ENGINEERING, PROCUREMENT AND TECHNOLOGY LICENSE AGREEMENT GENERAL CONDITIONS (Plant No. 3)
EXHIBIT
10.4
NOTE:
Information in this document marked with an "[*]" has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
ENGINEERING,
PROCUREMENT AND
TECHNOLOGY
LICENSE AGREEMENT
GENERAL
CONDITIONS
(Plant
No. 3)
THIS
AGREEMENT,
made
this 6th
day of
September, 2006 by and between Delta-T Corporation, a Virginia corporation,
with
its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter “Delta-T”), and Pacific
Ethanol, Inc., a Delaware corporation, with
its
principal place of business at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter “Owner”), each of which may be referred to individually as a
"Party," or jointly as the "Parties."
WITNESSETH:
WHEREAS,
DELTA-T is engaged in the performance of engineering, procurement and
construction services;
WHEREAS,
Owner desires DELTA-T through Delta-T Project Services, LLC (located at the
Ford, Bacon and ▇▇▇▇▇, LLC office in Monroe, LA) (hereinafter “DTPC”) to furnish
and perform certain engineering and procurement services to support the
construction and startup of Owner’s fuel ethanol plant at a location to be
designated; and
WHEREAS,
Owner and its parent/affiliate (Pacific Ethanol, Inc.) and DELTA-T desire to
use
this Agreement as a template for the execution of future projects utilizing
DELTA-T Technology.
NOW,
THEREFORE, IN CONSIDERATION of the mutual terms and conditions of this
Agreement, Owner and DELTA-T agree as follows:
ARTICLE
1
DEFINITIONS
1.1
Definitions:
The
following words, when capitalized, shall have the meanings set forth
below:
1.1.1
Affiliate
and Control:
“Affiliate”
shall
mean, with respect to any entity, any other entity Controlling, Controlled
by or
under common Control with such entity, where “Control” and its derivatives shall
mean, with regard to any entity, the legal, beneficial or equitable ownership,
directly or indirectly, of interest sufficient to exercise control over the
management of such entity.
1.1.2
Basic
Process Design:“Basic
Process Design” shall mean the process design to be provided by DELTA-T at the
level of detail described in Schedule A.
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1.1.3
Confidential
Information:“Confidential
Information” shall mean all of the following: (1) all of the provisions of this
Contract and its Exhibits/Schedules, especially, but not limited to, the
provisions concerning pricing and performance, financial information, vendor
lists, price lists, cost data, and other business and commercially sensitive
information, and (2) all technical information, including without limitation,
drawings, designs, methodology, processes, models, inventions, specifications,
plant or equipment test and operating data, improvements, processes, and other
technical information of any kind, whether or not patented or patentable and
whether embodied in a drawing or in equipment or any other physical thing.
Notwithstanding the foregoing, “Confidential Information” does not include
information which a Party can demonstrate: (a) was known to it or in its
possession prior to receipt from the disclosing Party; (b) was in the public
domain at the time of disclosure or thereafter enters into the public domain
through no breach of this Contract by the disclosing Party or is in general
use
in the trade without violation by a Party to this Contract, or violation by
any
other party of an obligation not to disclose it; or (c) is disclosed by a party
other than Owner or DELTA-T who is under no obligation not to disclose it .
Notwithstanding the foregoing or anything herein to the contrary, Owner’s
requirements and the description of Work will be deemed to be the Confidential
Information of Owner only.
1.1.4
Contract:“Contract”
shall mean these General Conditions, the Schedules, and all additions or
modifications thereto made in accordance with Article 5 and Article 20, Section
20.2 of these General Conditions.
1.1.5
Contract
Sum:“Contract
Sum” shall mean the sum determined in accordance with Article 8 of the General
Conditions.
1.1.6
Date
of Commencement:“Date
of
Commencement” shall mean the date of commencement of this Contract, which shall
be the date on which it has been executed by both Parties.
1.1.6a
Day: “day”
shall mean a calendar day unless specifically identified as a “business
day.”
1.1.7
DELTA-T
Technology:
“DELTA-T
Technology” shall mean all
Confidential Information of DELTA-T embodied in any drawing, design, patent,
patent application or process delivered by DELTA-T to Owner
and any
inventions (whether patentable or not), copyrights, trade secrets or other
similar intellectual property rights of Delta-T which are embodied in the Work
Product.
1.1.8
Equipment:“Equipment”
shall mean the equipment and materials for which DELTA-T will provide
procurement services under Schedule A of this Contract.
1.1.9
Final
Acceptance:“Final
Acceptance” shall mean the date upon which the Plant has operated at its
designed capacity for a continuous 2 week period.
1.1.10
Reserved.
1.1.11
General
Conditions:“General
Conditions” shall mean all portions of this Contract other than the
Schedules.
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1.1.12
Mechanical
Completion: The
completion of construction activities essential to the safe and proper operation
of the plant. This includes site, building, mechanical equipment, piping,
electrical as more fully described below:
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Inspection
of all equipment to check that erected facilities conform to construction
drawings and Contract
specifications.
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·
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Non-operating
field leak tests or field pressure tests on piping and field-fabricated
equipment as required by the Contract specifications, disposing
of test
media on site at a location specified by Owner, and removal of
test blinds
and restoring systems to “ready for operation”
condition.
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Removal
of all temporary supports, bracing or other foreign
objects.
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Inspection
of all columns to ensure proper installation of all
internals.
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Field
inspection of all shop fabricated
equipment.
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Line
flushing as part of hydrotesting.
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·
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Check
to ensure that all baseplates and soleplates are level and properly
grouted.
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·
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Check
pipe hangers, supports, guides and pipe specialties, and remove
all
shipping and erection bracing.
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Check
alignment of all piping fit-up with equipment to avoid excessive
nozzle
loading and pipe stresses.
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Insulation
for process purposes.
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Install
Lubricants.
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Check
rotating machinery for correct direction of rotation and for freedom
of
moving parts.
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Check
cold alignments on rotating
equipment.
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Schedule
the services of factory representatives for equipment or other
items as
required.
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Electrical
and Instrumentation installed.
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Irrespective
of the foregoing, Mechanical Completion shall be deemed achieved once feedstock
is introduced into the Plant and ethanol has been produced.
1.1.13
Plant:“Plant”
shall mean the new 50,000,000 GPY ethanol plant being designed,
developed and constructed
by Owner
at a location yet to be designated, being the third Plant developed by Owner
employing DELTA-T Technology.
1.1.14
Reserved.
1.1.15
Process:“Process”
shall mean a system designed for production of an anhydrous fuel-grade ethanol
at the rate of not less than 50,000,000 US gallons per year (based on a 350
day
operating year) of undenatured alcohol using corn feedstock of
56
lb/bushel test weight No. 2 Yellow Dent corn containing a maximum of 14.5%
moisture (by weight), a minimum of 72% dry, trash-free starch (by weight) and
a
max of 1% foreign material (by weight).
1.1.16
Reserved.
1.1.17
Startup:“Startup”
shall mean the point in time at which corn feedstock is first introduced into
the Process for the purpose of making ethanol.
1.1.18
Work:“Work”
shall mean the services to be provided by DELTA-T under this
Contract.
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ARTICLE
2
SCOPE
OF WORK
2.1
Description of Work:
DELTA-T
shall provide the technology transfer, engineering and procurement services
described in Schedule A. To the extent of any conflict between these General
Conditions and the Schedules hereto, these General Conditions shall be
controlling. DELTA-T shall not purchase or commit to purchase any Equipment
without first identifying in writing for Owner the Equipment and the cost to
DELTA-T and the cost to Owner and obtaining Owner’s written approval of such
Equipment.
2.2
Permits and Compliance with Law:
DELTA-T
shall, at its expense, secure all permits that it is required by any federal,
state or local law rule, regulation or other legal requirement (“Legal
Requirements”) to procure in connection with its performance of the Work. All
other permits required by applicable law or regulation, including without
limitation, permits related to environmental protection, operation of the plant
at which the Equipment is installed, or activities of Owner or any of its
contractors (other than DELTA-T), shall be secured by Owner at Owner’s expense.
DELTA-T shall comply with all Legal Requirements that are applicable to its
performance of the Work, and all work product generated by DELTA-T in connection
with the Work shall comply with all such Legal Requirements.
ARTICLE
3
INFORMATION,
GOODS AND SERVICES TO BE PROVIDED BY OWNER; COOPERATION ON DETAILED
DESIGN
3.1
Owner’s Deliverables:
Owner
shall furnish to DELTA-T, at Owner’s expense, the documents, drawings,
equipment, specifications, information, personnel and services identified in
Schedule A as within the scope of Owner’s obligations, and shall furnish them
within the times prescribed in Schedule C, or, if no time is prescribed, within
the time reasonably requested by DELTA-T to allow DELTA-T to perform its
obligations under this Contract.
3.2
Review of the Design:
Owner
will review the elements of the design that are specifically identified on
Schedule A as elements to be reviewed by Owner (as identified with “*”). Upon
receipt of the designs supplied by DELTA-T, Owner may, within twenty (20)
business days of receipt, suggest changes or additions to the design. DELTA-T
shall make all reasonable attempts to incorporate any changes or additions
suggested upon review, provided that Delta-T shall notify Owner in writing
if it
believes that doing so would not be useful to, or would be detrimental to,
the
Process.
3.3
Review of Detailed Design Components:
Owner
shall require its contractor or vendor to submit to DELTA-T, for its review,
all
detailed engineering documents identified on Schedule A as documents to be
reviewed by DELTA-T (as identified with a “*”). DELTA-T shall provide to Owner,
in writing, DELTA-T’s comments on such documents, work and data. Such review
shall not be deemed to constitute comments on integrity, compliance with codes,
correction of, or approval of, other design details.
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ARTICLE
4
SCHEDULE
DELTA-T
shall perform the Work in accordance with the Schedule C. In case of any delay,
including without limitation, Owner’s failure to provide deliverables under
Article 3, Section 3.1, other than a delay caused by DELTA-T, its employees,
subcontractors or vendors for reasons other than force majeure, the Schedule
C
for completion of the Work, or any part of it, shall be automatically extended
by a number of days equal to the number of days of such delay, plus the number
of days reasonably required for demobilization and remobilization.
ARTICLE
5
CHANGES
5.1
Issuance of Change Orders by Owner:
Owner
may, by its written order, require changes in the Work within the general scope
of the Contract consisting of additions, deletions or other revisions which
do
not result in any material change in the Work, provided that the Contract Sum
and payment schedule are adjusted to reflect the change in DELTA-T’s direct
costs, up or down, plus a fixed percentage thereof to cover indirect costs
and a
reasonable amount of profit (which percentage is consistent with the percentage
used to determine the initial Contract Sum), and that the time allowed for
completion, warranty obligations, and any other obligations of DELTA-T affected
by the changes are adjusted to cover the consequences to DELTA-T resulting
from
such change. DELTA-T shall have the right to make a claim for such adjustments
based on cumulative changes, including changes previously made for which it
notifies Owner that it was not claiming an adjustment due to the de minimus
nature of the adjustment required for that single change. The amount to be
paid
to DELTA-T, the effect on Schedule C, if any, and any other adjustments to
the
Contract will be made by mutual agreement. If the change, in DELTA-T’s judgment,
would have a detrimental impact on performance of the Plant, or if the amount
of
the change order in dispute exceeds one percent (1%) of the Contract Sum, then
DELTA-T shall have no obligation to proceed with any change until such agreement
is reached. Furthermore, DELTA-T shall in no case be required to agree to any
change requiring the handling of PCB’s, asbestos or any other hazardous
material. In all other cases, if Owner and DELTA-T are unable to reach agreement
within fifteen (15) business days of the date of DELTA-T’s notice to Owner
provided in accordance with Section 5.2 below, then DELTA-T shall proceed with
the change and the matter shall be resolved as provided at Article 18
below.
5.2
Notice of Instruction Constituting a Change; Notice of Impact of Change
Order:
If
DELTA-T receives instructions from Owner, which in DELTA-T’s opinion constitute
a change in the Work, DELTA-T shall so advise Owner within five (5) business
days of receipt of such instruction. If DELTA-T receives a change order under
Section 5.1 above or becomes aware of a constructive change order of the type
described in Section 5.3 below, or gives Owner a notice that an instruction
of
Owner constitutes a change, then DELTA-T shall within ten (10) business days
thereafter submit to Owner a statement of the impact of such change on the
Contract Sum, payment schedule, warranties, and any other provisions of the
Contract affected thereby. DELTA-T shall not delay prosecution of the Work
not
affected by the change.
5.3
Constructive Change Orders:
Any of
the following shall be deemed constructive change orders a modification of
applicable law, ordinance or regulation resulting in any increase in taxes
or
insurance premiums, or any other cost, payable by DELTA-T or in any government
regulated costs.
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ARTICLE
6
INSTALLATION
AND TRAINING
6.1
Training:
DELTA-T
shall have its representative, and any other employees or assistants that it
deems necessary or appropriate, at the work site to instruct Owner’s personnel
in the installation of the Equipment. DELTA-T shall provide such instruction
and
assistance for the number of days specified at Schedule A. DELTA-T shall provide
personnel to perform such services for additional days at Owner’s request at
rates of compensation provided in Schedule B or as agreed to by Owner and
DELTA-T.
6.2
Installation; Interface: DELTA-T’s
responsibility with respect to interface of the Equipment with the equipment
or
facility of Owner shall be to conform its Work to the Specifications set forth
in Schedule A and in the Basic Process Design. Any
work
done by, or change made by, Owner or any of its contractors (other than DELTA-T)
requiring any change or addition to any Work Product to permit proper interface
of the Work with any other equipment, utility supply, or other aspect of Owner’s
facility, shall be performed by Owner, or by DELTA-T at Owner’s expense at the
rates in Schedule B.
ARTICLE
7
Reserved
ARTICLE
8
CONTRACT
SUM AND PAYMENT
8.1
Contract Sum:
Owner
will pay DELTA-T a Contract Sum consisting of (a) a fixed fee of [*]
to
cover DELTA-T’s general conditions, overhead and profit for all services
provided hereunder, which is subject to adjustment as provided below, (b) [*]
for DELTA-T’s license fee (the “License Fee”), which License Fee has been
determined in accordance with Schedule G hereto, and (c) the cost of all
procured equipment at cost plus [*], subject to increase as set forth in Article
8.1.1.
The
Contract Sum does not include any sales, use, excise or other tax that DELTA-T
is required to charge and collect on the fees payable hereunder by Owner to
DELTA-T with respect to the Work or the Equipment (other than taxes on DELTA-T’s
income or on any facilities, personnel, equipment or other resources procured
by
DELTA-T for use in connection with the Work), and Owner agrees that it shall
pay
the same if and when due. Owner shall pay the lesser of 1% per month or the
highest amount permitted by law on all sums more than three (3) business days
past due.
8.1.1
Adjustments to Contract Sum:
In
addition to changes set forth in Article 5, the Contract Sum set forth in 8.1
may be adjusted as follows:
____________________________
[*] Certain
information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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a.
The
[* ]
referenced above represents DELTA-T’s general conditions, overhead and profit
for services described in Article 2 and includes [*]for construction management
services (under Schedule A, paragraphs 1.4, 1.5, and 1.6), and [*] for training,
commissioning and start-up services (under Schedule A, paragraphs 1.7, 1.8,
1.9,
1.10, and 1.11). Accordingly, in the event Owner elects not to employ DELTA-T’s
construction management services or DELTA-T’s training, commissioning and
start-up services, the fee shall be reduced accordingly.
b.
The
[*] procurement fee is based on Delta-T performing procurement services for
a
total of 5 new construction ethanol plants (including the Madera plant) owned
by
Owner or its affiliates to the same extent DELTA-T handled equipment procurement
at the Madera facility. In the event that, by September 1, 2009, Delta-T does
not provide such procurement services for Owner or its affiliates, Delta-T
shall
invoice Owner a fee representing the difference between procurement at cost
plus
[*] and cost plus [*]. Such invoice shall be immediately due and payable by
Owner.
8.2
Payment:
The
Contract Sum shall be payable as follows:
(a) The
General Conditions/Overhead/Profit shall be paid in the form of:
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1.
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an
initial payment of [*] of which [*] has been previously paid and
[*] which
shall be paid simultaneously with execution of this Contract if work
has
already begun on the Project. If work has not begun, the initial
payment
shall be due upon issuance of a Notice to proceed by owner to
Delta-T,
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2.
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monthly
installments of ninety-five percent (95%) of the remaining amount
in
accordance with the table set forth in Schedule F (the first such
payment
being paid on the thirtieth (30th)
day following the initial payment and the remaining payments being
paid on
the earlier of (i) the first day of each month following the date
of the
second payment, or (ii) upon Mechanical Completion,
and
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The
final payment shall be paid upon Mechanical
Completion.
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4.
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If
Delta-T is behind by more than 30 days in any deliverables called
for by
Schedule C, then Owner may delay payment under this subparagraph
8.2(a)
until such time as Delta-T and Owner mutually agree on a new schedule.
Both parties shall cooperate in reaching agreement in this regard.
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(b) Procurement:
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1.
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Delta-T
shall provide Owner with three (3) business days’ notice of the need for
procurement funds. Included within such notice shall be a breakdown
of the
items to be ordered with the requested funds. Within three (3) business
days after receiving notice from Delta-T, Owner shall wire transfer
the
requested funds to Delta-T. DELTA-T shall hold such funds IN TRUST
for the
benefit of Owner until such time as the funds are remitted to a vendor
or
returned to Owner.
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2.
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The
cost of the procurement portion of the Work will become due and payable
as
the costs for equipment are committed by DELTA-T as
follows:
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____________________________
[*] Certain
information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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a.
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Upon
placement of each purchase order, 10% of the total value of each
purchase
order, including markup is due and payable via wire transfer or zero
balance account.
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b.
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Upon
receipt of approval drawings, 20% of the total value of each purchase
order, including markup is due and payable via wire transfer or zero
balance account.
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c.
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Upon
receipt of materials at the vendor’s fabrication shop, 40% of the total
value of each purchase order, including markup is due and payable
via wire
transfer or zero balance account.
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d.
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Upon
delivery and acceptance at site, 25% of the total value of each purchase
order including markup is due and payable via wire transfer or zero
balance account.
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e.
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Upon
Mechanical Completion and the receipt of all vendor data and maintenance
manuals, 5% of the total value of each purchase order, including
markup is
due and payable via wire transfer or zero balance
account.
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3.
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Markup
shall be determined as set forth in Article 8.1.1(b).
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(c) The
License Fee shall be due and payable as follows:
1.
50%
upon
execution of this contract if the Parties have already begun work on the
Project. If work has not begun, the initial payment shall be due upon issuance
of a Notice to Proceed by Owner to Delta-T.
2.
50%
upon
Mechanical Completion.
(d) For
work
performed by written request, outside of the scope herein defined, the rates
in
Schedule B will apply.
8.3
Invoicing and Invoice Approval:
Other
than the initial payment described in Section 8.2(a) above, Owner shall pay
all
submitted DELTA-T invoices within the later of thirty (30) calendar days after
the
event
occurrence date and thirty (30) calendar days from date of receipt of the
subsequent invoices. Owner shall promptly review all DELTA-T invoices and,
where
appropriate, supporting documentation, and approve for payment such amounts
as
Owner reasonably determines to be properly due under the Contract. If Owner
disputes any amount invoiced, it shall: (i) give notice to DELTA-T of such
disputed amount together with a statement of the basis of the dispute, with
such
notice to be delivered by the due date for the applicable invoice, and (ii)
pay
undisputed amounts on or before the due date. If Owner fails to provide notice
of a disputed amount within the prescribed period, it shall be deemed to have
waived its right to withhold such amount. DELTA-T shall provide Owner with
access to such information or records which are necessary to enable Owner to
verify the accuracy of any invoice.
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ARTICLE
9
OWNERSHIP
OF WORK PRODUCT/CONFIDENTIALITY
9.1
License to Use: Owner
acknowledges that DELTA-T is and shall remain the sole owner of the DELTA-T
Technology, and of the copyrights in all the drawings, manuals and other
documents provided by DELTA-T under this Agreement. In consideration of Owner’s
payment to DELTA-T of the License Fee set forth in Article 8.1, DELTA-T grants
to Owner, subject to the conditions of this Agreement, a non-exclusive, paid-up,
non-transferable right to use in perpetuity the DELTA-T Technology, without
right to grant such rights to others, solely for the purposes of:
a.
Use
at
the Plant; and
b.
Maintenance
and optimization or enhancement of the Plant.
Owner
agrees that it shall not use the Delta-T Technology for any other
purpose.
Optimization and enhancement (“Modification”),
for
this purpose, shall include de-bottlenecking, but shall not include expanding
the physical dimensions of the distillation columns or molsieve vessels included
in the Delta-T Technology, or adding to the original number of distillation
columns or molsieve vessels specified in such design. Owner
may
not disclose any of the Delta-T Technology to (i) any third party that is listed
in Schedule E, or (ii) to any individual, group or company that is in the
business of designing alcohol plants or parts thereof and that is not
listed
in Schedule E, for the purpose of making any Modification, except
that Owner
may
make such disclosure to any Designer to the extent, and only to the extent,
necessary to permit such Designer to enable a Modification that was created
without the disclosure of any Delta-T Technology by or on behalf of Owner,
to interface with portions of the Plant designed by Delta-T.
ARTICLE
10
RIGHTS
OF OWNER AND DELTA-T TO SUSPEND WORK OR TERMINATE
10.1
Owner’s Right to Terminate For Cause:
Owner
may terminate this Contract if: (i) a petition in bankruptcy is filed by or
against DELTA-T and it is not dismissed within thirty (30) days, or (ii) DELTA-T
commits a material breach of this Contract and fails to cure within the longer
of 60 days of its receipt of written notice of such breach or such longer time
as may be approved in writing by Owner. Upon such termination Owner shall (at
its option) take possession of the Work and all Equipment for which it has
paid,
and upon Owner’s request, DELTA-T shall assign any then outstanding purchase
orders for Equipment. DELTA-T
shall cooperate in all respects with Owner in transiting the Work or Owner
or a
third party designated by Owner.
In the
event of termination under this Section 10.1, DELTA-T will be liable to Owner
for any reasonable costs incurred by Owner to complete the Work to the extent
that such costs exceed the unpaid balance of the Contract Sum set forth at
Section 8 above.
10.2
DELTA-T’s Right to Stop Work:
If Owner
does not pay DELTA-T any amount due under this Contract within five (5) business
days after the date such payment is due, then DELTA-T may, upon ten (10) days
written notice to Owner, stop the Work until it receives payment of the amount
owing. In such case, Schedule C shall be extended as provided at Article 4
above.
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10.3
DELTA-T’s Right to Terminate:
DELTA-T
may terminate the Contract if:
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a.
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issuance
of any order of a court or other public authority having jurisdiction
instructing DELTA-T to permanently cease
Work;
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b.
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on
30 days notice if Owner has not made payment within thirty (30) days
of
the date due or a petition in bankruptcy is filed by or against it
and is
not dismissed within sixty (60) calendar days;
or
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c.
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Owner
commits a material breach of this Contract and fails to cure within
30
days of its receipt of written notice of such breach or such longer
time
as may be approved in writing by
DELTA-T.
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Upon
such
termination, Owner shall pay DELTA-T the Contract Sum times the percentage
or
Work successfully completed as of the date of termination plus 15% of the
remainder of the Contract Sum (the “Termination Fee”); provided, that the
Termination Fee shall not be payable if Owner terminates due to DELTA-T 's
breach. If Owner has already paid a greater percentage of the Contract Sum
than
the amount of Work completed, any amounts remaining due will be adjusted such
that Owner pays no more than the Termination Fee.
10.4
Rights On Termination. Owner’s
right to an irrevocable and perpetual license to DELTA-T Technology as provided
for in Article 9 shall be unaffected by the expiration or termination of this
Agreement, irrespective of the reason; provided that Owner has paid DELTA-T
in
full its License
Fee as set forth in Article 8.
10.5
Owner’s Right to Terminate on Plant Cancellation:
Owner
may terminate this Contract at any time if Owner ceases development of the
Plant
for any reason. In the event of such a termination, Owner shall be entitled
to
apply all sums theretofor paid under this Agreement to a subsequent agreement
of
like tenor providing for engineering, procurement and construction services
in
connection with a new 50,000,000 GPY ethanol plant. To the extent the design
being implemented under the subsequent agreement differs materially from the
design for the Plant under this Agreement thus requiring material changes in
the
Work, then such changes shall be accounted for as Change Orders in accordance
with Article 5, or in such other manner as the Parties shall mutually
agree.
ARTICLE
11
SAFETY
DELTA-T
will cause all of its personnel to comply with all local, state and federal
regulations and with all of Owner's safety and security regulations, procedures
or standards, provided, however, that in the event that any of Owner’s safety
and security regulations, procedures or standards increases the cost of
DELTA-T’s performance and was not made known to it by Owner prior to DELTA-T’s
execution of this Contract, DELTA-T shall, at its request made within thirty
(30) days of being advised of such regulation, procedure or standard, be
reimbursed for its costs of complying with the same, provided DELTA-T identified
for Owner in writing the incremental costs within ten (10) days after learning
of any such Owner regulation, procedure or standard and identifies therein
the
incremental cost, and provided Owner did not subsequently relieve DELTA-T of
the
obligation to comply with any such Owner regulation, procedure or standard.
DELTA-T shall have no obligation to proceed with any of its obligations to
be
performed at the Work site in the event that such performance would, for reasons
attributable to Owner, be unsafe,
as
determined by DELTA-T in the exercise of its reasonable judgment.
Plant
#3 EPT
-10-
ARTICLE
12
WARRANTY
12.1
Equipment: For
the
Equipment listed in Schedule A that it provides procurement services for,
DELTA-T will transfer all manufacturers’ warranties to Owner.
12.2
Reserved.
12.3
Service Warranty:
DELTA-T
warrants
that it will perform the Work in accordance with the standards of care and
diligence normally practiced by recognized firms in the ethanol industry
performing services of a similar nature in existence at the time of performance
of the Work. If, during the 12 month period following Mechanical Completion,
it
is shown there is an error in the Work caused solely by DELTA-T’s (or its
agents, subcontractors or vendors) failure to meet such standards and Owner
has
notified DELTA-T
in
writing of any such error as provided below, DELTA-T
shall
re-perform, at no additional cost to Owner, such services within the original
scope of Work as may be necessary to remedy such error.
12.4
Remedies; Limitation on Warranty:
THE
WARRANTIES SET FORTH IN THIS SECTION ARE THE ONLY WARRANTIES MADE BY DELTA-T,
INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OF FITNESS FOR
A
PARTICULAR PURPOSE. THE REMEDIES SET FORTH IN THIS ARTICLE 12 SHALL BE OWNER’S
EXCLUSIVE REMEDIES FOR BREACH OF WARRANTY. The warranties set forth in this
Article 12 do not cover any defect or deterioration which results from failure
of Owner to provide any feedstock, utilities, or other supplies, services or
conditions specified by DELTA-T, which are not within the scope of the Work,
force majeure, operation or maintenance not in accordance with standards of
care
prevalent in the industry, foreign substance or impurity introduced into the
molecular sieve, or any other matter not within DELTA-T’s control.
12.5
Notice of Warranty Claim: Owner
shall notify DELTA-T in writing of any defect covered by this warranty within
ninety (90) days after discovering such defect. If Owner notifies DELTA-T after
such period, any damages to which Owner is entitled will be reduced by any
damages which DELTA-T could have avoided had Owner notified DELTA-T ninety
(90)
days after discovering the defect.
ARTICLE
13
LIMITATION
OF LIABILITY
In
no
case shall DELTA-T have any responsibility for the acts or omission of any
contractor, subcontractor, vendor or material suppliers of Owner, or any
employee, agent or contractor of any of them, other than its own subcontractors
or vendors, and its Affiliates to the extent they provide services hereunder,
including DELTA-T Project Services, LLC. IN NO EVENT SHALL EITHER PARTY HAVE
ANY
LIABILITY TO THE OTHER FOR ANY INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL
LOSS OR DAMAGE, INCLUDING WITHOUT LIMITATION, DAMAGE RESULTING FROM CONSTRUCTION
CHANGE ORDERS AND/OR CLAIMS, LOSS OF USE, LOSS OF REVENUE, LOSS OF PROFIT,
LOSS
OF CONTRACTS, LOSS OF PRODUCT OR PRODUCTION, LOSS OF BUSINESS OPPORTUNITY
SUFFERED OR INCURRED BY ANOTHER PARTY OR ANY OF THEIR AFFILIATES OR
CO-VENTURERS, HOWSOEVER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
OR
FROM THE TERMINATION OR BREACH HEREOF OR ANY WARRANTY MADE HEREUNDER. IN NO
CASE
SHALL EITHER PARTY’S LIABILITY TO THE OTHER UNDER THIS CONTRACT, WHETHER UNDER
ARTICLE 12 OR OTHERWISE, EXCEED THE FEES PAYABLE BY OWNER
HEREUNDER.
Plant
#3 EPT
-11-
THE
EXCLUSION OF DAMAGES AND THE LIABILITY LIMITATION IN THE PRECEDING PARAGRAPH
SHALL NOT APPLY TO BREACHES OF ARTICLES 9 OR 17.
In
no
case shall DELTA-T’s cumulative liability to Owner under
this Contract, whether under Article 12 or otherwise, exceed Two Million Dollars
($2,000,000.00). Notwithstanding anything herein to the contrary, to the extent
DELTA-T is holding funds that have been advanced by Owner in connection with
the
procurement of equipment, then DELTA-T’s liability for mishandling of Owner’s
funds shall be limited to the aggregate dollar amount of funds held at any
time
by DELTA-T.
ARTICLE
14
TRANSFER
OF TITLE AND RISK OF LOSS
14.1 Shipment:
All
Equipment will be shipped to the Owner at the Plant FOB the Plant and title
and
risk of loss shall pass to Owner at the Plant.
14.2 Inspection;
Acceptance:
Owner
will have 15 days to inspect Equipment. If Owner rejects any Equipment for
failure to comply with its specifications or any provision of this Agreement,
Owner will so notify DELTA-T and will return such Equipment as instructed by
DELTA-T at DELTA-T’s cost.
ARTICLE
15
INSURANCE
DELTA-T
shall maintain the following types of insurance coverage as a minimum until
the
earlier of (a) the date of Final Acceptance, or (b) termination of the
Contract.
15.1
Accident to Workmen:
Insurance against damages or compensation payable to any ▇▇▇▇▇▇▇ or other person
in the employment of DELTA-T, other than death or injury resulting from any
act
or default of Owner, its agents or servants. The coverage limits are those
as
required by law.
15.2
Comprehensive General or Commercial Liability:
Insurance against loss or damage to the Equipment prior to delivery to the
site,
other than loss or damage resulting from any act or default of Owner, its agents
or servants. Coverage limits are one million dollars ($1,000,000.00) per
occurrence and three million dollars ($3,000,000.00) cumulative.
15.3
Automobile Liability:
Insurance covering all owned, non-owned and hired vehicles against losses for
bodily injury and property damage. Coverage limits are five hundred thousand
dollars ($500,000.00) per occurrence and one million dollars ($1,000,000.00)
cumulative.
15.4
Professional Liability:
Insurance covering liability arising out of DELTA-T’s negligent acts, errors or
omissions in the rendering of its professional services under this Contract
up
to one million dollars ($1,000,000.00).
Plant
#3 EPT
-12-
15.5
Builder’s Risk; Waiver of Subrogation: Owner
shall purchase and maintain property insurance (including boiler and machinery
coverage) and all risk builder’s risk insurance upon the Plant in an amount no
less than the value of the Plant. The insurance shall include the interests
of
Owner, DELTA-T and all subcontractors at any tier and shall include coverage
for
direct physical damage resulting from all perils, including (without limitation)
fire, flood and earthquake coverage to (a) the installed Work, (b) materials
and
equipment which are stored at the site but have not yet been included in the
Plant, (c) all materials and equipment in transit or stored off site for which
payment has been made or is due from Owner, and (d) for business interruption.
Owner’s sole remedy in case of any loss or damage of the type covered by the
insurance required by this Section 15.5 shall be recovered under that policy.
Owner and DELTA-T intend that all builder’s risk policies purchased, or required
to be purchased, in accordance with this Section 15.5 will protect Owner,
DELTA-T and all subcontractors and sub-subcontractors, and will provide primary
coverage for all losses and damages caused by the perils or causes of loss
covered thereby. Owner and DELTA-T waive all rights against each other and
their
respective subcontractors, officers, directors, agents and employees of the
other arising out of or resulting from any of the perils or causes of loss
covered by such policies and any other property insurance applicable to the
Plant during the period prior to Final Acceptance and payment of all amounts
due
to DELTA-T under this Contract. None of the above waivers shall extend to the
rights that any Party making such waiver may have to the proceeds of insurance
held by Owner as trustee or otherwise payable under any policy so issued. In
addition, Owner waives all rights against DELTA-T, its subcontractors at any
tier and the officers, directors, employees and agents of any of them for
business interruption and any other consequential damages caused by, arising
out
of or resulting from any such insured perils or causes of loss or any other
peril or cause of loss whether or not insured. All policies required under
the
Contract shall be endorsed to include such waivers of subrogation, or
confirmation of such waivers shall appear on the certificates of insurance
required to be delivered under Section 15.7 below. Owner and DELTA-T shall
require similar waivers from each of their contractors and subcontractors who
do
work on the Work, each in favor of the other parties enumerated in this Section.
15.7
Certificates of Insurance: Before
commencing the Work, DELTA-T shall, at Owner’s request, furnish Owner with
certificates evidencing the coverage required under this Article 15 from the
insurance company or companies carrying the aforesaid coverage. These
certificates will provide that the policies may not be amended or terminated
unless at least thirty (30) days prior written notice is given to
Owner.
ARTICLE
16
INDEMNITY
16.1
Indemnity by DELTA-T for Bodily Injury and Property Damage: DELTA-T
shall indemnify and hold harmless Owner and its agents and employees from and
against all third party claims, damages, losses and expenses, including, but
not
limited to attorney's
fees,
arising out
of or
resulting from DELTA-T's performance of the Work, provided that, any such claim,
damage, loss or expense: (1) is attributable to bodily injury, sickness, disease
or death, or to injury to or destruction of tangible property, including the
loss of use resulting therefrom, and (2) is caused in whole or in part by any
negligent act or omission of DELTA-T, its subcontractors, or anyone for whose
acts DELTA-T is liable. In the event that any such damage, loss or expense
was
caused in part by Owner or by any other person or entity, however, then DELTA-T
shall be obliged to pay only the portion of the damage, loss or expense,
including reasonable attorney’s fees as is attributable to its relative share of
the negligence or omission which caused such damage, loss or expense. In no
case
shall DELTA-T be liable under this Section 16.1 for an amount, including costs
and attorney’s fees, in excess of the amount set forth at Article 13
above.
Plant
#3 EPT
-13-
16.2
Indemnity by DELTA-T for Intellectual Property: DELTA-T
hereby warrants that the Process, if used in a manner consistent with the Basic
Process Design provided by DELTA-T and used in accordance with DELTA-T’s
operating instructions, does not infringe any patent, copyright or trade secret.
DELTA-T further agrees upon receipt from Owner of notification of a lawsuit
or
claim against Owner for such an infringement, to promptly defend such claim
with
competent counsel of its own choosing. DELTA-T further agrees, to indemnify
Owner against any royalties, damages, orders, and court costs, awarded by a
final, non-appealable judgment resulting from a finding of an infringement
covered by this indemnity, or the settlement of a claim indemnifiable under
this
Section 16.2. This indemnification shall not apply to any design, process or
product of a particular manufacturer or manufacturers, which is specified by
Owner. This indemnification is valid only if (a) Owner gives notice of any
claim
or lawsuit for which it claims indemnity within time sufficient for Owner to
contest such claim, (b) Owner cooperates fully and promptly with DELTA-T in
the
defense thereof at Owner’s expense for all items related to such defense not
specifically imposed on DELTA-T above, including without limitation, any costs
for time of witnesses who are employees of Owner, costs related to travel,
production of documents, fees for any counsel it elects to assist it in addition
to counsel appointed by DELTA-T for defense of the claim, and (c) DELTA-T has
full authority in defense of such lawsuit or claim and to settle such claim,
provided
that,
it can
and does pay the cost of such settlement, and provided that it does not admit
guilt, culpability or liability on the part of Owner without Owner’s prior
written consent. In no case shall DELTA-T’s liability under this indemnity,
including all costs and fees born by it, exceed the amount set forth at Article
13 above.
ARTICLE
17
CONFIDENTIALITY
17.1
Confidential Information: In
connection with this Agreement, each party may receive or otherwise have access
to Confidential Information of the other party. The Parties shall not disclose
any Confidential Information of the other to any third party, nor shall they
use
any Confidential Information of the other for any purpose other than fulfilling
their respective rights and obligations under this Contract, without the express
written permission of the other. Each party agrees to take all reasonable
precautions to prevent Confidential Information of the other party from being
disclosed or disposed to any third party directly or indirectly without the
prior written consent of the disclosing party. Neither party shall disclose
any
Confidential Information of the other pursuant to court order or other legal
requirement unless: (i) it is advised by its legal counsel that it is legally
required to do so; (ii) it has promptly given the disclosing Party notice of
such order or process so that Party can obtain a secrecy order or other
appropriate legal protection; and, (iii) it uses all other reasonable means
to
ensure the confidential treatment of such information. Each party’s obligation
confidentiality shall extend beyond the term of this Agreement and shall
continue until such time as such Confidential Information meets one of the
exceptions in the definition of Confidential Information. Unless otherwise
directed by the disclosing party, the receiving party agrees that it will return
to the disclosing party upon completion of services under this Agreement all
Confidential Information in tangible form, including for example, drawings,
specifications and other documents. Each party may retain a single archive
copy
for reference purposes.
Plant
#3 EPT
-14-
ARTICLE
18
DISPUTE
RESOLUTION
18.1
Executive Conference or Arbitration: In
the
event of any controversy or claim arising out of or related to this Contract
(excluding any claims related to ownership and/or use rights of intellectual
property, including any claim that either party is infringing upon, or
mis-using, any intellectual property or proprietary information of the other
party), or the interpretation, termination or breach hereof, the Party involved
shall, upon the written request of the other, attempt to resolve the matter
by
agreement of the representatives of the Parties at least one management level
above the individuals who have had direct responsibility for performance of
the
Contract, or the highest level of management of any Party whose highest level
of
management has had direct responsibility for such performance. Such
representatives shall meet in person or by telephone or teleconference at least
once, and shall attempt to resolve any matter raised by either of them by the
written notice requesting such resolution for a period of at least forty five
(45) days. If the Parties are unable to resolve the dispute by agreement of
such
representatives within such 45-day period, then at the written request of any
Party they shall submit the matter to binding arbitration under the then current
Construction Industry rules of American Arbitration Association.
18.2
Arbitration:
The
place of arbitration shall be agreed in writing between the parties, or in
the
absence of agreement, shall be Los Angeles, California. Any Party who files
a
notice of demand for arbitration must assert in the demand all claims then
known
to that Party against the other. Judgment upon any award rendered by in
arbitration under this Agreement may be entered upon it in accordance with
applicable law in any court having jurisdiction thereof.
ARTICLE
19
FORCE
MAJEURE
No
delay
in, or failure of, performance by either party hereto under this Contract,
other
than the failure to pay amounts due, will constitute default hereunder or give
rise to any claim for damages if and to the extent caused by an occurrence
beyond the control of the party affected, including but not limited to: acts
of
governmental authority, acts of God, strikes or other concerted acts of workmen,
fire, flood, explosions, riots, war, rebellion or sabotage, provided, however,
that if either party hereto fails to perform due to force majeure and such
failure continues for more than one hundred twenty (120) days, the other may
terminate this Contract. In case of termination by Owner under this Article
19,
Owner shall pay DELTA-T for all Work completed and Equipment procured prior
to
the date of termination and billed in accordance with the Contract, including
any retention money. In case of termination by DELTA-T under this Article 19,
Owner shall pay DELTA-T for all Work completed prior to termination, including
any retention money.
ARTICLE
20
GENERAL
PROVISIONS
20.1
Assignment: Neither
DELTA-T nor Owner shall assign or transfer its duties or obligations hereunder
without the prior written consent of the other (provided,
that Owner may assign this Contract to an affiliate, to a successor in interest,
whether by merger, acquisition of asset or stock or otherwise, and to financing
sources and their designees, without the consent of DELTA-T; in which case
Owner
shall provide written notice to DELTA-T of such assignment).
This
Contract shall be binding upon and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of Owner and
DELTA-T.
Plant
#3 EPT
-15-
20.2
Entire Contract; Waiver; Amendment:
These
General Conditions and the attached Schedules constitute the full and complete
Contract between the Parties hereto with respect to the subject matter hereof.
There are no statements, agreements, understandings, representations or trade
customs of any kind, express or implied, concerning the subject matter which
are
not merged herein or superseded hereby. A waiver of any of the terms of this
Contract shall not bind either Party unless signed by one of its duly authorized
representatives. Waiver by either Party of any default by the other party
hereunder shall not be deemed a waiver by such Party of any default by the
other, which may occur thereafter. This Contract may only be modified or amended
by an appropriate change order as noted in Article 5 above or by an agreement
in
writing executed by both Parties hereto.
20.3
Governing Law: The
validity, performance, construction and effect of this Contract shall be
governed by the laws of the State of California.
20.4
Notices:
All
notices provided for herein will be considered as properly given if in writing
and delivered personally or sent properly addressed, postage
pre-paid:
|
If
to DELTA-T, to:
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
||
|
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
||
|
If
to Owner, to:
|
▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
||
|
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
With
a copy to:
|
General
Counsel
|
20.5
Survival: Owner’s
obligations under the provisions of Article 9, 13, 16, 17, and 18 shall survive
termination or expiration of this Contract.
Plant
#3 EPT
-16-
WITNESS
WHEREOF,
the
parties hereto have executed this CONTRACT on the 6th
day of
September, 2006.
| DELTA-T CORPORATION | PACIFIC ETHANOL, INC. | |||
|
By:
|
/S/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
By:
|
/S/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
Name:
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
|
Printed
Name:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
Printed
Name:
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
|
Title:
|
Vice
President
|
Title:
|
CEO
|
|
|
Date:
|
9/6/06
|
Date:
|
9/6/06
|
|
Plant
#3 EPT
-17-
SCHEDULE
A
ENGINEERING
& RELATED TECHNICAL SERVICES
1.0
Engineering/Deliverables Summary
NOTE:
|
1)
|
Scope
items and deliverables below designated by “ * ” will be reviewed and
signed off by OWNER per Section 3.2 of this Agreement before final
approval is given by OWNER to be implemented into the Project. These
items
include project issues and decisions that rely heavily on OWNER’S
discretion for financial, operating or strategic reasons. For example,
the
total amount of inventory and product storage capacity would need
OWNER’S
input as the decision has significant ramifications from a capital
cost
versus operating flexibility
standpoint.
|
|
2)
|
Per
Section 3.3 of this Agreement, scope items and deliverables below
designated by “ * ” require that DELTA-T, through DTPS, review the work
performed by OWNER’S general contractor(s), subcontractors or other agents
to make sure it is in compliance with Process
requirements.
|
|
3)
|
The
items designated “(C)” have been completed by DELTA-T, through DTPS, prior
to the date of execution of this
Agreement.
|
|
4)
|
The
items designated “(Basic Process Design”) are all the design and
engineering components provided by DELTA-T which are required to
complete
detailed engineering of the plant. A milestone will be defined in
the
Schedule setting forth a special “Basic Process Design review” for the
purpose of the Parties committing to all issues required to begin
the
detailed design of the Project. Once the Basic Process Design basis
has
been formally approved by both Parties and the data submitted to
detailed
engineering, any change requested by OWNER after that time will be
handled
as a change order with a reasonable extension of time and at a mutually
agreed price to perform the change.
|
|
5)
|
For
purposes of this Schedule A, “OWNER” shall include OWNER and all of
OWNER’s vendors and
subcontractors.
|
Plant
#3 EPT
-18-
|
Task/Deliverable
Description
|
Responsibility
D
- Delta-T (DTPS)
O
- OWNER
|
Basic
Process Design
|
|
|
Detailed
Cost Budget, Plot Plan, Typical Project Schedule, Block Flow
Diagrams,
Building Information and Vendor Quotes from the existing
facility
(C).
|
D
|
NO
|
|
|
Engineering
SCHEDULE*
|
D
|
NO
|
|
|
Master
Project SCHEDULE **
|
O
|
NO
|
|
|
Engineering
Document List*
|
D
|
YES
|
|
|
System
Design Specifications*
|
D
|
YES
|
|
|
Process
Description
|
D
|
YES
|
|
|
Facility
Process Flow Diagram
|
D
|
NO
|
|
|
Facility
Mass and Energy Balances
|
D
|
YES
|
|
|
Process
Areas Flow Diagrams
|
D
|
YES
|
|
|
Process
Areas Mass and Energy Balances
|
D
|
YES
|
|
|
Production
& Utility Consumption*
|
D
|
YES
|
|
|
Piping
& Instrument Diagrams
|
D
|
YES
|
|
|
Major
Equipment List
|
D
|
YES
|
|
|
Major
Equipment Data Sheets
|
D
|
YES
|
|
|
Motor
List
|
D
|
YES
|
|
|
Instrument
List
|
D
|
YES
|
|
|
Valve
List
|
D
|
YES
|
|
|
Pipeline
List
|
D
|
YES
|
Plant
#3 EPT
-19-
|
Insulation
& Heat Trace List
|
D
|
YES
|
|
|
Instrument
Data Sheets
|
D
|
YES
|
|
|
Major
Equipment Detailed Design
|
D
|
NO
|
|
|
PLANT
Process Equipment Procurement Technical Specifications
|
D
|
YES
|
|
|
Major
Equipment Bid Drawings
|
D
|
NO
|
|
|
Major
Equipment Bid Packages
|
D
|
NO
|
|
|
Non-PLANT
PROJECT Equipment Procurement Technical Specification
|
D
|
NO
|
|
|
Electrical
Single Line Diagram**
|
D
|
NO
|
|
Electrical
Arrangement Dwgs.**
|
D
|
NO
|
|
|
Electrical
Panel Design Drawings**
|
D
|
NO
|
|
|
Cable
and Conduit SCHEDULE
|
D
|
NO
|
|
|
Electrical
Interconnection Data
|
D
|
NO
|
|
|
Electrical
Schematic Diagrams**
|
D
|
NO
|
|
|
Control
Valve Data Sheets
|
D
|
YES
|
|
|
Manual
Valve Specifications
|
D
|
NO
|
|
|
Instrumentation
Installation Details
|
D
|
YES
|
|
|
Control
System Specification
|
D
|
YES
|
|
|
Control
Narrative
|
D
|
YES
|
|
|
Control
System Programming
|
D
|
NO
|
Plant
#3 EPT
-20-
|
PLANT
Basic AutoCAD 3-D Equipment Arrangement & Piping Model
|
D
|
NO
|
|
|
PLANT
Equipment Plan & Section Arrangement Drawings
|
D
|
YES
|
|
|
PLANT
Basic Piping Layouts & Arrangement
|
D
|
YES
|
|
|
Instrumentation
Location Information
|
D
|
YES
|
|
|
Piping
Specifications
|
D
|
NO
|
|
|
Detailed
Piping Design & Arrangement
|
D
|
NO
|
|
|
Piping
Support Design
|
D
|
NO
|
|
|
Piping
Isometrics (IFB)
|
D
|
NO
|
|
|
Structural
Steel Arrangements**
|
D
|
NO
|
|
|
Structural
Steel Design
|
D
|
NO
|
|
|
Structural
Steel Fabrication & Installation Technical Specifications
|
D
|
NO
|
|
|
Foundation
Design
|
D
|
NO
|
|
|
Equipment
Installation Technical Specification
|
D
|
YES
|
|
|
Instrument
Installation Technical Specifications
|
D
|
YES
|
|
|
Insulation
Installation Technical Specification
|
D
|
YES
|
|
|
Piping
Installation Technical Specification
|
D
|
YES
|
|
|
Site
Geotechnical Data
|
O
|
NO
|
|
|
Building
Design**
|
D
|
NO
|
|
|
Rail
and Facility Design**
|
O
|
NO
|
|
|
Prepare
Environmental Permit Applications
|
O
|
NO
|
|
|
Process
Safety Management Review (PSM)**
|
D
|
NO
|
|
|
Verify
Compliance with Construction Codes
|
D
|
NO
|
Plant
#3 EPT
-21-
|
Design
Fire Suppression System
|
O
|
NO
|
|
|
Supply
Process Needs Associated with Non Process Area Systems
|
D
|
YES
|
|
|
Review
of Detailed Engineering for Non-PLANT Areas
|
D
|
NO
|
|
|
Construction
Observation (with specific CLIENT approval of personnel)
|
D
|
NO
|
|
|
Operations
Manual
|
D
|
NO
|
|
|
Operator
Training*
|
O
|
NO
|
|
|
STARTUP
& Commissioning Assistance*
|
D
|
NO
|
|
|
Ongoing
Technical Service
|
D
|
NO
|
|
|
Bid
Evaluation & Equipment/Vendor Recommendation*
|
D
|
NO
|
|
|
Procurement
Services for Equipment listed in Section 1.13 below*
|
D
|
NO
|
|
|
Procurement
of construction materials, construction services, and equipment
other than
that listed in Section 1.13**
|
D
|
NO
|
The
following provides a text description of key DELTA-T (DTPS) deliverables for
the
packages and services shown in the preceding list of SCHEDULE A, Section
1.0.
1.1
Non-Process Area System Specifications
Performance
specifications will be provided for non-PROCESS areas which interconnect to
the
Process, and which may impact the overall operation of the PLANT. The
performance specification will be included in the System Design
Specification.
Plant
#3 EPT
-22-
Specifications
will be provided for the following non-Process areas:
| · |
Grain
handling and storage
|
1.2
Detail Engineering
DELTA-T
will provide the following detail engineering services for the
PLANT:
|
·
|
Detailed
piping design including layout, specifications and isometric
drawings
|
|
·
|
Instrumentation
and electrical installation
specifications
|
|
·
|
Specifications
for vessel detail design and installation, including
internals
|
|
·
|
3D
model reviews of piping, electrical and equipment
layout
|
|
·
|
Provide
electrical, structural, and process control design to support the
process.
|
|
·
|
Provide
bid packages for all major construction activities within DTC’s
scope.
|
1.3
Procurement Services for Equipment
DELTA-T
will provide procurement services for specific Equipment and Equipment packages
within the PLANT as listed in Section 1.13 of this Schedule A. Procurement
will
include:
|
·
|
Prepare
bid package supporting data and documentation, and prepare and issue
bid
packages to vendors
|
|
·
|
Evaluate
bids and vendor selections, subject to Owner’s
approval.
|
|
·
|
Issue
Purchase orders.
|
|
·
|
Track,
expedite and coordinate engineering drawings delivery as well as
equipment
deliveries to site
|
|
·
|
Review
and approve payment for all invoices for Equipment and
delivery.
|
1.4
Review of Non-PROCESS Areas of the PLANT
Review
and provide comments on all Non-PROCESS areas in the Plant designed by others,
including, but not limited to the following:
|
·
|
Corn
receiving and storage systems
|
This
review service will include:
|
·
|
Review
of design for conformance with PROCESS
requirements
|
|
·
|
Assistance
with preparation of vendor lists and selection of
vendors
|
|
·
|
Assistance
with establishing scope for RFQ
|
|
·
|
Review
final design to ensure that it is compatible with the PROCESS and
the
PLANT
|
Plant
#3 EPT
-23-
1.5
Review of Construction for Conformance with PROCESS
|
·
|
During
the construction phase, DELTA-T will provide a full time on-site
representative to interface with the construction contract and serve
as
the Delta-T (DTPC) representative.
|
1.6
Safety, Operability and Maintainability Review
DELTA-T
will perform the BASIC PROCESS DESIGN to meet the codes defined in Section
2 of
this Schedule A. DELTA-T will also provide skilled personnel to participate
in
Process Safety Management (PSM) activities conducted by OWNER for:
|
·
|
Assist
OWNER with review of the entire PLANT for safety, operability, and
maintainability issues
|
|
·
|
Assist
OWNER with any required formal PSM review of selected areas of the
PLANT
|
Any
review of the detail design requested by OWNER shall be handled under Change
Orders.
1.7
Operations Manuals
Five
(5) sets of Operations manuals will be provided for PROCESS areas, which will
include:
|
·
|
Description
of the entire PLANT PROCESS and each system
operation
|
|
·
|
Detailed
operating description of each process
unit
|
|
·
|
Initial
start-up procedures
|
|
·
|
Normal
operation
|
|
·
|
Startup
& shutdown under normal operating
conditions
|
|
·
|
Startup
& shutdown under emergency
conditions
|
|
·
|
Cleaning
& preventive maintenance
guidelines
|
|
·
|
Safety
& Health guidelines
|
|
·
|
Basic
troubleshooting guides
|
1.8
Maintenance Manuals
As
a part
of its purchasing services, DELTA-T will assemble maintenance manuals for all
Equipment it procures under this Agreement. These manuals will normally consist
of certified vendor drawings, operations manuals, maintenance manuals,
lubrication requirements (amount and type), and spare parts list (start-up,
one
and three year recommended spares), with special instructions included where
the
vendor information is insufficient.
Plant
#3 EPT
-24-
1.9
Operator Training
At
Owner’s election, DELTA-T will provide comprehensive on-site training for
operators, technicians, supervisors, and managers. Training activities will
cover the following:
|
·
|
Operations
manual, charts, diagrams
|
|
·
|
Classroom
instruction in the theory and background for system design &
operation
|
|
·
|
Instruction
in the PLANT consisting of "hands-on"
training
|
|
·
|
Startup
|
|
·
|
Normal
operation & control
|
|
·
|
Detection
of and reaction to abnormal operating
conditions
|
|
·
|
Cleaning
& preventive maintenance
guidelines
|
|
·
|
Planned
shutdown & startup
|
|
·
|
Emergency
shutdown & startup
|
|
·
|
Basic
troubleshooting
|
|
·
|
Safety
& Health guidelines
|
All
training shall be provided in fourteen (14) calendar days by two DELTA-T people.
The exact schedule for such training will be coordinated with OWNER. DELTA-T
recommends that training be done in one week of “classroom” oriented training
during the later stages of construction (after key positions have been filled
in
the operations staff) and one week of combination of “hands-on” and classroom
training during startup activities.
1.10 STARTUP
& Commissioning Assistance
DELTA-T
will provide up to 4 people for a duration of up to thirty (30) calendar days
to
assist/consult with Owner’s operating staff during STARTUP, commissioning, and
Acceptance Testing of the Plant. The scope of STARTUP and commissioning services
to be provided by DELTA-T includes:
|
·
|
Provide
skilled and experienced engineering/operations personnel on site
with 24
hour per day coverage during critical commissioning activities, startup
and conductance of Acceptance Testing.
|
|
·
|
Provide
consultation and advice to troubleshoot and problem-solve startup
and
operating problems for all areas of the
PLANT
|
|
·
|
Continuance
of “hands-on” operator training while conducting startup and commissioning
activities
|
Plant
#3 EPT
-25-
1.11
Ongoing Technical Service
DELTA-T
will provide ongoing telephone response at no charge to OWNER’s questions,
concerns or problems with regard to the operation and maintenance of the plant
for a period of one year following STARTUP.
1.12
General Conditions
DELTA-T
(DTPS) will provide all engineering deliverables such as electronic models,
drawings, calculations, and other project documentation to OWNER in electronic
format. All engineering deliverables generated by the performance of the work
will become the property of OWNER. In addition, DELTA-T (DTPS) will work with
OWNER to establish electronic communication practices.
1.13
List of Equipment for Which Procurement Services will be Provided by
DELTA-T
[*]
2.0
Design Codes & Standards
Unless
specifically noted to the contrary, the design specifications for the PROCESS
and the PLANT shall conform with the applicable sections and parts of the codes
and standards set forth below, including the most recent revisions and
supplements at the time of the execution of the Agreement.
____________________________
[*] Certain
information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Plant
#3 EPT
-26-
|
Applicable
Standards:
|
Federal,
State, Local, OSHA, Air quality, ANSI
|
|
Building
Codes:
|
UBC,
IBC, CBC, or other state, local, federal, or
international
building codes that may apply at
specified
site or sites
|
|
Cable
Marking:
|
ICEA
(Insulated Cable Engineers Association)
|
|
Concrete:
|
ACI
(American Concrete Institute)
|
|
Corrosion:
|
▇▇▇▇
(National Association of Corrosion Engineers)
|
|
Electrical/Instrumentation:
|
NEMA
(National Electrical Manufacturers Assoc)
|
|
NEC
(National Electrical Code)
|
|
|
ISA
(Instrument Society of America)
|
|
|
Electrical
Components:
|
UL
(Underwriters Laboratories)
|
|
Flanges:
|
ANSI
standard
|
|
Fire
Protection:
|
NFPA,
IFC, CBC, or other state, local, federal, or
international
codes that may apply at specified
site
or sites
|
|
Heat
Exchanger:
|
TEMA
(Tubular Exchanger Manufacturers Association)
|
|
Nuts,
Bolts, Fittings
|
ASTM
(American Society of Testing Materials)
|
|
&
Line Components:
|
SAE
(Society of Automotive Engineers)
|
|
Painting:
|
SSPC
(Steel Structure Painting Council)
|
|
Personnel
Safety:
|
OSHA
(Occupational Safety and Health Association)
|
|
Piping,
pumps:
|
ANSI
(American National Standards Institute)
|
|
Structural
Steel:
|
AISC
(American Institute of Steel Construction)
|
|
Tanks
|
API
(American Petroleum Institute)
|
|
Valves
and Fittings:
|
MSS
(Manufacturers Standardization Society)
|
|
Vessels
(Where required):
|
ASME
(American Society of Mechanical Engineers)
|
|
Welding:
|
AWS
(American Welding Society)
|
Plant
#3 EPT
-27-
SCHEDULE
B: RATES
|
DELTA-T
CORPORATE COMMERCIAL BILLING RATES
|
||
|
POSITION
/ FUNCTION
|
HOURLY
RATE
|
|
|
Senior
Consultant/Principal
|
$300.00
|
|
|
Director
of Engineering
|
$250.00
|
|
|
Project
Manager
|
$200.00
|
|
|
Construction
Manager
|
$150.00
|
|
|
Project
Engineer
|
$135.00
|
|
|
Project
Controls
|
$125.00
|
|
|
Procurement
Manager
|
$125.00
|
|
|
Senior
Process Consultant
|
$195.00
|
|
|
Senior
Process Engineer
|
$150.00
|
|
|
Senior
I&C Engineer
|
$150.00
|
|
|
Senior
Mechanical Engineer
|
$150.00
|
|
|
Process
Engineer
|
$125.00
|
|
|
I&C
Engineer
|
$110.00
|
|
|
Mechanical
Engineer
|
$110.00
|
|
|
Senior
Designer
|
$100.00
|
|
|
Designer
|
$75.00
|
|
|
Draftsperson
|
$60.00
|
|
|
Technicians
|
$110.00
|
|
|
Financial
Control and Billing
|
$80.00
|
|
|
Clerical
|
$60.00
|
|
Plant
#▇ ▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇
▇:
Project
Schedule
[*]
____________________________
[*] Certain
information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Plant
#3 EPT
-29-
SCHEDULE
D:
Reserved
Plant
#3 EPT
-30-
SCHEDULE
E:
List
of Designers
|
▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
|
Magnin-Interis
Charmes,
France
|
|
Abengoa
BioEnergy
Sevilla,
Spain
|
▇▇▇▇▇▇
International, Inc.
Cincinnati,
Ohio
|
|
Agrol
Biotechnologies Ltd.
Guildford,
Surrey Canada
|
Lurgi
PSI Inc.
Memphis,
TN
|
|
Ambitech
Engineering Corporation
Downers
Grove, Illinois
|
▇▇▇▇▇▇▇
& Company
Aurora,
Colorado
|
|
AMG
Engineering
Cincinnati,
Ohio
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇,
▇▇▇▇▇
|
|
Bio-Process
Innovation
West
Lafayette, Indiana
|
Process
Plus, LLC
Cincinnati,
Ohio
|
|
Bio-Renewable
Group
Omaha,
Nebraska
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇ Associates International
Cincinnati,
Ohio
|
|
Broin
& Associates, Inc.
Aberdeen,
South Dakota
|
Ro-Tech
Incorporated
Louisville,
Kentucky
|
|
▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇
Kansas
City, Missouri
|
SNC-Lavalin
Group
Toronto,
Canada
|
|
Chematur
Engineering &
▇▇▇▇▇▇▇▇▇
Engineering
Atlanta,
Georgia
|
Southeastern
Energy Development, Inc.
Brooklyn,
NY
(Alliance
with Pure Vision Technology)
|
|
Dick
Engineering Inc.
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
|
Technip
Cedex,
France
|
|
MECS,
Inc.
St.
Louis, Missouri
|
Vogelbusch
USA, Inc.
Houston,
TX
(and
its parent Vogelbusch-Austria)
|
|
▇▇▇▇▇,
Inc.
Granite
Falls, Nebraska
|
Wave
Zeal Ltd.
Winnepeg,
Manitoba CANADA
|
|
▇▇▇▇▇▇
Group Inc.
Seattle,
WA
|
Washington
Group International
Boise,
Idaho
|
|
ICM,
Inc.
Colwich,
KS
|
Washington
Group International
Boise,
Idaho
|
|
Any
individual, group or company that performs, on the date of the License
or
during its term, (a) consulting or engineering related to the design
of
alcohol process technology and/or (b) design/build services for existing
and prospective alcohol plants
|
Plant
#3 EPT
-31-
SCHEDULE
F:
Payment
Schedule
[*]
____________________________
[*] Certain
information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Plant
#3 EPT
-32-
SCHEDULE
G:
License
Fee Formula
[*]
____________________________
[*] Certain
information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Plant
#3
EPT
-33-