Exhibit 10.9
AGREEMENT BETWEEN
OWNER AND DESIGN BUILDER
THIS AGREEMENT made as of this ____ day of __________ in the year of
2001 between the Owner, Great Plains Ethanol, LLC, ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
and the Design Builder, Broin and Associates, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, for the following Project:
(INCLUDE PROJECT NAME, LOCATION AND A SUMMARY DESCRIPTION)
The construction of a 40MMGPY dry mill fuel ethanol processing plant located
near Chancellor, South Dakota.
The Owner and Design Builder, in consideration of the mutual covenants
hereinafter set forth, agree as follows:
Agreement Between Owner and Design Builder Page 2 of 23
THIS AGREEMENT IS ADAPTED FROM AIA DOCUMENT 191
ARTICLE 1 - GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 The Contract Documents consist of this Agreement, the Design
Builder's Exhibits and written addenda identified in Article 14, the
Construction Documents approved by the Owner and Modifications issued
after execution of this Agreement. A Modification is a Change Order or
a written amendment to this Agreement signed by both parties, or a
Construction Change Directive issued by the Owner in accordance with
Paragraph 8.3.
1.1.2 The term "Work" means the construction and services provided by
the Design Builder to fulfill the Design Builder's obligations.
1.2 EXECUTIONS, CORRELATION AND INTENT
1.2.1 It is the intent of the Owner and Design Builder that the
Contract Documents include all items necessary for proper execution and
completion of the Work. The Contract Documents are complementary, and
what is required by one shall be as binding as if required by all;
performance by the Design Builder shall be required only to the extent
consisted with and reasonably inferable from the Contract Documents as
being necessary to produce the intended results. Words that have
well-known technical or construction industry meanings are used in the
Contract Documents in accordance with such recognized meanings.
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1.2.2 If the Design Builder believes or is advised by another design
professional retained by the Design Builder to provide services on the
Project that implementation of any instruction received from the Owner
would cause a violation of any applicable law, the Design Builder shall
notify the Owner in writing. Neither the Design Builder nor another
design professional retained by the Design Builder shall be obligated
to perform any act which either believes will violate any applicable
law.
1.2.3 Nothing contained in this Agreement shall create a contractual
relationship between the Owner and any person or entity other than the
Design Builder.
1.3 OWNERSHIP AND USE OF DOCUMENTS
1.3.1 Drawings, specifications, and other documents and electronic date
furnished by the Design Builder and other design professional retained
by the Design Builder, are instruments of service. The Design Builder
and other providers of professional services shall retain all common
law, statutory and other reserved rights, including copyright in those
instruments of service furnished by them. Drawings, specifications, and
other documents and electronic data are furnished for use solely with
respect to this Agreement. The Owner shall be permitted to retain
copies, including reproducible copies, of the drawings, specifications,
and other documents and electronic data furnished by the Design Builder
for information and reference in connection with the Project except as
provided in Subparagraphs 1.3.2 and 1.3.3.
1.3.2 Drawings, specifications, and other documents and electronic data
furnished by the Design Builder shall not be used by the Owner or
others on other projects, for additions to this Project or for
completion of this Project by others, except by agreement in writing
and with appropriate compensation to the Design Builder.
1.3.3 Submission or distribution of the Design Builder's documents to
meet official regulatory requirements or for similar purposes in
connection with the Project is not to be construed as publication in
derogation of the rights reserved in Subparagraph 1.3.1.
ARTICLE 2 - OWNER
2.1 The Owner shall designate a representative authorized to act
on the Owner's behalf with respect to the Project. The Owner
or such authorized representative shall examine documents
submitted by the Design Builder and shall render decisions in
a timely manner and in accordance with the schedule accepted
by the Owner. The Owner may obtain independent review of the
Contract Documents by a separate architect, engineer,
contractor, or cost estimator under contract to or employed by
the Owner.
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Such independent review shall be undertaken at the Owner's
expense in a timely manner and shall not delay the orderly
progress of the Work.
2.2 The Owner shall cooperate with the Design Builder in securing
building and other permits, licenses and inspections. The
Owner shall not be required to pay the fees for such permits,
licenses and inspections unless the cost of such fees is
excluded from the Design Builder's Scope of Services.
2.3 The Owner shall furnish services of land surveyors,
geotechnical engineers, and other consultants for subsoil, air
and water conditions, when such services are deemed necessary
by the Design Builder to properly carry out the design
services required by this Agreement.
2.4 The Owner shall disclose, to the extent known to the Owner,
the results and reports of prior tests, inspections or
investigations conducted for the Project involving: structural
or mechanical systems; chemical; air and water pollution;
hazardous materials; or other environmental and subsurface
conditions. The Owner shall disclose all information known to
the Owner regarding the presence of pollutants at the
Project's site.
2.5 The Owner shall furnish all legal, accounting and insurance
counseling services as may be necessary at any time for the
Project, including such auditing services as the Owner may
require to verify the Design Builder's Applications for
Payment.
2.6 Those services, information, surveys and reports required by
Paragraphs 2.3 through 2.5 which are within the Owner's
control shall be furnished at the Owner's expense. The Design
Builder shall be entitled to rely upon the accuracy and
completeness thereof, except to the extent the Owner advises
the Design Builder to the contrary in writing.
2.7 If the Owner requires the Design Builder to maintain any
special insurance coverage, policy, amendment, or rider, the
Owner shall pay the additional cost thereof, except as
otherwise stipulated in this Agreement.
2.8 If the Owner observes or otherwise becomes aware of a fault of
defect in the Work or nonconformity with the Design Builder's
Scope of Services or the Construction Documents, the Owner
shall give prompt written notice thereof to the Design
Builder.
2.9 The Owner shall promptly upon request of the Design Builder,
furnish to the Design Builder reasonable evidence that
financial arrangements have been made to fulfill the Owner's
obligations under the Contract.
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2.10 The Owner shall communicate with persons or entities employed
or retained by the Design Builder through the Design Builder,
unless otherwise directed by the Design Builder.
ARTICLE 3 - DESIGN BUILDER
3.1 SERVICES AND RESPONSIBILITIES
3.1.1 Standard of Care: Design Builder shall perform or furnish Design
Professional Agreement Between Services and related services in all
phases of the project. The standard of care for all such services
performed or furnished under this Agreement will be the care and skill
ordinarily used by members of the engineering profession practicing
under similar conditions at the same time and locality.
3.1.2 The Design Builder shall be responsible to the Owner for acts and
omissions of the Design Builder's employees, subcontractors and their
agents and employees, and other persons, including other design
professionals, performing any portion of the Design Builder's
obligations under this Agreement.
3.2 BASIC SERVICES
3.2.1 The Design Builder's Basic Services are described below and in
Article 14.
3.2.2 The Design Builder shall designate a representative authorized to
act on the Design Builder's behalf with respect to the Project.
3.2.3 The Design Builder, with the assistance of the Owner, shall file
documents required to obtain necessary approvals of governmental
authorities having jurisdiction over the Project.
3.2.4 Unless otherwise provided in the Contract Documents, the Design
Builder shall provide or cause to be provided and shall pay for design
services, labor, materials, equipment, tools, construction equipment
and machinery, water, heat, utilities, transportation and other
facilities and services necessary for proper execution and completion
of the Work, whether temporary or permanent and whether or not
incorporated or to be incorporated in the Work.
3.2.5 Design Builder shall supervise, inspect and direct the
Construction competently and efficiently, devoting such attention
thereto and applying such skills and expertise as may be necessary to
provide the Construction in accordance with the Contract Documents.
Design Builder shall be solely responsible for the means, methods,
techniques, sequences and procedures employed for the provision of
Construction. Design Builder shall be responsible to see that the
complete Construction complies accurately with the Contract
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Documents and shall keep Owner advised as to the quality and progress
of the Construction.
3.2.6 The Design Builder shall keep the Owner informed of the progress
and quality of the Work.
3.2.7 The Design Builder shall be responsible for correcting Work which
does not conform to the Contract Documents.
3.2.8 The Design Builder warrants to the Owner that materials and
equipment furnished under the Contract will be of good quality and new
unless otherwise required or permitted by the Contract Documents, that
the construction will be free from faults and defects, and that the
construction will conform with the requirements of the Contract
Documents. Construction not conforming to these requirements, including
substitutions not properly approved by the Owner, shall be corrected in
accordance with Article 9.
3.2.9 The Design Builder shall pay all state sales, consumer, use and
similar taxes which had been legally enacted prior to the date of this
Agreement, and shall secure and pay for building and other permits and
governmental fees, licenses and inspections necessary for the proper
execution and completion of the Work which are either customarily
secured after execution of a contract for construction or are legally
required prior to the date of this Agreement.
3.2.10 Laws and Regulations
.1 Design Builder shall give all notices and comply with all
Laws and Regulations of the place of the Project which are
applicable to furnishing and performance of the Work. Except
where otherwise expressly required by applicable Laws and
Regulations, Owner shall not be responsible for monitoring
Design Builder's compliance with any Laws or Regulations.
.2 If Design Builder performs any Work knowing or having
reason to know that it is contrary to Laws or Regulations,
Design Builder shall bear all costs arising therefrom.
.3 Changes in Laws and Regulations not known or foreseeable on
the date of receipt of Proposals having an effect on the cost
or time of performance may be the subject of a claim under
Article 8.
3.2.11 Design Builder shall pay all license fees and royalties and
assume all costs incident to the use in the performance of the Work or
the incorporation in the Work of any invention, design, process,
product or device which is subject of patent rights or copyrights held
by others. If a particular invention, design, process, product or
device is specified in the Conceptual Documents for use in the
performance of the Construction and if to the actual knowledge of Owner
its
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use is subject to patent rights or copyrights calling for the payment
of any license fee or royalty to others, the existence of such rights
shall be disclosed by Owner in the Conceptual Documents. To the fullest
extent permitted by Laws and Regulations, Design Builder shall
indemnify and hold harmless Owner, from and against all claims, costs,
losses and damages (including but not limited to all fees and charges
of engineers, architects, attorneys and other professionals and all
court or arbitration or other dispute resolution costs) arising out of
or resulting from any infringement of patent rights or copyrights
incident to the use in the performance of the Work or resulting from
the incorporation in the Work of any invention, design, process,
product or device not specified in the Conceptual Documents.
3.2.12 Use of Site and Other Areas
.1 Design Builder shall confine construction equipment, the
storage of materials and equipment and the operations of
construction workers to those lands and areas permitted by the
Owner and other land and areas permitted by Laws and
Regulations, rights-of-way, permits and easements, and shall
not unreasonably encumber the premises with construction
equipment or other materials or equipment. Design Builder
shall assume full responsibility for any damage to any such
land or area, or to the owner or occupant thereof or of any
adjacent land or areas, resulting from the performance of the
Construction. Should any claim be made by any such owner or
occupant because of the performance of the Construction,
Design Builder shall promptly settle with such other party by
negotiation or otherwise resolve the claim by arbitration or
other dispute resolution proceeding or at law. Design Builder
shall, to the fullest extent permitted by Laws and
Regulations, indemnify and hold harmless Owner, Owner's
Consultants and anyone directly or indirectly employed by any
of them from and against all claims, costs, losses and damages
(including, but not limited to, fees of engineers, architects,
attorneys and other professionals and court and arbitration or
other dispute resolution costs) arising out of or resulting
from any claim or action, legal or equitable, brought by any
such owner or occupant against Owner, or any other party
indemnified hereunder to the extent caused by or based upon
Design Builder's performance of the Construction.
.2 During the performance of the Construction, Design Builder
shall keep the premises free from accumulations of waste
materials, rubbish and other debris resulting from the
Construction. At the completion of the Construction Design
Builder shall remove all waste materials, rubbish and debris
from and about the premises as well as all tools, appliances,
construction equipment, temporary construction and machinery
and surplus materials. Design Builder shall leave the Site
clean and ready for occupancy by Owner at Substantial
Completion. Design Builder shall
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restore to original condition all property not designated
for alteration by the Contract Documents.
.3 Design Builder shall not load nor permit any part of any
structure to be loaded in any manner that will endanger the
structure, nor shall Design Builder subject any part of the
Work or adjacent property to stresses or pressures that will
endanger it.
3.2.13 The Design Builder shall notify the Owner when the Design
Builder believes that the Work or an agreed upon portion thereof is
substantially completed. If the Owner concurs, the Design Builder shall
issue a Certificate of Substantial Completion which shall establish the
Date of Substantial Completion, shall state the responsibility of each
party for security, maintenance, heat, utilities, damage to the Work
and insurance, shall include a list of items to be completed or
corrected and shall fix the time within which the Design Builder shall
complete items listed therein. Disputes between the Owner and Design
Builder regarding the Certificate of Substantial Completion shall be
resolved in accordance with provisions of Article 10.
3.2.14 The Design Builder shall maintain at the site for the Owner one
record copy of the drawings, specifications, product data, samples,
shop drawings, Change Orders and other modifications, in good order and
regularly updated to record the completed construction. These shall be
delivered to the Owner upon completion of construction and prior to
final payment.
3.2.15 Unless otherwise provided in the Contract Documents, Design
Builder shall directly or through one or more Subcontractors obtain and
pay for all permits and licenses necessary for construction. Owner
shall assist Design Builder, when necessary, in obtaining such permits
and licenses. Design Builder shall pay all governmental charges and
inspection fees necessary for the prosecution of the Construction,
which are applicable on the date of this Agreement. The Owner is
responsible for paying any and all utility company connection charges
and/or capital costs related thereto.
3.2.16 Design Builder's General Warranty and Guarantee
.1 Design Builder warrants and guarantees to Owner that all
Construction will be in accordance with the Contract Documents
and will not be defective. This warranty shall be effective
for a period of twelve months from the date of substantial
completion and will cover all labor and materials to correct
any deficiencies. The warranty contained in this Section
3.2.16 shall be in addition to and separate from the process
guarantee identified in Exhibit 3 of the Contract Documents.
Design Builder's warranty and guarantee hereunder excludes
defects or damage caused by:
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a. Abuse, modification or improper maintenance or operation
by persons other than Design/Builder, Subcontractors or
Suppliers; or
b. Normal wear and tear under normal usage.
.2 Design Builder's obligation to perform and complete the
Work in accordance with the Contract Documents shall be
absolute. None of the following will constitute an acceptance
of Work that is not in accordance with the Contract Documents
or a release of Design Builder's obligation to perform the
Work in accordance with the Contract Documents:
a. Observations by Owner:
b. The making of any progress or final payment;
c. The issuance of a certificate of Substantial Completion;
d. Use or occupancy of the Work or any part thereof by
Owner;
e. Any acceptance by Owner or any failure to do so;
f. Any review and approval of a Submittal;
g. Any inspection, test or approval by others; or
h. Any correction of DEFECTIVE Construction by Owner
3.2.17 OPERATIONAL PHASE: During the Operations Phase, Design Builder
shall:
.1 Provide assistance in connection with the start-up,
testing, refining and adjusting of any equipment or system.
.2 Assist Owner in training staff to operate and maintain the
Project.
.3 Assist Owner in developing systems and procedures for
control of the operation and maintenance of and record keeping
for the Project.
3.3 ADDITIONAL SERVICES
3.3.1 The services described in this Paragraph 3.3 are not included in
Basic Services unless so identified in Article 14, and they shall be
paid for by the Owner as provided in this Agreement, in addition to the
compensation for Basic Services. The services described in this
Paragraph 3.3 shall be provided only if authorized or confirmed in
writing by the Owner.
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3.3.2 Making revisions in drawings, specifications, and other documents
or electronic data when such revisions are required by the enactment or
revision of codes, laws or regulations subsequent to the preparation of
such documents or electronic data.
3.3.3 Providing consultation concerning replacement of Work damaged by
fire or other cause during construction, and furnishing services
required in connection with the replacement of such Work.
3.3.4 Providing services in connection with a public hearing,
arbitration proceeding or legal proceeding, except where the Design
Builder is a party thereto.
3.3.5 Providing coordination of construction performed by the Owner's
own forces or separate contractors employed by the Owner, and
coordination of services required in connection with construction
performed and equipment supplied by Owner.
3.3.6 Submitting Construction Documents for review and approval by the
Owner. Construction Documents may include drawings, specifications, and
other documents and electronic data setting forth in detail the
requirements for construction of the Work.
3.3.7 Preparing a set of reproducible record documents or electronic
data showing significant changes in the Work made during construction.
3.3.8 Providing additional assistance for training personnel, preparing
manuals or consulting during operation outside of the Scope of Basic
Services.
ARTICLE 4 - TIME
4.1 Unless otherwise indicated, the Owner and the Design Builder
shall perform their respective obligations as expeditiously as is
consistent with reasonable skill and care and the orderly progress
of the Project.
4.2 Time limits stated in the Contract Documents are of the
essence. The Work to be performed under this Agreement shall
commence upon receipt of a Notice To Proceed unless otherwise
agreed and, subject to authorized Modifications, Substantial
Completion shall be achieved on or before the date established in
Article 14.
4.3 Substantial Completion is the stage in the progress of the
Work when the Work or designated portion thereof is sufficiently
complete in accordance with the Contract Documents so the Owner can
occupy or utilize the Work for its intended use.
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4.4 Based on the Design Builder's Scope of Services, a
construction schedule shall be provided consistent with Paragraph
4.2 above.
4.5 If the Design Builder is delayed at any time in the progress of
the Work by an act or neglect of the Owner, Owner's employees, or
separate contractors employed by the Owner, or by changes ordered
in the Work, or by labor disputes, fire, unusual delay in
deliveries, adverse weather conditions not reasonably
anticipatable, unavoidable casualties or other causes beyond the
Design Builder's control, or by delay authorized by the Owner
pending arbitration, or by other causes which the Owner and
Design Builder agree may justify delay, then Contract Time shall
be reasonably extended by Change Order.
ARTICLE 5 - PAYMENTS
5.1 PROGRESS PAYMENTS
5.1.1 The Design Builder shall deliver to the Owner itemized
Applications for Payment in such detail as indicated in Article 14.
5.1.1.1 Application Shall be made on AIA forms G702 and G703
or similar documents. Two percent retainage shall be held by
the owner on up to fifty percent value of the completed work
after which no retainage will be held.
5.1.2 Within ten (10) days of the Owner's receipt of a properly
submitted and correct Application for Payment, the Owner shall make
payment to the Design Builder.
5.1.3 The Application for Payment shall constitute a representation by
the Design Builder to the Owner that the design and construction have
progressed to the point indicated; the quality of Work covered by the
application is in accordance with the Contract Documents; and the
Design Builder is entitled to payment in the amount requested.
5.1.4 Upon receipt of payment from the Owner, the Design Builder shall
promptly pay the other design professionals and each contractor the
amount to which each is entitled in accordance with the terms of their
respective contracts.
5.1.5 The Owner shall have no obligation under this Agreement to pay or
to be responsible in any way for payment to another design
professional, or a contractor performing portions of the Work.
5.1.6 Neither progress payment nor partial or entire use or occupancy
of the Project by the Owner shall constitute acceptance of Work not in
accordance with the Contract Documents.
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5.1.7 The Design Builder warrants that title to all construction
covered by an Application for Payment will pass to the Owner no later
than the time of payment. The Design Builder further warrants that upon
submittal of an Application for Payment all construction for which
payments have been received from the Owner shall be free and clear of
liens, claims, security interests or encumbrances in favor of the
Design Builder or any other person or entity performing construction at
the site or furnishing materials or equipment relating to the
construction.
5.1.8 Upon compliance with the Process Guarantee, the Owner shall pay
the Design Builder the retainage, if any, less the reasonable cost to
correct or complete incorrect or incomplete Work. Final payment of such
withheld sum shall be made upon correction or completion of such Work.
5.2. FINAL PAYMENT
5.2.1 When the Work has been completed and the contract fully
performed, the Design Builder shall submit a final application for
payment to the Owner, who shall make final payment within ten (10) days
of receipt.
5.2.2 The making of final payment shall constitute a waiver of claims
by the Owner except those arising from:
5.2.2.1 liens, claims, security interests or encumbrances
arising out of the Contract and unsettled;
5.2.2.2 failure of the Work to comply with the requirements of
the Contract Documents; or
5.2.2.3 terms of special warranties required by the Contract
Documents
5.2.3 Acceptance of final payment shall constitute a waiver of all
claims by the Design Builder except those previously made in writing
and identified by the Design Builder as unsettled at the time of final
Application for Payment.
5.3 INTEREST PAYMENTS
5.3.1 Payments due to the Design Builder under this Agreement which are
not paid when due shall bear interest from the date due at the rate
specified in Article 13, or in the absence of a specified rate, at the
legal rate prevailing where the Project is located.
ARTICLE 6 - PROTECTION OF PERSONS AND PROPERTY
6.1 The Design Builder shall be responsible for initiating,
maintaining and providing supervision of safety precautions and
programs in connection with the performance of this Agreement.
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6.2 The Design Builder shall take reasonable precautions for the
safety of, and shall provide reasonable protection to prevent
damage, injury or loss to: (1) employees on the Work and other
persons who may be affected thereby; (2) the Work and materials
and equipment to be incorporate therein, whether in storage on
or off the site, under care, custody, or control of the Design
Builder or the Design Builder's contractors; and (3) other
property at or adjacent thereto, such as trees, shrubs, lawns,
walks, pavements, roadways, structures and utilities not
designated for removal relocation, or replacement in the course
of construction.
6.3 The Design Builder shall give notices and comply with applicable
laws, ordinances, rules, regulations and lawful orders of public
authorities bearing on the safety of persons or property or their
protection from damage, injury or loss.
6.4 The Design Builder shall promptly remedy damage and loss (other
than damage or loss insured under property insurance provided or
required by the Contract Documents) to property at the site
caused in whole or in part by the Design Builder, a contractor
of the Design Builder or anyone directly or indirectly employed
by any of them, or by anyone for whose acts they may be liable.
ARTICLE 7 - INSURANCE AND BONDS
7.1 PERFORMANCE, PAYMENT AND OTHER BONDS
7.1.1 If it is required by the Primary Lender, Design Builder shall
furnish performance and payment Bonds, each in an amount at least equal
to the Contract Price as security for the faithful performance and
payment of all Design Builder's obligations to furnish, provide and pay
for Construction and related materials under the Contract Documents.
These Bonds shall remain in effect at least until one year after the
date when final payment becomes due, except as provided otherwise by
Laws or Regulations or by the Contract Documents. Design Builder shall
also furnish such other Bonds as are required by Article 14. All Bonds
shall be in the form prescribed by the Contract Documents except as
provided otherwise by Laws or Regulations, and shall be executed by
such sureties as are named in the current list of "Companies Holding
Certificates of Authority as Acceptable Surety Companies" as published
in Circular 570 (amended) by the Audit Staff, Bureau of Government
Financial Operations, U.S. Treasury Department. All Bonds signed by an
agent must be accompanied by a certified copy of such agent's authority
to act. The cost of the performance and payment bonds shall be paid by
the Owner.
7.1.2 If the surety on any Bond furnished by Design Builder is declared
bankrupt or becomes insolvent or its right to do business is terminated
in any state where any part of the Project is located or it ceases to
meet the requirements of paragraph 7.1.1, Design Builder shall within
thirty days thereafter substitute another Bond and surety meeting the
requirements of paragraphs 7.1.1 and 7.9.
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7.2 DESIGN/BUILDER'S LIABILITY INSURANCE
7.2.1 Design Builder shall purchase from and maintain, in a company or
companies lawfully authorized to do business in the jurisdiction in
which the Project is located, such insurance as will protect the Owner
and Design Builder from claims set forth below which may arise out of
or result from operations under this Agreement by the Design Builder.
7.2.1.1 Claims under workers' compensation, disability
benefits and other similar employee benefit acts;
7.2.1.2 Claims for damages because of bodily injury,
occupational sickness or disease, or death of Design Builder's
employees;
7.2.1.3 Claims for damages because of bodily injury, sickness
or disease, or death of any person other than Design Builder's
employees;
7.2.1.4 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;
7.2.1.5 Claims for damages, other than to the Work itself,
because of injury to or destruction of tangible property
wherever located, including loss of use resulting therefrom;
and
7.2.1.6 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.
7.2.2 The policies of insurance required by paragraph 7.2.1 shall:
7.2.2.1 With respect to insurance required by paragraphs
7.2.1.3 through 7.2.1.6 inclusive, include as additional
insureds Owner and any other persons or entities indicated in
Article 14, all of whom shall be listed as additional
insureds, and include coverage for the respective officers and
employees of all such additional insureds;
7.2.2.2 Include at least the specific coverages and be written
for not less than the limits of liability provided in
7.2.2.2.a through 7.2.2.2.c or required by Laws or
Regulations, whichever is greater;
a. Worker's Compensation under Paragraph 7.2.1.1 of the
General Conditions:
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1. State: Statutory
2. Applicable Federal: Statutory
3. Employer's Liability: $500,000
b. Design Builder's General Liability (under paragraphs
7.2.1.2 through 7.2.1.6) which shall include
completed operations and product liability coverages.
1. General Aggregate:
(Except Products - Completed Operations)
$2,000,000
2. Products - Completed Operations Aggregate
$2,000,000
3. Personal and Advertising Injury
(Per Person/Organization) $1,000,000
4. Each Occurrence
(Bodily Injury and Property Damages)
$1,000,000,
5. Property Damage liability insurance will provide
Explosion, Collapse and Underground coverages
where applicable.
6. Excess Liability
General Aggregate $5,000,000
Each Occurrence $5,000,000
c. Automobile Liability:
Combine Single
Limit (Bodily Injury and Property Damage)
$1,000,000
7.2.2.3 include completed operations insurance;
7.2.2.4 Include contractual liability insurance covering
Design Builder's indemnity obligations under paragraphs
3.2.11, 3.2.12 and 11.4;
7.2.2.5 Contain a provision or endorsement that the coverage
afforded will not be cancelled, materially changed or renewal
refused until at least 30 days prior written notice has been
given to Owner and each other additional insured indicated in
Article 14 to whom a certificate of insurance has been issued
(and
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the certificates of insurance furnished by the Design Builder
pursuant to paragraph 7.9.2 will so provide);
7.2.2.6. 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 Article 9;
and
7.2.2.7 With respect to completed operations insurance, and any
other insurance coverage written on a claims-made basis, this
insurance shall remain in effect for at least one year after
final payment.
7.3 OWNER'S LIABILITY INSURANCE
7.3.1 The Owner shall be responsible for purchasing and maintaining the
Owner's General, Auto and Workmen's Compensation liability insurance.
Optionally, the Owner may purchase and maintain other insurance for
self-protection against claims which may arise from operations under
this Agreement. The Design Builder shall not be responsible for
purchasing and maintaining this optional Owner's liability insurance
unless specifically required by the Contract Documents.
7.4 PROPERTY INSURANCE
7.4.1 Unless otherwise provided in Article 14, Owner shall purchase and
maintain property insurance upon the Construction at the Site in the
amount of the full replacement cost thereof (subject to deductible
amounts not exceeding $5000 per occurrence. This insurance will:
7.4.1.1 Include the interests of Owner, Design/Builder,
Subcontractors, and any other persons or entities indicated in
the Supplementary Conditions, each of whom is deemed to have
an insurable interest and shall be listed as an insured or
additional insured;
7.4.1.2 Be written on a Builder's Risk "all-risk" or open
peril or special causes of loss 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, and such
other perils or causes of loss as may be specifically required
by the Supplementary Conditions;
7.4.1.3 Include expenses incurred in the repair or replacement
of any insured property (including but not limited to fees and
charges of engineers and design professionals);
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7.4.1.4 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;
7.4.1.5 Be maintained in effect until final payment is made
unless otherwise agreed to in writing by Owner and
Design/Builder with thirty days written notice to each other
additional insured to whom a certificate of insurance has been
issued; and
7.4.1.6 Allow partial utilization in accordance with paragraph
7.8.
7.4.2 BOILER AND PRESSURE VESSEL INSURANCE.
7.4.2.1 At the appropriate time during the construction
period, the Owner shall purchase and maintain Broad Coverage
Insurance for equipment such as boilers, other pressure
vessels, hot water boilers, fired storage water heaters, fired
coil water heaters, unfired pressure vessels, machinery, and
similar equipment or objects, which are provided under the
Contract for this Work and which may not be covered under
other insurances. The insurance shall be in accordance with
State Laws. Such coverage shall, as a minimum, insure against
loss or damages, including death or bodily injury, from
explosion, rupture, or bursting of the equipment piping and
normally covered appurtenances or other similar hazards
peculiar to the particular equipment or object.
7.4.2.2 The policy shall name the Owner, the Design/Builder,
all Subcontractors and lower tier Sub-subcontractors as joint
insured.
7.4.2.3 The insurance shall be placed into effect prior to the
testing, use or start up of any equipment of object provided
under the Contract. The Design/Builder shall notify the Owner
or insurance agent in ample time prior to testing or startup
of the object to permit any required inspections.
7.4.2.4 The policy, shall cover, as a minimum, (1) loss to
property of the insured, including extra costs of temporary
repair (2) death or bodily injury liability, including
defense, settlement and supplementary payments, and (3)
property damage liability including defense, settlement and
supplementary payments. The minimum limits shall be $1,000,000
per occurrence.
7.4.2.5 After acceptance of the Work, or upon occupancy by the
Owner, the Owner will provide pressure vessel insurance. Owner
will purchase and maintain boiler, machinery and other
property insurance as indicated in paragraph 7.4.
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7.4.2.6 Entities deemed to have an insurable interest shall be
listed as an insured or additional insured.
7.4.3 All the policies of insurance (and the certificates or other
evidence thereof) required to be purchased and maintained by Owner in
accordance with paragraph 7.4 will contain a provision or endorsement
that the coverage afforded will not be cancelled or materially changed
or renewal refused until at least 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 and will contain waiver
provisions in accordance with paragraph 7.5.1.
7.4.4. Owner shall not be responsible for purchasing and maintaining
any property insurance to protect the interests of Design Builder,
Subcontractors, Supplies, Engineers or others in the Work to the extent
of any deductible amounts. The risk of loss within such identified
deductible amount, 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 amounts, each may purchase
and maintain it at the purchaser's own expense.
7.5 WAIVER OF RIGHTS
7.5.1 Owner and Design Builder intend that all policies purchased in
accordance with paragraph 7.4 will protect Owner, Design Builder,
Engineers, Subcontractors, and all other individuals or entities
indicated in Article 14 to be listed as insured 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.
Owner and Design Builder waive all rights against each other and their
respective officers, directors, employees 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; and, in addition, waive all such
rights against Subcontractors, Suppliers, Engineers and all other
individuals or entities indicated in the Supplementary Conditions to be
listed as insureds or additional insureds under such policies for
losses and damages so caused. 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 Design
Builder, Subcontractors, Engineers and Suppliers and the officers,
directors, employees and agents of any of them for business
interruption, loss of use of Owner's property and any other
consequential damages caused by, arising out of or resulting from any
of such insured perils or causes of loss or any other peril or cause of
loss whether or not insured.
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7.6 RECEIPT AND APPLICATION OF PROCEEDS
7.6.1 Any insured loss under the policies of insurance required by
paragraph 7.4 will be adjusted with Owner and made payable to Owner as
fiduciary for the insureds, as their interests may appear, subject to
the requirements of any applicable mortgage clause and of paragraph
7.6.2. Owner shall deposit in a separate account any money so received,
and shall distribute it in accordance with such agreement as the
parties in interest may reach. If no other special agreement is reached
the damaged Work shall be repaired or replaced, the moneys so received
applied on account thereof and the Work and the cost thereof covered by
an appropriate Change Order or Written Amendment.
7.6.2 Owner as fiduciary shall have power to adjust and settle any loss
with the insurers unless one of the parties in interest shall object in
writing within fifteen days after the occurrence of loss to Owner's
exercise of this power. If such objection be made, Owner as fiduciary
shall make settlement with the insurers in accordance with such
agreement as the parties in interest may reach. If no such agreement
among the parties in interest is reached, Owner as fiduciary shall
adjust and settle the loss with the insurers and, if required in
writing by any party in interest, Owner as fiduciary shall give bond
for the proper performance of such duties.
7.7 ACCEPTANCE OF BONDS AND INSURANCE; OPTION TO REPLACE
7.7.1 If either party has any objection to the coverage afforded by or
other provisions of the Bonds or insurance required to be purchased and
maintained by the other party in accordance with Article 7 on the basis
of their not complying with the Contract Documents, the objecting party
shall so notify the other party in writing within ten days after
receipt of the certificates. Owner and Design Builder shall each
provide to the other such additional information in respect of
insurance provided as the other may reasonably request. If either party
does not purchase or maintain all of the Bonds and insurance required
of such party by the Contract Documents, such party shall notify the
other party in writing of such failure to purchase prior to the start
of the Work, or of such failure to maintain prior to any change in the
required coverage. Without prejudice to any other right or remedy, the
other party may elect to obtain equivalent Bonds or insurance to
protect such other party's interests at the expense of the party who
was supposed to provide such coverage, and a Change Order or Written
Amendment shall be issued to adjust the Contract Price accordingly.
7.8 PARTIAL UTILIZATION - PROPERTY INSURANCE
7.8.1 If Owner finds it necessary to occupy or use a portion or
portions of the Work prior to Substantial Completion of all the
construction, such use or occupancy may be accomplished; provided that
no such use or occupancy shall
18
commence before the insurers providing the property insurance have
acknowledged notice thereof and in writing effected any changes in
coverage necessitated thereby. The insurers providing the property
insurance shall consent by endorsement on the policy or policies,
but the property insurance shall not be cancelled or permitted to
lapse on account of any such partial use or occupancy.
7.9 LICENSED SURETIES AND INSURERS; CERTIFICATES OF INSURANCE
7.9.1 All Bonds and insurance required by the Contract Documents to be
purchased and maintained by Owner or Design Builder shall be obtained
from surety or insurance companies that are duly licensed or authorized
in the jurisdiction in which the Project is located to issue Bonds or
insurance policies for the limits and coverage's so required. Such
surety and insurance companies shall also meet such additional
requirements and qualifications as may be provided in Article 14.
7.9.2 Design Builder shall deliver to Owner, with copies to each
additional insured indicated in Article 14, certificates of insurance
(and other evidence of insurance requested by Owner or any other
additional insured) which Design/Builder is required to purchase and
maintain in accordance with paragraph 7.2.1. Owner shall deliver to
Design Builder, with copies to each additional insured indicated in
Article 14, certificates of insurance (and other evidence of insurance
requested by Design Builder or any other additional insured) which
Owner is required to purchase and maintain in accordance with
paragraphs 7.4.1 and 7.4.2.
ARTICLE 8 - CHANGES IN THE WORK
8.1 CHANGES
8.1.1 Changes in the Work may be accomplished after execution of this
Agreement, without invalidating this Agreement, by Change Order,
Construction Change Directive, or order for a minor change in the Work,
subject to the limitations stated in the Contract Documents.
8.1.2 A Change Order shall be based upon agreement between the Owner
and the Design Builder; a Construction Change Directive may be issued
by the Owner without the agreement of the Design Builder; an order for
a minor change in the Work may be issued by the Design Builder alone.
8.1.3 Changes in the Work shall be performed under applicable
provisions of the Contract Documents, and the Design Builder shall
proceed promptly, unless otherwise provided in the Change Order,
Construction Change Directive, or order for a minor change in the Work.
19
8.1.4 If unit prices are stated in the Contract Documents or
subsequently agreed upon, and if quantities originally contemplated are
so changed in a proposed Change Order or Construction Change Directive
that application of such unit prices to quantities of Work proposed
will cause substantial inequity to the Owner or the Design Builder, the
applicable unit prices shall be equitably adjusted.
8.2 CHANGE ORDERS
8.2.1 A Change Order is a written instrument prepared by the Design
Builder and signed by the Owner and the Design Builder, stating their
agreement upon all of the following:
.1 a change in the Work
.2 the amount of the adjustment, if any, in the Contract Sum;
and
.3 the extent of the adjustment, if any, in the Contract Time.
8.2.2 If the Owner requests a proposal for a change in the Work from
the Design Builder and subsequently elects not to proceed with the
change, a Change Order shall be issued to reimburse the Design Builder
for any costs incurred for estimating services, design services or
preparation of proposed revisions to the Contract Documents.
8.3 CONSTRUCTION CHANGE DIRECTIVES
8.3.1 A Construction Change Directive is a written order prepared and
signed by the Owner, directing a change in the Work prior to agreement
on adjustment, if any, in the Contract Sum or Contract Time, or both.
8.3.2 Except as otherwise agreed by the Owner and the Design Builder,
the adjustment to the Contract Sum shall be determined on the basis of
reasonable expenditures and savings of those performing the Work
attributable to the change, including the expenditures for design
services and revisions to the Contract Documents. In such case, the
Design Builder shall keep and present an itemized accounting together
with appropriate supporting data for inclusion in a Change Order.
Unless otherwise provided in the Contract Documents, costs for these
purposes shall be limited to the following:
.1 costs of labor, including social security, old age
and unemployment insurance, fringe benefits required
by agreement or custom, and workers' compensation
insurance;
.2 costs of materials, supplies and equipment, including
cost of transportation, whether incorporated or
consumed;
20
.3 rental costs of machinery and equipment exclusive of
hand tools, whether rented from the Design Builder or
others;
.4 costs of premiums for all bonds and insurance permit
fees, and sales, use or similar taxes;
.5 additional costs of supervision and field office
personnel directly attributable to the change; and
fees paid to other design professionals.
8.3.3 Pending final determination of cost to the Owner, amounts not in
dispute may be included in Applications for Payment. The amount of
credit to be allowed by the Design Builder to the Owner for deletion or
change which results in a net decrease in the Contract Sum and Contract
Time, such agreement shall be effective immediately and shall be
recorded by preparation and execution of an appropriate Change Order.
8.4 MINOR CHANGES IN THE WORK
8.4.1 The Design Builder shall have authority to make minor changes in
the Construction Documents and construction consistent with the intent
of the Contract Documents when such minor changes do not involve
adjustment in the Contract Sum or extension of the Contract Time. The
Design Builder shall promptly inform the Owner, in writing, of minor
changes in the Construction Documents and construction.
8.5 CONCEALED CONDITIONS
8.5.1 If conditions are encountered at the site which are (1)
subsurface or otherwise concealed physical conditions which differ
materially from those indicated in the Contract Documents, or (2)
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 the Contract Documents, then notice by the observing
party shall be given to the other party promptly before conditions are
disturbed and in no event later than 21 days after first observance of
the conditions. The Contract Sum shall be equitably adjusted for such
concealed or unknown conditions by Change Order upon claim by either
party made within 21 days after the claimant becomes aware of the
conditions.
8.6 REGULATORY CHANGES
8.6.1 The Design Builder shall be compensated for changes in the
construction necessitated by the enactment or revisions of codes, laws
or regulations subsequent to the submission of the Design Builder's
Proposal.
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ARTICLE 9 - CORRECTION OF WORK
9.1 The Design Builder shall promptly correct Work rejected by the
Owner or known by the Design Builder to be defective or
failing to conform to the requirements of the Contract
Documents, whether observed before or after Substantial
Completion and whether or not fabricated, installed or
completed. The Design Builder shall bear costs of correcting
such rejected Work, including additional testing and
inspections.
9.2 If, within one (1) year after the date of Substantial
Completion of the Work or, after the date for commencement of
warranties established in a written agreement between the
Owner and the Design Builder, or by terms of an applicable
special warranty required by the Contract Documents, any of
the Work is found to be not in accordance with the
requirements of the Contract Documents, the Design Builder
shall correct it promptly after receipt of a written notice
from the Owner to do so unless the Owner has previously given
the Design Builder a written acceptance of such condition.
9.3 Nothing contained in this Article 9 shall be construed to
establish a period of limitation with respect to other
obligations which the Design/Builder might have under the
Contract Documents. Establishment of the time period of one
(1) year as described in Subparagraph 9.2 relates only to the
specific obligation of the Design Builder to correct the Work,
and has no relationship to the time within which proceedings
may be commenced to establish the Design Builder's liability
with respect to the Design Builder's obligations other than
specifically to correct the Work.
9.4 If the Design Builder fails to correct nonconforming Work as
required or fails to carry out Work in accordance with the
Contract Documents, the Owner, by written order signed
personally or by an gent specifically so empowered by the
Owner in writing, may order the Design Builder to stop the
Work, or any portion thereof, until the cause for such order
has been eliminated; however, the Owner's right to stop the
Work shall not give rise to a duty on the part of the Owner to
exercise the right for benefit of the Design Builder or other
persons or entities.
9.5 If the Design Builder defaults or neglects to carry out the
Work in accordance with the Contract Documents and fails
within fourteen (14) days after receipt of written notice from
the Owner to commence and continue correction of such default
or neglect with diligence and promptness, the Owner may give a
second written notice to the Design Builder and, fourteen (14)
days following receipt by the Design Builder of that second
written notice and without prejudice to other remedies the
Owner may have, correct such deficiencies. In such case an
appropriate
22
Change Order shall be issued deducting from
payments then or thereafter due the Design Builder, the costs
of correcting such deficiencies. If the payments then or
thereafter due the Design Builder are not sufficient to cover
the amount of the deduction, the Design Builder shall pay the
difference to the Owner. Such action by the Owner shall be
subject to dispute resolution procedures as provided in
Article 10.
ARTICLE 10 - DISPUTE RESOLUTION - MEDIATION AND ARBITRATION
10.1 Claims, disputes or other matters in question between the
parties to this Agreement arising out of or relating to this
Agreement or breach thereof shall be subject to and decided by
mediation or arbitration. Such mediation or arbitration shall
be conducted in accordance with the Construction Industry
Mediation or Arbitration Rules of the American Arbitration
Association currently in effect.
10.2 In addition to and prior to arbitration, the parties shall
endeavor to settle disputes by mediation. Demand for mediation
shall be filed in writing with the other party to this
Agreement and with the American Arbitration Association. A
demand for mediation shall be made within a reasonable time
after the claim, dispute, or other matter in question has
arisen. In no event shall the demand for mediation be made
after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statutes or repose
or limitations.
10.3 Demand for arbitration shall be filed in writing with the
other party to this Agreement and with the American
Arbitration Association. A demand for arbitration shall be
made within a reasonable time after the claim, dispute or
other matter in question has arisen. In no event shall the
demand for arbitration be made after the date when institution
of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable
statutes of repose or limitations.
10.4 An arbitration pursuant to this Article may be joined with an
arbitration involving common issues of law or fact between the
Design Builder and any person or entity with whom the Design
Builder has a contractual obligation to arbitrate disputes. No
other arbitration arising out of or relating to this Agreement
shall include, by consolidation, joinder or in any other
matter, an additional person or entity not a party to this
Agreement or not a party to an agreement with the Design
Builder, except by written consent containing a specific
reference to this Agreement signed by the Owner, the Design
Builder and any other person or entities sought to be joined.
Consent to arbitration involving an additional person or
entity shall not constitute consent to arbitration of any
claim, dispute or other matter in question not described in
the written consent or with a person or entity not
23
named or described therein. The foregoing agreement to
arbitrate and other agreements to arbitrate with and additional
person or entity duly consented to by the parties to this
Agreement shall be specifically enforceable in accordance with
applicable law in any court having jurisdiction thereof.
10.5 The award rendered by the arbitrator or arbitrators shall be
final, and judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction thereof. Any
and all arbitration or mediation hearings shall be held in
Sioux Falls, SD.
ARTICLE 11 - MISCELLANEOUS PROVISIONS
11.1 Unless otherwise provided, this Agreement shall be governed by
the law of the place where the Project is located.
11.2 RELATED CONSTRUCTION OF SITE
11.2.1 Owner may perform other Work related to the Project at the Site
by Owner's own forces, or let other direct contracts therefore or have
other work performed by utility owners. If the fact that such other
work is to be performed was not noted in the Conceptual Documents then
(i) written notice thereof will be given to Design Builder prior to
starting any such other work and (ii) Design Builder may make a claim
therefore as provided in Article 8 if Design Builder believes that such
performance will involve additional expense to Design Builder or
requires additional time and the parties are unable to agree as to the
amount or extent thereof.
11.2.2 Design Builder shall afford each other contractor who is a party
to such a direct contract and each utility owner (and Owner, if Owner
is performing the additional work with Owner's employees) proper and
safe access to the Site and a reasonable opportunity for the
introduction and storage of materials and equipment and the execution
of such other work and shall properly connect and coordinate the
Construction with theirs. Unless otherwise provided in the Contract
Documents, Design Builder shall do all cutting, fitting and patching of
the Work that may be required to make its several parts come together
properly and integrate with such other work. Design Builder shall not
endanger any work of others by cutting, excavating or otherwise
altering their work with the written consent of Owner and the others
whose work will be affected. The duties and responsibilities of Design
Builder under this paragraph are for the benefit of such utility owners
and other contractors to the extent that there are comparable
provisions for the benefit of Design Builder in said direct contracts
between Owner and such utility owners and other contractors.
11.2.3 If the proper execution or results of any part of Design
Builder's Work depends upon work performed or services provided by
others under this
24
paragraph 11.2, Design Builder shall inspect such other work and
appropriate instruments of service and promptly report to Owner in
writing any delays, defects of deficiencies in such other work or
services that render it unavailable or unsuitable for the proper
execution and results of Design Builder's Work. Design Builder's
failure so to report will constitute an acceptance of such other work
as fit and proper for integration with Design Builder's Work except for
latent or nonapparent defects and deficiencies in such other work.
11.2.4 Coordination
11.2.4.1 If Owner contracts with others for the performance of
other work on the Project at the Site, the following will be
set forth in Article 14:
a. The individual or entity who will have authority and
responsibility for coordination of the activities among
the various prime contractors will be identified;
b. The specific matters to be covered by such authority and
responsibility will be itemized; and
c. The extent of such authority and responsibilities will be
provided.
11.2.4.2 Unless otherwise provided in Article 14, Owner shall
have sole authority and responsibility in respect of such
coordination.
11.3 CLAIMS FOR DAMAGES
11.3.1 If either party to this Agreement suffers injury or damage to
person or property because of an act or omission of the other party, of
any of the other party's employees or agents, or of others for whose
acts such party is legally liable, written notice of such injury or
damage, whether or not insured, shall be given to the other party
within a reasonable time not exceeding 21 days after first observance.
The notice shall provide sufficient detail to enable the other party to
investigate the matter. If a claim of additional cost or time related
to this claim is to be asserted, it shall be filed in writing.
11.4 INDEMNIFICATION
11.4.1 To the fullest extent permitted by law, the Design Builder shall
indemnify and hold harmless the Owner, Owner's consultants, and agents
and employees of any of them from and against claims, damages, losses
and expenses, including but not limited to attorney's fees, arising out
of or resulting from performance of the Work, provided that such claim,
damage, loss or expense is attributable to bodily injury, sickness,
disease or death, or to injury to or destruction of tangible property
(other than the Work itself) including loss of use resulting therefrom,
but only to the extent caused in whole or in part by negligent
25
acts or omissions of the Design Builder, anyone directly or indirectly
employed by the Design Builder or anyone for whose acts the Design
Builder may be liable. Such obligation shall not be construed to
negate, abridge, or reduce other rights or obligations of indemnity
which would otherwise exist as to a party or person described in
this Paragraph 11.4.
11.4.2 To the fullest extent permitted by law, the Owner shall
indemnify and hold harmless the Design Builder, Design Builder's
consultants, and agents and employees of any of them from and against
claims, damages, losses and expenses, including but not limited to
attorney's fees, arising out of or resulting from performance of the
Work, provided that such claim, damage, loss or expense is attributable
to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including
loss of use resulting therefrom, but only to the extent caused in whole
or in part by negligent acts or omissions of the Owner, anyone directly
or indirectly employed by the Owner or anyone for whose acts the Owner
may be liable. Such obligation shall not be construed to negate,
abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Paragraph
11.4.
11.4.3 In claims against any person or entity indemnified under this
Paragraph 11.4 by an employee of the Design Builder, anyone directly or
indirectly employed by the Design Builder or anyone for whose acts the
Design Builder may be liable, the indemnification obligation under this
Paragraph 11.4 shall not be limited by a limitation on amount or type
of damages, compensation or benefits payable by or for the Design
Builder under worker's compensation acts, disability benefit acts or
other employee benefit acts.
11.5 SUCCESSORS AND ASSIGNS
11.5.1 The Owner and Design Builder, respectively, bind themselves,
their partners, successors, assigns and legal representatives to the
other party to this Agreement and to the partners, successors and
assigns of such other party with respect to all covenants of this
Agreement. Neither the Owner nor the Design Builder shall assign this
Agreement without the written consent of the other. The Owner may
assign this Agreement to any institutional lender providing
construction financing, and the Design Builder agrees to execute all
consents reasonably required to facilitate such an assignment. If
either party makes such an assignment, that party shall nevertheless
remain legally responsible for all obligations under this Agreement,
unless otherwise agreed by the other party.
11.6 EXTENT OF AGREEMENT
11.6.1 This Agreement represents the entire agreement between the Owner
and the Design Builder and supersedes prior negotiations,
representations or
26
agreements, either written or oral. This Agreement may be amended only
by written instrument and signed by both the Owner and the Design
Builder.
ARTICLE 12 - TERMINATION OF THE AGREEMENT
12.1 TERMINATION BY THE OWNER
12.1.1 This Agreement may be terminated by the Owner upon 14 days'
written notice to the Design Builder in the event that the Project is
abandoned. If such termination occurs, the Owner shall pay the Design
Builder for Work completed and for proven loss sustained upon
materials, equipment, tools, and construction equipment machinery,
including reasonable profit and applicable damages.
12.1.2 If the Design Builder defaults or persistently fails or neglects
to carry out the Work in accordance with the Contract Documents or
fails to perform the provisions of this Agreement, the Owner may give
written notice that the Owner intends to terminate this Agreement. If
the Design Builder fails to correct the defaults, failure or neglect
within fourteen (14) days after being given notice, the Owner may then
give a second written notice and, after an additional fourteen (14)
days the Owner may without prejudice to any other remedy terminate the
employment of the Design Builder and take possession of the site and of
all materials, equipment and finish the Work by whatever method the
Owner may deem expedient. If the unpaid balance of the Contract Sum
exceeds the expense of finishing the Work and all damages incurred by
the Owner, such excess shall be paid to the Design Builder. If the
expense of completing the Work and all damages incurred by the Owner
exceeds the unpaid balance, the Design Builder shall pay the difference
to the Owner. This obligation for payment shall survive termination of
this Agreement.
12.2 TERMINATION BY THE DESIGN/BUILDER
12.2.1 If the Owner fails to make payment when due, the Design Builder
may give written notice of the Design Builder's intention to terminate
this Agreement. If the Design Builder fails to receive payment within
fourteen (14) days after receipt of such notice by the Owner, the
Design Builder may give a second written notice and, fourteen (14) days
after receipt of such second written notice by the Owner, may terminate
this Agreement and recover from the Owner payment for Work executed and
for proven losses sustained upon materials, equipment, tools, and
construction equipment and machinery, including reasonable profit and
applicable damages.
ARTICLE 13 - BASIS OF COMPENSATION
The Owner shall compensate the Design Builder in accordance with
Article 5, Payments, and the other provisions of this Agreement as
described below.
27
13.1 COMPENSATION
13.1.1 For the Design Builder's performance of the Work, as described
in Paragraph 3.2 and including any other services listed in Article 14
as part of Basic Services, the Owner shall pay the Design Builder in
current funds the Contract Sum as follows:
Forty Five Million Seven Hundred Fifty Thousand Dollars
($45,750,000.00). This price includes sales and excise tax and will
remain valid as long as construction is started by June 1, 2002. A
Start date after that time will cause the price to be reviewed and
adjusted accordingly.
13.1.2 For Additional Services, as described in Paragraph 3.3 and
including any other services listed in Article 14 as Additional
Services, compensation shall be at a negotiated price.
13.2 REIMBURSABLE EXPENSES
13.2.1 Reimbursable Expenses are in addition to the compensation for
Basic and Additional Services, and include actual expenditures made by
the Design Builder and the Design/Builder's employees and contractors
in the interest of the Project.
13.2.2 FOR REIMBURSABLE EXPENSES, compensation shall be a multiple of
(1.1) times the amounts expended.
13.3 INTEREST PAYMENTS
13.3.1 The rate of interest for past due payments shall be as follows:
(1.5%) one and one half percent per month.
ARTICLE 14 - OTHER CONDITIONS AND SERVICES
14.1 The Basic Services to be performed shall be commenced on issuance
of Notice to Proceed and, subject to authorized adjustments and
to delays not caused by the Design Builder, Substantial
Completion shall be achieved in Fourteen(14) months following
the start of Concrete work.
14.2 The Basic Services beyond those described in Article 3 are as
follows:.
None
14.3 Additional Services beyond those described in Article 3 are as
follows:
None
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14.4 The Design Builder shall submit an Application for Payment on the
tenth (10) day of each month.
14.5 The Design Builders Exhibits include the following documents:
Title Date
----- ----
Exhibit 1 Schedule of Contract Values consisting (to be furnished)
of 2 pages
Exhibit 2 Licensing Agreement for Ethanol Production
Process
Exhibit 2A List of Licensors Technology to be transferred
consisting of 1 page
Exhibit 2B Confidentiality and Non Disclosure
agreement consisting of 6 pages to the
Licensing Agreement (Exhibit 2)
Exhibit 3 Process Guarantee consisting of 1 page 2/09/2001
Exhibit 4 Notice to Proceed consisting of 1 page
Exhibit 5 Schedule of Value Details consisting of 3 pages (to be furnished)
14.6 OTHER CONDITIONS
14.6.1 An initial payment of three hundred thousand dollars ($300,000)
for permitting and preliminary design shall become due and payable at
the signing of this agreement.
14.6.2 The design Builder shall have authority to coordinate the work
of Utility and Railroad workers.
14.6.3 Owner will apply for and receive any applicable state sales or
use tax refunds. Design Builder will assist the Owner in compiling
necessary documentation.
14.6.4 The Process Guarantee, attached as Exhibit 3, shall be met
within 90 days following the date of Substantial Completion.
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14.6.5 Owner hereby authorizes Design Builder to act as its agent to
execute Purchase Orders for the Owner for the direct purchase of
process items and budget account 900 items throughout the duration of
the Contract.
NO OTHER CONDITIONS ARE NEITHER EXPRESSED NOR IMPLIED OTHER THAN THOSE STATED
ABOVE.
IN WITNESS WHEREOF, OWNER and DESIGN BUILDER have signed this Agreement in
duplicate. One counterpart each has been delivered to OWNER and DESIGN BUILDER.
All portions of the Contract Documents have been signed, initialed or identified
by OWNER and DESIGN BUILDER.
This Owner - Design Builder Agreement will be effective on the day and year
first written above.
OWNER: Great Plains Ethanol, LLC DESIGN BUILDER:
Broin and Associates, Inc.
By: _____________________________ By: __________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman Title: President
[CORPORATE SEAL] [CORPORATE SEAL]
Attest: __________________________ Attest: _______________________
Address for giving notices: Address for giving notices:
Great Plains Ethanol, LLC Broin and Associates, Inc.
▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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