety under this Bond, subject to the Owner’s priority to use the funds for
the completion of the work.
9. The Surety shall not be liable to the Owner, Claimants or others for obligations of the
Contractor that are unrelated to the Construction Contract. The Owner shall not be liable for
payment of any costs or expenses of any Claimant under this Bond, and shall have under this Bond no
obligation to make payments to, give notices on behalf of, or otherwise have obligations to
Claimants under this Bond.
10. The Surety hereby waives notice of any change, including changes of time, to the
Construction Contract or to related subcontracts, purchase orders and other obligations.
11. No suit or action shall be commenced by a Claimant under this Bond other than in a court
of competent jurisdiction in the location in which the work or part of the work is located or after
the expiration of one year from the date (1) on which the Claimant gave the notice required by
Subparagraph 4.1 or Clause 4.2.3, or (2) on which the last labor or service was performed by anyone
or the last materials or equipment were furnished by anyone under the Construction Contract,
whichever of (1) or (2) first occurs. If the provisions of this Paragraph are void or prohibited by
law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the
suit shall be applicable.
12. Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the
address shown on the signature page. Actual receipt of notice by Surety, the Owner or the
Contractor, however accomplished, shall be sufficient compliance as of the date received at the
address shown on the signature page.
13. When this Bond has been furnished to comply with a statutory or other legal requirement in
the location where the construction was to be performed, any provision in this Bond conflicting
with said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming
to such statutory or other legal requirement shall be deemed incorporated herein. The intent is
that this Bond shall be construed as a statutory bond and not as a common law bond.
14. Upon request by any person or entity appearing to be a potential beneficiary of this Bond,
the Contractor shall promptly furnish a copy of this Bond or shall permit a copy to be made.
15. DEFINITIONS
15.1 Claimant: An individual or entity having a direct contract with the Contractor or with a
subcontractor of the Contractor to furnish labor, materials or equipment for use in the performance
of the Contract. The intent of this Bond shall be to include without limitation in the terms
“labor, materials or equipment” that part of water, gas, power, light, heat, oil, gasoline,
telephone service or rental equipment used in the Construction Contract, architectural and
engineering services required for performance of the work of the Contractor
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
I-3
and the Contractor’s subcontractors, and all other items for which a mechanic’s lien may be
asserted in the jurisdiction where the labor, materials or equipment were furnished.
15.2 Construction Contract: The agreement between the Owner and the Contractor identified on
the signature page, including all Contract Documents and changes thereto.
15.3 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay
the Contractor as required by the Construction Contract or to perform and complete or comply with
the other terms thereof.
MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:
This bond is subject to the attached Dual Obligee Rider dated [ ].
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(Space is provided below for additional signatures of added parties other than those appearing on
the cover page.)
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CONTRACTOR AS PRINCIPAL |
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SURETY |
(Corporate Seal) |
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(Corporate Seal) |
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Company:
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Company: |
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Address: |
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Address: |
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Name and Title: |
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Name and Title: |
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Signature: |
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Signature: |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
I-4
(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)
TO BE ATTACHED TO AND FORM PART OF Performance and Payment Bond NO. , dated concurrently
with the execution of this Rider, issued by the , a corporation, as
Surety, on behalf of Xxxxx, Inc., as Principal, and in favor of , as Obligee.
IT IS HEREBY UNDERSTOOD AND AGREED that the above described bond(s) are hereby amended to include
the following paragraph:
Notwithstanding anything contained herein to the contrary, there shall be no liability on the part
of the Principal or Surety under this bond to the Obligees, or either of them, unless the Obligees,
or either of them, shall make payments to the Principal or to the Surety in case it arranges for
completion of the Contract upon default of the Principal, strictly in accordance with the terms of
said Contract as to payments, and shall perform all the other obligations required to be performed
under said Contract at the time and in the manner therein set forth.
IT IS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held to change, alter or
vary the terms of the above described bond(s) except as hereinbefore set forth.
SIGNED, SEALED AND DATED this ___ day of , 200___.
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Xxxxx, Inc. |
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(Contractor) |
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By: |
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[ ] |
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(Surety) |
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By: |
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
I-5
EXHIBIT J
Work Schedule
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NUMBER OF DAYS TO |
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BE COMPLETED AFTER |
OWNER’S RESPONSIBILITIES |
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NOTICE TO PROCEED |
Notice to Proceed
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[*] |
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Storm Water Permits Complete
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[*] |
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Natural Gas/Propane Supply Agreements Complete
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[*] |
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Water Supply and Service Agreements Complete
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Risk Insurance Provider Selected/Fire
Protection Requirements Known
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NPDES Discharge Point Selected
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Electrical Service
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Water Pre-Treatment System Design Complete
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Wastewater Discharge System Complete
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Operating Permits Complete
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Discharge Permits Complete
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Pumphouse/Water Pre-treatment System Complete
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Fire Protection System Complete
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Administration Building Complete
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Paving (Plant Roads) Complete
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Rail Spur Complete
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Employees Hired and Ready for Training
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Natural Gas Pipeline Complete
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NUMBER OF DAYS TO |
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BE COMPLETED AFTER |
DESIGN-BUILDER’S RESPONSIBILITIES |
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NOTICE TO PROCEED |
Substantial Completion
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485 |
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Final Completion
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575 |
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* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
J-1
EXHIBIT K
Preliminary Construction Documents
To be furnished at a later date per Section 3.2.1
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
K-1
EXHIBIT L
Draw (Payment) Schedule
ADVANCED BIO-ENERGY, LLC
Fairmont, NE
Monthly Draw Schedule — 16 Month Project (485 Days)
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Previously |
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Month # |
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This Month |
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Completed |
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Total |
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% of Total |
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1 |
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2 |
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% |
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3 |
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% |
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4 |
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% |
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5 |
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[*] |
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% |
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6 |
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[*] |
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$ |
[*] |
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% |
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7 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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% |
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8 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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% |
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9 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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% |
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10 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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% |
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11 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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% |
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12 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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[*] |
% |
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13 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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[*] |
% |
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14 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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[*] |
% |
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15 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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[*] |
% |
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16 |
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$ |
[*] |
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$ |
[*] |
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$ |
[*] |
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[*] |
% |
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$ |
[*] |
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*** $8,000,000 Mobilization Fee included in 1st Billing
* Portions omitted pursuant to
a request for confidential treatment and filed separately with the SEC.
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
L-1
EXHIBIT M
Construction Permit
See Construction Permit attached hereto
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ADVANCED BIOENERGY, LLC
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March 16, 2006 |
M-1
EXHIBIT N
Phase I and Phase II Engineering Services Agreement
See Phase I and Phase II Engineering Services Agreement attached hereto
N-1