EXHIBIT 10.7
AGREEMENT
BETWEEN OWNER AND DESIGN/BUILDER ON THE BASIS OF A
STIPULATED PRICE
THIS AGREEMENT is made and entered into
this 26th day of August, 20O4 by and
between Western Plains Energy, LLC, a
Kansas limited liability company
(hereinafter called OWNER) and ICM, Inc., a
Kansas corporation (hereinafter
called DESIGN/BUILDER).
OWNER and DESIGN/BUILDER, in consideration
of the mutual covenants hereinafter
set forth, agree as follows:
Article 1. THE PROJECT AND WORK.
1.01. DESIGN/BUILDER shall complete all
Work for the Project as specified or
indicated in the Contract Documents. The
Project is generally described as the
expansion of the dry mill fuel-grade
ethanol plant of OWNER located near Campus,
Kansas that increases the capacity of said
plant from 30 million gallons per
year of denatured fuel-grade ethanol to 40
million gallons per year. The
DESIGN/BUILDER'S Work includes engineering
services, labor, materials, and
equipment in connection with such
expansion. A more specific statement of the
scope of work to be provided by
DESIGN/BUILDER is described in Exhibits A and B.
Article 2. CONTRACT TIMES.
2.01. Days to Achieve Substantial
Completion and Final Payment. The Work will be
Substantially Completed within 240 days
after the date when the Contract Times
commence to run as provided in paragraph
2.01.A of the General Conditions, and
completed and ready for final payment of
the Contract Price in accordance with
paragraph 13.08 of the General Conditions
within 60 days after Substantial
Completion, unless otherwise provided in
the Contract Documents.
Article 3. CONTRACT PRICE.
3.1. OWNER shall pay DESIGN/BUILDER the
Contract Price for completion of the
Work in accordance with the Contract
Documents. The Contract Price may be
adjusted as provided by the General
Conditions. For all items included in the
Base Scope of Work, OWNER shall pay to
DESIGN/BUILDER a price equal to Four
Million Dollars ($4,000,000). For those
items listing in the Additional Scope of
work the owner shall pay Design/Builder a
price equal to cost +10%.
DESIGN/BUILDER to provide budget to prior
to starting work.
3.2. Unless otherwise expressly agreed by
the parties, the Work to be performed
by DESIGN/BUILDER shall include only those
items listed in Exhibits A and B.
Owner shall be responsible for any and all
other items relating to such
expansion.
3.03 DESIGN/BUILDER agrees to maintain the
insurance coverage's, limits, and
deductibles set forth in Exhibit D.
Article 4. PAYMENT PROCEDURES
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<PAGE>
4.01 Payment of Contract Price.
DESIGN/BUILDER shall submit and OWNER will
process Applications for Payment of the
Contract Price in accordance with
Article 13 of the General Conditions and
Sections 4.01.A. through C. below.
A. Down Payment.
On or before delivery of the Notice to Proceed, OWNER
shall make a down payment of One Million
Dollars ($1,000,000) to DESIGN/BUILDER.
B. Progress
Payments. OWNER shall make progress payments on account of Two
Million Five Hundred Thousand Dollars
($2,750,000) of the Contract Price on the
basis of DESIGN/BUILDER'S Applications for
Payment. Progress payments shall be
due and payable in accordance with 13.04 of
the General Conditions. All such
payments will be measured by the acceptable
Schedule of Values established under
paragraph 2.06.A of the General Conditions.
No retainage will be withheld from
such payments.
C. Final
Payment. OWNER shall pay the remaining Five Hundred Thousand
Dollars ($250,000.00) of the Contract Price
to DESIGN/BUILDER in accordance with
paragraph 13.08 of the General
Conditions.
Article 5. INTEREST.
5.01. All moneys not paid by OWNER to
DESIGN/BUILDER when due hereunder shall
bear interest at the rate of Eighteen
Percent (18%) per annum, compounded
monthly, from the due date thereof.
Article 6. DESIGN/BUILDER'S
REPRESENTATIONS.
6.01. DESIGN/BUILDER makes the following
representations:
A.
DESIGN/BUILDER has examined and carefully studied the Contract
Documents
listed in Sections 7.01.A through C, and,
to the extent prepared (but not yet
approved by OWNER) prior to the Effective
Date, the documents described in
Section 7.01.D.3 and .4.
B.
DESIGN/BUILDER is familiar with and is satisfied as to all
federal,
state and local Laws and Regulations in
existence on the Effective Date that may
affect cost, progress, performance,
furnishing, and completion of the Work in
accordance with the Contract Documents.
C.
DESIGN/BUILDER is familiar with the work to be performed by OWNER
and
others at the Site that relates to the Work
as indicated in the Contract
Documents.
D.
DESIGN/BUILDER has correlated the information known to
DESIGN/BUILDER,
reports and drawings identified in the
Contract Documents, and all additional
examinations, investigations, tests,
studies and data with the Contract
Documents.
E.
DESIGN/BUILDER has given OWNER written notice of all conflicts,
errors,
ambiguities or discrepancies that
DESIGN/BUILDER has discovered in the Contract
Documents and the written resolution
thereof by OWNER is acceptable to
DESIGN/BUILDER, and the Contract Documents
are sufficient to indicate and convey
understanding of all terms and conditions
for performance and furnishing of the
Work.
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<PAGE>
Article 7. CONTRACT DOCUMENTS.
7.01. The Contract Documents which comprise
the entire agreement between OWNER,
and DESIGN/BUILDER concerning the Work
consist of the following:
A. This
Agreement (pages 1 to 4, inclusive).
B. Exhibits to
this Agreement (A to D, inclusive).
C. General
Conditions of the Contract Between Owner and Design/Builder
(pages 1 to 34, inclusive).
D. The following
which may be delivered, prepared, or issued after the
Effective Date of this Agreement and are
not attached hereto.
1. Notice to
Proceed.
2. All Written
Amendments and other documents amending, modifying or
supplementing the Contract Documents
pursuant to paragraph 3.03.A of the General
Conditions.
3.
Specifications as defined in paragraph 1.01.A.32 of the General
Conditions.
4. Drawings as
defined in paragraph 1.01.A.16 of the General Conditions.
7.02. There are no Contract Documents other
than those listed above in this
Article 7. The Contract Documents may only
be amended, modified or supplemented
as provided in paragraph 3.03.A of the
General Conditions.
Article 8. MISCELLANEOUS.
8.1. The attached General Conditions of the
Contract between Owner and
Design/Builder are referred to herein as
the General Conditions.
8.2. Terms used in this Agreement which are
defined in Article 1 of the General
Conditions will have the meanings indicated
therein.
8.3. No assignment by a party hereto of any
rights under or interests in the
Contract Documents will be binding on
another party hereto without the written
consent of the party sought to be bound,
which consent shall not be unreasonably
withheld; and, specifically but without
limitation, moneys that may become due
and moneys that are due may not be assigned
without such consent (except to the
extent that the effect of this restriction
may be limited by law), and unless
specifically stated to the contrary in any
written consent to an assignment no
assignment will release or discharge the
assignor from any duty or
responsibility under the Contract
Documents.
8.4. OWNER and DESIGN/BUILDER each binds
itself, its successors, assigns and
legal representatives to the other party
hereto, its successors, assigns and
legal representatives in respect to all
covenants, agreements and obligations
contained in the Contract Documents.
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8.5. Any provision or part of the Contract
Documents held to be void or
unenforceable under any Law or Regulation
shall be deemed stricken, and all
remaining provisions shall continue to be
valid and binding upon OWNER and
DESIGN/BUILDER, who agree that the Contract
Documents shall be reformed to
replace such stricken provision or part
thereof with a valid and enforceable
provision that comes as close as possible
to expressing the intention of the
stricken provision.
8.6. This Agreement may be executed in any
number of counterparts, each of which
shall be deemed to be an original and all
of which shall constitute one
agreement that is binding upon all of the
parties hereto, notwithstanding that
all parties are not signatories to the same
counterpart. Facsimile signatures of
the parties hereto shall be binding.
8.7. This Agreement will be effective on
the date first written above. Within
sixty (60) days of such effective date,
OWNER shall provide to DESIGN/BUILDER
the Notice to Proceed and evidence,
acceptable to DESIGN/BUILDER, of funding for
the Project.
IN WITNESS WHEREOF, OWNER and
DESIGN/BUILDER have signed this Agreement on the
date first written above.
OWNER: Western Plains Energy, LLC
DESIGN/BUILDER: ICM, Inc.
By: /s/ Michael J. Erhart
By: /s/ Dave
Vander Griend
-----------------------
----------------------
Title: CEO/General Manager
Title: CEO
Addresses for giving notices and
representatives:
Name: Michael J. Erhart
Name: Dave Vander
Griend
Title: CEO/General Manager
Title: CEO
Address: 3022 County Rd 18, Oakley, KS
Address: 310 N. First
Street
Colwich, KS
Phone: 785-672-8810
Phone:
316-796-0900
Facsimile: 785-672-4494
Facsimile:
316-796-0570
JDJ
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Exhibit A
to
Agreement Between Owner and Design/Builder On the Basis
of a Stipulated Price
Performance Criteria
DESIGN/BUILDER
represents and warrants to OWNER that the completed Project
will satisfy the following performance
criteria. Prior to final payment under
paragraph *13.08 of the General Conditions,
DESIGN/BUILDER shall commission the
Project and conduct a seven-day performance
test to establish compliance with
the following performance criteria.
Compliance shall be computed on the average
over the seven-day performance test. If the
Project fails to reach such
performance criterion, then DESIGN/BUILDER
shall (at no additional cost to
OWNER) make such changes in design,
construction, or equipment as required to
meet the criterion, and conduct another
seven day performance test.
DESIGN/BUILDER makes no other
representation, warranty or guarantee concerning
the Project including, without limitation,
production of DDGS or CO2, or
compliance with any applicable atmospheric
emissions standards.
<TABLE>
<CAPTION>
Table 1 ethanol plant criteria --40 MGY
capacity
----------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
Criteria
|
Specification |
Testing Statement
| Documentation
|
----------------------------------------------------------------------------------------------
Plant Capacity - | Capable of
operating |
Ten day
| Concurrence of
|
fuel-grade ethanol | at a rate of 40
|
performance test. | production records
|
| million gallons per | Protocol to be
|
and a written
report|
| year of denatured | agreed upon by
|
from
|
| fuel grade ethanol | DESIGN BUILDER
|
DESIGN/BUILDER.
|
| meeting the
| and
OWNER.
|
|
| specifications of |
|
|
| ASTM 4806
|
|
|
----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit B
to
Agreement Between Owner and Design/Builder On the Basis
of a Stipulated Price
Items Included in Base Scope of Work:
1. Beerwell addition:
a. Provide and
install all necessary foundations, piping, and tank
to add one 750,000 gallon tank to be used as a beerwell.
b. Provide and
install new pump and associated piping necessary for
new beerwell.
2. Cooling tower expansion:
a. Provide and
install all necessary foundations, piping, and
cooling tower to expand to three cells.
b. Provide and
install new cooling tower pump.
3. Centrifuge:
a. Provide and
install one "Z6" model Flottweg centrifuge with all
associated piping. Currently WPE has "Z53" model centrifuges
installed. The up sizing to a Z6 would be to allow more
flexibility in process.
4. Fourth eductor in slurry
tank:
a. Provide and
install 4th steam eductor in slurry tank.
b. Provide and
install CIP lines for fermenter #4.
5. Fermenter #4
modifications:
a. Provide and
install new pump and heat exchanger for fermenter #4.
6. Scalper:
a. Provide and
install necessary equipment to change scalper to
rotary scalper in current location. Any additional
modifications
at owners cost.
7. RO water to lab:
a. Provide RO
water to lab. Water is to be available when pump is
running. Installation of a dedicated pump is at owners cost.
8. Sulfuric Acid Line to RO
System:
a. Provide and
install Alloy 20 acid line to RO.
9. Cook water pre-heater:
a. Provide
necessary changes or improvements to cook water
pre-heater. (45 mmgpy rate)
b. Provide and
install sulfamic acid line to cook water pre-heater.
If alloy 20, WPE purchases material.
10. Pumps and Heat exchangers:
a. Provide and
install necessary improvements to heat exchangers and
pumps as approve by engineering for expansion and approved by
owner.
Items Included in Additional Scope of
work
1. Sulfuric Acid Tank
a. Provide and
install a second sulfuric acid tank with associated
piping & equipment.
2. Slurry Tank
a. Provide and
install modifications to convert slurry tank to 2
stages, this includes the new agitator.
3. Tank Farms
<PAGE>
a. Provide and
install a second ethanoi loadout pump with necessary
piping, valves, and instruments to allow simultaneous truck
&
rail loadout.
b. Provide and
install piping needed to bypass the denaturant pump
during railcar
off-loading.
DESIGN/BUILDER proposes to provide
engineering, equipment, and installation for
the above described items for OWNER.
Anything not listed above is OWNER'S
responsibility, including but not limited
to:
1. Any pump or heat exchanger
modifications that are not required or
approved by engineering.
2. Additional piping that is
approved but not described above.
3. Ethanol loading changes.
4. Any wet cake pad
modifications.
5. Any other additional tanks
or vessels not described above.
6. Any grain system
modifications not described above.
7. Start up assistance
<PAGE>
Exhibit C
to
Agreement Between Owner and Design/Builder On the
Basis of a Stipulated Price
LICENSE OF PROPRIETARY PROPERTY OF DESIGN/BUILDER
OWNER expressly understands, acknowledges
and agrees that:
1. DESIGN/BUILDER is using
certain technology and information in the design
and construction
of the Project which is more fully described in paragraphs
3 and 4 below
(the "PROPRIETARY PROPERTY").
2. Upon OWNER'S payment to
DESIGN/BUILDER of the entire Contract Price, OWNER
shall be granted
a perpetual limited license to use the PROPRIETARY
PROPERTY in
connection with OWNER'S operations of the Project, subject to
the limitations
provided herein. In the event the Agreement is terminated
for any reason
under Article 14 of the General Conditions prior to payment
of the entire
Contract Price, OWNER shall be granted a perpetual limited
license to use
the PROPRIETARY PROPERTY in connection with OWNER'S
operations of
the Project, subject to the limitations provided herein, upon
payment in full
by OWNER to DESIGN/BUILDER of (i) all amounts due and
payable to
DESIGN/BUILDER under the Contract Documents.
3. The PROPRIETARY PROPERTY
includes, without limitation, OPERATING PROCEDURES
(hereinafter defined),
operating methods, techniques, protocols,
procedures,
plans and processes, and other information relating to design,
construction and
operation of the Project including the design,
arrangement,
configuration and specifications of (i) the combinations of
distillation,
evaporation and alcohol dehydration equipment (including, but
not limited to,
pumps, vessels, tanks, heat exchangers, piping, values and
associated
electronic control equipment) and all documents supporting
those
combinations;
(ii) the combination of the distillers grain drying (DGD),
thermal
oxidization (TO) and heat recovery steam generation (HRSG)
equipment
(including, but not limited to, pumps, vessels, tanks, heat
exchangers,
piping and associated electronic control equipment) and all
documents
supporting those combinations; and (iii) the Project computer
system, known as
the distributed control system (DCS) (including, but not
limited to, the
software configuration, programming, parameters, set
points, alarm
points, ranges, graphical interface and system hardware
connections) and
all documents supporting that system. The "OPERATING
PROCEDURES"
include, without limitation, the process equipment and
specifications
manuals, standards of quality, service, protocols, data
collection
methods, construction specifications, training methods,
engineering
standards, advertising or promotional materials, and any other
information
prescribed by DESIGN/BUILDER from time to time concerning the
PROPRIETARY
PROPERTY.
4. DESIGN/BUILDER has the
exclusive right and interest in and to the
PROPRIETARY
PROPERTY and the goodwill associated therewith. Notwithstanding
the foregoing,
goodwill created by the operation of the Project and all
financial
benefits derived
1
<PAGE>
therefrom shall
be the property of OWNER.
5. OWNER considers the
PROPRIETARY PROPERTY to be valid and will not directly
or indirectly,
contest the validity or the ownership by DESIGN/BUILDER
thereof.
6. OWNER'S use of the
PROPRIETARY PROPERTY does not give OWNER any ownership
interest or
other interest in or to the PROPRIETARY PROPERTY except for the
limited license
granted to OWNER.
7. Except as otherwise provided
in paragraph 2 above, OWNER shall not pay any
separate license
fee or royalty to DESIGN/BUILDER for OWNER'S continual use
of the
PROPRIETARY PROPERTY pursuant to the limited license granted to
OWNER, the
consideration for this license is included in the Contract
Price
payable to
DESIGN/BUILDER under the Contract Document.
8. OWNER'S failure to
materially comply with the OPERATING PROCEDURES shall
void all
representations and warranties set forth in Exhibit A to the
Agreement
relating to the performance of the Project.
9. The limited license granted
to OWNER shall not be assigned or sublicensed,
in whole or in
part, without the prior written consent of DESIGN/BUILDER,
which consent
will not be unreasonably withheld. Prior to any such
assignment or
sublicense, OWNER shall obtain from such assignee or
sublicensee an
agreement to be bound by all of the provisions contained
herein, in form
and substance acceptable to DESIGN/BUILDER.
10. The PROPRIETARY PROPERTY is
confidential and proprietary. OWNER shall keep
the PROPRIETARY
PROPERTY confidential, and shall use all reasonable efforts
to maintain the
PROPRIETARY PROPERTY as secret and confidential. OWNER
shall not at any
time without DESIGN/BUILDER's prior written consent, copy,
duplicate,
record or otherwise reproduce the PROPRIETARY PROPERTY, in
whole
or in part, or
otherwise make the same available to any unauthorized
person. OWNER
agrees that DESIGN/BUILDER would be irreparably damaged by
reason of any
violation of the confidentiality provisions contained herein
and that any
remedy at law for a breach of such provisions would be
inadequate.
Therefore, DESIGN/BUILDER shall be entitled to seek injunctive
or other
equitable relief in a court of competent jurisdiction against
OWNER, its
agents, employees, affiliates, partners, members, stockholders,
officers or
other associates, for any breach or threatened breach of the
confidentiality
covenants contained herein without the necessity of proving
actual monetary
loss. It is expressly understood that the remedy described
herein shall not
be the exclusive remedy of DESIGN/BUILDER for any breach
of such
covenants, and DESIGN/BUILDER shall be entitled to seek such
other
relief or
remedy, at law or in equity, to which it may be entitled as a
consequence of
any breach of such covenants.
11. Nothing herein or the AGREEMENT
shall be interpreted or construed as
granting OWNER a
license or right to use the PROPRIETARY PROPERTY in the
design or
construction of any enlargement or expansion of the Project.
12. The laws of the State of Kansas
shall govern the validity of the provisions
contained
herein, the construction of such provisions, and the
interpretation
of the rights and duties of the parties. Any legal action
brought to
enforce or construe the provisions of this Exhibit shall be
brought in
courts located in Kansas, and the parties agree to the
exclusive
2
<PAGE>
jurisdiction of
such courts and agree that they will not invoke the
doctrine of
forum non conveniens or other similar defenses.
13. The provisions of this Exhibit
shall survive the termination or expiration
of the Contract
Documents
The foregoing provisions are part of, and
incorporated into, the Agreement and
should be interpreted consistently
therewith. Unless otherwise defined herein or
unless the context otherwise requires,
capitalized terms used herein shall have
the meaning given to such terms in the
Contract Documents. In the event any of
the foregoing provisions is contrary to any
provision in the Agreement (or any
other document referenced therein), the
foregoing provision shall supercede and
have precedence over such contrary
provision.
3
<PAGE>
GENERAL CONDITIONS OF THE
CONTRACT BETWEEN
OWNER AND
DESIGN/BUILDER
ARTICLE 1-DEFINITIONS
1. 01 Defined Terms
A. Wherever used
in these General Conditions or in the other Contract
Documents the following terms have the
meanings indicated which are applicable
to both the singular and plural
thereof:
1.
Agreement--The Agreement Between Owner and Design/Builder on the
Basis
of a Stipulated
Price covering the Work. Other Contract Documents are
incorporated
into the Agreement and made a part thereof as provided
therein.
2. Application
for Payment--The form which is to be used by DESIGN/BUILDER
in requesting
progress or final payments and which is to be accompanied by
such supporting
documentation as is required by the Contract Documents.
3. Asbestos--Any
material that contains more than one percent (1%) asbestos
and is friable
or is releasing asbestos fibers into the air above current
action levels
established by the United States Occupational Safety and
Health
Administration.
4.
Bonds--Performance and payment bonds and other instruments of
security.
5. Cash Flow
Projection--A schedule prepared by DESIGN/BUILDER estimating
that portion of
the Contract Price to be due during each month of
performance.
6. Change
Order-A written order which is signed by DESIGN/BUILDER and
OWNER
which authorizes
an addition, deletion or revision in the Work, or an
adjustment in
the Contract Price or the Contract Times, issued on or after
the Effective
Date of the Agreement.
7.
Construction--The performing or furnishing of labor, the furnishing
and
incorporating of
materials and equipment into the Work and the furnishing
of services
(other than Design Professional Services) and documents, all as
required by the
Contract Documents. Construction includes the materials and
equipment
incorporated into the Project.
8. Construction
Subagreement--A written agreement between DESIGN/BUILDER
and a
construction contractor for provision of Construction.
9. Contract
Documents--The Agreement and related exhibits, the Notice to
Proceed, these
General Conditions, the Specifications and the Drawings
together with
all Change Orders, and Written Amendments, issued on or after
the Effective
Date of the Agreement.
10. Contract
Price-The moneys payable by OWNER to DESIGN/BUILDER for
completion of
the Work in accordance with the Contract Documents.
11. Contract
Times--The number of days or the dates stated in the Agreement
(i) to achieve
Substantial Completion, and (ii) to complete the Work so
that it is ready
for final payment of the Contract Price in accordance with
paragraph
13.08.
1
<PAGE>
12.
defective--An adjective which when modifying the term
Construction
refers to
Construction that is unsatisfactory, faulty or deficient, in
that
it does not
conform to the Contract Documents, or does not meet the
requirements of
any inspection, reference standard, test or approval
referred to in
the Contract Documents, or has been damaged prior to OWNER'S
final
payment.
13.
DESIGN/BUILDER-ICM, Inc., a Kansas corporation.
14. Design
Subagreement--A written agreement between DESIGN/BUILDER and a
design
professional for provision of Design Professional Services.
15. Design
Professional Services--Services provided by or for licensed
design
professionals during Construction, or operational phases of the
Project,
including the development of drawings, Specifications, and
other
design
submittals specified by the Contract Documents and required to
be
performed by
licensed design professionals..
16.
Drawings--Those portions of the Contract Documents prepared by or
for
DESIGN/BUILDER
and approved by OWNER consisting of drawings, diagrams,
illustrations,
schedules and other data which show the scope, extent, and
character of the
Work.
17. Effective
Date of the Agreement--The date indicated in the Agreement on
which it becomes
effective, but if no such date is indicated it means the
date on which
the Agreement is signed and delivered by the last of the two
parties to sign
and deliver.
18. Engineer--A
duly licensed individual or entity designated by
DESIGN/BUILDER
to perform or furnish specified Design Professional Services
in connection
with the Work.
19. Hazardous
Condition--The presence at the Site of Asbestos, Hazardous
Waste, PCB's,
Petroleum Products or Radioactive Materials in such
quantities or
circumstances that there is a danger to persons or property.
20. Hazardous
Waste--The term Hazardous Waste shall have the meaning
provided in
Section 1004 of the Solid Waste Disposal Act (42 USC Section
6903).
21. Laws and
Regulations; Laws or Regulations--Any and all applicable laws,
rules,
regulations, ordinances, codes, permits, and orders of any and
all
governmental
bodies, agencies, authorities and courts having jurisdiction.
22.
Liens--Charges, security interests or encumbrances upon real
property
or personal
property.
23. Notice to
Proceed-A written notice given by OWNER to DESIGN/BUILDER
fixing the date
on which the Contract Times will commence to run.
24. OWNER-The
public body, or authority, individual or entity with whom
DESIGN/BUILDER
has entered into the Agreement and for whom the Work is to
be provided.
25.
PCBs--Polychlorinated biphenyls.
2
<PAGE>
26.
Petroleum--Petroleum, including crude oil or any fraction thereof
which
is liquid at
standard conditions of temperature and pressure (60 degrees
Fahrenheit and
14.7 pounds per square inch absolute), such as oil,
petroleum, fuel
oil, oil sludge, oil refuse, gasoline, kerosene, and oil
mixed with other
non-Hazardous Wastes and crude oils.
27. Project--The
Construction to be provided under the Contract Documents
as provided in
paragraph 1.01 of the Agreement.
28. Radioactive
Material--Source, special nuclear, or byproduct material as
defined by the
Atomic Energy Act of 1954 (42 USC Section 2011 et seq.) as
amended from
time to time.
29. Schedule of
Values-A schedule prepared by DESIGN/BUILDER and acceptable
to OWNER
indicating that portion of the Contract Price to be paid for
each
major component
of the Work.
30. Site--Lands
or other areas designated in the Contract Documents as
being furnished
by OWNER for the performance of the Construction, storage,
or access.
31.
Specifications--Those portions of the Contract Documents prepared
by or
for
DESIGN/BUILDER and approved by OWNER consisting of written
technical
descriptions of
materials, equipment, construction systems, standards and
workmanship as
applied to the Construction and certain administrative
details
applicable thereto.
32.
Subcontractor--An individual or entity other than a Supplier or
Engineer having
a direct contract with DESIGN/BUILDER or with any other
Subcontractor
for the performance of a part of the Work.
33. [not
used]
34. Substantial
Completion--The time at which the Construction (or a
specified part)
has progressed to the point where it is sufficiently
complete, in
accordance with the Contract Documents, so that ethanol can be
produced at the
capacity of 40 million gallons per year. The terms
"substantially
complete" and "substantially completed" as applied to the
Construction
refer to Substantial Completion of Construction.
35. Supplier--A
manufacturer, fabricator, supplier, distributor,
materialman or
vendor having a direct contract with DESIGN/BUILDER or with
any
Subcontractor to furnish materials or equipment to be incorporated
in
the Work by
DESIGN/BUILDER or any Subcontractor.
36. Work--The
entire completed construction or the various separately
identifiable
parts thereof required to be performed or furnished under the
Contract
Documents. Work includes and is the result of performing or
furnishing
Design Professional Services and Construction required by the
Contract
Documents.
37. Written
Amendment--A written amendment of the Contract Documents,
signed by OWNER
and DESIGN/BUILDER on or after the Effective Date of the
Agreement and
normally dealing with the nonengineering or nontechnical
rather than
strictly design or construction-related aspects of the Contract
Documents.
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ARTICLE 2--PRELIMINARY MATTERS
2.01 Commencement of Contract Times; Notice
to Proceed
A. The Contract
Times will commence to run on the day indicated in the
Notice to Proceed. A Notice to Proceed may
be given at any time within the
period of time set forth in Section 9.07 of
the Agreement.
2.02 Starting the Work
A.
DESIGN/BUILDER shall start to perform the Work on the date when
the
Contract Times commence to run.
2.03 Before Starting Construction
A.
DESIGN/BUILDER shall submit the following for review within ten
(10)
days after commencement of the Contract
Times:
1. A preliminary
progress schedule indicating the times (number of days or
dates) for
starting and completing the various stages in the design and
construction of
the Work;
2. A preliminary
Schedule of Values for all of the Work, which will include
quantities and
prices of items aggregating the Contract Price and will
subdivide the
Work into component parts in sufficient detail acceptable to
OWNER to serve
as the basis for progress payments during performance of the
Work. Such
prices will include a pro rata amount of overhead and profit
applicable to
each item of Work; and
3. A preliminary
Cash Flow Projection.
B. Before any
Work is started, DESIGN/BUILDER and OWNER shall each deliver
to the other, with copies to each
additional insured, certificates of insurance
(and other evidence of insurance which
either of them or any additional insured
may reasonably request) which
DESIGN/BUILDER and OWNER respectively are required
to purchase and maintain in accordance with
paragraphs 5.02.A, 5.04.A and
5.04.B.
2.04 Initial Conference
A. Within twenty
(20) days after the Contract Times start to run, a
conference by telephone or in person with
OWNER, DESIGN/BUILDER and others as
appropriate will be held to establish a
working understanding among the parties
as to the Work and to discuss the design
concepts, schedules referred to in
paragraph 2.03.A, processing Applications
for Payment, maintaining required
records, items required pursuant to
paragraph 8.01.A.6 and other matters.
2.05 Initially Acceptable Schedules
A. At least ten
(10) days before submission of the first Application for
Payment a conference by telephone or in
person with DESIGN/BUILDER, OWNER and
others as appropriate will be held to
review for acceptability the schedules
submitted in accordance with paragraph
2.03.A. DESIGN/BUILDER shall have an
additional ten (10) days to make
corrections and adjustments and to complete and
resubmit the
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schedules. No progress payment shall be
made to DESIGN/BUILDER until the
schedules are submitted to and acceptable
to OWNER as provided below. The
progress schedule will be acceptable to
OWNER as providing an orderly
progression of the Work to completion
within the Contract Times, but such
acceptance will neither impose on OWNER
responsibility for the sequencing,
scheduling or progress of the Work nor
interfere with or relieve DESIGN/BUILDER
from DESIGN/BUILDER's full responsibility
therefor. The format and structure of
the progress schedule will be acceptable to
OWNER. OWNER'S acceptance shall not
be deemed to confirm that the schedule is a
reasonable plan for performing the
Work. DESIGN/BUILDER's Schedule of Values
and Cash Flow Projection will be
acceptable to OWNER as to form and
substance.
ARTICLE 3-CONTRACT DOCUMENTS: INTENT,
AMENDING, REUSE
3.01 Intent
A. The Contract
Documents comprise the entire agreement between OWNER and
DESIGN/BUILDER concerning the Work. The
Contract Documents are complementary;
what is called for by one is as binding as
if called for by all. The Contract
Documents will be construed in accordance
with the laws of the State of Kansas.
Except as otherwise required by applicable
Laws and Regulations, the Contract
Documents shall govern the obligations of
the parties regarding the Work and
Project.
B. It is the
intent of the Contract Documents to describe a functionally
complete Project to be designed and
constructed in accordance with the Contract
Documents. Any Work, materials or equipment
that may reasonably be inferred from
the Contract Documents or from prevailing
custom or trade usage as being
required to produce the intended result
will be furnished and performed whether
or not specifically called for. When words
or phrases which have a well-known
technical or construction industry or trade
meaning are used to describe work,
materials or equipment, such words or
phrases shall be interpreted in accordance
with that meaning.
3.02 References
A. Reference to
standards, specifications, manuals or codes of any
technical society, organization or
association, or to the Laws or Regulations of
any governmental authority, whether such
reference be specific or by
implication, shall mean the latest
standard, specification, manual, code or Laws
or Regulations in effect on the Effective
Date of the Agreement except as may be
otherwise specifically stated in the
Contract Documents.
B. No provision
of any standard, specification, manual, code or instruction
shall be effective to change the duties and
responsibilities of OWNER,
DESIGN/BUILDER or any of their
subcontractors, consultants, agents, or employees
from those set forth in the Contract
Documents, nor shall it be effective to
assign to OWNER any duty or authority to
supervise or direct the furnishing or
performance of the Work or any duty or
authority to undertake responsibility
inconsistent with the provisions of Article
8 or any other provision of the
Contract Documents.
3.03 Amending and Supplementing Contract
Documents
A. The Contract Documents may be
amended to provide for additions,
deletions and revisions in the Work or to
modify the terms and conditions
thereof in one or more of the following
ways:
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1. A Change
Order; or
2. A formal
Written Amendment.
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3.04 Reuse of Documents
A. All documents
including Drawings and Specifications prepared or
furnished by DESIGN/BUILDER pursuant to the
Contract Documents are instruments
of service in respect of the Project and
DESIGN/BUILDER shall retain an
ownership and property interest therein
whether or not the Project is completed.
OWNER may make and retain copies for
information and reference in connection
with the use and occupancy of the Project
by OWNER and others; however, such
documents are not intended or represented
to be suitable for reuse by OWNER or
others on extensions of the Project or on
any other project. Any reuse without
written verification or adaptation by
DESIGN/BUILDER for the specific purpose
intended will be at OWNER'S sole risk and
without liability or legal exposure to
DESIGN/BUILDER, and OWNER shall indemnify
and hold harmless DESIGN/BUILDER,
Subcontractors, and Engineer from all
claims, damages, losses and expenses
including attorneys' fees arising out of or
resulting therefrom. Any such
verification or adaptation will entitle
DESIGN/BUILDER to further compensation
at rates to be agreed upon by OWNER and
DESIGN/BUILDER.
B. In addition
to paragraph 3.04.A, all documents including Drawings and
Specifications prepared or furnished by
DESIGN/BUILDER pursuant to the Contract
Documents are subject to the use and
disclosure restrictions set forth in
Exhibit C attached to the Agreement.
Nothing contained in paragraph 3.04.A.
shall be construed or interpreted as
granting OWNER any rights or interest in
the PROPRIETARY PROPERTY (as defined in
Exhibit C) other than as expressly
provided in Exhibit C attached to the
Agreement.
ARTICLE 4--AVAILABILITY OF LANDS; DIFFERING
SITE CONDITIONS; REFERENCE POINTS;
HAZARDOUS CONDITIONS
4.01 Availability of Lands
A. OWNER shall
furnish, as indicated in the Contract Documents, the lands
upon which the Construction is to be
performed, rights-of-way and easements for
access thereto, and such other lands which
are designated for the use of
DESIGN/BUILDER.
B. Upon
reasonable written request, OWNER shall furnish DESIGN/BUILDER
with
a correct statement of record legal title
and legal description of the lands
upon which the Construction is to be
performed and OWNER'S interest therein.
OWNER shall identify any encumbrances or
restrictions not of general application
but specifically related to use of lands so
furnished with which DESIGN/BUILDER
will have to comply in performing the Work.
Easements for permanent structures
or permanent changes in existing facilities
will be obtained and paid for by
OWNER, unless otherwise provided in the
Contract Documents.
C. OWNER shall
provide any of its lands and access thereto that may be
required for temporary construction
facilities or storage of materials and
equipment.
4.02 Differing Site Conditions
A.
DESIGN/BUILDER shall promptly, and before the conditions are
disturbed,
give a written notice to OWNER of (i)
subsurface or latent physical conditions
at the Site which differ materially from
those indicated in the OWNER'S
geotechnical report for the Project site or
the land and grading specifications
required by DESIGN/BUILDER, or (ii) unknown
physical conditions at the Site, of
an unusual nature,
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which differ materially from those
ordinarily encountered and generally
recognized as inhering in work of the
character called for by the Contract
Documents.
B. OWNER will
investigate the site conditions promptly after receiving the
notice. If the conditions do materially so
differ and cause an increase or
decrease in the DESIGN/BUILDER's cost of
performing any part of the Work, an
equitable adjustment shall be made under
this clause and the Contract Price
modified in writing by Change Order in
accordance with Article 9.
C. No request by
DESIGN/BUILDER for an equitable adjustment under paragraph
4.02 shall be allowed unless DESIGN/BUILDER
has given the written notice
required; provided that the time prescribed
in paragraph 9.02.A for giving
written notice may be extended by
OWNER.
4.03 Reference Points
A.
DESIGN/BUILDER shall be responsible for laying out the construction
and
shall protect and preserve the reference
points established by OWNER pursuant to
paragraph 8.01.A.6.e and shall make no
changes or relocations without the prior
written approval of OWNER. DESIGN/BUILDER
shall report to OWNER whenever any
reference point or property monument is
lost or destroyed or requires relocation
because of necessary changes in grades or
locations, and shall be responsible
for the accurate replacement or relocation
of such reference points or property
monuments by professionally qualified
personnel.
4.04 Hazardous Conditions
A. OWNER
represents and warrants that there is no Hazardous Condition or
materials that could create a Hazardous
Condition existing at the Site as of the
Effective Date of the Agreement and that
OWNER will be responsible for any
Hazardous Condition encountered at the Site
which was not identified )in the
Contract Documents to be within the scope
of the Work. OWNER shall not be
responsible for materials creating a
Hazardous Condition brought to the Site by
DESIGN/BUILDER, Subcontractors, Suppliers
or anyone else for whom DESIGN/BUILDER
is responsible.
B.
DESIGN/BUILDER and any affected Subcontractor shall immediately (i)
stop
all Construction in connection with such
Hazardous Condition and in any area
affected thereby (except in an emergency as
required by paragraph 6.15), and
(ii) notify OWNER (and thereafter confirm
such notice in writing). OWNER shall
promptly determine the necessity of
retaining a qualified expert to evaluate
such Hazardous Condition or take corrective
action, if any. DESIGN/BUILDER shall
not be required to resume Construction in
connection with such Hazardous
Condition or in any such affected area
until after OWNER has obtained any
required permits related thereto and
delivered to DESIGN/BUILDER special written
notice (i) specifying that such Hazardous
Condition and any affected area is or
has been rendered safe for the resumption
of Construction, or (ii) specifying
any special conditions under which such
Construction may be resumed safely. If
OWNER and DESIGN/BUILDER cannot agree as to
entitlement to or the amount or
extent of an adjustment, if any, in
Contract Price as a result of such
Construction stoppage or such special
conditions under which Construction is
agreed by DESIGN/BUILDER to be resumed,
either party may make a claim therefor
as provided in Article 9.
C. To the
fullest extent permitted by Laws and Regulations, OWNER shall
indemnify and hold harmless DESIGN/BUILDER,
Subcontractors, Suppliers, Engineers
and the officers, directors, employees,
agents, other consultants and
subcontractors of each and any of them from
and against all claims, costs,
losses and damages (including but not
limited to all reasonable fees and charges
of engineers, architects,
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attorneys and other professionals and all
court.or arbitration or other dispute
resolution costs) arising out of or
resulting from such Hazardous Condition.
Nothing in this paragraph 4.04.C shall
obligate OWNER to indemnify any
individual or any entity, including
DESIGN/BUILDER, from and against the
consequences of that individual's or
entity's own negligence or willful
misconduct. OWNER shall not be obligated to
indemnify or hold harmless
DESIGN/BUILDER, Subcontractors, Suppliers
or any other individual or any entity
for any such claim, cost, loss or damage
arising out of or resulting from
materials creating a Hazardous Condition
brought to the Site by DESIGN/BUILDER,
Subcontractors, Suppliers or any other
party for whom DESIGN/BUILDER is
responsible.
ARTICLE 5--BONDS AND INSURANCE
5.01 Performance, Payment and Other
Bonds
A.
DESIGN/BUILDER shall not be required to furnish a performance,
payment
or any other Bonds.
5.02 DESIGN/BUILDER's Liability
Insurance
A.
DESIGN/BUILDER shall purchase and maintain such Commercial
General
Liability (subject to customary exclusions
in respect of professional
liability), Automobile Liability and
Worker's Compensation insurance as is
appropriate for the Work being performed
and furnished and as will provide
protection from claims set forth below
which may arise out of or result from
DESIGN/BUILDER's performance and furnishing
of the Work and DESIGN/BUILDER's
other obligations under the Contract
Documents, whether it is to be performed or
furnished by DESIGN/BUILDER, any
Subcontractor or Supplier, or by anyone
directly or indirectly employed by any of
them to perform or furnish any of the
Work, or by anyone for whose acts any of
them may be liable:
1. Claims under workers' compensation, disability benefits and
other
similar employee
benefit acts;
2. Claims for damages because of bodily injury, occupational
sickness
or disease, or
death of DESIGN/BUILDER's employees;
3. Claims for damages because of bodily injury, sickness or
disease,
or death of any
person other than DESIGN/BUILDER's employees;
4. Claims for damages insured by customary personal injury
liability
coverage which
are sustained (i) by any person as a result of an offense
directly or
indirectly related to the employment of such person by
DESIGN/BUILDER,
or (ii) by any other person for any other reason;
5. Claims for damages, other than to the Work itself, because
of
injury to or
destruction of tangible property wherever located other than
claims under
paragraph 5.02.A.7. below, including loss of use resulting
therefrom;
6. Claims for damages because of bodily injury or death of any
person
or property
damage arising out of the ownership, maintenance or use of any
motor vehicle;
and
7. Claims for professional errors and omissions arising from
the
Design
Professional Services provided for the Project.
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B. The policies
of insurance required by paragraph 5.02.A shall:
1. With respect
to insurance required by paragraphs 5.02.A.3 through
5.02.A.6
inclusive, include as additional insureds OWNER and any other
persons or
entities identified in writing by OWNER, all of whom shall be
listed as
additional insureds, and include coverage for the respective
officers and
employees of all such additional insureds;
2. Include at
least the specific coverages and be written for not less than
the limits of
liability set forth in Exhibit D or required by Laws or
Regulations,
whichever is greater;
3. Include
completed operations insurance;
4. Include
contractual liability insurance covering DESIGN/BUILDER's
indemnity
obligations under paragraphs 6.06, 6.10 and 6.19;
5. Contain a
provision or endorsement that the coverage afforded will not
be cancelled,
materially changed or renewal refused until at least thirty
(30) days prior
written notice has been given to OWNER and each other
additional
insured to whom a certificate of insurance has been issued (and
the certificates
of insurance furnished by the DESIGN/BUILDER pursuant to
paragraph 5.08.B
will so provide);
6. Remain in
effect at least until final payment and at all times
thereafter when
DESIGN/BUILDER may be correcting, removing or replacing
defective
Construction in accordance with paragraphs 12.06 and 12.07;
7. With respect
to completed operations insurance, remain in effect for at
least one year
after final payment (and DESIGN/BUILDER shall furnish
OWNER and each
other additional insured to whom a certificate of insurance
has been issued
evidence satisfactory to OWNER and any such additional
insured of
continuation of such insurance at final payment); and
8.
DESIGN/BUILDER shall maintain in effect all insurance coverage
required
under this
paragraph at the DESIGN/BUILDER'S sole expense with insurance
companies (and
policies) approved by OWNER and lawfully authorized to do
business in the
jurisdiction in which the Project is located. If the
DESIGN/BUILDER
fails to obtain or maintain any insurance coverage required
under this
Agreement, the OWNER may purchase such coverage and charge the
expense to the
DESIGN/BUILDER, or terminate this Agreement for cause in
accordance with
paragraph 14.02 below.
5.03 OWNER 's Liability Insurance
A. In addition
to the insurance required to be provided by DESIGN/BUILDER
under paragraph 5.02, OWNER, at OWNER'S
option, may purchase and maintain at
OWNER'S expense OWNER'S own liability
insurance as will protect OWNER against
claims which may arise from operations
under the Contract Documents.
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5.04 Property Insurance
A. OWNER shall
purchase and maintain property insurance upon the
Construction at the Site in the amount of
the full replacement cost thereof at
the OWNER'S sole expense with insurance
companies (and policies) approved by
DESIGN/BUILDER and lawfully authorized to
do business in the jurisdiction in
which the Project is located (subject to
such deductible amounts as may be
agreed to by OWNER and DESIGN/BUILDER or as
may be required by Laws and
Regulations). This insurance will:
1. Include the
interests of OWNER, DESIGN/BUILDER, Subcontractors, and any
other persons or
entities listed as an insured or additional insured;
2. Be written on
a Builder's Risk "all-risk" or equivalent policy form that
shall at least
include insurance for physical loss and damage to the
Construction,
temporary buildings, falsework and all materials and
equipment in
transit, and shall insure against at least the following
perils or causes
of loss: fire, lightning, extended coverage, theft,
vandalism and
malicious mischief, earthquake, collapse, debris removal,
demolition
occasioned by enforcement of Laws and Regulations, water
damage,
flood, system
testing, and such other perils or causes of loss as may be
agreed in
writing by DESIGN/BUILDER and OWNER;
3. Include
expenses incurred in the repair or replacement of any insured
property
(including but not limited to fees and charges of engineers and
architects);
4. Cover
materials and equipment stored at the Site or at another
location
that was agreed
to in writing by OWNER prior to being incorporated in the
Construction,
provided that such materials and equipment have been included
in an
Application for Payment approved by OWNER; and
5. Be maintained
in effect until final payment is made unless otherwise
agreed to in
writing by OWNER and DESIGN/BUILDER with thirty (30) days
written notice
to each other additional insured to whom a certificate of
insurance has been
issued.
B. OWNER shall
purchase and maintain such boiler and machinery insurance or
additional property insurance as
DESIGN/BUILDER may reasonably require or
required by Laws and Regulations which will
include the interests of OWNER,
DESIGN/BUILDER, Subcontractors, and other
individuals and entities listed as an
insured or additional insured.
C. All the
policies of insurance (and the certificates or other evidence
thereof) required to be purchased and
maintained by OWNER in accordance with
paragraph 5.04 will contain a provision or
endorsement that the coverage
afforded will not be cancelled or
materially changed or renewal refused until at
least thirty (30) days prior written notice
has been given to DESIGN/BUILDER and
to each other additional insured to whom a
certificate of insurance has been
issued.
D. OWNER shall
not be responsible for purchasing and maintaining any
property insurance to protect the interests
of DESIGN/BUILDER, Subcontractors,
Suppliers, Engineers or others in the Work
to the extent of any deductible
amounts agreed to by OWNER and
DESIGN/BUILDER. The risk of loss within such
identified deductible amounts will be borne
by DESIGN/BUILDER, Subcontractor or
others suffering any such loss and if any
of them wishes property insurance
coverage within the limits of such
deductible amount, each may purchase and
maintain it at the purchaser's own
expense.
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E. If
DESIGN/BUILDER requests in writing that other special insurance
be
included in the property insurance policies
provided under paragraph 5.04,
OWNER shall, if possible, include such
insurance, and the cost thereof will be
charged to DESIGN/BUILDER by appropriate
Change Order or Written Amendment.
Prior to commencement of the Work at the
Site, OWNER shall in writing advise
DESIGN/BUILDER whether or not such other
insurance has been procured by OWNER.
5.05 Waiver of Subrogation Rights
A. OWNER and
DESIGN/BUILDER intend that all policies purchased in
accordance with paragraph 5.04 will protect
OWNER, DESIGN/BUILDER, Engineers,
Subcontractors, others who may have a
financial interest in the Project, and all
other individuals or entities listed as
insureds or additional insureds in such
policies and will provide primary coverage
for all losses and damages caused by
the perils or causes of loss covered
thereby. All such policies shall contain
provisions to the effect that in the event
of payment of any loss or damage the
insurers will have no rights of recovery
against any of the insureds or
additional insureds thereunder. Each party
waives all rights against the other
party and its officers, directors,
employees, members, and agents for all losses
and damages caused by, arising out of or
resulting from any of the perils or
causes of loss covered by such policies and
any other property insurance
applicable to the Work.
5.06 Receipt and Application of
Proceeds
A. Any insured
loss under the policies of insurance required by paragraph
5.04 will be adjusted with OWNER and made
payable to OWNER as fiduciary for the
benefit of insureds, as their interests may
appear, subject to the requirem
