CHANGE ORDER NUMBER 123108MV TO ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES FIXED PRICE CONTRACT LOCATION: MT. VERNON, INDIANA
Exhibit
10.6.1
CHANGE
ORDER NUMBER 123108MV
TO
ENGINEERING, PROCUREMENT AND
CONSTRUCTION
SERVICES
FIXED
PRICE CONTRACT
LOCATION:
MT. ▇▇▇▇▇▇, INDIANA
THIS CHANGE ORDER (“Change
Order”) is made and entered into effective as of December 31, 2008 (the
“Effective Date”) by and between Aventine Renewable Energy – Mt. ▇▇▇▇▇▇, LLC
(“Owner”) and Kiewit Energy Company (“Kiewit”).
WHEREAS,
Owner and Kiewit are parties to that certain Engineering, Procurement and
Construction Services Fixed Price Contract dated May 31, 2007 (the “Contract”);
and
WHEREAS,
pursuant to Article 6 of the Contract, Owner provides the following as written
direction to Kiewit to make certain changes in the Work, and Kiewit by its
signature below accepts such direction.
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1.
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Capitalized
terms not defined herein shall have the meaning set forth in the
Contract.
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2.
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Pursuant
to Section 9.5 of the Contract, Owner directed Kiewit to suspend the Work
on the Plant as of the Effective Date (the “Date of
Suspension”).
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3.
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Pursuant
to the terms of the Contract, Owner owes Kiewit $7,934,615 (subject to the
Dispute Resolution procedures referenced below), which amount includes
$6,685,431 not previously invoiced for the agreed progress of the Work
completed as of November 14, 2008, $241,159 for sales and use taxes, and
$1,008,025 for the agreed progress of the Work completed as of December
31, 2008. Such amount is due and owing to Kiewit as of December
31, 2008, and may be subject to adjustment which may be mutually agreed
upon by Kiewit and Owner or determined pursuant to the Dispute Resolution
procedures set forth in Article 18 of the Contract. Such amount
shall be paid by Owner to Kiewit in accordance with the payment schedule
set forth in Section 12 below. Nothing contained in the Change
Order shall be deemed to constitute the creation of indebtedness of Owner
under any of its loan documents and the amount owing hereunder arose in
the ordinary course of business of
Owner.
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4.
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In
addition to the amounts Owner owes Kiewit in Section 3, the parties agree
that Owner shall pay Kiewit the following: (i) ▇▇▇▇▇▇’▇ costs,
with no profit or ▇▇▇▇-up to be paid by Owner, associated with the
directed suspension of the work in the lump sum amount of $2,936,600, and
(ii) $2,000,000 as an allowance for the amounts invoiced by ▇▇▇▇▇▇’▇
subcontractors and material subcontractors (collectively the
“Subcontractors”) for such Subcontractors’ suspension costs, plus a
▇▇▇▇-up of twenty percent (20%) of such invoiced costs (“Subcontractors’
Suspension Costs”), which amounts, to the extent not disputed by Owner,
shall be paid by Owner to Kiewit in accordance with the payment schedule
set forth in Section 12 below. Such amount includes payment for
the Suspension Services defined below. Kiewit will work with
Owner, and shall allow Owner to work with ▇▇▇▇▇▇’▇ Subcontractors (to the
extent allowed under the terms of such subcontracts), in an effort to
reduce the Subcontractors’ Suspension Costs. Disputes regarding
the validity or amount of the Subcontractors’ Suspension
Costs
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claims
and Kiewit invoice(s) based thereon will be resolved pursuant to Article
18 of the Contract.
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5.
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If
the total Subcontractors’ Suspension Costs exceed the allowance provided
for in Section 4 above, the additional amount of Subcontractors’
Suspension Costs in excess of the allowance shall be added to the amount
owed by Owner to Kiewit pursuant to this Change Order and shall be paid as
an additional payment on June 30, 2009 in accordance with the provisions
of Section 12 below. If the total Subcontractors’ Suspension
Costs do not exceed the allowance provided for in Section 4 above, Kiewit
will credit the difference between the allowance and the actual
Subcontractors’ Suspension Costs to the last amounts payable to Kiewit in
accordance with Section 12 of this Change
Order.
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6.
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Owner
and Kiewit agree that the Work may be suspended for up to 180 days from
the Date of Suspension (the “Suspension Period”). If Owner is
not in default of the payment obligations specified in this Change Order,
Owner may terminate the Suspension Period and direct Kiewit to resume
construction of the Work following the delivery to Kiewit of (i) 10 days
advance written notice to resume the Work and (ii) reasonable evidence
reasonably satisfactory to Kiewit that Owner can satisfy the remaining
financial obligations of this Change Order and the Contract and (iii)
payment in full of all remaining amounts payable under this Change Order
(without consideration of the schedule in Section 12 below); provided,
however, that nothing in this Change Order shall be construed to limit or
restrict ▇▇▇▇▇▇’▇ entitlement to an equitable adjustment to the Contract
Sum arising from the suspension (including costs associated with
re-mobilization and rescheduling of the Work) and the Schedule in
connection with such suspension in accordance with Article 6 of the
Contract.
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7.
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If
the Suspension Period expires without the Owner’s termination of the
Suspension Period in accordance with the terms of the Contract and this
Change Order, the Contract shall be deemed to have been terminated for the
Owner’s convenience under Section 9.4 of the Contract, and Owner shall pay
Kiewit any amounts due Kiewit under Section 9.4 of the Contract and all
remaining payments due under this Change Order (without consideration of
the schedule in Section 12 below); provided there shall be no
duplication of payments under Section 9.4 of the Contract and this Change
Order. Notwithstanding the provision contained in the first
sentence of Section 9.4, Owner may enter into a contract with another
entity to complete construction of the Plant, if Owner has made all
payments due Kiewit under Section 9.4 of the Contract and all remaining
payments due under this Change Order; provided there shall be no
duplication of payments under Section 9.4 of the Contract and this Change
Order.
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8.
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During
the Suspension Period, all Contract milestone dates and Schedule deadlines
are tolled and, in the event of re-mobilization, shall be reestablished by
change order pursuant to Article 6 of the Contract; provided, however,
that in the event of such remobilization, Kiewit shall be excused from the
notice requirements contained in Sections 6.2 and 6.3 of the
Contract. The amounts set out in Sections 3, 4 and 5 above and
the rental payments or demobilization costs for the Cranes as set forth in
Section 15 below shall be the only amounts due to Kiewit for costs
associated with the Suspension Period; provided that nothing in this
sentence shall preclude Kiewit from entitlement to a change order as set
forth in Section 6 above in the event the Suspension Period is
terminated.
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9.
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For
so long as Owner complies with the payment provisions of this Change
Order, Kiewit will
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provide
qualified personnel on the Plant Site to perform necessary maintenance of
equipment in accordance with equipment manufacturer’s operation and
maintenance manuals (collectively the “Suspension Services”) during the
Suspension Period. Other than the Suspension Services, Kiewit
has no obligation during the Suspension Period to continue performance of
the Work at the Plant Site. During the Suspension Period,
Kiewit shall have no obligation to comply with the requirements of 10.2
(Security), 11.1 (Kiewit Representatives), 11.3 (Project Reviews and
Approvals) and 20.11 (Time is of the Essence) and, except to the extent
that Kiewit has previously received payment or receives funds from the
Owner in accordance with the payment schedule set out in Section 12,
Kiewit shall be excused from any requirement under the Contract to keep
the project lien free with respect to those liens filed by Subcontractors
which represent amounts unpaid under such subcontract, after the
Suspension Date, but not yet due and owing under the terms of the
subcontract, or to indemnify and/or reimburse the Owner with respect to
such liens. During the performance of the Suspension Services,
Owner shall have access to the Plant Site, but in no event shall Owner be
entitled to modify the Work completed to the Date of Suspension nor shall
Owner be entitled to operate any equipment existing on the Plant Site
without ▇▇▇▇▇▇’▇ prior written consent.
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10.
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Kiewit
has provided an irrevocable letter of credit in lieu of retainage per
Section 8.3 of the Contract. Within three (3) business days
after full execution of this Change Order, Owner shall return such letter
of credit to the issuing bank, and instruct the issuing bank that Owner is
returning the letter of credit for cancellation.
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11.
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The
Owner hereby waives the requirements in the Contract for retainage or a
letter of credit in lieu of retainage. Notwithstanding any
provision in the Contract to the contrary, retainage shall not be withheld
from any amounts described in this Change Order or any amounts due under
the Contract thereafter.
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12.
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In
consideration of the agreements and forbearances contained in this Change
Order, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and notwithstanding that all
amounts described in this Change Order in Section 3 4 and 5 above are
presently due and owing to Kiewit (subject to dispute resolution under the
Contract), Kiewit agrees to forebear from exercising its remedies under
the Contract for non-payment, other than its rights to file mechanic’s and
materialman’s liens against the Project, for so long as Owner makes the
following payments in strict accordance with the deadlines below by wire
transfer of immediately available funds to a bank to be selected by
Kiewit, as follows:
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a.
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Three
Million Five Hundred Thousand Dollars ($3,500,000) on or before December
31, 2008;
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b.
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One
Million Eighty Thousand Dollars ($1,080,000) on or before January 31,
2009;
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c.
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One
Million Eight Hundred Thousand Dollars ($1,800,000) on or before February
27, 2009;
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d.
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One
Million Eight Hundred Thousand Dollars ($1,800,000) on or before March 31,
2009;
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e.
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One
Million Eight Hundred Thousand Dollars ($1,800,000) on or before April 30,
2009;
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f.
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One
Million Eight Hundred Thousand Dollars ($1,800,000) on or before May 29,
2009; and
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g.
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Remaining
balance on June 30, 2009.
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Such
payments shall be first credited against the amounts due and owing for
▇▇▇▇▇▇’▇ suspension costs and the Subcontractors’ Suspension Costs, and
thereafter to amounts due to Subcontractors under the terms of such
subcontract, and thereafter to the amounts described in Sections 3 and 5
of this Change Order. In addition to the provisions of Section
9.3 of the Contract, in the event Owner fails to make a payment described
in this Section 12 when due, Kiewit may terminate the Contract three (3)
business days after providing written notice of such failure to Owner,
unless cured within that period. Such termination shall be
considered a termination for Owner’s convenience under Section 9.4 of the
Contract, Kiewit shall have no obligation to exercise forbearance under
this Change Order, and all remaining amounts due under Section 9.4 of the
Contract and under this Change Order shall be immediately due and payable
to Kiewit (without consideration of the schedule in Section 12
below); provided there shall be no duplication of payments
under Section 9.4 of the Contract and this Change
Order. Notwithstanding the provision contained in the first
sentence of Section 9.4, Owner may enter into a contract with another
entity to complete construction of the Plant, if Owner has made all
payments due Kiewit under Section 9.4 of the Contract and all remaining
payments due under this Change Order (without consideration of the
schedule in Section 12 below); provided there shall be no duplication of
payments under Section 9.4 of the Contract and this Change
Order. Time is of the essence of this Change
Order.
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13.
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Nothing
in this Change Order shall preclude Kiewit from filing a mechanic’s and
materialman’s lien against the Plant Site for the amounts unpaid, whether
or not due under the Contract as modified by this Change Order. In the
event any payment under the Contract or this Change Order is determined to
be a preferential transfer and is required to be disgorged by Kiewit, the
parties agree that any waiver of mechanic’s lien rights provided by Kiewit
shall be rescinded, invalid, and of no further force and
effect.
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14.
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(a)
In
the event Owner terminates the Suspension Period as provided above, Owner
and Kiewit will negotiate a change order pursuant to Article 6 of the
Contract; provided, however, that Kiewit shall have no obligation to so
remobilize or recommence the Work unless and until Owner has paid in full
all amounts due to Kiewit under this Change Order (without consideration
of the schedule in Section 12 below). In such event, Kiewit
will provide to Owner both a cost plus and a fixed price option at a
negotiated profit margin for the remaining work to be performed in
sufficient detail to allow a meaningful analysis of the
options.
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| (b) Following any resumption of and completion of the Work, and subject to the other provisions of the Contract, Kiewit warrants to Owner pursuant to Section 12.1 of the Contract that the Plant will be free from defects in design, material and workmanship (other than design, material and workmanship provided by Subcontractors) until twelve (12) months from Substantial Completion, as such date may be extended as the result of the suspension and that the Plant will be free from defects in design, material and workmanship provided by the |
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| Subcontractors until twelve (12) months from the originally scheduled Substantial Completion Date of March 27, 2009. Kiewit shall have no responsibility to correct or address defects in design, materials or workmanship provided by Subcontractors which are discovered after March 27, 2010, unless such Subcontractor warranties already extend past such date or are extended at Owner’s expense as provided in 14(c) below. | ||
| (c) Following any resumption of the Work and before March 27, 2010, Kiewit will provide Owner with the costs associated with extending Subcontractor warranties beyond March 27, 2010, to the extent such information is available. If Owner elects to extend any Subcontractors’ warranties beyond the existing warranty periods, Kiewit shall cooperate with Owner in obtaining any such extensions and Owner shall pay the costs associated with obtaining any such extension(s). | ||
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15.
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Owner
will retain the Tower Crane and Crawler Crane (the “Cranes”) on site and
pay rental at a total amount of $260,000 for the 180 day Suspension Period
(for both Cranes, which total amount is included in the calculation of
▇▇▇▇▇▇’▇ suspension costs in Section 4 of this Change
Order. After the initial 26 weeks the rental for the Cranes
shall be as negotiated between Owner and Kiewit. Owner will
have the option, upon written notice to Kiewit, to pay an agreed
demobilization fee in lieu of continuing to pay rent of $5,000 per Crane
per week for said Cranes, in which event the amount of rent paid by Owner
through the date of demobilization shall be credited against the
demobilization fee. However, in the event of demobilization of
the Cranes, Owner will continue to pay the rental costs set out in this
Section 15 for a period not to exceed six (6) weeks, or until Kiewit has
otherwise rented the Cranes, if earlier.
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16.
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Notwithstanding
its obligation to provide and maintain Builder’s Risk insurance under
Section 14.3(c) of the Contract, in the even the Builder’s Risk insurance
policy in effect for the Plant Site is canceled by Owner, and Owner
includes the Plant Site and Work situated thereupon in its permanent
property insurance program, Owner shall be deemed to be in compliance with
its obligations under Section 14.3(c) of the Contract during the
Suspension Period, provided that (i) Kiewit and its Subcontractors are
named as additional insured under Owner’s permanent property insurance
program with waiver of subrogation in their favor, and (ii) such permanent
property insurance program is reasonably acceptable to Kiewit and (iii)
such permanent property insurance is maintained during the Suspension
Period. Prior to and as an additional condition to any Kiewit
remobilization to the Plant Site and recommencement of Work at the Plant
Site following the Suspension Period, Owner shall provide and maintain the
Builder’s Risk policy as required by Section 14.3(c).
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17.
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In
the event Owner cancels the existing Builder’s Risk insurance policy in
effect for the Plant Site and otwithstanding any contrary provision in the
Contract, care, on the effective date of such cancelation of Builder’s
Risk policy, the care, custody and control of, and risk of loss to the
Work located at the Plant Site, or any part thereof, including the
Equipment shall be with Owner as of and during the Suspension Period, and
Owner shall be responsible for and shall pay any and all related insurance
deductibles with respect to same. Notwithstanding the foregoing
sentence, Kiewit will be held responsible for any damage (i) to such Work,
whether completed or ongoing, occurring during the provision of the
Suspension Services or (ii) to the Owner’s existing structures, materials,
or equipment adjacent to or on the Plant Site, in the case of (i) and (ii)
to the extent arising from any gross negligence or willful misconduct of
Kiewit,
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| ▇▇▇▇▇▇’▇ agents or employees, Subcontractors or Subcontractors’ agents or employees. Kiewit shall perform the repair or replacement of any such damaged Work, structures, materials, or equipment at Owner’s direction, and subject to the preceding sentence, at Owner’s sole cost and expense and upon advance payment for ▇▇▇▇▇▇’▇ services. Owner shall release and hold Kiewit harmless from liability to Owner for any loss or damage to such Work not caused by the gross negligence or willful misconduct of Kiewit, ▇▇▇▇▇▇’▇ agents or employees, Subcontractors or Subcontractors’ agents or employees. Owner will cause its insurers to issue a waiver of subrogation in favor of Kiewit and its Subcontractors of any tier consistent with the rights and obligations of this Article. | ||
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18.
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Effective
December 31, 2008, Owner will assume all responsibility and cost
associated with the requirements of the Mt. ▇▇▇▇▇▇ Stormwater Pollution
and Prevention Plan (SWPPP). All available inspection and
corrective action reports developed by Kiewit dated November 2007 through
December 2008 shall be provided to Owner per the requirements of the
SWPPP. Upon the effective date of the notice to proceed with
remobilization of the Work, Kiewit will resume responsibility for the
requirements of the SWPPP.
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19.
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Within
ten (10) days of the Effective Date, Owner shall cause its parent
guarantor, Aventine Renewable Energy Holdings, Inc., to provide a written
consent to this Change Order, and Kiewit shall cause its parent guarantor,
Kiewit Energy Group Inc. (formerly known as Kiewit Energy Ltd.) to provide
a written consent to this Change Order.
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20.
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This
Change Order may be executed by Kiewit and Owner in any number of
counterparts, each of which shall be deemed an original instrument, but
all of which together shall constitute one and the same
instrument. Execution can be evidenced by fax signatures with
original signature pages to follow in due
course.
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IN
WITNESS WHEREOF, the Parties have caused this Amendment to be executed effective
as of December 31, 2008.
| AVENTINE RENEWABLE ENERGY - MT ▇▇▇▇▇▇, LLC |
KIEWIT
ENERGY COMPANY
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| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
By:
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
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Name:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
Name:
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▇▇▇▇ ▇▇▇▇▇▇▇ | |||
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Title:
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V.P. Tech. Services |
Title:
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President | |||
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