Exhibit 10.59

EXECUTION VERSION

 

 

 

SITE WORK AGREEMENT

between

RED RIVER ENVIRONMENTAL PRODUCTS, LLC

Owner

and

BE&K CONSTRUCTION COMPANY, LLC

Contractor

January 23, 2009

 

 

 

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List of Annexes

 

Annex 1:    Scope of Work Annex 2:    Special Payment and Security Provisions
Annex 3:    Site Work Subcontracts

 

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SITE WORK AGREEMENT

This SITE WORK AGREEMENT (this “Site Work Agreement”) is entered into as of the
23rd day of January, 2009, by and between Red River Environmental Products, LLC,
a Delaware limited liability company (“Owner”), and BE&K Construction Company,
LLC, a Delaware limited liability company (“Contractor”). Owner and Contractor
are sometimes collectively referred to herein as the “Parties.” Capitalized
terms used but not defined herein will have the meaning set forth in the
Preliminary EPC Agreement (defined below).

W I T N E S S E T H:

WHEREAS, Owner is developing, constructing and intends to operate and maintain
the Project located at the Project Site in order to produce activated carbon and
electricity from the processing of lignite coal;

WHEREAS, Owner and Contractor are parties to an Engineering, Procurement and
Construction Agreement dated as of January 29, 2008 (the “Preliminary EPC
Agreement”) pursuant to which the Parties agreed upon the terms and conditions
for providing certain preliminary engineering, design and long lead procurement
activities and certain terms and conditions to be included in the Full EPC
Agreement and this Site Work Agreement;

WHEREAS, the Parties entered into a Letter Agreement, dated as of August 15,
2008, as supplemented by a Supplemental Letter Agreement, dated as of August 25,
2008 (collectively, the “Letter Agreement”), providing for the performance of
certain procurement services for the Project, to include procurement of certain
site work and other related services;

WHEREAS, the Parties entered into an Amended and Restated Engineering,
Procurement and Construction Agreement dated as of September 8, 2008 (the “Full
EPC Agreement”) providing for the performance of certain engineering, design,
procurement, construction, construction management, testing, commissioning and
related services for the Project;

WHEREAS, pursuant to this Site Work Agreement, the Parties intend to amend the
Preliminary EPC Agreement so as to provide for the performance of certain site
work and other related services described in the Preliminary EPC Agreement,
commenced pursuant to the Letter Agreement;

WHEREAS, the Parties desire for this Site Work Agreement to be the complementary
amendment to the Preliminary EPC Agreement, such that the Full EPC Agreement and
this Site Work Agreement reflect the complete agreement of the Parties and
explicitly replace the Preliminary EPC Agreement and the Letter Agreement;

 

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NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties covenant and agree as follows:

ARTICLE 1

GENERAL

1.1 Preliminary EPC Agreement. Unless specifically amended or excluded pursuant
to the provisions below, the provisions of the Preliminary EPC Agreement
relating to “Phase 1” shall be applicable to and govern the performance of the
Site Work (defined below) under this Site Work Agreement.

1.2 Scope of Work. The Scope of Work to be performed pursuant to this Site Work
Agreement shall be as set forth in Annex 1 (the “Site Work”).

1.3 Payment for the Site Work; Scheduling of the Site Work.

1.3.1 Payment. Payments for performance of the Site Work to be performed
pursuant to this Site Work Agreement shall be made in the same manner as
provided for payment of the Phase 1 Work under the Preliminary EPC Agreement,
with the exceptions provided in Annex 2. Contractor covenants to use its
commercially reasonable good faith efforts in a timely fashion during
prosecution of the Site Work (i) to verify the performance of the Subcontractors
under the Contractor Subcontracts listed in Annex 3, (ii) to reconcile the
estimated costs provided in such Contractor Subcontracts with actual costs
incurred pursuant to such Contractor Subcontracts and (iii) to anticipate any
cost overruns or underruns pursuant to such Contractor Subcontracts and to
provide such information of such overruns or underruns to Owner promptly upon
learning of such, in each case no less than the next weekly review meeting.
Without limiting the cost-reimbursable structure of this Agreement, Contractor
shall provide Owner for Owner’s approval any proposed change under any of the
Contractor Subcontracts which change(s), in the aggregate and as may be
presented by Contractor to Owner from time to time, may cause the aggregate
amount for which Owner shall reimburse Contractor for costs Contractor incurs
under the Contractor Subcontracts to exceed the Owner’s target cost of Nine
Million Six Hundred Thirty-six Thousand Four Hundred Twenty-three dollars
($9,636,423). The Parties acknowledge this figure is not a lump sum amount, but
rather is the target amount set by Owner for the Site Work. The Parties
acknowledge that Owner has the right to reasonably reject any proposed scope of
work by Subcontractors performing Site Work in order to keep Site Work costs
within the said target amount, but once a subcontract has been let, Contractor
shall use its best efforts to manage such subcontract to its scope in
coordination with Owner with the goal (but not a warranty) that the Site Work
will be performed within such cost.

 

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1.3.2 Scheduling. The Site Work shall be performed in accordance with the
Project Schedule, as such term is defined in the Full EPC Agreement. Any
“Changes” effected under the Full EPC Agreement regarding the Project Schedule
shall be deemed Changes hereunder. For purposes of clarity, any requested,
directed or required modification of the Project Schedule, as applicable,
regarding the Site Work shall be deemed “Changes” under the Full EPC Agreement,
and addressed pursuant to the change order provisions thereunder.

1.4 Incorporation of the Site Work. Upon completion of, and payment for, the
Site Work performed under this Site Work Agreement, such Site Work shall become
part of the “Work” performed under the Full EPC Agreement and shall be subject
to the performance test, warranty and all other requirements and obligations of
Contractor thereunder. All amounts paid to Contractor under this Site Work
Agreement shall be part of the “Total Work Cost”, as such term is defined under
the Full EPC Agreement.

1.5 Certain Taxes. Contractor shall be responsible for the administration and
timely payment of all “Sales Taxes”, with reimbursement by Owner therefor, and
subject to the corresponding terms and conditions pertaining to Sales Taxes and
“Taxes,” as each term is defined in the Full EPC Agreement. To fulfill this
obligation, Contractor shall submit all required documents pursuant to Appendix
L to the Full EPC Agreement that pertain to the Site Work hereunder. Contractor
shall remain responsible for “Contractor Taxes,” as such term is defined in the
Full EPC Agreement.

1.6 Incorporation by Reference. The provisions of the Preliminary EPC Agreement
with respect to Phase 1 are incorporated herein by reference as though restated
in their entirety herein, subject only to amendment or supplement as provided in
the other Sections of this Site Work Agreement.

 

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ARTICLE 2

MISCELLANEOUS

2.1 Miscellaneous. This Site Work Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Site Work Agreement
will in all respects be governed by and construed in accordance with the laws of
the State of New York, without giving effect to any choice of law rules thereof,
which may direct the application of the laws of another jurisdiction. For
purposes of resolving any Dispute arising under this Agreement, and the Parties
hereby submit to the non-exclusive jurisdiction of the courts of the State of
New York and the federal district courts, in each case located in New York.

2.2 Assignment/Delegation. Sections 20.2 and 20.17 of the Full EPC Agreement are
incorporated herein by reference as though restated in their entirety herein.

2.3 Entire Agreement. This Site Work Agreement, the Full EPC Agreement and those
portions of the Preliminary EPC Agreement incorporated herein by reference
contain the entire agreement between the Parties with respect to the subject
matter hereof, and supersedes any and all prior and contemporaneous written and
oral agreements, proposals, negotiations, warranties, guarantees, understandings
and representations pertaining to the subject matter hereof, including the
Letter Agreement.

 

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IN WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have
caused this Site Work Agreement to be executed by their duly authorized officers
as of the date first written above.

 

BE&K CONSTRUCTION COMPANY, LLC     RED RIVER ENVIRONMENTAL PRODUCTS, LLC    

By:

 

Crowfoot Development, LLC, its sole member

By:   /s/ T. W. Vaughn     By:   /s/ C. Jean Bustard Name:   T. W. Vaughn    
Name:   C. Jean Bustard Title:   President     Title:   Manager

 

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ANNEX 1

Scope of Work

A limited amount of construction will be required to ensure: (a) stormwater
controls are in place, (b) Project Site access, laydown and other areas are
prepared for construction of the Project (c) the MHF foundations are in place,
according to specifications and (d) the Project Site and MHF foundations are
otherwise ready for MHF erection and construction of the balance of the Project
in accordance with Project Schedule “Milestones” established under the Full EPC
Agreement.

Contractor shall provide the construction-related activities listed below with
detailed scope specified in the drawings and specifications that have been
reviewed by Owner and released-for-construction by Contractor and as will be
generated, reviewed and released-for-construction pursuant to Contractor’s
continuing obligations hereunder. Contractor home office management and support,
field supervision, and temporary facility costs (excluding Subcontractor costs)
for the limited construction activities are included in the Phase 1
Not-to-Exceed Price.

 

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Mobilization to Project Site.

 

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Establish access roads, including temporary construction access at the northwest
corner of the Project Site and two access roads from the Project Site to Parish
Road 604, temporary construction utilities, construction trailers and
facilities, Project Site security, fencing, and laydown areas.

 

  •  

Stormwater controls installed in accordance with “Storm Water Pollution
Prevention Plan.”

 

  •  

Project Site earthwork including rough site grading and mass excavation,
backfill, compaction, and soil stabilization as required to prepare the Project
Site for installation of building and equipment foundations, including MHF
foundations. Owner may elect to include additional earthwork based on cost and
schedule analysis and recommendations provided by Contractor.

 

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Surveying as required to support the Site Work, establish elevations and grades,
and confirm earthwork quantities.

 

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Installation of underground utilities as required to support construction of MHF
foundations and provide for start of MHF installation.

 

  •  

Installation of pilings for the MHF foundations.

 

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Installation of the four (4) MHF foundations

 

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Inspection, testing, and reporting for the scope identified above, including
independent inspection and testing in accordance with Contractor’s “Quality
Assurance Program” established pursuant to the Full EPC Agreement and
construction specifications released-for-construction.

 

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ANNEX 2

Special Payment and Security Provisions

1. On August 15, 2008, Owner caused that certain letter of credit, number 1436
dated August 15, 2008 issued by Colorado Business Bank and in the stated amount
of four million dollars ($4,000,000.00) (the “LOC”) to be provided to Contractor
in connection with the issuance of a purchase order for procurement of the PCC
Afterburner and Waste Heat Boiler (the “Early Order Equipment”). On August 25,
2008, Owner caused the LOC’s stated amount to be increased to six million six
hundred thousand dollars ($6,600,000.00) in connection with issuance of a
purchase order for procurement of certain site work and site work-related
services to be performed by Contractor’s Subcontractors, which site work and
site work-related services constitute the Site Work under this Site Work
Agreement. Pursuant to the Full EPC Agreement, Owner is obligated, on or before
September 30, 2008, to provide to Contractor the “Pre-Financial Closing Letter
of Credit,” as such term is defined in the Full EPC Agreement, with a maximum
stated amount of twenty-one million three hundred fifty thousand Dollars
($21,350,000), with the stated amount thereof also to be increased or decreased
to ensure that the then-current balance of the stated amount is sufficient to
pay all amounts foreseeably due Contractor in the event of an Owner payment
default (including, without limitation, cancellation charges under Contractor
Subcontracts) under this Site Work Agreement or the Full EPC Agreement prior to
“Financial Closing,” as such term is defined in the Full EPC Agreement. By
separate letter agreement, Contractor agreed to deem Owner’s obligations to
provide the Pre-Financial Closing Letter of Credit discussed above satisfied if
Owner provides letters of credit, which, in the aggregate, are of a stated
amount sufficient to pay all amounts foreseeably due Contractor in the event of
an Owner payment default under this Site Work Agreement and/or the Full EPC
Agreement, prior to Financial Closing; provided, however, that the issuer of
each such letter of credit shall be a Qualified Security Provider, as such term
is defined under the Full EPC Agreement.

2. The LOC will be subject to a draw by Contractor in any of the following
events in an amount necessary to satisfy the obligation giving rise to such
draw:

a) An invoice by Contractor for payment of amounts due for Early Order Equipment
under the Early Order Equipment purchase orders has not been paid in full by
Owner when due according to such invoice;

b) An invoice by Contractor for payments of amounts due for the Site Work under
the Site Work subcontracts has not been paid in full by Owner when due according
to such invoice;

 

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c) Financial Closing has not occurred and a replacement or amended letter of
credit has not been delivered to Contractor in substitution for the LOC and/or
Pre-Financial Closing Letter of Credit, in each case, by July 21, 2009;

d) An Owner payment default has occurred under the Full EPC Agreement prior to
the Financial Closing (with the draw to be in an amount, and only to the extent
necessary, to immediately recover the amount of outstanding unpaid and
undisputed Contractor invoices); or

e) At any time Contractor has a right to terminate the Full EPC Agreement prior
to Financial Closing (with the draw to be in an amount, and only to the extent
necessary, to secure funds for payment of termination payment amounts due
Contractor under the Full EPC Agreement).

3. The Pre-Financial Closing Letter of Credit is to be in effect until the
earlier of July 31, 2009 or Financial Closing. Contractor is entitled to draw
the full stated amount if Financial Closing has not occurred by July 15, 2009
and Owner has not further extended either the letter of credit then in place or
replaced the same by July 21, 2009, which amount shall be held in escrow by
Contractor and applied only, and to the extent permitted in connection with, one
of the other draw conditions thereunder.

4. All invoices for the Early Order Equipment and Site Work must be paid in full
when due. There is no right of Owner to withhold amounts properly invoiced and
directly related to procurement of any Early Order Equipment or Site Work, as
evidenced by such Early Order Equipment vendors’ and Site Work Subcontractors’
invoices to Contractor. If Owner disputes whether an invoice is properly
payable, Owner may withhold payment thereunder and proceed with dispute
resolution procedures, as set forth in the Preliminary EPC Agreement, and Owner
will hold Contractor harmless for costs or liabilities incurred by Contractor
resulting from such dispute resolution activities as and to the extent such
dispute is resolved in Contractor’s favor.

 

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ANNEX 3

Site Work Subcontracts

 

1. Temporary Electrical Supply and 13.8 Feeder

 

2. Potable Water Supply

 

3. Mass excavation, roads, site grading, drainage, and fencing

 

4. Auger cast pile (for MHF foundations)

 

5. MHF foundation

 

6. Security service (prior to January 1, 2009)

 

7. Third party testing related to the Site Work

 

8. Surveying to support Site Work

 

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