CONSTRUCTION AGREEMENT—NACSAC
Exhibit 99.2
CONSTRUCTION AGREEMENT—NACSAC
THIS AGREEMENT (“Agreement”) is made and entered into as of the 6th day of November, 2013 (“Effective Date”) between El Dorado Chemical Company, an Oklahoma Corporation (“Owner”) and SAIC Constructors, LLC, an Oklahoma limited liability company (“Contractor”).
B. | WHEREAS, the Owner desires the Plant to be constructed upon Owner’s real property located near El Dorado, Arkansas (“Site”); |
C. | WHEREAS, Owner desires Contractor to provide for the entire Project all General Conditions in one fixed cost; |
D. | WHEREAS, Owner desires Contractor to provide for the entire Project on an open-book basis, all Work other than General Conditions on a pass-through basis, plus 4.5% for overhead and profit; |
ARTICLE 1
SUMMARY AND CERTAIN DEFINITIONS
property at the Site on a pass-through basis, plus 4.5%, as set forth in Exhibit B. All pass-through Work shall be performed by Contractor on an open-book basis that allows Owner or its agent to examine actual costs and expenses of Contractor in connection with the Project.
1.2. The output, capabilities and characteristics of the Project will comply with the requirements of this Agreement and shall also include all required activities up to and including accomplishment of Mechanical Completion and Final Completion, and including participation as reasonably necessary in Process Safety Management (“PSM”), Pre-Startup Safety Review (“PSSR”) and other commissioning support in compliance with this Agreement and its exhibits (hereinafter, the “Work”). The term “Work” includes, but is not limited to all supervision, labor, materials, tools, equipment (except for Owner-Furnished Equipment), supplies and services necessary to construct the Project as defined in Exhibit A, whether or not such labor, materials, tools, equipment, supplies and services are incorporated in the Project. Work also includes the installation by Contractor of Owner-Furnished Equipment into a fully integrated and functioning Project.
(a) “Contract Documents” include this Agreement, and all Exhibits thereto, and the plans and specifications approved by Owner. The Contract Documents include any modifications to any of them whether such modifications upon mutual agreement are made prior to or after the execution of this Agreement. Contract Documents further define the scope of the Project and the Work.
(b) “Designer of Record” shall be Xxxxxxxxx Inc., which shall be responsible for all engineering and design of the Plant, including all design documentation O&M manuals and other documentation necessary for Contractor to construct the Plant.
(c) “Estimated Contract Price” means the estimated total installed cost prepared by Contractor and includes costs for installation of all related equipment and materials, including catalyst and chemicals if so designated by the Owner and any approved change orders. The Estimated Contract Price specifically excludes Owner costs, including but not limited to labor and materials for Owner oversight, management, permitting, engineering and design, site preparation, pre-project award costs, and other similar costs incurred directly by the Owner. The Estimated Contract Price as set forth in Exhibit C, is an estimate only, and should not be construed to be a total fixed price for the Project.
(d) “Final Completion” means that (i) all of the items on the punch list signed by Contractor and Owner have been corrected to Owner’s reasonable satisfaction; (ii) if applicable, all lien waivers required under this Agreement have been delivered; (iii) all warranties and other documents identified for delivery to the Owner have been delivered; and (iv) Contractor has completed its other obligations under this Agreement.
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(e) “General Conditions” is a category of costs often referred to as indirect costs that include budgets for various costs required to support project execution. General Conditions costs include but are not limited to staffing cost, both field and home office staff, such as field supervision, inspection, management, safety, home office support, procurement and project controls. General Conditions also include living and travel expenses for field staff and Project-related travel, temporary facilities such as trailers, portable toilets, communications, printing, mailing and distribution, safety equipment and supplies, protective equipment, etc. General Conditions further include for the Project: (i) Payroll costs, salaries and all other compensation of Contractor’s officers, executives, principals, general managers, project managers, engineers, accountants, purchasing and contracting agents, schedulers, expeditors, clerks and other personnel whether stationed at Contractor’s principal office or offices or the Site office, except payments made by Contractor directly to Subcontractors, vendors, consultants or suppliers for labor, equipment and materials, including any per diem, payroll taxes, transportation charges and sales tax required by law to be paid in connection therewith, furnished by Contractor and to be incorporated into the Project; (ii) Expenses of Contractor’s principal office and branch offices, including the Site office; (iii) Overhead, general and administrative expenses; (iv) Contractor’s capital expenses, including interest on Contractor’s capital employed for the Work; (v) Rental costs of machinery, equipment, and tools not required to specifically perform the Work; (vi) Costs incurred as a result of the replacement of Contractor’s representative; (vii) Certain premiums for insurance, unless specifically provided in the Agreement as provided at additional cost; and (viii) Any cost or expense not described in Exhibit C, unless approved in advance in writing by Owner.
(f) “Mechanical Completion” or “Mechanically Complete” shall mean the achievement of the following: Acceptance in writing by Owner of a certificate issued by Contractor certifying that i) the physical completion of the Work relating to the Project in accordance with the terms of this Agreement such that the Work is ready to undergo Start-Up, including, setting of the applicable equipment on foundations; connecting such equipment to other applicable equipment with piping, wiring, controls, and safety systems; ensuring that such equipment and such related operating systems are, as applicable, individually cleaned, pressure tested, leak checked, lubricated, and point-to-point checked to verify that such equipment and such related operating systems have been correctly installed so as to respond to simulated test signals equivalent to actual signals received during operation; and ensuring that such equipment and related operating systems are ready for initial operation, adjustment and testing and may be so operated, adjusted and tested without damage thereto or to any other property and without injury to any person; ii) compliance of the Work and the Project with the agreed to standards where applicable; and iii) completion of the Work so that commissioning of the plant or the applicable portion of the facility may commence. Should Owner achieve 72 hours continuous operation of the Facility at full designed capacity, or less if reduction is not caused by Work of Contractor, then the Facility shall be deemed to be Mechanically Complete.
(g) “Modification” or “modification” is either a written and signed amendment to this Agreement or a Change Order authorized in writing and signed by Owner and Contractor.
(h) “Owner-Furnished Equipment” means the items of equipment listed on Exhibit A, Section E, Equipment List. This list is expected to change and shall be updated from time to time.
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1.4. List of Exhibits
A | Scope of Work |
B | Compensation & Payment |
C | Cost Breakdown/Schedule of Values |
D | Project Schedule |
E | Change Order Form |
F | SAIC Guaranty |
G | LSB Guaranty |
H | Certain Security, Safety and Regulatory Requirements |
I | Responsibility Matrix |
ARTICLE 2
2.1.1. Perform the Work as appropriate to complete the Work in accordance with the Estimated Contract Price (Exhibit C) and the Project Schedule (Exhibit D);
2.1.2. Enter into direct contracts with Subcontractors and material suppliers and be fully responsible for their work, including the timeliness, quality and price of their Work. Contractor shall consult with Owner and keep Owner informed on an ongoing basis regarding the selection of Subcontractors whose cumulative budgeted work is over $100,000. In the event that any such Subcontractor’s actual quote or estimate is over ten percent (10%) in excess of the budgeted amount under the Estimated Contract Price, Contractor shall notify Owner for Owner to determine whether Designer of Record need to redesign.
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2.1.3. Review and process all applications for payment by Subcontractors and material suppliers for monthly progress and final payments; pay all Subcontractors and material suppliers directly; require that the Subcontractors and material suppliers furnish an acknowledgement of payment/waiver of lien in a form approved by Owner with each application for payment certifying that money has been received for performance of their subcontract during the previous payment period, and to the extent legally permitted, waiving to the extent of payments received any right to file or assert a mechanic’s and materialmen’s lien therefor;
2.1.4. Maintain a competent full-time staff at the Site including a full time construction manager, as provided in Section 11.1, to supervise and confirm that the Work and progress of the Subcontractors is in full compliance with the plans and specifications and completion dates set forth in this Agreement. Contractor shall be solely responsible for the means, methods, techniques, sequences, and procedures for all portions of the Work;
2.1.5. Perform all necessary preparation for designated laydown areas, storage areas or areas needed for access of materials and equipment;
2.1.6. Secure, monitor and coordinate Subcontractor activity to complete the Work in a coordinated, integrated and functional manner. Construction services shall be performed by qualified construction contractors and Subcontractors. Security checks and management of personnel for access to the Site shall be performed in accordance with all legal and regulatory requirements and in coordination with Owner;
2.1.7. Keep Owner informed of the procedures, sequencing, progress, problems and scheduling of the Project;
2.1.8. Provide, update and maintain the Project Schedule (Exhibit D);
2.1.9. Provide a Project payment schedule on a monthly basis, invoicing separately on a separated contract basis for pass-through labor, services, materials, equipment and construction equipment, invoicing separately for all equipment and components that Owner advises Contractor are exempt from Arkansas sales tax and invoicing separately for General Conditions. This monthly report will also include on a rolling updated basis a forecast of all expected invoice amounts from Contractor and its subcontractors performing or to perform Work on the Project.
2.1.10. Manage the Project in accordance with the technical, environmental, security, safety, OSHA and industrial hygiene standards applicable in Arkansas and consistent with Owner’s standards, rules and requirements for the Site;
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2.1.11. Provide quality control and inspect the Work for defects and deficiencies in the Work to confirm that the Work is in full compliance with the plans, specifications and this Agreement. In conjunction with Owner, coordinate review during construction of Project components not included in the Work. Establish procedures to promptly correct any non-conformity with appropriate notice to vendors, manufacturers, Subcontractors, suppliers and Owner. Implement a written control program to provide notice to the Owner of any non-conforming work, materials or equipment, develop and implement remedial measures;
2.1.12. Record the progress of the Project and submit a monthly comprehensive progress report to Owner. Keep and maintain an accurate and comprehensive daily log on the Site and available to Owner upon request.
2.1.13. Maintain at the Project site on a current basis records of all necessary Contract Documents, samples, purchases, materials, equipment, and other construction-related documents, including all Contractor red-line revisions; obtain data from Subcontractors and maintain a current set of issued for construction drawings and specifications, and at the completion of the Project, deliver to Owner all such records, and all hard copies and in electronic format (original Word or Office document or scan);
2.1.14. Be responsible at all times for enforcing reasonable discipline and good order among its employees and/or the employees of the Subcontractors. If any person on the site of the Work shall appear to be incompetent, disorderly or intemperate, in any way disrupts or interferes with the Work, presents a security risk, or is in any other way disqualified for or unfaithful to the job entrusted to him, such person shall be promptly reassigned to tasks unrelated to this Project and he shall not again be employed on the Work or allowed access to the Site without the prior written consent of Owner;
2.1.15. Be solely responsible for all Project site-specific safety orientation, safety orders, rules, precautions and programs necessary for the safety and security of the Work; take precautions to secure the safety of all of Contractor’s employees and others for which it has direct supervision and control and which are involved in the Work, all equipment and materials incorporated in the Work, all property on the site of the Work and adjacent to it, and remain cognizant of Owner’s affiliates operations which are on the Site of the Work or in the vicinity of it. Contractor will maintain pro-active safety and security program, in fulfillment of and in compliance with all legal and regulatory requirements, as provided in Exhibit H. Contractor shall maintain a qualified Safety Manager on site at all times during construction of the Project;
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2.1.16. Give all notices and comply with all laws, ordinances, rules, regulations and permits and orders of any local, state or federal authority having jurisdiction over the Work, or which have any bearing on the execution of the Work. If Contractor observes that any of the Contract Documents are at variance in any respect with any such laws, ordinances, rules, regulations and orders, it shall promptly notify Owner in writing and any necessary changes shall be promptly made. If Contractor fails to give such notice or executes any of the Work in a manner contrary to any such laws, ordinances, rules, regulations or orders, it shall bear the resulting costs to correct said Work to comply with such laws and regulations;
2.1.17. Perform testing, including PMI (positive materials identification) on materials and equipment in accordance with applicable codes and laws, and the Xxxxx Risk provided program. Contractor shall provide to Owner the results of all such testing;
2.1.18. Correct Work which does not conform to the Agreement at no cost to Owner;
2.1.19. Procure and provide materials and equipment to be incorporated in the Work that are new and warrant that the Work will be of good quality, and in conformance with the Contract Documents. Owner shall provide the Owner-Furnished Equipment at its costs and responsibility.
2.1.20. Retain only first quality, competent and qualified Subcontractors;
2.1.21. Be responsible for and pay all duties and taxes on all Contractor supplied materials and equipment for the Project, such costs to be considered as pass-through costs to Owner’s account except as such costs may relate to General Conditions;
2.1.22. Maintain the Project site reasonably free from accumulation of waste materials or rubbish caused by Contractor’s operations. At the completion of the Work, Contractor shall remove from the Site Contractor’s temporary objects and facilities, tools, construction equipment, machinery, surplus materials, waste materials and rubbish;
2.1.24. Obtain and keep current its operating permits as well as the documents proving legal ability to execute the Work. Copies of such documents shall be provided to Owner by Contractor upon request.
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2.1.25. Manage and complete the Work in a manner that substantially conforms with Exhibit I.
ARTICLE 3
OWNER’S SERVICES AND RESPONSIBILITIES
3.2.1 Surveys describing the property, boundaries, topography and reference points for use during construction, including existing service and utility lines;
3.2.2 Geotechnical studies describing subsurface conditions, and other surveys describing other latent or concealed physical conditions at the Site;
3.2.3 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;
3.2.4 A legal description of the Site;
3.2.5 To the extent available, as-built and record drawings of any existing structures at the Site; and
3.2.6 To the extent available, environmental studies, reports and impact statements describing the environmental conditions, including, but not limited to, hazardous conditions, in existence at the Site.
3.2.7 Owner shall provide all Owner-Furnished Equipment, and vendor support, in accordance with the schedule. Owner shall cooperate with Contractor in the coordination of the delivery and receipt on Site of the Owner-Furnished Equipment.
3.2.8 Owner shall provide a means of disposal for all hydro test water.
3.2.9 Owner shall be responsible for development and implementation of the Facility PSM and PSSR programs. Contractor will cooperate with Owner in its development of said programs.
3.2.10 Owner shall be responsible for timely provision of all engineering and design documents from the Designer of Record to Contractor.
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3.2.11 Owner shall be responsible for providing the process to Contractor, and shall be responsible for the performance of the Plant, except to the extent this Agreement places responsibility on Contractor for any Work,
3.2.12 Provide support for Contractor’s performance of the Work substantially in conformity to Exhibit I.
3.3 Owner shall be responsible for start-up and commissioning of the Plant, subject to assistance by Contractor as provided in this Agreement.
ARTICLE 4
4.2.1 Scheduling and Time Extensions. Attached as Exhibit E to this Agreement is a progress schedule (“Project Schedule”) setting forth the durations for all the major items of Work to be performed; the start and finish date of all such activities; the performance tests; and the Completion Date of the Project. Contractor shall submit to Owner updated Progress Schedules each month to reflect the actual progress made and to forecast future progress of the Work. The Completion Date shall be extended only for such number of calendar days as the Work is actually delayed by acts of God, acts or omissions of Owner or the Designer of Record, delays in the issuance of required permits occurring after November 1, 2013, the presence of any undisclosed hazardous substances (including, but not limited to Hazardous Materials) affecting the Work, a casualty, change in law, flood, fire, or a change order, plus a reasonable number of additional days to allow Contractor to resume Work following such delay, and only then if it is not feasible for Contractor to avoid or to mitigate the impact of the delay (“Unavoidable Excusable Delay”). No extensions to the Completion Date shall be granted due to the negligence or fault of Contractor or its Subcontractors or untimely delivery of equipment or the non-availability of materials or labor, not including the Owner-Furnished Equipment and materials. In order to obtain a time extension due to an Unavoidable Excusable Delay, Contractor must give written notice to Owner within five (5) working days after the commencement of each Unavoidable Excusable Delay, including a description of actions taken to avoid or mitigate the delay and a proposed action plan or re-sequencing to minimize the impact on the Project.
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4.3.1 Up to a maximum total amount of $200,000, Contractor shall pay to Owner as liquidated damages and not as a penalty the sum of $3,000 per day for each full day of delay if Contractor fails to achieve Mechanical Completion by August 31, 2015 (subject to automatic extension for Unavoidable Excusable Delay), provided such delay is due to a) failure by Contractor to prosecute the Work with diligence, or b) Contractor’s or Subcontractor’s negligence.
Contractor further agrees that any assessment by Owner of liquidated damages or payment by Contractor to Owner of liquidated damages is to compensate Owner only for the damages arising out of Contractor’s delay in achieving the Completion Date, and is not a release of any of Owner’s other rights or claims against Contractor, including claims of Owner for defective or improper workmanship of Contractor.
ARTICLE 5
5.2 Variable Cost Portion of Work. Owner and Contractor agree that Contractor shall be paid in accordance with Exhibit C for all Construction Work, excluding General Conditions included in Exhibit B.
(a) On or before the twenty-fifth day of each calendar month during the performance of the Work or the preceding working day if the last day is a Saturday, Sunday or holiday, Contractor shall submit to Owner an application and certificate for payment, based on the Work completed during the preceding month, using a form approved by Owner.
(b) Each application and certificate for payment shall be accompanied by: (1) copies of all vendors and Subcontractors invoices; (2) a separation of construction materials, services, labor, equipment and manufacturing equipment materials; (3) releases and lien waivers from Contractor and all Subcontractors and vendors; and (4) other documentation as may be requested by Owner for its proper review of the application and certificate of payment.
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(c) Payments by Owner shall be made on or about the 25th day of the following month in which an approved Application and Certificate for Payment properly certified and verified has been submitted or the next working day if the 25th day of the month is a Saturday, Sunday or holiday. Contractor shall be entitled to 1% interest per month on any late payments. Owner reserves the right to verify the accuracy of any such payments both during the Project and upon completion. Contractor shall within a reasonable time period reimburse Owner for any overpayments made during the course of the Project or upon completion. If Owner disputes any portion of Contractor’s Application, Owner shall pay the undisputed portion as set forth in this Section 4.3(c), and any disputed portion of the Application shall be subject to the Dispute Resolution provision in Section 23.13 of this Agreement. If Owner fails to make payment to Contractor when due, Contractor shall, after fifteen (15) days notice to Owner to cure, stop all Work until such time as Owner pays amounts not in dispute and due Contractor. If after Contractor stops work, Owner cures such failure to pay, Contractor shall remobilize to the Site and be entitled to seek a Change Order for additional costs or fees associated with Contractor’s demobilization and remobilization to the Site, as well as for any extension of the Completion Date. If Owner’s failure to pay continues for a period of sixty (60) additional days, Contractor may terminate this Agreement.
(a) Final payment by Owner is due upon Final Completion but shall not constitute a waiver of claims by Owner arising from terms of warranties unsettled liens, incomplete or defective workmanship, defective materials, or for failure of the Work to comply with requirements of the Contract Documents provided by Contractor under this Agreement.
(b) Final Completion and final acceptance of the Work shall occur only after all Work (including punch list items) provided for in the Contract Documents has been finally completed and accepted in writing by Owner.
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(c) Thereafter final payment shall become due upon Contractor delivery to Owner the following:
(i) written statement that all payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which Owner or its interest in the property, or the Site or the Project might in any way be responsible, have been paid, or will be paid with funds received from final payment, or otherwise satisfied, along with any documentary evidence requested by Owner, including without limitation, lien waivers;
(ii) other data establishing payment or satisfaction of all such obligations, such as receipts, releases and waivers of liens, arising out of the Work, to the extent and in such form as may be designated by Owner;
(iii) Warranties assigned to the Owner; and
(iv) Vendor supplied Operating manuals set forth in Exhibit A.
5.7 The Right of Owner to Withhold Payment. Owner may, on account of subsequently discovered evidence, withhold or nullify the whole or part of any payment, including Final Payment, to such extent as may be necessary to reasonably protect itself from any of the following:
(a) defective Work not remedied;
(b) third-party claims for payment or liens filed or reasonable evidence indicating the probable filing of such claims or liens;
(c) failure of Contractor to make payments properly due to Subcontractors pursuant to applicable subcontracts or purchase orders or failure of the Subcontractors to make payment properly due for any portion of the Work or failure of Contractor or its Subcontractors to make payment properly due for equipment, materials or labor;
(d) evidence of fraud, over-billing or overpayment discovered upon audit or otherwise;
(e) failure of Contractor to prosecute the Work in accordance with the Contract Documents; or
(f) damage to Owner or Owner’s affiliates caused by Contractor, or any entity for whom Contractor is responsible.
ARTICLE 6
6.1 Materials Provided by Contractor.
(a) Contractor shall provide and pay as a cost of the Work for all equipment, materials, labor, tools, equipment, light, transportation, and other facilities necessary for the performance of the Work, excluding Owner-Furnished Equipment. Water and power is to be provided by Owner.
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(b) All equipment, machinery, material, and articles incorporated in the Work shall be of good quality and new.
6.2 Contractor Equipment Procurement.
6.2.1 Except for the Owner-Furnished Equipment, Contractor shall procure and pay for all construction equipment and materials to be incorporated in the Work or necessary for operation or continued operation of the Project as set forth in Exhibit A. Owner shall provide to the Project for installation by Contractor all Owner-Furnished Equipment.
6.2.2 Contractor shall be solely responsible for verifying that all utilities and services are adequate for operation and are connected properly and ready for operation. Contractor shall take reasonable steps or actions necessary to coordinate with Owner to allow Owner to cause the Owner-Furnished Equipment to arrive at the Site at such time that they are required to support the Project Schedule and Completion Date.
6.2.3 Contractor shall be fully responsible for the care, custody, and control of all manufacturing equipment, equipment and materials and security of site until Mechanical Completion of the Project or turnover to Owner, whichever occurs earlier.
ARTICLE 7
7.1 As-Built Drawings. Contractor shall coordinate with the Designer of Record and provide red-line markups of the design documents to the Designer of Record for the Designer of Record’s inclusion in and creation of “as-built” drawings.
7.2 Operation and Maintenance Data.
(a) Installation information for all machinery and equipment also shall be kept on the site of the Work during construction. All such information shall be provided in electronic form (original Word or Office document or scan).
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ARTICLE 8
(a) preserve and protect the rights of Owner under the Contract Documents with respect to the portion of the Work to be performed under the subcontract so that the subcontracting will not prejudice such rights;
(b) require that all Work be performed in accordance with the requirements of the Contract Documents;
(c) require that all Work comply with the requirements of OSHA and all other applicable government regulations construction codes, and other applicable codes or applicable trade or legal regulations.
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(d) require that all Work comply with all federal, state and local environmental statutes, regulations and ordinances, including without limitation, environmental statutes, regulations and ordinances;
(e) require the Subcontractor to meet standard on-site contractor requirements as established by Owner and by the El Dorado Chemical Company plant.
(f) require submission to Contractor of periodic applications for payment accompanied by a release and lien waiver to the extent of each payment;
(g) require that all requests for change order, additional compensation or extensions of time be submitted to Contractor in sufficient time so that Contractor may comply in the manner provided in the Contract Documents for like requests by Contractor upon Owner; and
(h) establish that the Owner is an intended third-party beneficiary of the subcontract, agreement or purchase order, provided that if any Subcontractor refuses to agree that the Owner is a third-party beneficiary of the subcontract, Contractor shall so advise Owner, and Owner shall consider the circumstances and alternatives and may reasonably waive this requirement on a case by case basis.
ARTICLE 9
(a) Either Party, without invalidating the Agreement, may order or seek extra Work or make changes by altering, adding to or deducting from the Work by executing a Change Order in the form provided by Owner, attached as Exhibit E. All work performed pursuant to a Change Order shall be performed under the terms and conditions of the Contract Documents.
(b) Owner shall have authority to make changes in the Work not involving extra cost, and not inconsistent with the purposes of the Project, but otherwise, no extra work or change in the Work shall be made unless pursuant to a written Change Order. No claim by Contractor for additional compensation, cost or fee or any extension of the Completion Date shall be valid unless provided in a Change Order.
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proposal of Contractor, a Change Order in the form provided by Owner shall be executed by the parties and the contract price and the Completion Date shall be adjusted. All Change Orders must be executed by Owner’s authorized representative or such other individual designated in writing by an officer of Owner, subject to any limitations set forth in such written designation, in order to be valid.
(a) Increases in the Scope. Any increase in the contract price attributable to a Change Order performed by Contractor or any of its Subcontractors shall not exceed the sum of the following:
(i) the actual costs to Contractor to perform the Change Order, as calculated from the Rate Schedule attached to Exhibit F, Change Order form; and
(ii) the actual cost of Subcontractors to perform the Change Order, with a 4.5% xxxx-up;
(b) Decreases in the Scope. The decrease in the contract price attributable to a Change Order deleting or modifying a portion of the scope of Work shall equal all costs incurred to execute such deductive change order less the sum of the following:
(i) the actual labor cost that Contractor would have incurred to perform the scope of Work deleted in the Change Order;
(ii) the actual cost of Subcontractors or materials that Contractor would have incurred in performing the scope of Work deleted in the Change Order;
ARTICLE 10
THE UNDERSTANDING OF CONTRACTOR
10.1 Unforeseen Work Site Conditions. If concealed or unknown conditions, including, but not limited to, surface, subsurface and/or site environmental conditions, which affect in whole or in part the performance of the Work are encountered, then Contractor shall stop work and give written notice thereof to Owner before conditions are further disturbed and promptly after first observing such changed conditions by Contractor. The Agreement (e.g., costs, prices, schedule, etc.) shall be adjusted in accordance with the changes clause.
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ARTICLE 11
ARTICLE 12
12.1 The Construction Manager of Contractor. Contractor shall designate in writing to Owner, and keep assigned to the Work during its progress, a competent Construction Manager satisfactory to Owner. The Construction Manager shall be Xxx Xxxxxxxx. The Construction Manager shall be changed upon written request of Owner, but shall not be changed by Contractor except with the consent of Owner (which consent shall not be arbitrarily withheld), unless the Construction Manager ceases to be in its employ. The Construction Manager shall represent Contractor and all directions given to him by Owner shall be binding as if given to Contractor directly. The Construction Manager shall devote full time to the Work and shall maintain his office on the site of the Work. He shall direct, coordinate and supervise all Work, inspect all materials, excluding Owner Furnished Equipment, delivered to the Project to ascertain whether or not they comply with the requirements of the Contract Documents, and reject all non-conforming materials or workmanship.
12.2 Owner’s Right to Review the Work.
(a) Owner and persons designated by Owner shall at all times have access to the Work whenever it is in preparation or progress and Contractor shall provide proper facilities for such access and for a detailed review of the Work by Owner. If Owner discovers any Defective Work in connection with any review, it shall report such Defective Work to Contractor and Contractor shall, at no cost to Owner, immediately correct the defective work.
(b) If the Contract Documents, the written instructions of Owner, laws, ordinances, rules or regulations, or any public authority require any of the Work to be specifically tested or inspected, Contractor shall give Owner timely notice of its readiness for inspection and testing, and if the test or inspection is performed by an authority other than Owner, of the date set for such test or inspection. Inspections by Owner shall be promptly made and, where practicable, at the source of supply. If any of the Work should be covered up without the approval or consent of Owner or any necessary authority, it shall be uncovered for examination, if required by Owner or such other authority, at the sole expense of Contractor.
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(c) Re-examination of questioned work that has been previously inspected by Owner may be ordered by Owner and, if so ordered, the questioned work shall be uncovered by Contractor. If such work is found to be in compliance with the Contract Documents, Owner shall pay the actual documented and verified cost of the re-examination and if such re-examination causes the Completion Date to be extended, grant a time extension and shall pay all costs incurred as a result of such extension via the contract change procedure accordingly. If such work is found not to be in compliance with the Contract Documents, Contractor shall bear the costs of the re-examination, and the costs to correct.
ARTICLE 13
13.1 Owner shall have the right, but not the obligation, to audit or examine all cost documents, cost records, pertaining to the Project through the Project and for one year after Final Completion, excluding Contractor’s documentation to support any fixed price portion of the Work.
ARTICLE 14
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ARTICLE 15
15.3 General Warranty and Correction of Work.
(a) In addition to any other warranties contained in the Contract Documents, Contractor warrants to Owner and its successors or assigns to the Project that all materials and equipment furnished by Contractor in performance of the Work will be new, that all Work will be of good quality, free from faults and defects and in conformance with the Contract Documents. All Work not so conforming to these standards shall be considered defective and corrected by Contractor at no cost to Owner (“Defective Work”).
(b) Contractor shall promptly correct all Defective Work to the standards of this Agreement and the Contract Documents whether observed before or after the Completion Date and whether or not fabricated, installed or completed. Contractor shall bear all costs of correcting such Defective Work.
(c) If, within one (1) year from Mechanical Completion of the Work any of the Work is found to be defective and not in accordance with the Contract Documents, Contractor shall correct it promptly upon receipt of a written notice to do so from Owner or any successor or assign of Owner.
(d) If Contractor fails to correct Defective Work in accordance herewith and the Contract Documents, Owner or its successor or assign may correct it and hold Contractor liable for all costs, expenses and damages, including redesign fees, attorney’s fees and litigation costs incurred by any of them in correcting it.
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(e) In addition to the foregoing warranty, if any Defective Work in material or workmanship is discovered during the warranty period, a warranty period of one (1) additional year shall apply to workmanship, material and equipment under the same terms and conditions as the original warranty, to any work, supplied in correction of the Defective Work under warranty pursuant to the provisions of this Section 14.3 and Contractor shall assign to Owner or its successor or assign any warranties, including extended warranties, as to materials or designs furnished in the performance of such correction of Defective Work. Such warranty period shall commence on the date Owner or its successors or assigns accepts the corrective work of Contractor.
ARTICLE 16
ARTICLE 17
(a) CGL insurance shall cover liability arising from premises, operations, independent contractors, products-completed operations, sudden and accidental pollution, personal injury and liability assumed under an insured contract (including the tort liability of another assumed in a business contract).
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(b) Contractor shall maintain CGL and commercial umbrella liability insurance with a limit of not less than $10,000,000 for each occurrence and aggregate, for at least 1 year following completion of the Work. Unless otherwise set forth below, the continuing CGL insurance shall meet all of the requirements set forth above in Paragraphs (i) and (ii). Continuing CGL insurance shall, at minimum, cover liability arising from products-completed operations and liability assumed under an insured contract. Continuing commercial umbrella coverage, if any, shall include liability coverage for damage to the insured’s completed work equivalent to that provided under ISO form CG 00 01 10.
(a) the employers liability and/or commercial umbrella limits shall not be less than $10,000,000 each accident for personal injury by accident or $10,000,000 each employee for personal injury by disease.
17.3 Builder’s Risk Insurance.
(a) Owner shall purchase and maintain in force builder’s risk insurance for the entire Work. Such insurance shall be written in an amount at least equal to $20 million as well as subsequent modifications of that sum. The insurance shall apply on a replacement cost basis.
(b) The insurance as provided in this paragraph shall name Contractor as additional insured. The insurance as required in this Paragraph shall cover the entire Work at the Project site, and shall also cover portions of the Work located away from the site but intended for use at the site, and shall also cover portions of the Work in transit.
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(c) The insurance as provided in this paragraph shall include business interruption coverage from a delay due to an insured peril.
(d) The deductible or self-insured retention applicable to the insurance purchased in compliance with this Paragraph shall be paid by Owner. Provided however, if Contractor causes loss covered by this Paragraph, Contractor shall pay the first one hundred thousand dollars ($100,000.00) of the deductible or self-insured retention.
17.4 No Representation of Coverage Adequacy. By requiring the insurance as set out in this Article 17, Owner does not represent that coverage and limits will necessarily be adequate to protect Contractor, and such coverage and limits shall not be deemed as a limitation on Contractor’s liability under the indemnities provided to Owner in this Agreement, or any other provision of the Contract Documents.
17.6 Primary Insurance. Any insurance required to be maintained by Contractor pursuant to this Article 17 shall apply as primary insurance with respect to any other insurance or self-insurance programs afforded to, or maintained by, Owner or any of the other Additional Insureds.
(a) All certificates shall provide for 30 days written notice to Owner prior to the cancellation or material change of any insurance referred to therein.
(b) Failure of Owner to demand such certificate or other evidence of full compliance with these insurance requirements or failure of Owner to identify a deficiency from evidence that is provided shall not be construed as a waiver of Contractor’s obligation to maintain such insurance.
(c) Owner shall have the right, but not the obligation, to prohibit Contractor or any Subcontractor from entering the Project site until such certificates or other evidence that insurance has been placed in complete compliance with these requirements is received and approved by Owner.
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(d) Failure to maintain the insurance required in this Article 17 may result in termination of this Agreement at Owner’s option. If Contractor fails to maintain the insurance as set forth herein, Owner shall have the right, but not the obligation, to purchase said insurance at Contractor’s expense, after a reasonable period in which the Contractor has failed to comply.
(e) With respect to insurance maintained after final payment in compliance with a requirement above, an additional certificate(s) evidencing such coverage shall be promptly provided to Owner when requested.
17.13 Owner-Controlled Insurance Program (“OCIP”). Owner may elect to implement an Owner Controlled Insurance Program (“OCIP”). An OCIP may include general liability, workers compensation and umbrella coverage for the entire Project and all Subcontractors. If Owner elects to implement an OCIP, Contractor and all Subcontractors agree to be included under the OCIP coverage and exclude their own General Liability, Workers Compensation and Umbrella costs from their bids.
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ARTICLE 18
18.1 Contractor will provide a guarantee from its parent corporation Science Applications International Corporation, in the form as provided in Exhibit F.
18.2 LSB Industries, Inc. will provide a guaranty to Contractor, in the form as provided in Exhibit G.
ARTICLE 19
INDEMNIFICATION AND WAIVER OF CONSEQUENTIAL DAMAGES
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damage, loss, claims, demands, actions and expenses of any nature whatsoever, including reasonable attorneys’ fees, which arise from the negligence or willful misconduct by the Contractor Indemnitees collectively or any constituent member of the Contractor Indemnitees individually.
19.3 Notwithstanding and superseding anything in this Agreement to the contrary, Owner shall indemnify, defend and hold harmless Contractor from any and all environment liabilities (e.g., Hazardous Materials, waste or substance, etc.) arising out of preexisting conditions at the worksite, and shall be responsible for any environmental remediation on the Site arising out of said preexisting conditions, and any costs and liabilities related thereto, provided Contractor promptly advises Owner if and when the Contractor becomes aware of any such environmental condition.
19.4 Neither party shall be liable to the other for indirect, special, punitive, incidental or consequential damages.
19.5 The obligations set forth in this Article 19 shall survive any termination of this Agreement
ARTICLE 20
ARTICLE 21
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ARTICLE 22
DEFAULT; RIGHT TO TERMINATE OF OWNER
22.1 Event of Default.
(a) For the purposes of this Agreement, an Event of Default shall be if:
(i) at any time there shall be filed by or against Contractor in any court a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of the property of Contractor, and within twenty (20) days from the filing date Contractor fails to secure a discharge; or
(ii) Contractor makes an assignment for the benefit of creditors or petitions for or enters into an agreement or arrangement with its creditors; or
(iii) Contractor fails to prosecute the Work properly or safely, or fails to complete the Work entirely on or before the Completion Date; or
(iv) Contractor fails to make prompt payment to its Subcontractors or for materials or labor used in the Work; or
(v) Contractor fails to supply sufficient qualified labor, material and/or equipment so as to complete the Work timely and in accordance with the Contract Documents including, but not limited to the Progress Schedule; or
(vi) without limitation, Contractor fails to perform any term, condition or obligation of this Agreement or the Contract Documents.
(b) Upon occurrence of an Event of Default, Owner shall give written notice to Contractor. Contractor shall within ten (10) days from receipt of such written notice cure or undertake all reasonable steps to cure such Event of Default and, failing to do so, then Owner shall be permitted to terminate the Agreement and complete the Work by such means as it deems fit. In such case, Contractor shall not be entitled to receive any further payment until the Work is completed. If the unpaid balance of the Fixed Price portion of the Contract Price exceeds the aggregate of (1) the expense of Owner of completing the Fixed Price portion of the Work, including compensation for additional managerial, architectural and administrative services, and (2) the loss and damage of Owner, including attorney’s fees and litigation expense associated with the Fixed Price portion of the Work, such excess shall be paid to Contractor. If such expense, loss and damage of Owner exceeds the unpaid balance of the Fixed Price portion of the Contract Price, Contractor shall pay the difference to Owner promptly on demand. Any costs to Owner to complete the Variable Cost portion of the Contract Price shall be to Owner’s account and shall not be due from Contractor.
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22.4 An Event of Default set forth in Section 21.1(a)(iii-vi) shall not be grounds for default of Contractor under any other contracts with Owner.
ARTICLE 23
23.1 If Owner fails to make payment to Contractor when due, or fails to perform it’s obligations set forth in Article 3, above, Contractor shall, after fifteen (15) days notice to Owner to cure, stop all Work until such time as Owner pays all amounts due Contractor, or cures its obligations (all an “Event of Owner Default”). If such failure to pay continues for a period of sixty (60) additional days, or if Owner fails to cure its Article 3 obligations within the cure period, Contractor may terminate this Agreement.
23.2 If Contractor terminates this Agreement due to an Event of Owner Default, Contractor, if not already done so, shall immediately demobilize from the site. Owner shall be responsible to pay Contractor all amounts due under the Agreement for Work performed up to and including the day of termination, plus all reasonable demobilization costs of Contractor, its Subcontractors and vendors, as well as any costs owed by Contractor to its Subcontractors and vendors for termination of agreements of such Subcontractors and vendors.
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ARTICLE 24
24.1 Hazardous Materials Covenants.
(a) Contractor hereby represents to and for the benefit of Owner that the Project or Project site will not be used or operated in any manner that will result in the storage, use, treatment, manufacture and disposal of any Hazardous Materials (hereinafter defined) upon the Project or Project site or any portion thereof or which will result in Hazardous Materials contamination (hereinafter defined). For purposes hereof, the term “Hazardous Materials” shall mean and refer to (i) any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. ‘ 6901 et. seq.), as amended from time to time, and regulations promulgated thereunder; (ii) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. ‘ 9601 et. seq.) (“CERCLA”), as amended from time to time, and regulations promulgated thereunder; (iii) asbestos; (iv) polychlorinated biphenyls; (v) urea formaldehyde; (vi) any substance the presence of which on the premises is prohibited by any applicable environmental laws or regulations including but not limited to, the Hazardous Material Transportation Act, as amended (49 U.S.C. ‘ 1801, et. seq.), the Toxic Substance Control Act, as amended (15 U.S.C. ‘ 2601, et. seq.), (hereinafter referred to as “Laws”) or by any other legal requirements affecting the Work or the Work site; (vii) petroleum based materials (with the exception of tires affixed to vehicles); (viii) lead, including lead based paints; and (ix) any other substance which is defined as hazardous, toxic, infectious or radioactive by any Laws or by any other legal requirements affecting the Project or Project site. The term “Hazardous Materials Contamination” shall mean and refer to the contamination of the Project or Project site, soil, surface water, ground water, air, or other elements on, or of, the buildings, facilities, soil, surface water, ground water, air, or other elements on, or of, any other property as a result of Hazardous Materials at any time emanating from the Project or Project site.
(b) In addition to and without limiting the generality of any other provision of this Contract, Contractor shall and hereby does agree to defend, indemnify and hold Owner, its agents, employees, officers, directors, partners and related entities, harmless from and against any and all losses, damages, expenses, fees, claims, demands, causes of action, judgments, costs and liabilities, including, but not limited to, reasonable attorney’s fees and costs of litigation, and costs and expenses of response, remedial and corrective work and other clean up activities, arising out of or in the manner connected with (i) the “release” or “threatened release” (as those terms are defined in CERCLA and the rules and regulations promulgated thereunder, as from time to time amended) by Contractor or Contractor’s employees, agents, delegees, invitees, licensees, concessionaires, Subcontractors or representatives, of any Hazardous Materials, or (ii) any occurrence of Hazardous Materials Contamination caused by Contractor affecting the Project or Project site. The provisions of this Section shall survive any payment or satisfaction of this Agreement and such provisions shall remain in full force and effect.
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ARTICLE 25
25.4 Governing Law and Forum. This Agreement is entered into in Arkansas and shall be governed by and construed according to the laws of Arkansas, without regard to Arkansas’ law on choice of law or conflict of laws. Any and all disputes arising from or out of this Agreement and/or the Project shall be resolved in a federal or state court of competent jurisdiction in Union County, Arkansas.
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25.10 Press releases and other public announcements by Contractor or its Subcontractors concerning this Project shall be reviewed and approved by Owner, in writing, prior to their issuance. Written approval shall be a prerequisite to any release or announcement, although approval shall not be unreasonably withheld.
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(a) If to Owner, addressed to:
Xx. Xxxxx Xxxxxxxxx
SVP of Operations
El Dorado Chemical Company
4500 X. Xxxx Xxxxxx
Xx Xxxxxx, XX 00000
Xxth a copy to:
Xxxxx Xxxxx
General Counsel
El Dorado Chemical Company
16 Sxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx XX 00000
(x) If to Contractor, addressed to:
SAIC Constructors, LLC
Mr. Xxxxxxx Xxxxxxxx
Vice President
9400 X. Xxxxxxxx, Xxx. 000
Xxxxxxxx Xxxx, XX 00000
Xxth a copy to:
Xxxxxxx X. Xxxxxx
Associate Counsel
SAIC Constructors, LLC
9400 X. Xxxxxxxx, Xxx. 000
Xxxxxxxx Xxxx, XX 00000
Xxner or Contractor may at any time change the addresses to which copies of notices must be mailed by sending written notice to the other of such change in the manner provided.
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EL DORADO CHEMICAL COMPANY | ||
By: | /s/ Xxxxx Xxxxx | |
Name: Xxxxx Xxxxx | ||
Title: General Manager | ||
SAIC CONSTRUCTORS, LLC | ||
By: | /s/ Xxxxxxx X. Xxxx | |
Name: Xxxxxxx X. Xxxx | ||
Title: President |
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Exhibit B
Compensation & Payment
This Contract contains both Cost Reimbursable with a fee and Fixed Price scopes of work as further detailed below:
1. | Fixed Price Portion. |
1.1 | The Fixed Price will include those costs associated with the personnel and indirect support facilities required to manage the execution of the project which are detailed in Exhibit A and further defined as General Conditions. |
1.2 | Contractor shall be paid a fixed lump sum amount for the above (the “Fixed Price”) which represents the General Conditions cost of $786,459 (seven hundred eighty six thousand four hundred fifty nine dollars). Said Fixed Price shall only be increased through the change order process as detailed in Section 10 of this Agreement. Both categories will be billed monthly based on progress of the associated activity. |
1.3 | The lump sum amounts listed in 1.2 are contingent upon Contractor being awarded the work at the El Dorado facility, commonly referred to as the Ammonia Plant, DMW2, Waste Steam Generation Unit and associated/supporting Outside Battery Limits infrastructure substantially within the schedule detailed in exhibit D. Should the referenced work not proceed, not proceed on the substantially concurrent schedule as detailed in Exhibit D, not be awarded to Contractor or if awarded, suffer significant scope reduction, the above values may be subject to change as described in Section 10 of the agreement. |
2. | Variable Cost Portion. |
2.1 | Contractor’s Fee. For the performance of the Construction Work, Contractor shall be paid the Cost of the Work plus a fee of four and one half percent (4.5%) of the Cost of the Work (the “Contractor’s Fee”). |
2.2 | Cost of the Work. As used herein, the term “Cost of the Work” shall mean the following actual costs necessarily and reasonably incurred by Contractor in the performance of the Construction Work. |
(a) Payments made by Contractor directly to subcontractors, vendors, consultants or suppliers for labor, equipment and materials, including any per diem, payroll taxes, transportation charges and sales tax required by law to be paid in connection therewith, furnished by Contractor and to be incorporated into the Plant.
(b) Reasonable rental and transportation cost of construction machinery, equipment and tools (excluding hand tools customarily provided by workers) rented from third parties and used at the Facilities for the Construction Work, provided Contractor receives, where possible, competitive bids for such equipment; or the reasonable rental cost of such machinery, equipment and tools belonging to Contractor but only if approved in writing in advance by Owner. The rental of any such machinery, equipment and tools shall cease after the use thereof is no longer necessary for the Construction Work.
(c) Fees and assessments for permits, licenses and inspections for the Construction Work which Contractor is required to pay by the Contract Documents by reason of such Construction Work.
(d) Fees of testing laboratories for tests required by the Contract Documents for the Construction Work less amounts for testing expenses related to Defective Work.
(e) Certain premiums for the insurance required by Article 18 of this agreement.
2.3 | Exclusions from Cost of the Work. The Cost of the Work shall not include: |
(a) Payroll costs, salaries and other compensation of Contractor’s officers, executives, principals, general managers, project managers, engineers, accountants, purchasing and contracting agents, schedulers, expediters, clerks and other personnel except as specifically included in the job classifications referred to in Section 2.2(a), whether stationed at Contractor’s principal office or offices or the Site office.
(b) Expenses of Contractor’s principal office and branch offices, including the Site office.
(c) Overhead, general and administrative expenses.
(d) Contractor’s capital expenses, including interest on Contractor’s capital employed for the Work.
(e) Rental costs of machinery, equipment, and tools not required to specifically perform the Construction Work.
(f) Costs incurred as a result of the replacement of Contractor’s representative.
(g) Certain premiums for the insurance not required by Article 18 of this agreement.
(h) Any cost or expense not specifically and expressly described in Section 2.2, unless approved in advance in writing by Owner.
Exhibit F
This Parent Guaranty, dated as of November 6, 2013 (as amended, supplemented or otherwise modified from time to time, this “Guaranty”), is made and entered into by Leidos, Inc., formerly known as Science Applications International Corporation, a Delaware corporation (“Guarantor”), in favor of El Dorado Chemical L.L.C., an Oklahoma limited liability corporation (“Beneficiary”).
A. Beneficiary and SAIC Constructors, LLC (“SAIC”), a subsidiary of Guarantor, have entered into that certain Construction Agreement dated November 6, 2013 (collectively, with all Attachments and Appendices and as amended, modified, supplemented, and otherwise in effect as of the date hereof, the “Contract”), pursuant to which SAIC and Beneficiary have agreed on the terms and conditions set forth therein for the provision of certain goods and services for the 546-NACSAC Plinke project site in El Dorado, Arkansas (the “Project”);
B. Guarantor is the ultimate parent of SAIC;
C. Guarantor is providing this Guaranty pursuant to the Contract; and
D. Guarantor acknowledges that it will benefit from the transactions contemplated under the Contract.
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions.
“Beneficiary” has the meaning given in the preamble hereof.
“Contract” has the meaning given in Recital A hereof.
“Guaranteed Obligations” has the meaning given in Section 2.01 hereof.
“Guarantor” has the meaning given in the preamble hereof.
“Guaranty” has the meaning given in the preamble hereof.
“Project” has the meaning given in Recital A hereof.
ARTICLE 2
THE GUARANTY
SECTION 2.01 The Guaranty. Guarantor, as primary obligor and not merely as surety, hereby unconditionally, absolutely, and irrevocably guarantees to Beneficiary all obligations of SAIC under the Contract, including the full and timely performance to Beneficiary under the Contract (the “Guaranteed Obligations”). Beneficiary shall have no right to make a claim pursuant to this Guaranty unless and until an uncured default has occurred with respect to SAIC’s obligations under the Contract.
SECTION 2.02 Performance of Guaranteed Obligations. Guarantor agrees, upon the failure of SAIC to perform any of the Guaranteed Obligations when they become due and after the expiration of any applicable cure periods set forth in the Contract, that Guarantor will pay, or cause to be paid, or perform, or cause to perform, any and all Guaranteed Obligations upon receipt of written notice from a duly authorized officer of Beneficiary specifying such failure of SAIC.
SECTION 2.03 Subsequent Recovery. If, in connection with any payment by Guarantor of the Guaranteed Obligations, Beneficiary shall finally recover any such amounts from any other source directly making payments with respect to the Guaranteed Obligations, or it shall be finally determined that such Guaranteed Obligations were not owed to Beneficiary, Beneficiary shall promptly remit such amounts to Guarantor.
SECTION 2.04 Exercise of Remedies. This Guaranty constitutes a guaranty of performance and payment and not of collection, and the obligations of Guarantor under this Guaranty are primary obligations of Guarantor, and a separate action or actions may be brought and prosecuted against Guarantor to enforce this Guaranty, irrespective of whether any action is brought against SAIC or any other guarantor or whether SAIC or any other guarantor is joined in such action or actions.
SECTION 2.05 Insolvency. The voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, or other proceeding affecting SAIC or the disaffirmance of the Contract in any such proceeding shall not release or discharge Guarantor from this Guaranty.
SECTION 2.06 Waiver; Consent.
(a) Guarantor hereby unconditionally and irrevocably waives diligence, presentment, demand for payment, protest, the benefit of any discharge due to any disability of SAIC, and all notices whatsoever in respect of the Guaranteed Obligations, this Guaranty, and any and all rights to require Beneficiary to exhaust any right, power or remedy or proceed against SAIC under the Contract.
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(b) Guarantor warrants and agrees that each of the waivers and consents set forth in this Guaranty are made voluntarily and unconditionally after consultation with legal counsel and with full knowledge of their significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which Guarantor otherwise may have against SAIC. If, notwithstanding the intent of the parties that the terms of this Guaranty shall control in any and all circumstances, any such waivers or consents are determined to be unenforceable under applicable law, such waivers and consents shall be effective to the maximum extent permitted by law.
SECTION 2.07 Defenses. Notwithstanding anything herein to the contrary, Guarantor specifically reserves to itself all rights, counterclaims and other defenses that SAIC is or may be entitled to arising from or out of the Contract, except for any defenses arising out of the bankruptcy, insolvency, dissolution or liquidation of SAIC or the lack of power or authority of SAIC to enter into the Contract and to perform its obligations thereunder.
ARTICLE 3
REPRESENTATIONS
SECTION 3.01 Representations and Warranties. Guarantor represents and warrants to Beneficiary that as of the date of this Guaranty:
(a) Organization; Corporate Authority. Guarantor (i) is a corporation duly organized, validly existing and in good standing under the laws of its state of formation, and (ii) has all requisite corporate power and authority to own its assets and to carry on the business in which it is engaged and to execute, deliver and perform its obligations under this Guaranty.
(b) Authorization; No Conflicts. The execution and delivery of this Guaranty and the performance of the obligations hereunder have been duly authorized by all necessary corporate action and do not violate, breach or contravene (i) Guarantor’s organizational documents and agreements or (ii) any law or contractual restriction binding on or affecting Guarantor or its properties except where such violation, breach or contravention, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on Guarantor’s ability to perform its obligations under this Guaranty.
(c) Enforceability. This Guaranty has been duly executed and delivered by Guarantor, and constitutes the legal, valid and binding obligation of Guarantor, enforceable against it in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(d) Required Consents. All authorizations, consents and approvals of any governmental authority or third party necessary for the execution, delivery or performance by Guarantor of this Guaranty have been obtained and are in full force and effect.
(e) No Actions. There are no actions, suits, proceedings or investigations pending or, to the Guarantor’s knowledge, threatened in writing against it at law or in equity before any court or before any governmental authority, that individually or in the aggregate could reasonably be expected to have a material adverse effect on the business of the Guarantor or could reasonably be expected to result in an impairment of its ability to perform its obligations under this Guaranty.
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ARTICLE 4
MISCELLANEOUS
SECTION 4.01 No Waiver. No failure or delay on the part of Beneficiary to exercise and no delay in exercising, and no course of dealing with respect to, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver of such right, remedy, power or privilege nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which Beneficiary would otherwise have.
SECTION 4.02 No Consequential or Punitive Damages. In no event shall Guarantor be liable hereunder to any party for any lost profits, special damages, indirect or consequential damages of any nature whatsoever, whether based on contract or tort, or for any punitive or exemplary damages.
SECTION 4.03 Notices. All notices and other communications provided for in this Guaranty shall be sent, if practicable, by confirmed telecopy (with hard copy sent on the same day by overnight courier) and, otherwise, by overnight courier service prepaid to a party at its address specified below and shall be deemed effective when received. A communication shall be addressed, until such time as a party shall have notified the other parties hereto of a change of address: (a) if to Beneficiary, 00 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxx, and (b) if to Guarantor, 0000 X. Xxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, XX 00000; Facsimile: (000) 000-0000, Attention: Legal.
SECTION 4.04 Amendments. No amendment of any provision of this Guaranty shall be effective unless the same shall be in writing and signed by Guarantor and Beneficiary, such consent shall be effective only in the specific instance and for the specific purpose for which given.
SECTION 4.05 Benefit, Successors and Assigns. This Guaranty is for the benefit of and is enforceable by Beneficiary and not for the benefit of or enforceable by any other Person. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of Beneficiary. This Guaranty and all obligations of Guarantor hereunder to Beneficiary shall be assignable by Guarantor only upon the prior written consent of Beneficiary. Any such assignee shall assume all of the obligations hereunder from and after the effective date of such assignment and in connection therewith, Guarantor shall be released from all obligations hereunder other than any obligations arising from acts or events that occurred prior to the date of such assignment.
SECTION 4.06 Headings. The Article and Section headings in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.
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SECTION 4.07 Counterparts. This Guaranty may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute the same instrument. Delivery of an executed counterpart of a signature page of this Guaranty by facsimile or “pdf” electronically imaged transmission shall be effective as delivery of a manually executed counterpart of this Guaranty.
SECTION 4.08 Severability. In case any one or more provisions contained in this Guaranty or obligation under this Guaranty shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions or obligations contained herein, and any other application thereof, shall not in any way be affected or impaired thereby.
SECTION 4.09 Agreements Superseded. This Guaranty supersedes all prior agreements and understandings, written or oral, between the parties with respect to the subject matter of this Guaranty.
SECTION 4.10 Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the Oklahoma.
SECTION 4.11 Consent to Jurisdiction. Guarantor hereby irrevocably consents to the non-exclusive personal jurisdiction of the state and federal courts located in Oklahoma City, Oklahoma, and any action, claim or other proceeding arising out of any dispute in connection with this Guaranty or any rights or obligations hereunder or thereunder or the performance of such rights and obligations. Guarantor hereby irrevocably consents to the service of a summons and complaint and other process in any action, claim or proceeding brought by Beneficiary in connection with this Guaranty or any rights or obligations hereunder or thereunder or the performance of such rights and obligations, on behalf of itself, in the manner specified in Section 4.03 above. Nothing in this Section 4.11 shall affect the right of Beneficiary to serve legal process in any other manner permitted by applicable law or affect the right of Beneficiary to bring any action or proceeding against Guarantor in the courts of any other jurisdiction.
SECTION 4.12 Termination. This Guaranty shall terminate and be of no force and effect upon the expiration or satisfaction of all Guaranteed Obligations.
[Remainder of page intentionally blank.]
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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION,
a corporation
By: |
| |
Name: |
| |
Title: |
|
ACCEPTED AND AGREED:
EL DORADO CHEMICAL COMPANY, an
Oklahoma Corporation
By: |
| |
Name: |
| |
Title: |
|
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Exhibit G
This Parent Guaranty, dated as of November 6, 2013 (as amended, supplemented or otherwise modified from time to time, this “Guaranty”), is made and entered into by LSB Industries, Inc., a Delaware corporation (“Guarantor”), in favor of SAIC CONSTRUCTORS, LLC, an Oklahoma limited liability corporation (“Beneficiary”).
A. El Dorado Ammonia, LLC (“Owner”) and Beneficiary have entered into that certain Engineering, Procurement and Construction Contract dated November 6, 2013 (collectively, with all Attachments and Appendices and as amended, modified, supplemented, and otherwise in effect as of the date hereof, the “Contract”), pursuant to which Owner and Beneficiary have agreed on the terms and conditions set forth therein for the provision of certain goods and services for the NACSAC project site in El Dorado, Arkansas (the “Project”);
B. Guarantor is the ultimate parent of Owner;
C. Owner is providing this Guaranty from Guarantor pursuant to the Contract; and
D. Guarantor acknowledges that it will benefit from the transactions contemplated under the Contract.
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:
ARTICLE 1
SECTION 1.01 Definitions.
“Beneficiary” has the meaning given in the preamble hereof.
“Contract” has the meaning given in Recital A hereof.
“Guaranteed Obligations” has the meaning given in Section 2.01 hereof.
“Guarantor” has the meaning given in the preamble hereof.
“Guaranty” has the meaning given in the preamble hereof.
“Maximum Guaranteed Amount” has the meaning given in Section 2.01 hereof.
“Owner” has the meaning given in Recital A hereof.
“Project” has the meaning given in Recital A hereof.
ARTICLE 2
SECTION 2.01 The Guaranty. Guarantor, as primary obligor and not merely as surety, hereby unconditionally, absolutely, and irrevocably guarantees to Beneficiary all obligations of Owner under the Contract, including the full and timely payment to Beneficiary of all amounts due and payable by Owner to Beneficiary under the Contract (the “Guaranteed Obligations”), less all amounts paid to Beneficiary under the Contract (the “Maximum Guaranteed Amount”). Beneficiary shall have no right to make a claim pursuant to this Guaranty unless and until an uncured default has occurred with respect to Owner’s payments to Beneficiary under the Contract.
SECTION 2.02 Payment of Guaranteed Obligations. Guarantor agrees, upon the failure of Owner to pay any of the Guaranteed Obligations when they become due and after the expiration of any applicable cure periods set forth in the Contract, that Guarantor will pay, or cause to be paid, any and all such unpaid Guaranteed Obligations in full upon receipt of written notice from a duly authorized officer of Beneficiary specifying such failure of Owner.
SECTION 2.03 Subsequent Recovery. If, in connection with any payment by Guarantor of the Guaranteed Obligations, Beneficiary shall finally recover any such amounts from any other source directly making payments with respect to the Guaranteed Obligations, or it shall be finally determined that such Guaranteed Obligations were not owed to Beneficiary, Beneficiary shall promptly remit such amounts to Guarantor.
SECTION 2.04 Exercise of Remedies. This Guaranty constitutes a guaranty of payment and not of collection, and the obligations of Guarantor under this Guaranty are primary obligations of Guarantor, and a separate action or actions may be brought and prosecuted against Guarantor to enforce this Guaranty, irrespective of whether any action is brought against Owner or any other guarantor or whether Owner or any other guarantor is joined in such action or actions.
SECTION 2.05 Insolvency. The voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, or other proceeding affecting Owner or the disaffirmance of the Contract in any such proceeding shall not release or discharge Guarantor from this Guaranty.
SECTION 2.06 Waiver; Consent.
(a) Guarantor hereby unconditionally and irrevocably waives diligence, presentment, demand for payment, protest, the benefit of any discharge due to any disability of Owner, and all notices whatsoever in respect of the Guaranteed Obligations, this Guaranty, and any and all rights to require Beneficiary to exhaust any right, power or remedy or proceed against Owner under the Contract.
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(b) Guarantor warrants and agrees that each of the waivers and consents set forth in this Guaranty are made voluntarily and unconditionally after consultation with legal counsel and with full knowledge of their significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which Guarantor otherwise may have against Owner. If, notwithstanding the intent of the parties that the terms of this Guaranty shall control in any and all circumstances, any such waivers or consents are determined to be unenforceable under applicable law, such waivers and consents shall be effective to the maximum extent permitted by law.
SECTION 2.07 Other Credit Support. Guarantor shall have the right to terminate this Guaranty immediately after Guarantor provides Beneficiary with a letter of credit or other replacement security reasonably acceptable to Beneficiary for the Maximum Guaranteed Amount.
SECTION 2.08 Defenses. Notwithstanding anything herein to the contrary, Guarantor specifically reserves to itself all rights, counterclaims and other defenses that Owner is or may be entitled to arising from or out of the Contract, except for any defenses arising out of the bankruptcy, insolvency, dissolution or liquidation of Owner or the lack of power or authority of Owner to enter into the Contract and to perform its obligations thereunder.
ARTICLE 3
SECTION 3.01 Representations and Warranties. Guarantor represents and warrants to Beneficiary that as of the date of this Guaranty:
(a) Organization; Corporate Authority. Guarantor (i) is a corporation duly organized, validly existing and in good standing under the laws of its state of formation, and (ii) has all requisite corporate power and authority to own its assets and to carry on the business in which it is engaged and to execute, deliver and perform its obligations under this Guaranty.
(b) Authorization; No Conflicts. The execution and delivery of this Guaranty and the performance of the obligations hereunder have been duly authorized by all necessary corporate action and do not violate, breach or contravene (i) Guarantor’s organizational documents and agreements or (ii) any law or contractual restriction binding on or affecting Guarantor or its properties except where such violation, breach or contravention, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on Guarantor’s ability to perform its obligations under this Guaranty.
(c) Enforceability. This Guaranty has been duly executed and delivered by Guarantor, and constitutes the legal, valid and binding obligation of Guarantor, enforceable against it in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law).
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(d) Required Consents. All authorizations, consents and approvals of any governmental authority or third party necessary for the execution, delivery or performance by Guarantor of this Guaranty have been obtained and are in full force and effect.
(e) No Actions. There are no actions, suits, proceedings or investigations pending or, to the Guarantor’s knowledge, threatened in writing against it at law or in equity before any court or before any governmental authority, that individually or in the aggregate could reasonably be expected to have a material adverse effect on the business of the Guarantor or could reasonably be expected to result in an impairment of its ability to perform its obligations under this Guaranty.
ARTICLE 4
SECTION 4.01 No Waiver. No failure or delay on the part of Beneficiary to exercise and no delay in exercising, and no course of dealing with respect to, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver of such right, remedy, power or privilege nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which Beneficiary would otherwise have.
SECTION 4.02 No Consequential or Punitive Damages. In no event shall Guarantor be liable hereunder to any party for any lost profits, special damages, indirect or consequential damages of any nature whatsoever, whether based on contract or tort, or for any punitive or exemplary damages.
SECTION 4.03 Notices. All notices and other communications provided for in this Guaranty shall be sent, if practicable, by confirmed telecopy (with hard copy sent on the same day by overnight courier) and, otherwise, by overnight courier service prepaid to a party at its address specified below and shall be deemed effective when received. A communication shall be addressed, until such time as a party shall have notified the other parties hereto of a change of address: (a) if to Guarantor, 00 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxx, and (b) if to Beneficiary, 0000 X. Xxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, XX 00000; Facsimile: (000) 000-0000, Attention: Legal.
SECTION 4.04 Amendments. No amendment of any provision of this Guaranty shall be effective unless the same shall be in writing and signed by Guarantor and Beneficiary, such consent shall be effective only in the specific instance and for the specific purpose for which given.
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SECTION 4.05 Benefit, Successors and Assigns. This Guaranty is for the benefit of and is enforceable by Beneficiary and not for the benefit of or enforceable by any other Person. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of Beneficiary. This Guaranty and all obligations of Guarantor hereunder to Beneficiary shall be assignable by Guarantor only upon the prior written consent of Beneficiary. Any such assignee shall assume all of the obligations hereunder from and after the effective date of such assignment and in connection therewith, Guarantor shall be released from all obligations hereunder other than any obligations arising from acts or events that occurred prior to the date of such assignment.
SECTION 4.06 Headings. The Article and Section headings in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.
SECTION 4.07 Counterparts. This Guaranty may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute the same instrument. Delivery of an executed counterpart of a signature page of this Guaranty by facsimile or “pdf” electronically imaged transmission shall be effective as delivery of a manually executed counterpart of this Guaranty.
SECTION 4.08 Severability. In case any one or more provisions contained in this Guaranty or obligation under this Guaranty shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions or obligations contained herein, and any other application thereof, shall not in any way be affected or impaired thereby.
SECTION 4.09 Agreements Superseded. This Guaranty supersedes all prior agreements and understandings, written or oral, between the parties with respect to the subject matter of this Guaranty.
SECTION 4.10 Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the Oklahoma.
SECTION 4.11 Consent to Jurisdiction. Guarantor hereby irrevocably consents to the non-exclusive personal jurisdiction of the state and federal courts located in Oklahoma City, Oklahoma, and any action, claim or other proceeding arising out of any dispute in connection with this Guaranty or any rights or obligations hereunder or thereunder or the performance of such rights and obligations. Guarantor hereby irrevocably consents to the service of a summons and complaint and other process in any action, claim or proceeding brought by Beneficiary in connection with this Guaranty or any rights or obligations hereunder or thereunder or the performance of such rights and obligations, on behalf of itself, in the manner specified in Section 4.03 above. Nothing in this Section 4.11 shall affect the right of Beneficiary to serve legal process in any other manner permitted by applicable law or affect the right of Beneficiary to bring any action or proceeding against Guarantor in the courts of any other jurisdiction.
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SECTION 4.12 Termination. This Guaranty shall terminate and be of no force and effect upon the expiration or satisfaction of all Guaranteed Obligations.
LSB INDUSTRIES, INC., a
Delaware corporation
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ACCEPTED AND AGREED:
SAIC CONSTRUCTORS LLC, an
Oklahoma limited liability company
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Name: |
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