NEDAK Ethanol EPC Contract
DELTA-T CORPORATION
CONFIDENTIAL INFORMATION
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
FIXED PRICE CONTRACT
BETWEEN
DELTA-T CORPORATION
AND
NEDAK Ethanol LLC
August 9, 2006
* PORTIONS OF THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES FIXED
PRICE CONTRACT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
INDEX
SECTION PAGE NUMBER
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1. DEFINITIONS
2. DELTA-T'S SCOPE OF WORK
3. INFORMATION, GOODS AND SERVICES TO BE PROVIDED BY OWNER
4. INTERFACE AND SITE CONDITIONS
5. SCHEDULE
6. CHANGES
7. FINAL ACCEPTANCE
8. PAYMENT
9. RIGHT OF OWNER AND DELTA-T TO SUSPEND WORK OR TERMINATE
10. SAFETY AND SECURITY
11. PROJECT EXECUTION
12. WARRANTY
13. TRANSFER OF TITLE AND RISK OF LOSS
14. INSURANCE
15. INDEMNITIES
16. LIMITATIONS OF LIABILITY
17. CONFIDENTIALITY
18. DISPUTE RESOLUTION
19. FORCE MAJEURE
20. GENERAL PROVISIONS
21. RIGHT TO TERMINATE/LIMITED OBLIGATION TO PROCEED PRIOR TO FINANCIAL CLOSING
LIST OF EXHIBITS
A. Scope of Work
B. Commercial Terms
C. Performance Test Protocol
D. Performance Guarantees
E. Mechanical Completion, Commissioning, Startup
F. Project Schedule
G. Insurance
H. Non-Disclosure Agreement
I. List of Competitors
J. Work Prior to Financial Closing
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ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
FIXED PRICE CONTRACT
GENERAL CONDITIONS
THIS CONTRACT, IS made effective the 9th day of August, 2006 by and
between NEDAK Ethanol LLC a limited liability company organized and acting under
and pursuant to the laws of Nebraska and having its main place of business at
87590 Hillcrest Road, P.O. Box 391, Atkinson, Nebraska 68713 (hereinafter called
the "Owner") and Delta-T Corporation, a corporation organized and acting under
and pursuant to the laws of the Commonwealth of Virginia and having its main
place of business at 000 Xxxxxxxxx Xxx Xxxxxxx, Xxxxxxxxxxxx, XX 00000,
(hereinafter called "Delta-T"). Owner and Delta-T may sometimes be referred to
herein individually as a "Party" or jointly as the "Parties."
W I T N E S S E T H:
WHEREAS, Delta-T is engaged in the performance of engineering,
procurement and construction services; and,
WHEREAS, Owner desires Delta-T to furnish and perform certain
engineering, procurement and construction services in the design, development,
construction, commissioning, and start-up of a 44 MGY ethanol production
facility in Nebraska.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, it is agreed as follows:
1. DEFINED TERMS AND ORDER OF PRECEDENCE
1.1 DEFINED TERMS: The following words, when capitalized, shall have the
meanings set forth below:
1.1.1 COMMISSIONING: "Commissioning" means checking and preparation of
the Plant for operation, functional control loop checking, interlock
testing, system purging and utility system startups to confirm that the
Plant is ready for Startup, as described in Exhibit E.
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1.1.2 CONFIDENTIAL INFORMATION: "Confidential Information" means all of
the following information delivered by Delta-T to Owner under this
Contract: (a) all of the provisions of this Contract and its Exhibits,
especially but not limited to the provisions concerning pricing and
guarantees, financial information, vendor lists, price lists, cost data,
and other business and commercially sensitive information, and (b) all
technical information, including without limitation, drawings, designs,
methodology, processes, models, inventions, specifications, plant or
equipment test and operating data, improvements, processes, and other
technical information of any kind, whether or not patented or patentable
and whether embodied in a drawing or in equipment or any other physical
thing. Notwithstanding the foregoing, Confidential Information does not
include information which the Owner can demonstrate by documentary
evidence: (a) was in its possession prior to receipt from Delta-T; (b)
appears in issued patents or printed publications in integrated form or
is in general use in the trade without violation by Owner of this
Agreement, or violation by any other party of an obligation not to
disclose it; or (c) is disclosed to Owner by a third party who is under
no obligation not to disclose it.
1.1.3 CONTRACT: "Contract" means these General Conditions, the attached
Exhibits A through I, and all additions or modifications thereto made in
accordance with Section 20.2 below.
1.1.4 CONTRACT SUM: "Contract Sum" means the sum set forth in Section
8.1 below, or such greater or lesser amount as may be determined in
accordance with Section 6 below.
1.1.5 DELTA-T'S PROJECT MANAGER: "Delta-T's Project Manager" means the
individual designated from time to time by Delta-T in writing as having
the responsibilities described at Section 11.1 below.
1.1.6 DATE OF COMMENCEMENT: "Date of Commencement" means the date of
commencement of this Contract, which shall be the later of the date that
it has been executed by both Parties, or the date that Delta-T has
received the payment due at the Date of Commencement according to the
payment schedule set forth in Exhibit B.
1.1.7 DAY: "Day" means calendar day.
1.1.8 DELTA-T TECHNOLOGY: "Delta-T Technology" means all Confidential
Information included in the information, designs and information
embodied in all drawings, software or other documents delivered by
Delta-T to Owner under this Contract, or embodied in the Plant or,
Equipment.
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1.1.9 EQUIPMENT: "Equipment" means the equipment described at Exhibit A.
1.1.10 FINAL COMPLETION: "Final Completion" means that (i) Delta-T has
completed its obligations under the Performance Test protocol described
at Exhibit C and any right to cure that it may choose to exercise under
Exhibit D, or that completion of such obligations has been waived by
Owner in writing or by passage of time as provided at Section 7.5 below,
(ii) all of the items on the Punch List signed by both Owner and Delta-T
have been corrected and (iii) all lien waivers, or affidavits, required
under Section 8.5 have been delivered and (iv) all drawings and other
documents identified on Exhibit A as documents to be delivered by
Delta-T to Owner have been delivered.
1.1.11 GENERAL CONDITIONS: "General Conditions" means all portions of
this Contract other than the attached Exhibits.
1.1.12 MECHANICAL COMPLETION: "Mechanical Completion" means that the
Plant has satisfied all of the conditions to Mechanical Completion set
forth at Exhibit E.
1.1.13 OWNER'S REPRESENTATIVE: "Owner's Representative" means the
individual designated from time to time by Owner in writing as having
the responsibilities described at Section 11.2 below.
1.1.14 PERFORMANCE TEST: "Performance Test" means the test defined in
Exhibits C and D.
1.1.15 PLANT: "Plant" means the ethanol plant to be constructed for
Owner under this Contract.
1.1.16 PUNCH LIST: "Punch List" means a list of all portions of the
Work, if any, which are incomplete or do not conform to the Contract.
1.1.17 SCHEDULE: "Schedule" means the schedule set forth in Exhibit F,
as amended from time to time by mutual agreement of the Parties in
accordance with this Contract.
1.1.18 INTENTIONALLY LEFT BLANK.
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1.1.19 SITE MANAGER: "Site Manager" means the individual designated from
time to time in writing by Delta-T under Section 11.1 below.
1.1.20 STARTUP: "Startup" means the commencement of operation of the
Plant for the purposes of either commencing the Performance Test or for
commercial purposes, as described in Exhibit E.
1.1.21 WORK: "Work" means the obligations of Delta-T to be performed
under this contract prior to Final Completion.
1.2 ORDER OF PRECEDENCE: In the event of any conflict between these General
Conditions and the Exhibits hereto, these General Conditions shall be
controlling.
2. DELTA-T'S SCOPE OF WORK
2.1 DESCRIPTION OF WORK: Delta-T shall, in addition to its obligations under
these General Conditions, provide the Equipment and services described at
Exhibit A, all in accordance with these General Conditions and the
specifications set out in Exhibit A.
2.2 PERMITS: Delta-T shall, at its expense, secure all permits identified as
permits to be procured by it in Exhibit A. All other permits required by
applicable law or regulation, including without limitation, permits related
to environmental protection, to operation of the plant at which the
Equipment is installed, or activities of Owner or any of its contractors, if
any, other than Delta-T, shall be secured by Owner at Owner's expense.
2.3 PERFORMANCE AND PAYMENT BONDS: Delta-T shall require its construction
subcontractor to furnish bonds covering the construction of the Plant in
accordance with the contract between Delta-T and its construction
subcontractor and payment of all obligations arising under such contract in
the full amount of such contract but in any event not less than $30,000,000.
The bonds shall be written by a Surety satisfactory to the Owner ("Surety")
and shall name NEDAK Ethanol LLC and NEDAK's construction lender , as
obligees, as well as any other entity reasonably required by Owner. The
bonds shall be written on a form acceptable to Owner and Owner's
construction lender. Delta-T shall also require payment and performance
bonds or irrevocable letters of credit for all equipment suppliers providing
equipment costing in excess of $250,000.00. Any other bonds required by
Owner's or Owner's construction lender shall be provided at the Owner's
expense.
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2.4 DRAWINGS: Delta-T shall, upon completion of the Work, deliver to Owner a
complete set of appropriately stamped or sealed ready for construction
plans, specifications or drawings ("Ready for Construction Design Drawings")
required to perform the Work, as set forth under the applicable rules and
regulations related to the practice of professional engineering. Delta-T
shall have no responsibility to provide Owner with any other plans,
specifications or drawings for work performed by Owner or its contractors or
subcontractors. In the event that Delta-T is required, pursuant to Exhibit
A, to provide Owner or any of Owner's contractors or subcontractors with
electronic copies of plans, specifications or drawings ("Electronic
Drawings"), during execution of the Work, Delta-T expressly disclaims any
and all liability associated with any changes made to such Electronic
Drawings. Owner acknowledges and agrees that should a dispute arise with
respect to the accuracy of the Electronic Drawings and the Ready for
Construction Design Drawings to be submitted under this Section 2.3, the
Ready for Construction Design Drawings shall be considered prima facie
evidence in any dispute resolution proceedings as set forth in Section 18
below.
2.5 LICENSE OF CERTAIN DOCUMENTS AND DRAWINGS: Delta-T shall retain
ownership of the copyright in, and any and all inventions and trade secrets
embodied in, the documents and drawings delivered to Owner under this
Contract and in all of the Delta-T Technology, and Owner's rights therein
shall be governed by Section 17.2 below.
2.6 OR EQUAL: Whenever in any of the Contract documents, any Section,
materials, or equipment is defined by describing a proprietary product or by
using the name of a manufacturer or vendor, the term, "or equal" if not
inserted, will be implied. The specific Section, material or equipment
mentioned will be understood as indicating the type, function, minimum
standard of design, efficiency, and quality desired and will not be
construed in such a manner as to exclude manufacturer's products of
comparable quality, design, and efficiency. Where a product is mentioned by
the name of a manufacturer or vendor in the Contract, Delta-T will identify
to Owner the names of any products to be used in lieu of the ones named in
the documents prior to awarding a purchase order. Owner shall have the right
to reject any substituted product upon ten (10) business days written notice
to Delta-T, unless such product is critical to the successful completion of
the Work, or is the only product available that is suitable for the purpose
for which it is intended.
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3. INFORMATION, GOODS AND SERVICES TO BE PROVIDED BY OWNER
3.1 SPECIFIC GOODS AND SERVICES: Owner shall provide the following prior to
commencement of any Work by Delta-T: (a) a Plant site suitable for
construction of the Plant, complete with adequate space for office and
storage needs of Delta-T during construction, (b) suitable access of the
Plant site, (c) utilities to the Plant boundary as necessary for Delta-T's
performance of the Work, (d) all permits and licenses necessary for
construction and operation of the Plant other than those to be provided by
Delta-T as listed on Exhibit A, and (e) evidence reasonably satisfactory to
Delta-T that it has secured financing sufficient to permit Owner to pay all
its financial obligations in connection with building of the Plant,
including payment of all amounts due to Delta-T. Owner shall provide the
following prior to commencement of the Performance Test: (i) personnel
required to be trained by Delta-T, at the time(s) needed to meet the
training plan described at Exhibit A and (ii) supplies and utilities
required to perform Owner's obligations under Exhibits C and D.
3.2 OTHER GOODS AND SERVICES: Owner shall also furnish to Delta-T, at
Owner's expense, all documents, drawings, specifications, information and
services showing all existing structures, foundations and undergrounds in or
adjacent to the Plant site that may be relevant to performance of the Work,
if any; coordinates, bench marks and base lines for the land area and
locations where all associated items of equipment, if any, are to be
installed; the existence and location of subsurface obstructions and
conditions; soil data and subsurface information for Delta-T's use for
foundation design relevant to the Work; adequate arrangement drawings,
utility requirements and process connections of all those existing items of
machinery and equipment of existing facilities, if any, with which the Work
must interconnect or accommodate, sufficient for Delta-T's performance of
the Work; and the specific emission, effluent and environmental criteria and
requirements for the Work; and all other documents, drawings,
specifications, information and services, if any, identified as within the
Owner's Scope of Services in Exhibit A. Delta-T shall be entitled to rely
upon such data and design criteria in the performance of the Work. Owner
shall provide all such items within the times prescribed in the Schedule, or
if no time is prescribed, within the time reasonably required to allow
Delta-T to perform its obligations under this contract. If no time is
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prescribed for Owner to provide such items, Delta-T shall provide reasonable
written notice to Owner setting forth the date such item(s) are required.
Furthermore, Delta-T shall have the right to receive from Owner reasonable
written assurance, and evidence reasonably acceptable to Delta-T, that Owner
is not aware of any physical, financial or legal matters that would prevent
Owner from fulfilling its obligations hereunder or impede performance of the
Parties obligations under this Contract in accordance with the Schedule. If
Delta-T becomes aware of any error in a document, drawing, specification or
other information supplied by Owner it will promptly notify Owner of the
same. Delta-T shall, however, have no liability of any kind with respect to
any error of which it is not actually aware. In addition, Owner shall be
fully responsible for providing all goods and services, if any, that become
necessary as a result of the discovery of hazardous materials (unless such
material were brought onto the Site by Delta-T or its subcontractors) or
materials with archeological significance.
4. INTERFACE AND SITE CONDITIONS
4.1 SITE CONDITIONS: Delta-T has visited the Work site and had an
opportunity to become familiar with the condition of the site as it applies
to performance of the Work. If conditions are encountered at the site which
were not readily observable by visual inspection of the site on February 21,
2006 or a review of the available subsurface information, or (2) are unknown
physical conditions of an unusual nature, which differ materially from those
ordinarily found to exist and generally recognized as inherent in
construction activities of the character provided for in this Contract, or
(3) differ from conditions shown in any drawing, document or other
information, if any, that Owner is required to deliver to Delta-T under
Section 3 above, then notice by the observing Party shall be given to the
other Party promptly before such conditions are further disturbed and in no
event later than 21 days after first observance of the conditions. If any
such condition causes any increase or decrease in Delta-T's cost of, or time
required for, performance of any part of the Work, or any increase or
decrease in any other obligation of Delta-T, Owner shall within 21 days of
issuance or receipt of notice, as the case may be, under this Section 4.1,
issue a change order in accordance with Section 6 below.
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4.2 COOPERATION WITH OTHERS: Delta-T will cooperate with Owner's other
contractors, if any, to facilitate coordination of the Work with the work of
others, but any changes to the Work or the Schedule required to do so shall
be treated as a change under Section 6 below. Notwithstanding the foregoing,
Delta-T shall not be required to check the quality or quantity of work
performed by Owner or Owner's contractors or subcontractors, provided,
however, Delta-T shall confirm that any predecessor work shall be sufficient
for Delta-T's Work. Delta-T shall not have control over or responsibility
for the construction, methods, techniques, sequences or procedures, or for
safety precautions and programs used by Owner or Owner's contractors or
subcontractors in connection with the Work and shall have no liability
thereon.
5. SCHEDULE
5.1 SCHEDULE: Delta-T shall use its best reasonable efforts to perform the
Work in accordance with the Schedule, but it does not guarantee that the
Work will be completed according to such Schedule. In case of any delay
other than a delay caused by Delta-T, its employees, subcontractor's or
vendors for reasons other than force majeure (which shall be treated in
accordance with Section 19 below), the Schedule for completion of the Work,
or any part of it, shall be extended by a number of days equal to the actual
number of days of such delay, plus the number of days reasonably required
for demobilization and remobilization. Delta-T shall use all reasonable
efforts to comply with Owner's wishes with respect to changes in Schedule,
but any adjustment requested by Owner to the Schedule shall be deemed a
change and Delta-T shall have no obligation to slow down or accelerate its
performance of the Work except in accordance with Section 6 below.
5.2 COMPENSATION TO DELTA-T FOR DELAY: In the event of any delay caused by
Owner, its employees, subcontractor's or vendors for reasons other than
force majeure exceeds, individually or in the aggregate, fourteen (14) days,
Delta-T shall be entitled to compensation for its unavoidable direct costs
resulting from such delay, including in particular, but without limitation,
the costs, if any, of extended site overhead and those itemized at Exhibit
B.
6. CHANGES
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6.1 ISSUANCE OF CHANGE ORDERS BY OWNER: Owner may by its written order
require changes in the Work within the general scope of the Contract
consisting of additions, deletions or other revisions which do not result in
any material change in the Work, provided that the Contract Sum and payment
schedule are adjusted to reflect the change in Delta-T's direct costs
resulting from such changes, plus a reasonable amount for profit, and that
the time allowed for completion, warranty obligations, and any other
obligations of Delta-T affected by the changes are adjusted to cover the
consequences to Delta-T resulting from such change. Furthermore, Owner shall
issue a change order providing for all such adjustments when required to do
so under Section 4.1 above. The amount to be paid to Delta-T, the effect on
Schedule, if any, and any other adjustments to the Contract will be made by
mutual agreement. If the change, in Delta-T's judgment, would have a
detrimental impact on performance of the Plant, or if the amount of the cost
of the change order in dispute exceeds 1% of the Contract Sum, then Delta-T
shall have no obligation to proceed with any change until such agreement is
reached. Furthermore, Delta-T shall in no case be required to agree to any
change requiring the handling of PCBs, asbestos or any other hazardous
material. In all other cases, if Owner and Delta-T are unable to reach
agreement within fifteen (15) days of the date of Delta-T's notice to Owner
provided in accordance with Section 6.2 below, then Delta-T shall proceed
with the change and the matter shall be resolved as provided at Section 18
below.
6.2 NOTICE OF INSTRUCTION CONSTITUTING A CHANGE; NOTICE OF IMPACT OF CHANGE
ORDER: If Delta-T receives instructions from Owner, which in Delta-T's
opinion constitute a change in the Work, Delta-T shall so advise Owner
within five (5) business days of receipt of such instruction. If Delta-T
receives a change order under Section 6.1 above or becomes aware of a
constructive change order of the type described at Section 6.3 below, or
gives Owner a notice that an instruction of Owner constitutes a change, then
Delta-T shall within ten (10) business days thereafter submit to Owner a
statement of the impact of such change on Contract Sum, payment schedule,
Schedule, warranties, and any other provisions of the Contract affected
thereby. Delta-T shall not delay prosecution of the Work not affected by the
change.
6.3 CONSTRUCTIVE CHANGE ORDERS: Any of the following shall be deemed
constructive change orders: (a) a modification of applicable law, ordinance
or regulation resulting in any increase in taxes or insurance premiums, or
any other cost, payable by Delta-T or in any government regulated costs that
was not or should not have been reasonably anticipated by Delta-T, (b) any
increase in Delta-T's costs due to force majeure, but only to the extent (i)
such costs are not compensated by insurance, and (ii) the actual delay
caused by the force majeure event is more than five (5) days, and (iii) such
costs include the direct costs of the force majeure event plus fifty percent
of any extended general condition costs, or (c) unknown or differing site
conditions of the type described at Section 4.1 above.
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7. COMMISSIONING, STARTUP, TRAINING OF OWNER'S PERSONNEL, AND FINAL ACCEPTANCE
7.1 MECHANICAL COMPLETION AND COMMISSIONING: Delta-T shall give Owner at
least five calendar days notice when Delta-T believes that the Work has
reached Mechanical Completion. Owner and Delta-T shall, within seven
calendar days jointly inspect the Work and prepare a proposed Punch List.
Such Punch List shall clearly designate which items, if any, need to be
completed in order to reach Mechanical Completion. Delta-T shall within
three (3) calendar days of receipt of the jointly prepared Punch List mark
the list to show Delta-T's disagreement, if any, with any of the items
listed by Owner, and return a copy of the list so marked and signed by
Delta-T to Owner. In the event that Parties do not agree on the items that
should be included on the Punch List within three (3) calendar days
thereafter, then either Party may submit the matter to disputes resolution
under Section 18 below. Owner and Delta-T shall commence Commissioning upon
achievement of Mechanical Completion of the Plant.
7.2 PERFORMANCE TEST: Owner and Delta-T shall Startup the Plant and begin
the Performance Test as soon as the conditions to Startup described in
Exhibit C have been completed. If for any reason the Performance Test is not
completed on the first attempt, then Owner shall allow Delta-T reasonable
access to the Plant to do all things required to be done to achieve Final
Completion for a period of at least six (6) months after Startup, as
provided at Exhibit D.
7.3 TRAINING OF OWNER'S PERSONNEL: Delta-T shall provide the training
described in Exhibit A. Except as provided otherwise in Exhibit A, Owner
shall provide appropriate personnel, and Delta-T shall provide such
training, at times mutually agreed by them, commencing prior to
Commissioning in sufficient time to prepare Owner's employees to perform
Commissioning and Startup and to perform their obligations with respect to
the Performance Test.
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7.4 USE OF PLANT PRIOR TO FINAL ACCEPTANCE: Owner may use the Plant for
commercial purposes on or after the achievement of Mechanical Completion. If
Owner elects to use any portion of the Work for commercial purposes prior to
Final Completion, however, then it shall allow Delta-T free access to the
Plant to do all things required to be done to achieve Final Completion,
including without limitation, shut downs of the Plant, as reasonably
necessary including, without limitation, preparation for and execution of
one or more Performance Tests.
7.5 FAILURE TO REACH FINAL COMPLETION FOR REASONS BEYOND DELTA-T'S CONTROL:
Subject to the provisions of Section 19 below, if for any reason Owner fails
to permit Delta-T access to the Plant after the date of Mechanical
Completion in order to permit Delta-T to do all things necessary to achieve
Final Completion, or Delta-T is prevented from achieving Final Completion
for reasons beyond Delta-T's control and such failure to permit access or
prevention of performance continues for an aggregate of sixty (60) days,
then Final Completion shall be deemed to occur on the sixtieth day (in the
aggregate) that such access is denied or performance prevented for purposes
of payment only in accordance with Section 8 below. Delta-T shall complete
the Performance Testing in accordance with Exhibit C.
8. PAYMENT
8.1 CONTRACT SUM: Owner will pay Delta-T for the full and satisfactory
completion of the Work the Contract Sum of $61,800,000.00, or such other sum
as may be determined in accordance with Section 6. In addition to the sum of
$61,800,000.00, Owner will pay Delta-T the sum of $10,600,000.00 for the
cost of the dryer, field-fab tanks, shop-fab tanks, bulk piping and
electrical wiring[.] * * The Contract Sum does not include any sales or
other tax. If Delta-T is, now or in the future, required to collect from
Owner or pay any federal, state, local or other tax with respect to all or
any part of the Work, then that amount shall be paid by Owner at Delta-T's
request, in addition to the Contract sum. The Contract Sum listed in this
paragraph 8.1 is contingent on
* PORTIONS OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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the Owner making the first payment to Delta-T in the amount of $8,000,000.00
(equipment deposits) on or before August 9, 2006. In the event that the
Owner fails to make this payment, a constructive change order shall be
issued to cover any increase in equipment costs.
8.2 PAYMENT TERMS: Owner shall make payment in accordance with Exhibit B and
this Section 8. Delta-T shall submit Applications for Payment in the form
set forth at Exhibit B. Owner shall, through Owner's Representative, sign
the Certificate for Payment set forth on the Application for Payment for the
full payment applied for, unless it believes that all or any part of such
amount is not then due. If Owner believes all or part of the amount
requested in the Application for Payment is not then due, Owner shall amend
the Certificate for Payment contained therein by indicating the amount, if
any, that it believes to be due, and shall sign the certificate as amended
and deliver the certificate, together with written notice of Owner's reasons
for certifying less than the whole amount of applied for. Owner or Owner's
construction lender shall wire transfer, in immediately available funds, all
amounts for which it has issued certificates, within the time set forth in
Exhibit B, and if no time is indicated thereon, within thirty (30) days of
the date of its receipt of the Application for Payment, to a bank account to
be selected by Delta-T, at its sole discretion. Owner's payment shall
constitute a Certificate for Payment if the Certificate for Payment form is
not executed by Owner. If Owner does not certify payment in the amount of
the Application, and Delta-T and Owner cannot agree on a revised amount
within fifteen (15) days of the date of the Certificate for Payment for less
than the full amount, then either Party may request a demand for arbitration
in accordance with Section 18. In any case, when the reasons stated by Owner
for withholding payment of any amount for which an application has been made
are removed, in whole or in part, Owner shall immediately issue a
Certificate for Payment for the amount withheld and make payment, via wire
transfer as described in this Section 8.2, of the amount so certified. .
8.3 LATE PAYMENT: Owner shall pay the lesser of 1.0% per month or the
highest amount permitted by law on all sums more than 10 calendar days past
due.
8.4 MECHANIC'S LIEN WAIVERS AND INDEMNITY: Delta-T shall pay promptly for
all valid amounts due for all materials, labor and equipment used in or in
connection with the performance of this Contract, including those of its
subcontractor's and vendors, when bills or claims become due, and shall
indemnify and hold harmless Owner from and against all claims of its
subcontractors and vendors for amounts due arising from Delta-T's failure to
make any such payments, provided that Owner gives Delta-T prompt notice of
such claim and cooperates with Delta-T in defense of such claim.
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8.5 MECHANIC'S LIENS: Delta-T shall keep the real property upon which the
Plant is to be located free and clear of laborer's, materialmen's and
mechanic's liens arising out of the performance of the Work for which Owner
has made payment. Owner shall promptly notify Delta-T in writing of any lien
so arising of which it has notice or knowledge. Delta-T shall obtain and
timely provide to Owner a partial release of lien with respect to any
partial or progress payment made to relevant subcontractors and shall also
obtain and timely provide a complete release of lien and general release
with respect to any subcontract for which full and final payment is made. In
each case, the release of lien may be for an amount less amounts that will
be paid from the payment for which such release of lien is requested.
Delta-T shall promptly pay each subcontractor upon receipt of payment from
Owner of the amount invoiced that is due to such subcontractor.
8.6 FINAL PAYMENT: Delta-T shall invoice Owner for the final amount due to
it in accordance with Exhibit B.
8.7 CONSTRUCTION LENDER. Delta-T understands that Owner is obtaining
construction financing and that the financial institution providing such
construction financing may have certain requirements and procedures for
making progress and other payments to Delta-T. Delta-T agrees to cooperate
with any and all reasonable requirements and procedures imposed by Owner's
construction lender.
8.8 WITHHOLDING PAYMENTS. Owner shall be entitled to deduct from any amounts
due or owing by Owner to Contractor any amounts as may be reasonably
necessary to protect owner from losses due to:
(a) Work that is damaged, defective or not in conformance with this
Agreement and has not been remedied by Contractor after having written
notice from Owner of such damage, defect or nonconformity and Contractor
having not corrected such damage, defect or nonconformity within thirty (30)
calendar days of receiving such notice; or
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(b) Failure of Contractor to pay Subcontractors, or for labor, materials or
Equipment unless a Payment Default has occurred and is continuing and then
only to the extent such Work was part of the Invoice which forms the basis
of the Default Payment; or
(c) claims filed by third parties relating to or arising out of the Work
against the Owner or its Construction Lender and damage to the Owner or
another person or entity caused by Delta-T, its subcontractor, or material
suppliers that arise out of the Work, provided such claim or damage has not
been resolved by Delta-T after having written notice from Owner of such
claim or damage and Delta-T not having corrected or resolved such claim or
damage within thirty (30) days of receiving such notice.
9. RIGHTS OF OWNER AND DELTA-T TO SUSPEND WORK OR TERMINATE
9.1 OWNER'S RIGHT TO TERMINATE FOR CAUSE: Owner may terminate this Contract
if: a. a petition in bankruptcy is filed by Delta-T, and such filing
materially impacts Delta-T's ability to perform its obligations under
this Contract, or such a petition is filed against Delta-T and it is not
dismissed within 45 days, or
b. Delta-T commits a material breach of a material obligation under this
Contract, or fails to make reasonable progress toward completion of the
Work, and fails to cure such breach or failure within the longer of 45
days of its receipt of written notice of such breach or such longer time
as is reasonably required to cure such breach.
Upon such termination Owner may take possession of the Work completed by
Delta-T or delivered to the Plant site and all materials and Equipment at
the site acquired for incorporation into the Work and owned by Owner or
Delta-T, take assignment of all purchase orders and subcontracts related to
the Work and complete the Work by whatever reasonable method Owner may deem
expedient. Owner shall permit Delta-T access to the Plant site after such
termination as reasonably required by Delta-T to remove any equipment,
trailers, supplies, goods and materials maintained by Delta-T in connection
with the Work but not intended to be incorporated into the Plant, or owned
or used by any of its subcontractors under subcontracts not to be assigned
to Owner. In the event of termination for any of the reasons set forth
above, Delta-T will be liable to Owner for any reasonable costs incurred by
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Owner to complete the Work in excess of the Contract Sum remaining unpaid to
Delta-T, up to a maximum of 10% of the Contract Sum. In case of such
termination, the license granted under Section 17.2 below with respect to
the Delta-T Technology delivered prior to the date of termination shall
become effective, no further payments will be made to Delta-T after
termination until the Work is completed and upon completion of the Work,
Owner shall pay Delta-T the balance due under this Contract, less the
amounts required to be paid by Owner to third parties to complete the Work,
and if the unpaid balance of the Contract Sum is less than the cost of
finishing the Work, Delta-T shall then pay such excess, up to a maximum of
the amount set forth in the preceding sentence.
9.2 DELTA-T'S RIGHT TO STOP WORK: If Owner does not pay Delta-T amounts that
Owner has certified for payment within five (5) Days after the date such
payment is due, then Delta-T may, upon ten (10) Days written notice to
Owner, stop the Work until payment of the amount owing has been received.;
provided, however, Delta-T may not stop the Work if there is a good faith
dispute regarding the amount of payment due Delta-T. If Delta-T suspends the
Work under this Section 9.2, then the time allowed for completion of any of
the Work shall be extended as provided at Section 5.1 above.
9.3 DELTA-T'S RIGHT TO TERMINATE: Delta-T may terminate the Contract on
seven (7) Days written notice if the Work is stopped, without fault on the
part of the Delta-T or, any of its vendors or subcontractors, for more than
twenty-one Days, for any of the following reasons:
a. a petition in bankruptcy is filed by Owner, and such filing
materially impacts Owner's ability to perform its obligations under
this Contract, or such a petition is filed against Owner and it is not
dismissed within forty-five (45) Days.
b. Owner has not made payment within sixty (60) Days of the date due;
or
c. Owner commits any other material breach of a material obligation
under this Contract, and fails to cure such breach within the longer
of 45 Days of its receipt of written notice of such breach or such
longer time as is reasonably required to cure such breach.
Delta-T may terminate the Contract on seven (7) Days written notice if the
Work is stopped, without fault on the part of the Delta-T or, any of its
vendors or subcontractors, for more than ninety (90) Days because of the
issuance of any order of a court or other public authority having
jurisdiction over the Site or project.
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Upon such termination Owner shall pay Delta-T (a) all amounts then due to it
under this Contract as of the date of termination, including all amounts
completed but not yet invoiced, and including the portions, if any, of such
amounts that would have been held as retainage in accordance with Exhibit B,
(b) all unavoidable costs payable to subcontractors at any tier and all
other vendors related to the work, including reasonable fees for
cancellation, and (c) a termination fee calculated as set forth in Exhibit
B. For this purpose, the amounts then due to Delta-T shall be deemed to be
all amounts billed in accordance with Exhibit B up to the date of
termination, plus the value of all goods delivered and services performed
under this Contract and not billed as of the date of termination. In the
event that the Parties cannot agree on the total amount due within thirty
(30) Days of the date of Delta-T's demand for payment hereunder, either
Party may initiate arbitration under Section 18.2 below.
10. SAFETY AND SECURITY
10.1 PREMISES: Delta-T will keep the premises clean and free from rubbish
caused by performance of the Work and will insure that its subcontractors do
likewise. At completion of the Work, Delta-T shall leave the premises clean
of all debris resulting from performance of the Work. Owner shall provide
dumpsters for disposal or recycling of materials and Delta-T shall be
responsible to insure that the proper material is placed in the appropriate
dumpster. Owner shall receive the proceeds of the sale or recycling of any
salvage items or scrap from the project.
10.2 SECURITY: During construction and installation of the Work, Delta-T
will use reasonable means to protect the Work and all Equipment and
materials to be used in connection with the Work and located on the Work
site safe from injury or defacement, within the defined battery limits, and
all equipment owned or leased by Delta-T or any of its subcontractors, and
all other equipment and goods of any kind located at the Plant site for the
purpose of performing the Work.
10.3 SAFETY: Delta-T will insure all its labor and other authorized
personnel comply with all appropriate safety and security regulations,
procedures or standards. Delta-T shall furnish and maintain all necessary
safety equipment and training for its employees and shall maintain a safe
work site at all times. All Work shall be performed in accordance with
Delta-T and its primary subcontractor's safety plan.
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10.4 COMPLIANCE WITH OSHA AND SIMILAR LAWS AND REGULATIONS: Owner shall at
all times be solely responsible for compliance with the Occupational Safety
and Health Act ("OSHA"), and any similar state laws or regulations, with
respect to its own employees. In particular, but without limitation, Owner
shall be responsible for claims made by any of its employees, by reason of
any personal injury or death which results from a violation of any such law
or regulation. Delta-T shall be solely responsible for compliance with OSHA,
and any similar state laws or regulations, with respect to its own employees
and will require the same of its subcontractors. In particular, but without
limitation, Delta-T shall be responsible for claims made by any of its
employees, whether against Owner or Delta-T by reason of any personal injury
or death which results from a violation of any such law or regulation. The
Schedule shall be extended as necessary to allow for cure of any unsafe
condition, which results in a suspension of the Work, which is caused by
anyone other than Delta-T, its agents, employees or sub-subcontractors.
11. PROJECT EXECUTION
11.1 DELTA-T REPRESENTATIVES: Delta-T will keep a Project Manager
("Delta-T's Project Manager") assigned to the Work at all times during its
progress, and shall keep a Site Manager on the Work site on a daily basis
during the construction phase of the Work. Delta-T's Project Manager shall
represent Delta-T, and written communications given to Delta-T's Project
Manager or Delta-T's Site Manager shall be as binding as if given to Delta-T
itself. All communications to Delta-T's Project Manager or Site Manager by
Owner shall be confirmed in writing upon request by Delta-T.
11.2 OWNER REPRESENTATIVE: Owner will have at all times during the progress
of the Work, a competent representative ("Owner's Representative") assigned
to the Work. Owner's Representative shall represent Owner, and written
communications given to Owner's Representative shall be as binding as if
given to Owner itself. Owner shall have its Owner's Representative on site,
or available within 24 hours, at all times during the progress of the Work.
11.3 PROJECT REVIEWS AND APPROVALS:
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11.3.1 REVIEWS: Delta-T will, as appropriate, and additionally upon
Owner's request, issue a project progress schedule to Owner. Delta-T
shall provide Owner each week a two-week look ahead schedule. Delta-T
shall participate in weekly meetings to review the progress of the Work
at the Work site at Owner's request as set forth in Exhibit A. . Owner
may review and comment on any plan, drawing or specification, that
Delta-T delivers to Owner. No review or comment made by Owner shall
result in Owner's being deemed to have assumed any responsibility for
any of the Work. Delta-T shall attempt to incorporate Owner's comments
where it can do so without increasing Delta-T's cost, the time required
for performance, or any of its other obligations, but Delta-T shall have
no obligation to suspend work to allow time for review and comment
except as provided in the Schedule, or to incorporate any of Owner's
comments except as required in order to comply with Delta-T`s
obligations under the Contract, or as agreed under Section 6 above.
11.3.2 APPROVAL PROCESS: If Exhibit A or the Schedule provides for
approval by Owner of any portion of the Work or any document, then Owner
shall be deemed to have given its approval unless it delivers written
notice of its disapproval, and the specific reasons for its disapproval
within the time allowed according to the Exhibit or Xxxxxxxx.Xx the
event that the reason for disapproval by the reviewing Party results
from failure of the other Party ("submitting Party") to fulfill any of
its obligations under this Contract, then the submitting Party shall
correct the work or document requiring correction and resubmit it for
review. The reviewing Party shall have five (5) business days, or
one-half the time allowed according to the applicable Exhibit or
Schedule if such time is prescribed, for the initial review to approve
or disapprove the resubmitted work or document, and it shall be deemed
to have given its approval unless it delivers written notice of its
disapproval, and the specific reasons for its disapproval, within that
time. The review and resubmittal process shall continue in like manner
until the submitted Work is approved. In the event that any disapproval
results from a cause other than failure of the submitting Party to
fulfill any of its obligations under this Contract, the Schedule shall
automatically be extended as provided at Section 5.1 above.
11.4 SUBCONTRACTORS AND VENDORS:
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11.4.1 NOTICE OF SUBCONTRACTOR SELECTION: Delta-T shall, as soon as
practicable after award of the Contract, furnish in writing to Owner the
names of persons or entities (including those who are to furnish
materials or equipment fabricated to a special design) proposed for
major portions of the Work. Owner acknowledges that Delta-T,
particularly on large or fast-track projects, may not make final
selection of some subcontractor or vendors until later in the project,
and that Delta-T has the right to select subcontractors and vendors as
long as the selection would not result in failure to satisfy the
requirements of this Contract. The subcontracting of any portion of the
Work, as described in Exhibit A, shall not relieve Delta-T of
responsibility for performance of the Work as provided therein.
Notwithstanding the foregoing, Delta-T shall have the right to
subcontract such portions of the Work as it shall determine to be
necessary to others which, in turn, shall have the right to subcontract
such portions of the Work assigned to them, if any, as they shall deem
necessary.
12. WARRANTY
12.1 EQUIPMENT WARRANTIES: Delta-T shall, for the protection of Owner,
assign to Owner all warranties and guarantees supplied by all vendors and
subcontractors from who it procured goods or services incorporated into the
Project. In addition, Delta-T warrants to Owner that the Equipment will be
free from mechanical defects, structural defects and defects in material and
workmanship until twelve (12) months from completion of the Performance
Test,. OWNER'S SOLE AND EXCLUSIVE REMEDY IN CASE OF BREACH OF THIS WARRANTY
SHALL BE REPAIR OR REPLACEMENT AS PROVIDED IN THIS SECTION 12.1. If any
defect covered by the above warranties is discovered within the warranty
period, Delta-T shall, subject to the provisions set forth below, repair or
replace the defective material or Equipment. The decision to repair or
replace shall be made by Owner. If Owner and Delta-T do not agree on whether
repair or replacement is the most appropriate remedy, and if the remedy
recommended by Delta-T would not impair the performance of the Work or
otherwise materially diminish the value of the Work, then Delta-T shall not
be required to perform the remedy elected by Owner unless Owner pays Delta-T
the excess cost of performing such remedy over and above the cost of
performing the remedy recommended by Delta-T. Delta-T shall in no case have
any liability, under this warranty or otherwise, for any defect or
deterioration which results from failure of Owner to provide any feedstock,
utilities, or other supplies, services or conditions specified in Exhibit C,
force majeure, improper operation or maintenance including damage caused by
freezing, foreign substance or impurity introduced into the equipment, or
any other matter not within Delta-T's control.
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12.2 DESICCANT MATERIAL: Delta-T warrants that the molecular sieve desiccant
will not deteriorate due to mechanical abrasion to such an extent as to
reduce the dehydration capacity of the molecular sieve below the level
specified in the Performance Guarantee set forth at Exhibit D for a period
of five years from twelve (12) months from the completion of the Performance
Test. OWNER'S SOLE AND EXCLUSIVE REMEDY UNDER THIS WARRANTY SHALL BE
REPLACEMENT OF THE DESICCANT MATERIAL AS PROVIDED IN THIS SECTION 12.2.
Replacement shall be made at no cost to Owner in the event of a claim under
this warranty within one year after Final Acceptance. With respect to any
claim made thereafter, the desiccant replacement cost to Owner shall be pro
rated, on a daily basis, on the basis of the number of days remaining in the
last four (4) years of the warranty period. As an example, Owner would pay
50% of the cost of replacement desiccant if the original desiccant had to be
replaced exactly three (3) years from the commencement of the warranty
period (100% x 730th day/ 1460 total Days).
12.3 PROFESSIONAL SERVICES: Delta-T warrants, for a period ending one year
after Final Acceptance, or the last date on which Delta-T performed work
under this Contract if this Contract is terminated for any reason prior to
Final Acceptance, that the services provided by it hereunder will be
provided with reasonable skill and care of the type normally exercised by
other design professionals under similar circumstances. Delta-T shall not
have any obligation or liability for failures or defects due to ordinary
wear and tear, corrosion or erosion, or as a result of improper operation,
improper maintenance or operating conditions more severe than, or different
from, those contemplated in the original design of the Work.
12.4 LABOR: Delta-T warrants to Owner that the labor performed and materials
supplied will be free from defects in workmanship and will be of good
quality until twelve (12) months from completion of the Performance Test.
OWNER'S SOLE AND EXLCUSIVE REMEDY IN CASE OF BREACH OF THIS WARRANTY SHALL
BE REPAIR OR REPLACEMENT AS PROVIDED IN THIS SECTION 12.4. If any defect
covered by the above warranties is discovered within the warranty period,
Delta-T shall, subject to the provisions set forth below, repair or replace
the defective workmanship. The decision to repair or replace shall be made
by Owner. If Owner and Delta-T do not agree on whether repair or replacement
is the most appropriate remedy, and if the remedy recommended by Delta-T
would not impair the performance of the Work or otherwise materially
diminish the value of the Work, then Delta-T shall not be required to
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perform the remedy elected by Owner unless Owner pays Delta-T the excess
cost of performing such remedy over and above the cost of performing the
remedy recommended by Delta-T. Delta-T shall in no case have any liability,
under this warranty or otherwise, for any defect or deterioration which
results from failure of Owner to provide any feedstock, utilities, or other
supplies, services or conditions specified in Exhibit C, force majeure,
improper operation or maintenance including damage caused by freezing,
foreign substance or impurity introduced into the equipment, or any other
matter not within Delta-T's control
12.5 PROCESS WARRANTY: Delta-T warrants that the Plant will perform as set
forth in Exhibit D during the Performance Test. Delta-T shall not have any
obligation or liability for failures or defects due to ordinary wear and
tear, corrosion or erosion, or as a result of improper operation, improper
maintenance or operating conditions more severe than, or different from,
those contemplated in the original design of the Work. OWNER'S SOLE AND
EXCLUSIVE REMEDY FOR BREACH OF THIS WARRANTY IS PAYMENT BY DELTA-T OF
LIQUIDATED DAMAGES AS SET FORTH AT EXHIBIT D.
12.6 NO OTHER WARRANTIES: Delta-T's sole warranties to Owner under this
Contract are the warranties set forth in this Section 12 and in Exhibit D.
OWNER HEREBY ACKNOWLEDGES AND AGREES THAT DELTA-T MAKES NO OTHER WARRANTY
UNDER OR BY VIRTUE OF THIS CONTRACT, WHETHER EXPRESS OR IMPLIED, AND WHETHER
RELATED TO GOODS OR SERVICES, AND THAT DELTA-T MAKES NO WARRANTY OF ANY KIND
TO ANYONE OTHER THAN TO OWNER.
12.7 NOTICE OF WARRANTY CLAIM: Owner shall notify Delta-T of any defect
covered by the warranty set forth in Section 12.5 and Exhibit D as provided
at Exhibit D, and shall notify Delta-T in writing of any defect covered by
any other warranty within thirty (30) Days after discovering such defect,
and in no case later than thirty (30) Days after expiration of the
applicable warranty period.
12.8 PERFORMANCE IN EXCESS OF GUARANTEES: Performance of the Plant in excess
of the performance guarantees shall in no way be construed to void the
warranties set forth herein.
13. TRANSFER OF TITLE AND RISK OF LOSS
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Title to, and risk of loss of, the Equipment or any part thereof and all
materials and components used, or to be used in the Plant, shall pass to Owner
upon delivery to the Work site. This provision, however, shall in no case be
deemed to alter any of the rights or obligations of any party under any
insurance policy provided under Exhibit G, or any waiver of subrogation set
forth in Section 14 below.
14. INSURANCE
14.1 REQUIRED INSURANCE: Each Party shall carry the insurance coverage
described in Exhibit G as insurance to be carried by it.
14.2 ADJUSTMENT OF LOSS: Any loss insured under property or builders risk
insurance required under this Section 14 shall be adjusted by the insurance
carrier with the insured as fiduciary for the other party or parties whose
interests are insured thereunder as their interests may appear, and the
insured shall pay the proceeds due to them promptly. The insured shall bear
the costs of the deductible, if any, under such policy.
14.3 WAIVER OF SUBROGATION: Owner and Delta-T intend that all builder's risk
policies purchased, or required to be purchased, in accordance with Exhibit
G will protect Owner, Delta-T and all subcontractors at any tier, and will
provide primary coverage for all losses and damages caused by the perils or
causes of loss covered thereby. Owner and Delta-T waive all rights against
each other and their respective subcontractors, officers, directors, agents
and employees of the other arising out of or resulting from any of the
perils or causes of loss covered by such policies and any other property
insurance during the period prior to Final Completion and payment of all
amounts due to Delta-T under this Contact. None of the above waivers shall
extend to the rights that any Party making such waiver may have to the
proceeds of insurance held by Owner as trustee or otherwise payable under
any policy so issued. In addition, Owner waives all rights against Delta-T,
its subcontractors at any tier and the officers, directors and employees and
agents of any of them for business interruption and any other consequential
damages caused by, arising out of or resulting from any such insured perils
or causes of loss or any other peril or cause of loss whether or not
insured. All policies required under the Contract shall be endorsed to
include such waivers of subrogation, or confirmation of such waivers shall
appear on the certificates of insurance required to be delivered under
Section 14.4 below. Owner and the Delta-T shall require from each of their
contractors and subcontractors who do work on the Project similar waivers,
each in favor of the other parties enumerated in this Section.
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14.4 CERTIFICATES OF INSURANCE: Before commencing the Work, Delta-T and
Owner shall each furnish the other with certificates evidencing the coverage
required under Exhibit G from the insurance company or companies carrying
the aforesaid coverage. These certificates will provide that the policies
may not be amended or terminated unless at least thirty (30) days prior
written notice is given to Owner and Delta-T. Failure of either Party to
demand any such certificate prior to commencement of the Work shall not,
however, be deemed to relieve any Party of its obligation to carry such
insurance.
15. INDEMNITY
15.1 INDEMNITY BY DELTA-T FOR PERSONAL INJURY AND PROPERTY DAMAGE: Delta-T
shall indemnify and hold harmless Owner and its agents and employees from
and against all claims made by a third party for any, damages, losses and
expenses, including, but not limited to attorney's fees, arising out of or
resulting from Delta-T's performance of the Work, provided that any such
damage, loss or expense: (1) is attributable to bodily injury, sickness,
disease or death, or to injury to or destruction of tangible property (other
than the Plant, Equipment or the Work itself) and (2) is caused in whole or
in part by any negligent act or omission of Delta-T, its subcontractors, or
anyone for whose acts Delta-T is liable. In the event that any such damage,
loss or expense was caused in part by Owner or by any other person or
entity, however, then Delta-T shall be obliged to pay only the portion of
the damage, loss or expense, including reasonable attorney's fees as is
attributable to its relative share of the negligence or omission which
caused such damage, loss or expense.
15.2 INDEMNITY BY DELTA-T FOR INTELLECTUAL PROPERTY: Notwithstanding
anything to the contrary herein, Delta-T hereby warrants that the Plant, and
the use thereof in an application described in the process description set
forth at Exhibit A, as delivered by Delta-T under this Contract, when
operated in accordance with Delta-T's operating instructions, will not
infringe any United States patent, copyright, any trade secret, or any other
intellectual property right held by others. Delta-T further agrees, upon
receipt of notification from Owner of a lawsuit or claim against Owner for
such an infringement, to promptly defend such claim with competent counsel
of its own choosing. Delta-T further agrees, to indemnify Owner against any
royalties, damages, orders, and court costs, awarded by a final,
non-appealable judgment resulting from a finding of an infringement covered
by this indemnity, or the settlement of a claim indemnifiable under this
Section 15.2.
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15.3 CONDITIONS TO INDEMNITY: The indemnities set forth in Sections 15.1 and
15.2 above all shall not apply to any design, process or product of a
particular manufacturer or manufacturers, which is specified by Owner. These
indemnities are valid only if (a) Owner gives notice of any claim or lawsuit
for which it claims indemnity within time sufficient for Delta-T to contest
such claim, (b) Owner cooperates fully and promptly with Delta-T in the
defense thereof at Owner's expense for all items related to such defense for
time of witnesses who are employees of Owner, costs related to travel,
production of documents, fees for any counsel it elects to assist it in
addition to counsel appointed by Delta-T for defense of the claim, and (c)
Delta-T has full authority in defense of such lawsuit or claim and to settle
such claim, provided that, it pays to Owner the cost, if any, of any change
in operations resulting from such settlement. In no case shall Delta-T be
liable under Sections 15.1 or 15.2 for any amount, including costs and
attorney's fees, in excess of the limit set forth at Section 16 below.
15.4 INDEMNITY BY OWNER: Owner shall indemnify and hold harmless Delta-T
and its agents and employees from and against all damages, losses and
expenses, including but not limited to attorney's fees, and arising or
resulting from a claim, order, requirement or charge made or brought by a
third party or by the federal, state or local government, or any department,
agency or subdivision thereof, based, in whole or in part, on: (a) defects
in title; (b) Owner's negligence; (c) hazardous materials, unless such
materials were brought on the Site by Delta-T or its subcontractors; (d) the
existence of any substance located on or under the Work site, unless such
substance was brought on the Site by Delta-T or its subcontractors; (e) a
condition of the Work site subject to any law or regulation related to
protection of the environment; or (f) any other matters for which Owner
shall have responsibility pursuant to this Contract. This indemnification is
valid only if (a) Delta-T gives notice of any claim or lawsuit for which it
claims indemnity within time sufficient for Owner to contest such claim, (b)
Delta-T cooperates fully and promptly with Owner in the defense thereof at
its expense for all items related to such defense for time of witnesses who
are employees of Delta-T, costs related to travel, production of documents,
fees for any counsel it elects to assist it in addition to counsel appointed
by Owner for defense of the claim, and (c) Owner has full authority in
defense of such lawsuit or claim and to settle such claim, provided that
such settlement requires payment of monetary damages only and that Owner
can, and does, pay the full cost of any such settlement.
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16. LIMITATION OF LIABILITY
In no case shall Delta-T or Owner have any liability to the other under or
arising from any performance, delay in performance, or breach of this Contract
for any indirect, incidental, reliance, punitive, exemplary, or consequential
damages (including, without limitation, lost profits, increase in costs of goods
or services resulting from delay, cost of capital or losses due to business
interruption) whether based on contract, tort or other legal theory, whether or
not Delta-T had knowledge of the damages that might result, except as expressly
provided otherwise under these General Conditions and except in case of breach
of Section 17 below, to which this limitation shall not apply. Subject to the
limitations set forth in this paragraph, nothing shall preclude Delta-T or Owner
from recovering direct damages. Furthermore, Delta-T's maximum cumulative
liability for any and all direct damages under this Contract, including without
limitation liquidated damages payable Exhibit D, shall be as follows:
1. 100% of the Contract Sum as set forth in paragraph 8.1 beginning at
commencement of the Project. (For purposes of paragraph 16 only, the computation
of the Contract Sum shall not include any Change Orders as provided for in this
Agreement.) The 100% of Contract Sum maximum liability shall be reduced in
amounts equal to the payments made by Owner to Delta-T under this Agreement.
Once the Owner has paid Delta-T 50% of the Contract Sum, Delta-T's maximum
liability shall remain fixed at 50% of the Contract Sum until such time as the
Plant reaches Mechanical Completion.
2. Once the Plant reaches Mechanical Completion, Delta-T's maximum
cumulative liability shall be reduced to Thirteen Million Dollars
($13,000,000.00), inclusive of the Retainage provided for under this Agreement.
Delta-T's maximum liability shall remain fixed at $13,000,000.00 until such time
as the Plant reaches 90% of the Performance Guaranty values set forth in this
Agreement.
3. Upon reaching 90% of the Performance Guaranty amounts, Delta-T's
maximum cumulative liability shall be reduced to the amount of the Retainage
which shall be released pursuant to Exhibit B.
The limitations set forth in this Section shall not apply to limit or
restrict available insurance nor shall it effect warranty or indemnification
obligations hereunder.
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17. CONFIDENTIALITY
17.1 CONFIDENTIAL INFORMATION: Owner shall not use any Confidential
Information for any purpose other than the purposes permitted under this
Contract and shall not use any Delta-T Technology except as permitted under
Section 17.2. Furthermore, Owner shall not disclose any Delta-T Technology
or other Confidential Information to, or permit the visual inspection of the
Equipment, Plant or Work embodying any Confidential Information by, any
person or entity other than its employees who need to have access to such
data in order to operate the Plant, any consulting engineers retained by
Owner, or representatives of the construction lender unless (a) such access
is required by local, state or federal regulatory authorities, or (b) it is
necessary to do so in order to maintain or repair the Plant or to facilitate
interface of connection of the Equipment to other equipment or facilities of
Owner, and Owner has complied with the first right of refusal requirements
of Section 17.3 below; and (c) Owner first obtains a signed confidentiality
agreement from such person in the form attached hereto as Exhibit H and
provided a copy of the same to Delta-T. In addition to the foregoing,
Delta-T shall have the right to reasonably object to Owner's request to
disclose Confidential Information to third parties. Furthermore, Owner shall
not disclose any Confidential Information to any of its employees other than
those who have been made aware of and agreed to comply with the
non-disclosure provisions of this Section 17.1. Owner shall not disclose any
Confidential Information pursuant to court order or other legal process
unless it is advised by its legal counsel that it is legally required to do
so; it has promptly given Delta-T notice of such order or process so that
Delta-T can seek to obtain a secrecy order; and, it uses all other
reasonable means to ensure the confidential treatment of such information.
In particular, but without limitation, in no event will Owner knowingly
allow an entity that is a competitor of Delta-T to tour the Plant, or to
provide maintenance or other services that would expose it to Delta-T
Technology, as long as there is a reasonably feasible alternative to
complete the maintenance through Delta-T or a non-competitor of Delta-T. A
"competitor" for this purpose shall mean entities listed on Exhibit I, and
such other entities as Delta-T may advise Owner from time to time in
writing. Owner shall maintain a log of each individual (other than its
employees and contractors) who has access to the Delta-T Technology, and the
date and purpose for such access. Owner shall provide a copy of such log to
Delta-T upon request.
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17.2 LICENSE OF DELTA-T TECHNOLOGY: Owner acknowledges that Delta-T is and
shall remain the sole owner of the Delta-T Technology, and of the copyrights
in all the drawings, manuals and other documents provided by Delta-T under
this Agreement. Delta-T grants to Owner, subject to the conditions of this
Agreement, a non-exclusive, paid-up, non-transferable right to use in
perpetuity the Delta-T TECHNOLOGY, without right to grant such rights to
others, solely for the purposes of:
a. Use and operation of the Plant.
b. Maintenance, repair, and optimization or enhancement of the
Plant.
Optimization and enhancement, for this purpose, shall include
de-bottlenecking, but shall not include expanding the physical dimensions of
the distillation columns and molsieve vessels specified in the design, or
adding to the original number of distillation columns and molsieve vessels
delivered by Delta-T under this Contract. Delta-T agrees that if Owner
wishes to expand or add distillation columns or molsieve vessels in order to
increase the production capacity of the Plant, Delta-T shall negotiate in
good faith with Owner to agree to a grant of rights, and corresponding
technology fee, to allow for such expansion or addition. The right granted
under this Section 17.2 shall become effective only upon payment in full of
the entire amount due to Delta-T under Section 8 above, and Owner shall have
no right to use any such Delta-T Technology, for any purpose other than
Plant Startup and conducting the Performance Test until the payment of all
such amounts is made per the terms of this Contract.
17.3 FIRST RIGHT OF REFUSAL: Owner shall not disclose any Delta-T Technology
for the purpose of maintenance or repair of the Plant to anyone other than
its employees or other entities who need to have access for those purposes
unless (a) Owner first obtains a fully executed Non-Disclosure Agreement in
a form identical to Exhibit H from each such person or entity who may be
exposed in any way to Delta-T's Technology and (b) Owner provides Delta-T
with a copy of such fully executed Non-Disclosure Agreement.
18. DISPUTE RESOLUTION
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18.1 EXECUTIVE CONFERENCE OR MEDIATION: In the event of any controversy or
claim arising out of or related to this Contract, or the interpretation,
termination or breach hereof, other than default in payment due under
Section 8 above which shall be subject to the provisions of this Section at
Delta-T's option, the Parties shall, upon the written request of either of
them, attempt to resolve the matter by agreement of the representatives of
the Parties. Such representatives shall be at least one management level
above the individuals who have had direct responsibility for performance of
the Contract, or the highest level of management of any Party whose highest
level of management has had direct responsibility for such performance. Such
representatives shall meet in person or by telephone or teleconference at
least once, and shall attempt to resolve any matter raised by either of them
by the written notice requesting such resolution for a period of at least
thirty (30) Days. In the event that the Parties are unable to resolve the
dispute by agreement of such representatives within such thirty (30) Day
period, then at the written request of either Party, the Parties shall
submit the matter to mediation under the then current rules of mediation and
conciliation of the American Arbitration Association. The Parties shall
attempt to resolve any matter submitted to mediation under this Section 18.1
within thirty (30) Days after the date of delivery of the written request
for mediation.
18.2 ARBITRATION: Any controversy or claim arising out of or related to this
Contract, or the interpretation, termination or breach hereof, which cannot
be resolved by mutual agreement of the parties or by mediation within the
time periods provided at Section 18.1 above shall be submitted to binding
arbitration in accordance with the applicable rules of the American
Arbitration Association. The place of arbitration shall be Nebraska. Neither
Party shall submit any such matter to arbitration unless the parties have
been unable to resolve it by mediation for a period of at least thirty (30)
days after the date of request for mediation. Any party who files a notice
of demand for arbitration must assert in the demand all claims then known to
that party against the other. Judgment upon any award rendered by an
arbitrator or arbitrators under this Contract may be entered upon it in
accordance with applicable law in any court having jurisdiction thereof, but
either party hereto shall have the right to contest such award on the
grounds that it is contrary to applicable law.
18.3 INJUNCTIVE RELIEF: Notwithstanding the foregoing, Delta-T may seek
injunctive relief from any court of competent jurisdiction at any time in
case of a breach of Section 17 above.
18.4 ATTORNEY'S FEES AND COSTS: All costs, expenses and attorney's fees
resulting from the litigation or arbitration of any claim under this
Contract shall be paid by the losing party to the prevailing party,
considering the totality of the circumstances, including any offers of
settlement.
30
19. FORCE MAJEURE
19.1 No delay in, or failure of, performance by either Party under this
Contract will constitute default hereunder or give rise to any claim for damages
if and to the extent caused by an occurrence beyond the control of the party
affected, to include but not limited to, acts of governmental authority, acts of
God, strikes or other concerted acts of workmen, fire, flood, abnormal weather,
explosions, riots, war, rebellion or sabotage.
19.2 Adjustments to all scheduled dates shall be made as a result of a
delay caused by a Force Majeure Event and shall be equal to the actual number of
days of delay incurred by Delta-T or its subcontractors.
20. GENERAL PROVISIONS
20.1 ASSIGNMENT: Neither Delta-T nor Owner shall assign or transfer its
duties or obligations hereunder without the prior written consent of the
other, which consent shall not be unreasonable withheld. This Contract shall
be binding upon and shall inure to the benefit of the Parties and the
successors and permitted assigns of Owner and Delta-T.
20.2 ENTIRE CONTRACT; WAIVER; AMENDMENT: These General Conditions and the
attached Exhibits constitute the full and complete contract between the
parties hereto with respect to the subject matter hereof. There are no
statements, agreements, understandings, representations or trade customs of
any kind, express or implied, concerning the subject matter which are not
merged herein or superseded hereby. A waiver of any of the terms of this
Contract shall not bind either party unless signed by one of its duly
authorized representatives. Waiver by either Party of any default by the
other party hereunder shall not be deemed a waiver by such Party of any
default by the other which may occur thereafter. This Contract may only be
modified or amended by an agreement in writing executed by both Parties
hereto.
20.3 GOVERNING LAW: The validity, performance, construction and effect of
this Contract shall be governed by the laws of the state in which the work
is performed.
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20.4 NOTICES: ALL notices provided for herein will be considered as properly
given if in writing and delivered personally or, by fax or sent properly
addressed, postage pre-paid:
If to Delta-T, to: 000 Xxxxxxxxx Xxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000 XXX
Attn: Xxxxxx Xxxxx, VP & CFO
If to Owner, to: Xxxxxx Xxxxxxxxx
President-General Manager
87590 Hillcrest Road
P.O. Box 391
Xxxxxxxx, Nebraska 68713
Notices shall be deemed effective upon actual receipt, or in the case of
posting in the U. S. mail, on the fourth Day after mailing.
20.5 SURVIVAL: Sections 16, 17.1, 18, 19, and 20 shall survive termination
of this Contract.
20.6 THIRD PARTIES: The Parties agree that this Contract is not intended by
either Party to give any benefits, rights, privileges, actions or
remedies to any person, partnership, firm or corporation (other than a
Party or its permitted assignee) as a third party beneficiary under
any theory of law.
20.7 EQUAL BARGAIN AND REPRESENTATION: The Parties have participated
jointly in the negotiations and drafting of this Contract. In the
event that an ambiguity or question of intent or interpretation
arises, this Contract shall be construed as if drafted jointly by the
Parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement. Each of the Parties acknowledges
that it has been represented by legal counsel of its own choice
throughout all negotiations, preparation, review and execution of this
Contract, and that each Party has executed this Contract voluntarily
and with the consent and on the advice of any such legal counsel. In
entering into this Contract, each Party has undertaken such factual
inquiry as it has deemed necessary and has relied solely on that
inquiry and not on statements or representations of the other Party.
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21. PROCEEDING BEFORE FINANCIAL CLOSING
21.1 The Owner has the option to request that Delta-T initiate engineering
tasks prior to financial closing. If this option is elected, until
such time as Owner notifies DELTA-T that Owner has secured financing
sufficient to permit Owner to pay all its financial obligations in
connection with building of the Plant upon terms acceptable to Owner,
(the "Financing"), DELTA-T shall only perform (i) the tasks described
on Exhibit J and (ii) such other portions of the Work as Owner may
from time to time specifically request and as DELTA-T may agree in a
writing signed by it to perform. DELTA-T shall have the right to
receive from Owner reasonable assurance of Owner's ability to pay for
Work that Owner asks it to perform prior to performing any such Work
until such time as DELTA-T shall have received written notice from the
Owner, and evidence reasonable acceptable to DELTA-T, that the
Financing has been secured. If this option is elected, Owner shall
provide DELTA-T a topographical and legal survey of the Plant site,
and the amount due to DELTA-T under Exhibit B-3, prior to commencement
of Work under this Section 21. DELTA-T's commencement of Work under
this Section 21 shall in no case be deemed a waiver of Owner's
obligation to provide the items that it is required to provide under
Section 3 above prior to performing Work other than the Work described
on Exhibit J.
21.2 If DELTA-T does not receive notice that Financing has been secured on
or before September 15, 2006, then DELTA-T may terminate this
Agreement at any time thereafter without penalty or expense of any
kind upon at least 30 days' written notice of its intent to terminate.
In such case, the termination shall become effective at the end of the
notice period unless DELTA-T receives notice of Owner's receipt of
Financing prior to the effective date of termination. Upon termination
under this Section, Owner's rights in the DELTA-T technology under
Section 17.2 above shall immediately cease, and Owner shall return all
documents and other materials containing any such technology to
DELTA-T and certify to DELTA-T in writing that it has done so. Upon
such termination, neither Party shall have any obligations to the
other under this Agreement (except for such obligations as survive
under Section 20 above), except that Owner shall be obligated to pay
DELTA-T for all Work performed by DELTA-T prior to date of such
termination.
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WITNESS WHEREOF, the parties hereto have executed this Contract to be
effective on the 9th day of August, 2006.
DELTA -T CORPORATION NEDAK ETHANOL, LLC
BY: /S/ XXXXX XXXXXXXX BY: /S/ XXXXXXX XXXXX
------------------------ ----------------------------
XXXXX XXXXXXXX, VP OF OPERATIONS XXXXXXX XXXXX, CHAIRMAN
BY: /S/ XXXXX XXXXX
----------------------------
XXXXX XXXXX
CHAIRMAN OF ENERGY AND
DESIGN COMMITTEE
BY: /S/ XXXXXX XXXXXXXXX
----------------------------
XXXXXX XXXXXXXXX, PRESIDENT
34
NEDAK EPC Contract
Exhibit A Scope of Work
EXHIBIT A*
SCOPE OF WORK
A.1 DELTA-T'S SCOPE OF SERVICES
A.2 DELTA-T TECHNICAL SPECIFICATIONS
A.3 OWNER'S SCOPE OF SERVICES
*EXHIBIT A HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
35
NEDAK EPC Contract
Exhibit B Commercial Terms
EXHIBIT B*
COMMERCIAL TERMS
B.1 PRICE
B.2 PAYMENT TERMS
B.3 SCHEDULE OF PAYMENTS
B.4 FORM OF INVOICE
*EXHIBIT B HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
36
NEDAK EPC Contract
Exhibit C Performance Test Protocols
EXHIBIT C*
PERFORMANCE TEST PROTOCOLS
*EXHIBIT C HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
37
NEDAK EPC Contract
Exhibit D Performance Guarantees
EXHIBIT D*
PERFORMANCE GUARANTEES
*EXHIBIT D HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
38
NEDAK EPC Contract
Exhibit E Mechanical Completion, Commissioning, Startup
EXHIBIT E*
MECHANICAL COMPLETION, COMMISSIONING, STARTUP
*EXHIBIT E HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
39
NEDAK EPC Contract
Exhibit F Project Schedule
EXHIBIT F*
PROJECT SCHEDULE
*EXHIBIT F HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
40
NEDAK EPC Contract
Exhibit G Insurance
EXHIBIT G*
INSURANCE
*EXHIBIT G HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
41
NEDAK EPC Contract
Exhibit H Non-Disclosure Agreement
EXHIBIT H*
NON-DISCLOSURE AGREEMENT
*EXHIBIT H HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
42
NEDAK EPC Contract
Exhibit I List of Competitors
EXHIBIT I*
LIST OF COMPETITORS
*EXHIBIT I HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
43
EXHIBIT J*
PRE-FINANCING WORK
*EXHIBIT J HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
44
NEDAK EPC Contract
Exhibit J Application and Certificate for Payment
EXHIBIT J* APPLICATION AND CERTIFICATE FOR PAYMENT
--------------------------------------------------------------------------------
*EXHIBIT J HAS BEEN OMITTED IN ITS ENTIRETY PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
45
