**Exhibit 10.1**

**AGREEMENT**

**BETWEEN OWNER AND DESIGN/BUILDER**

**ON THE BASIS OF A STIPULATED PRICE**

 

**THIS AGREEMENT** is made and entered into this 6th dayof December, 2004 by and between LSCP, L.P., an Iowa limited partnership(hereinafter called **OWNER**) and ICM,Inc., a Kansas corporation (hereinafter called **DESIGN/BUILDER**).

 

OWNER and DESIGN/BUILDER, in consideration of the mutual covenantshereinafter set forth, agree as follows:

 

**Article 1.       THE PROJECT ANDWORK.**

 

1.01.        DESIGN/BUILDER shallcomplete all Work for the Project as specified or indicated in the ContractDocuments. The Project is generally described as a retrofit of OWNER’s existingfuel-grade ethanol plant located in or around Marcus, Iowa that increases thecapacity of said plant to fifty-two (52) million gallons per year of denaturedfuel-grade ethanol.  The DESIGN/BUILDER’sWork includes engineering services, labor, materials, and equipment inconnection with such retrofit.  A morespecific statement of the scope of work to be provided by DESIGN/BUILDER isdescribed in Exhibits A and B.

 

**Article 2.       CONTRACT TIMES.**

 

2.01.        *Days toAchieve Substantial Completion and Final Payment.*  The Work will be completed and ready forfinal payment of the Contract Price in accordance with paragraph 13.08 of theGeneral Conditions within thirty (30) days after the date the OWNER shuts downthe plant in late March or early April of 2005, unless otherwise provided inthe Contract Documents.  During such30-day period, DESIGN/BUILDER anticipates that the plant will need to be shutdown for no more than four (4) days in order for DESIGN/BUILDER to complete theWork.

 

**Article 3.       CONTRACT PRICE.**

 

3.01.        OWNER shall payDESIGN/BUILDER the Contract Price for completion of the Work in accordance withthe Contract Documents.  The ContractPrice may be adjusted as provided by the General Conditions.  For all Work, OWNER shall pay toDESIGN/BUILDER a price equal to the aggregate of (i) Four Million Six HundredThousand Dollars ($4,600,000), and (ii) amounts due and payable by OWNER toDESIGN/BUILDER under paragraph 2 of Exhibit B.

 

3.02.        Unless otherwiseexpressly agreed by the parties, the Work to be performed by DESIGN/BUILDERshall include only those items listed in Exhibits A and B.  Owner shall be responsible for any and allother items relating to such retrofit.

 

3.03         DESIGN/BUILDER andOWNER agree to maintain the insurance coverage, limits, and deductibles setforth in Exhibit D.

 

**Article 4.       PAYMENTPROCEDURES**

 

4.01         *Payment of ContractPrice. *DESIGN/BUILDER shallsubmit and OWNER will process Applications for Payment of the Contract Price inaccordance with Article 13 of the General Conditions and Sections 4.01.A.through C. below.

 

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              A.      *Down Payment*. Onor before delivery of the Notice to Proceed, OWNER shall make a down payment ofTen Percent (10%) of the Contract Price to DESIGN/BUILDER, which shall beapplied toward the first progress payment with any excess applied towardimmediately successive progress payments thereafter.

 

              B.       *Progress Payments.*  OWNER shall make progress payments on accountof all of the remaining balance of the Contract Price on the basis ofDESIGN/BUILDER’s Applications for Payment. Progress payments shall be due and payable in accordance with 13.04 ofthe General Conditions.  All suchpayments will be measured by the acceptable Schedule of Values establishedunder paragraph 2.03.A of the General Conditions.  No retainage will be withheld from suchpayments.

 

              C.       *Final Payment.*  OWNER shall pay the remaining balance, ifany, of the Contract Price to DESIGN/BUILDER in accordance with paragraph 13.08of the General Conditions; provided, however, OWNER may withhold from suchpayment such amounts as the parties may mutually agree is the reasonable valueor cost for DESIGN/BUILDER to complete all remaining or incomplete punch listitems.

 

**Article 5.       INTEREST.**

 

5.01.        All moneys not paid byOWNER to DESIGN/BUILDER when due hereunder shall bear interest at the rate ofEighteen Percent (18%) per annum, compounded monthly, from the due date thereof.

 

**Article 6.       DESIGN/BUILDER’SREPRESENTATIONS.**

 

6.01.        DESIGN/BUILDER makesthe following representations:

 

             A.      DESIGN/BUILDER has examined and carefullystudied the Contract Documents listed in Sections 7.01.A through C (includingthe representations and warranties concerning the performance criteria setforth in Exhibit A), and, to the extent prepared (but not yet approved byOWNER) prior to the Effective Date, the documents described in Section 7.01.D.3and .4.

 

             B.       DESIGN/BUILDER is familiar with and issatisfied as to all federal, state and local Laws and Regulations in existenceon the Effective Date that may affect cost, progress, performance, furnishing,and completion of the Work in accordance with the Contract Documents.

 

             C.       DESIGN/BUILDER is familiar with the workto be performed by OWNER and others at the Site that relates to the Work asindicated in the Contract Documents.

 

             D.       DESIGN/BUILDER has correlated theinformation known to DESIGN/BUILDER, reports and drawings identified in theContract Documents, and all additional examinations, investigations, tests,studies and data with the Contract Documents.

 

             E.       DESIGN/BUILDER has given OWNER writtennotice of all conflicts, errors, ambiguities or discrepancies thatDESIGN/BUILDER has discovered in the Contract Documents and the writtenresolution thereof by OWNER is acceptable to DESIGN/BUILDER, and the ContractDocuments are sufficient to indicate and convey understanding of all terms andconditions for performance and furnishing of the Work.

 

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**Article 7.       CONTRACTDOCUMENTS.**

 

7.01.        The ContractDocuments which comprise the entire agreement between OWNER and DESIGN/BUILDERconcerning the Work consist of the following:

 

                A.    This Agreement (pages 1 to 4, inclusive).

 

                B.    Exhibits to this Agreement (A to D,inclusive).

 

                C.    General Conditions of the Contract BetweenOwner and Design/Builder (pages 1 to 35, inclusive).

 

                D.    The following which may be delivered, prepared,or issued after the Effective Date of this Agreement and are not attachedhereto.

 

                1.      Notice to Proceed.

 

                2.     All Written Amendments and other documentsamending, modifying or supplementing the Contract Documents pursuant toparagraph 3.03.A of the General Conditions.

 

                3.     Specifications as defined in paragraph1.01.A.32 of the General Conditions.

 

                4.     Drawings as defined in paragraph 1.01.A.16of the General Conditions.

 

7.02.        There are no ContractDocuments other than those listed above in this Article 7.  The Contract Documents may only be amended,modified or supplemented as provided in paragraph 3.03.A of the GeneralConditions.

 

**Article 8.       MISCELLANEOUS.**

 

8.01.        The attached GeneralConditions of the Contract between Owner and Design/Builder are referred toherein as the General Conditions.

 

8.02.        Terms used in thisAgreement which are defined in Article 1 of the General Conditions will havethe meanings indicated therein.

 

8.03.        No assignment by aparty hereto of any rights under or interests in the Contract Documents will bebinding on another party hereto without the written consent of the party soughtto be bound, which consent shall not be unreasonably withheld; and,specifically but without limitation, moneys that may become due and moneys thatare due may not be assigned without such consent (except to the extent that theeffect of this restriction may be limited by law), and unless specificallystated to the contrary in any written consent to an assignment no assignmentwill release or discharge the assignor from any duty or responsibility underthe Contract Documents.

 

8.04.        OWNER andDESIGN/BUILDER each binds itself, its successors, assigns and legalrepresentatives to the other party hereto, its successors, assigns and legalrepresentatives in respect to all covenants, agreements and obligationscontained in the Contract Documents.

 

8.05.        Any provision or partof the Contract Documents held to be void or unenforceable under any Law orRegulation shall be deemed stricken, and all remaining provisions shallcontinue to be valid 

 

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and binding upon OWNER and DESIGN/BUILDER, who agree that the ContractDocuments shall be reformed to replace such stricken provision or part thereofwith a valid and enforceable provision that comes as close as possible toexpressing the intention of the stricken provision.

 

8.06.        This Agreement may beexecuted in any number of counterparts, each of which shall be deemed to be anoriginal and all of which shall constitute one agreement that is binding uponall of the parties hereto, notwithstanding that all parties are not signatoriesto the same counterpart.  Facsimilesignatures of the parties hereto shall be binding.

 

8.07.        This Agreement willbe effective on the date first written above. Within _____________ (10) days of such effective date, OWNERshall provide to DESIGN/BUILDER the Notice to Proceed and evidence, acceptableto DESIGN/BUILDER, of funding for the Project.

 

IN WITNESS WHEREOF, OWNER and DESIGN/BUILDER have signed this Agreementon the date first written above.

 
| **OWNER**: Little Sioux Corn  Processors, LP |               | **DESIGN/BUILDER**: ICM, Inc. |   |
|----------------------------------------------|--------------------|-------------------------------|--------|
|                                         |               |                          |   |   |   |
| By:                                          | /s/ Stephen G. Roe |                          | By:    | /s/ Dave Vander Griend |   |
| Title:                                       | President          |                          | Title: | CEO |   |

Name:___________________________

Addresses for giving notices and representatives:

 
| Name:      | Stephen G. Roe          |   | Name:      | Dave Vander Griend               |   |
|------------|-------------------------|--------|------------|----------------------------------|--------|
| Title:     | General Manager         |   | Title:     | C.E.O.                           |   |
| Address:   | 4808 F Ave., Marcus, IA |   | Address:   | 310 N. First Street, Colwich, KS |   |
| Phone:     | 712-376-2815            |   | Phone:     | 316-796-0900                     |   |
| Facsimile: | 712-376-2815            |   | Facsimile: | 316-796-0570                     |   |

 

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** **

**ExhibitA**

**to**

**AgreementBetween Owner and Design/Builder**

**On theBasis of a Stipulated Price**

 

# **Performance Criteria**

 

                DESIGN/BUILDERrepresents and warrants to OWNER that the completed Project will satisfy thefollowing performance criteria.  Prior tofinal payment under paragraph 13.08 of the General Conditions, DESIGN/BUILDERshall commission the Project and conduct a seven-day performance test toestablish compliance with the following performance criteria.  Compliance shall be computed on the averageover the seven-day performance test.  Ifthe Project fails to reach such performance criterion, then DESIGN/BUILDERshall (at no additional cost to OWNER) make such changes in design,construction, or equipment as required to meet the criterion, and conductanother seven day performance test. DESIGN/BUILDER makes no other representation, warranty or guaranteeconcerning the Project including, without limitation, production of DDGS orCO2, or compliance with any applicable atmospheric emissions standards.

 

**Table 1  *ethanol plant criteria—52 MGY capacity***
| **Criteria**                           | **Specification**                                                                                                                                                                                                            | **Testing Statement**      | **Documentation**                                                            |
|----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|------------------------------------------------------------------------------|
| Plant Capacity—fuel-grade ethanol | Capable of operating at a rate of 52 million gallons per year of  denatured fuel grade ethanol meeting the specifications of ASTM 4806 and  capable of operating at a rate of 675 gallons per minute beer column feed  rate. | Seven-day performance test | Concurrence of production records and a written report from  DESIGN/BUILDER. |

 

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** **

**ExhibitB**

**to**

**AgreementBetween Owner and Design/Builder**

**On theBasis of a Stipulated Price**

** **

**1.             ItemsIncluded in Scope of Work:**

(a)           **Develop ISO PipingDrawings**

(b)           **Review Permitting at Site**

(c)           **Revise Permitting asneeded**

(d)           ***Install grating on top ofStillage Tanks**

(e)           ***Extend Concrete at WetFeed Pad** which consists of:

DesignConcrete structure for walls and floor

Purchaseand deliver rebar and concrete materials

Pourfootings for concrete walls

Pourconcrete walls

Pourextended floor

(f)            **Install Expansion of ROSystem** which consists of:

Purchaseand deliver RO system components which consists of:

                6-3 array RO Filter System

                Tonkaflo high pressure pump

                RO system control package

                4th multimedia filter

Iron Recovery System with 3cone bottomed tanks, related pumps, chemical feed system, and valves &control system

Runadditional piping

Runadditional conduit and wires to unit

InstallRO system based on US Water design

(g)           **Replace Liq Pump**which consists of:

Purchaseand deliver Liq Pump

InstallLiq Pump

ModifySuction and Discharge Piping

(h)           **Replace Fermenter SprayBall CIP Pump** which consists of:

Purchaseand deliver CIP Pump

InstallCIP Pump

ModifySuction and Discharge Piping

(i)            **Add onto Process BuildingMCC** which consists of:

Determineelectrical load requirements and availability

Purchaseand deliver MCC components

Installnew MCC cabinet

Installnew motor starters

RunMain Power lines to motor starters

RunConduit from MCC to cable tray network

(j)            **Add onto Grain Silo MCC**which consists of:

Determineelectrical load requirements and availability

Purchaseand deliver MCC components

 

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Installnew MCC cabinet

Installnew motor starters

RunMain Power lines to motor starters

                (k)           ***Build Extension ontoMaintenance Shop** which consists of:

DesignConcrete and Structural Steel for Building

Purchaseand deliver Steel and Siding

Purchaseand deliver culvert and rebar

RerouteEnzyme unloading line

RerouteAcid unloading line

Installculvert at ditch

PourConcrete driveway

PourConcrete containment area

Pourfootings for steel columns

RemoveGarage and Man Door from building

InstallStructural Steel for building

InstallSteel Siding

InstallRoof on Building

Extendconduit and wires for garage door blower

InstallLights in Building

InstallHeating units in building

InstallConduit/Wire/Electrical Receptacles

Runplant air and water lines

InstallGarage and Man Doors on building

(l)            ***Extend Process Buildingat Fermenters** which consists of:

DesignConcrete and Structural Steel for Building

Purchaseand deliver Steel and Siding

Purchaseand deliver rebar

RemoveGarage and Man Door from building

Pourfootings for steel columns

Installsump pit in floor

PourSlab floor

InstallStructural Steel for building

InstallSteel Siding

InstallRoof on Building

Buildpipe rack for pipes to new Fermenter

Extendconduit/wires and relocate garage door blower

Installlights in extended section

Extendplant air and water hose lines

InstallGarage and Man Doors on building

(m)          **Install Roller Mills**which consists of:

Designsupport structure for Roller Mills

DesignDuctwork pieces

Purchaseand deliver Roller Mills and related equip

Runconduit and wires for Roller Mills

Runconduit and wires for instrumentation

BuildSupport for Roller Mills

 

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Fabnew duct transition pieces

Installnew duct pieces

InstallRoller Mills

CompleteProgramming for instruments and motor control

(n)           **Install New Fermenter**which consists of:

ReviewUnderground drawings

ReviewSoil Analysis

DesignFoundation

DesignSteel for access and top of tank platform

SiteWork for foundation

Pourfoundation for Fermenter

BuildTank on site

Installaccess and top of tank platform

InstallFermenter Agitator

Purchaseand deliver Fermenter Agitator

Purchaseand deliver CIP Spray Balls

Purchaseand deliver CO2 Pressure/Vac Relief

Purchaseand deliver Level Transmitter

Purchaseand deliver (2) Temperature Transmitters

Purchaseand deliver Fermenter Cooler Recir Pump

Purchaseand deliver Fermenter #4 Drain Pump

Purchaseand deliver Fermenter Cooler

Purchaseand deliver Cooling Tower Control Valve

Purchaseand deliver Chiller Water Control Valve

Purchaseand deliver 12” digital valve

Purchaseand deliver 3” digital valve

Purchaseand deliver 6” digital valve

BuildNew CO2 Header

Buildnew vent lines from fermenters

BuildCIP line to top of new Fermenter

InstallFermenter #4 Drain Pump

RunSupply line to Drain Pump

RunDischarge line from Drain Pump

RunConduit and wires to Fermenter Drain Pump

RunConduit and wires to Drain Pump Flow Transmitter

RunConduit and wires to EV Valves

Pourslab foundation for Recirc Pump

InstallFermenter Cooler Recirc Pump

Pourslab foundation for Fermenter Cooler

Setnew Fermenter Cooler

RunCooling water lines to/from Cooler

RunBeer Supply line to Cooler

RunConduit and wires to Fermenter Recirc Pump

RunConduit and wires to Fermenter Agitator

RunConduit and wires to instrumentation

RunFerm #4 to Beer Well line

 

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RunSupply line to Fermenter Recirc Pump

Runnew Ferm Feed line to #4 Ferm

RunCIP line to Fermenter #4 Ferm Feed line

MakeTie in on transfer to Beer Well line

MakeTie in on CIP Line

MakeTie in on Cooling supply/return lines

MakeTie in on Chilled Water line

Maketie in on Fermenter Feed line

CompleteProgramming for instruments and motor control

(o)           **Install CO2 Booster Fan**which consists of:

Purchaseand deliver Booster Fan

Purchaseand deliver Pressure Transmitter

DesignPlatform

Buildand Install Platform

SetFan onto Platform

BuildCO2 Supply to fan

BuildFan discharge ductwork

Runconduit and wires to Pressure Transmitter

Runconduit and wires to Booster Fan

MakeTie ins on CO2 line

CompleteProgramming for instruments and motor control

                (p)           **Install Slurry Tank**which consists of:

ReviewUnderground drawings

ReviewSoil Analysis

DesignFoundation

DesignSteel for ladder and top of tank platform

Sitework for Slurry Tank foundation

Pourfoundation for new Slurry Tank

PourSlab foundation for Slurry Pump

BuildSlurry Tank on site

Installladder and top of tank platform

Purchaseand deliver Slurry Tank Agitator

Purchaseand deliver Slurry Tank Pump

Purchaseand deliver Level Transmitter

Purchaseand deliver Level Control Valve

Purchaseand deliver steam eductors

Purchaseand deliver Temp Transmitter

Purchaseand deliver Temp Control Valve

SetSlurry Tank #2 pump

Runconduit and wires for Slurry Tank Pump

Runconduit and wires for Slurry Tank Agitator

Runconduit and wires for instrumentation

RunSlurry Tank #1 to #2 Transfer Pipe

RunSlurry Tank #2 vent line

RunSlurry Tank #2 discharge line

InstallSteam eductors on Slurry Tank #2

 

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RunSteam line to Slurry Tank #2

Maketie in on Slurry #1 Discharge

Maketie in for Slurry #2 Vent

Maketie in for Slurry #2 Discharge

Maketie in on Steam line for Tank #2 heaters

InsulateTank and Piping

CompleteProgramming for instruments and motor control

                (q)           **Upgrade Hydro-heater**which consists of:

Purchaseand deliver new hydro-heater

Installnew hydro-heater

(r)            **Install Liquefaction Tank**which consists of:

ReviewUnderground drawings

ReviewSoil Analysis

DesignFoundation

                *Design Steel for ladder and top of tank platform (3tanks)

Sitework for Liq Tank foundation

Pourfoundation for new Liq Tank

FabLiq Tank at the site

*Repairexisting Liq Tank

*Installladder and top of tank platform (3 tanks)

Purchaseand deliver Liq Tank Agitator

Purchaseand deliver Level Transmitter

Purchaseand deliver Piping and Valves

InstallLiq Tank Agitator

Runconduit and wires for Liq Tank Agitator

Runconduit and wires for instrumentation

Runfeed line to new Liq Tank

RunOverflow line from new Liq Tank

Maketie in on Liq Feed Line

Addport to existing Liq #1 for new overflow line

Install10” valve into feed line to existing Liq #1

InsulateTank and Piping

CompleteProgramming for instruments and motor control

InstallMole Sieve Bottles

ReviewUnderground drawings

ReviewSoil Analysis

DesignFoundation and Containment Dike

DesignSteel for top of tank platform

DesignSteel for additional Regen Condenser Support

Sitework for Sieve Bottle foundation

Pourfoundation for Sieve Bottles

PourContainment Dike around Sieve Bottles

Pourslab foundation for Regen Pump

Purchaseand deliver Sieve Bottles

Purchaseand deliver Pressure Transmitters

Purchaseand deliver Temperature Transmitters

 

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Purchaseand deliver Steam Flow Control Valve

Purchaseand deliver Mole Feed Control Valve

Purchaseand deliver Mole Feed Flow Transmitter

Purchaseand deliver EV Valves

Purchaseand deliver Pressure Relief Valves

Purchaseand deliver Regen Condenser

Purchaseand deliver Regen Eductor

Purchaseand deliver additional Regen Pump

Purchaseand deliver Mole Sieve Pressure Control Valve

Purchaseand deliver Mole Feed Vaporizer

Purchaseand deliver Structural Steel components

Purchaseand deliver rebar and concrete materials

Purchaseand deliver Piping and Valves

SetBottles onto foundation

InstallBeads and internal equipment into bottles

Buildsupport for Regen Condenser

SetRegen Condenser onto support

SetRegen Pump

Runconduit and wires to Regen Pump

BuildValve Trees for feed/regen/depressure distributors

InstallValve Trees and valves onto Bottles

Runconduit and wires to valves and instrumentation

RunRegen line from Valve Trees to Regen Condenser

RunRegen Condensate line from Condenser to Regen Eductor

RunRegen Pump Supply and Discharge lines

Setnew Mole Vaporizer

RunMole Feed line to new Mole Vaporizer

RunVapor line from Vaporizer to Valve Trees

RunVapor Product line to Evap Inlet

RunCondensate line to Existing Condensate line

MakeTie in on Regen Tank

MakeTie in on Regen Pump Suction

MakeTie in on Mole Feed line

MakeTie in on Existing Condensate line

MakeTie in on Evap Inlet

MakeTie in on Steam supply to vaporizer

InsulateBottles, Vaporizer and Piping

CompleteProgramming for instruments and motor control

 

2.             Theabove items marked with an asterisk (*) are not included in the $4,600,000portion of the Contract Price. DESIGN/BUILDER will perform those items for an amount determinedpursuant to paragraph 10.02 of the General Conditions.  DESIGN/BUILDER’s fee for overhead and profitunder paragraph 10.02.C.1 shall be fifteen percent (15%) of the costs forsubcontracts, materials and equipment. Prior to commencing work on each of those items, DESIGN/BUILDER shall providea detailed estimate of the cost of such item to OWNER and obtain OWNER’sapproval to perform such work.

 

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**ExhibitC**

**to**

**AgreementBetween Owner and Design/Builder**

**On theBasis of a Stipulated Price**

 

**LICENSEAGREEMENT**

 

**THISLICENSE AGREEMENT**(this “License Agreement”) is entered into and madeeffective as of the 6th day of December,2004 (“Effective Date”) by and between LSCP, L.P., an Iowa limitedpartnership (“OWNER”), and ICM, Inc., a Kansas corporation (“DESIGN/BUILDER”).

 

                WHEREAS,OWNER and DESIGN/BUILDER have entered into that certain Agreement Between Ownerand Design/Builder on a Basis of a Stipulated Price dated December 6,2004 (the “Design/Build Agreement”) concerning the performance of certain workby DESIGN/BUILDER for the retrofit of OWNER’s ethanol plant currently locatedin or near Marcus, Iowa (the “Plant”);

 

                WHEREAS,DESIGN/BUILDER owns certain proprietary technology and information, and will beusing such technology and information in performing its obligations under theDesign/Build Agreement; and

 

                WHEREAS,OWNER desires to be granted a limited license to use that proprietarytechnology and information in connection with the design, construction andoperation of the Plant, and DESIGN/BUILDE desires to grant to OWNER suchlimited license, all upon the terms and conditions set forth herein;

 

                NOW,THEREFORE, the parties, in consideration of the foregoing premises and themutual promises contained herein and for other good and valuable consideration,receipt of which is hereby acknowledged, agree as follows:

 

1.             Certain Proprietary Property (as defined below) will beused in the design, construction and operation of the Plant.

 

2.             Upon OWNER’s payment in full of allamounts due and owing under the Design/Build Agreement (including any licensefee set forth therein, if any), DESIGN/BUILDER grants to OWNER a perpetuallimited license to use the Proprietary Property solely in connection with thedesign, construction and operation of the Plant, subject to the limitationsprovided herein.  This License may beterminated by DESIGN/BUILDER upon OWNER’s failure to cure any default by OWNERof any material duty or obligation of OWNER hereunder within thirty (30) daysafter written notice thereof is given by DESIGN/BUILDER.

 

3.             The Proprietary Property includes, without limitation,documents, Operating Procedures (hereinafter defined), operating methods,techniques, protocols, procedures, plans and processes, and other informationrelating to design, construction and operation of the Plant including thedesign, arrangement, configuration, and specifications of (i) the combinationsof distillation, evaporation, and alcohol dehydration equipment (including, butnot limited to, pumps, vessels, tanks, heat exchangers, piping, valves andassociated electronic control equipment) and all documents supporting thosecombinations; (ii) the combination of the distillers grain drying (DGD), andheat recovery steam generation (HRSG) equipment (including, but not limited to,pumps, vessels, tanks, heat exchangers, piping and associated electroniccontrol equipment) and all documents supporting those combinations; 

 

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and (iii) the computersystem, known as the distributed control system (DCS and/or PLC) (including,but not limited to, the software configuration, programming, parameters, setpoints, alarm points, ranges, graphical interface, and system hardwareconnections) and all documents supporting that system.  The “Operating Procedures” include, withoutlimitation, the process equipment and specifications manuals, standards ofquality, service protocols, data collection methods, constructionspecifications, training methods, engineering standards and any otherinformation prescribed by ICM from time to time concerning the ProprietaryProperty and operations of the Plant. Proprietary Property shall not include any information or materials thatOWNER can demonstrate by written documentation: (i) was lawfully in the possession of OWNER prior to disclosure by ICM;(ii) was in the public domain prior to disclosure by ICM; (iii) was disclosedto OWNER by a third party having the legal right to possess and disclose suchinformation or materials; or (iv) after disclosure by ICM comes into the publicdomain through no fault of OWNER or its employees, agents, partners, officers,contractors, consultants or other representatives (hereinafter collectivelyreferred to as “Representatives”). Information and materials shall not be deemed to be in the public domainmerely because such information is embraced by more general disclosures in thepublic domain, and any combination of features shall not be deemed to be withinthe foregoing exceptions merely because individual features are in the public domainif the combination itself and its principles of operation are not in the publicdomain.

 

4.             Between the parties, DESIGN/BUILDER has the exclusiveright and interest in and to the Proprietary Property and the goodwillassociated therewith.

 

5.             OWNER will not, directly orindirectly, contest the ownership of the Proprietary Property.  Any and all modifications to the ProprietaryProperty by OWNER (or its Representatives) shall be the property ofDESIGN/BUILDER.  OWNER shall promptlynotify DESIGN/BUILDER of any such modification and OWNER agrees to assign allof its right, title and interest in such modification to DESIGN/BUILDER.

 

6.             OWNER’s use of the Proprietary Property does not giveOWNER any ownership interest or other interest in or to the ProprietaryProperty except for the limited license granted to OWNER herein.  Nothing in this License Agreement shall beconstrued or interpreted as granting OWNER a license to use the ProprietaryProperty in connection with any expansion or enlargement of the Plant beyondthe size and configuration originally contemplated in the Design/BuildAgreement.

 

7.             OWNER shall pay no license fee or royalty toDESIGN/BUILDER for OWNER’s use of the Proprietary Property pursuant to thelimited license granted to OWNER, other than the amounts described in paragraph2 above.

 

8.             OWNER’s failure to materially comply with the OperatingProcedures shall void all representations, warranties or guarantees concerningthe performance of the Plant given by DESIGN/BUILDER, directly or indirectly,under the Design/Build Agreement or otherwise.

 

9.             OWNERmay not assign the limited license granted herein, in whole or in part, withoutthe prior written consent of DESIGN/BUILDER, which will not be unreasonablywithheld or delayed.  Prior to anyassignment, OWNER shall obtain from such assignee a written instrument, in formand substance reasonably acceptable to DESIGN/BUILDER, agreeing to be bound byall the terms and provisions of this License Agreement.  Any assignment of this License Agreementshall not release OWNER from (i) its duties and obligations hereunderconcerning the disclosure and use of the Proprietary Property, or (ii) damagesto DESIGN/BUILDER resulting from, or arising out of, a breach of such duties orobligations by OWNER or its Representatives. DESIGN/BUILDER may assign its 

 

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right, title and interest in the ProprietaryProperty, in whole or part, subject to the limited license granted herein.

 

10.           The Proprietary Property is confidential andproprietary.  OWNER shall keep theProprietary Property confidential and shall use all reasonable efforts tomaintain the Proprietary Property as secret and confidential for the sole useof OWNER and its Representatives in the design, construction, and operation ofthe Plant.  OWNER shall retain allProprietary Property at its place of business and/or the Plant.  Failure to so maintain the ProprietaryProperty as confidential shall entitle DESIGN/BUILDER to any damages stemmingfrom such failure, to include without limitation, reasonable attorneys’fees.  OWNER shall not at any timewithout DESIGN/BUILDER’s prior written consent, copy, duplicate, record, orotherwise reproduce the Proprietary Property, in whole or in part, for anyunauthorized persons, or otherwise make the same available to any unauthorizedperson.  OWNER shall not disclose theProprietary Property except to its Representatives who are directly involvedwith the design, construction or operation of the Plant, and even then only tosuch extent as is necessary and essential for such Representatives’involvement.  OWNER shall inform suchRepresentatives of the confidential and proprietary nature of suchinformation.  OWNER shall make allreasonable efforts to safeguard the Proprietary Property from disclosure by itsRepresentatives to anyone other than permitted hereby.  In the event that OWNER or itsRepresentatives are required by law to disclose the Proprietary Property, OWNERshall provide DESIGN/BUILDER with prompt written notice of same so thatDESIGN/BUILDER may seek a protective order or other appropriate remedy.  In the event that such protective order orother appropriate remedy is not obtained, OWNER or its Representatives willfurnish only that portion of the Proprietary Property which in the reasonableopinion of its or their legal counsel is legally required.

 

11.           OWNER agrees toindemnify DESIGN/BUILDER for any and all damages (including, withoutlimitation, reasonable attorneys’ fees) arising out of or resulting from anyunauthorized disclosure or use of the Proprietary Property by OWNER or itsRepresentatives.  OWNER agrees thatDESIGN/BUILDER would be irreparably damaged by reason of any violation of theprovisions contained herein and that any remedy at law for a breach of suchprovisions would be inadequate. Therefore, DESIGN/BUILDER shall be entitled to seek injunctive or otherequitable relief in a court of competent jurisdiction against OWNER or itsRepresentatives, or both, for any breach or threatened breach of OWNER’s dutiesand obligations contained herein without the necessity of proving actualmonetary loss or posting any bond.  It isexpressly understood that the remedy described herein shall not be theexclusive remedy of DESIGN/BUILDER for any breach of such covenants, andDESIGN/BUILDER shall be entitled to seek such other relief or remedy, at law orin equity, to which it may be entitled as a consequence of any breach of suchduties or obligations.

 

12.           All provisions ofthis License Agreement shall survive and remain in full force and effectnotwithstanding any termination or expiration of the Design/Build Agreement.

 

13.           Thelaws of the State of Kansas and the United States of America shall govern thevalidity of the provisions contained herein, the construction of suchprovisions, and the interpretation of the rights and duties of theparties.  Any legal action brought toenforce or construe the provisions of this License Agreement shall be broughtin courts located in Kansas, and the parties agree to and hereby submit to theexclusive jurisdiction of such courts and agree that they will not invoke thedoctrine of forum non conveniens or other similar defenses in any such actionbrought in such courts.

 

14.           OWNERagrees to notify DESIGN/BUILDER promptly of any attempt by any unauthorizedperson to use the Proprietary Property, and of any action involving theProprietary Property that is threatened or instituted by any person againstOWNER; and if any action is so instituted against 

 

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OWNER, DESIGN/BUILDER is herebyauthorized (but not obligated) to defend the action on OWNER’s behalf, and totake whatever other steps DESIGN/BUILDER deems necessary to defend such actionand/or otherwise to protect its ownership and rights in the ProprietaryProperty.  Whenever OWNER learns of anyinfringement or threatened infringement of the Proprietary Property, OWNERshall forthwith give written notice thereof to DESIGN/BUILDER and provideDESIGN/BUILDER with all information it has acquired with respect thereto.  DESIGN/BUILDER shall determine, in itsabsolute discretion, whether to institute or defend such proceedings, as thecase may be, with regard to each of the foregoing matters.  OWNER shall not institute any proceedingsrelating to the Proprietary Property, in any capacity, without the priorwritten consent of DESIGN/BUILDER.  Inthe event that DESIGN/BUILDER undertakes the defense or prosecution of any suchproceedings, OWNER agrees to execute and deliver such documents and do suchthings, including, without limitation, being made a party to such proceedings,at DESIGN/BUILDER’s expense, as may be deemed necessary or advisable by counselon behalf of DESIGN/BUILDER in order to assist DESIGN/BUILDER in enforcing itsright, title and interest in the Proprietary Property.

15.           The provisions of the Design/Build Agreement (includingwithout limitation, Section 16.06 of the General Condition thereto) are partof, and incorporated into, this License Agreement and this License Agreementshould be interpreted consistently therewith.  Unless otherwise defined herein or unless the context otherwiserequires, capitalized terms used herein shall have the meaning given to suchterms in the Contract Documents.  In theevent any of the provisions of this License Agreement is contrary to anyprovision in the Design/Build Agreement (or any other document referencedtherein), the provision of this License Agreement shall supercede and haveprecedence over such contrary provision. The terms and conditions of this License Agreement and the Design/BuildAgreement constitute the entire agreement between the parties with respect tothe subject matter hereof and supersede any prior understandings, agreements orrepresentations by or between the parties, written or oral.

 

16.           DESIGN/BUILDERrepresents and warrants that OWNER’s use of the Proprietary Property inaccordance with the terms of this License Agreement does not infringe anypatent or other proprietary right or interest of any third party.  Subject to the limitations of liability setforth in Section 16.06 of the General Condition of the Design/Build Agreement,DESIGN/BUILDER agrees to defend, indemnify and hold harmless OWNER from and againstany and all costs (including reasonable attorneys’ fees) arising out of orresulting from the actual or alleged infringement of any patent or otherproprietary right or interest of a third party pertaining to OWNER’s use of theProprietary Property.  OWNER shallpromptly notify DESIGN/BUILDER upon becoming aware of such infringementclaim.  DESIGN/BUILDER, in order to avoidsuch infringement claims, shall have the right at its expense to substitutenon-infringing equipment, materials and processes so they becomenon-infringing, or to obtain the necessary licenses to use the infringingequipment, materials or processes provided that such substituted and modifiedequipment, materials or processes shall meet all the requirements and besubject to all the provisions of the Design/Build Agreement.

 

17.           This License Agreement may not be modified or amended atany time without the written consent of the parties.

 

18.           All notices, requests, demands, reports, statements orother communications (herein referred to collectively as “Notices”) required tobe given hereunder or relating to this License Agreement shall be in writingand shall be deemed to have been duly given on the date of delivery if sent tosuch party by overnight courier service (such as DHL) at the respective addressof such party set forth above.   Anyparty hereto may, at any time, designate a different address to which Noticesshall be directed by providing written notice in the manner set forth in thisparagraph.

 

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19.           In the event that any of the terms, conditions, covenantsor agreements contained in this License Agreement, or the application of anythereof, shall be held by a court of competent jurisdiction to be invalid,illegal or unenforceable, such term, condition, covenant or agreement shall bedeemed void ab initio and shall be deemed severed from this LicenseAgreement.  In such event, and except ifsuch determination by a court of competent jurisdiction materially changes therights, benefits and obligations of the parties under this License Agreement,the remaining provisions of this License Agreement shall remain unchangedunaffected and unimpaired thereby and, to the extent possible, such remainingprovisions shall be construed such that the purpose of this License Agreementand the intent of the parties can be achieved in a lawful manner.

 

20.            The duties and obligations herein contained shall bind,and the benefits and advantages shall inure to, the respective successors andassigns of the parties hereto.

 

21.           The waiver by any party hereto of the breach of any term,covenant, agreement or condition herein contained shall not be deemed a waiverof any subsequent breach of the same or any other term, covenant, agreement orcondition herein, nor shall any custom, practice or course of dealings arisingamong the parties hereto in the administration hereof be construed as a waiveror diminution of the right of any party hereto to insist upon the strictperformance by any other party of the terms, covenants, agreement and conditionsherein contained.

 

22.           In this License Agreement, where applicable, (i)references to the singular shall include the plural and references to theplural shall include the singular, and (ii) references to the male, female, orneuter gender shall include references to all other such genders where thecontext so requires.

 

IN WITNESS WHEREOF, the parties hereto have executed thisLicense Agreement, the Effective Date of which is indicated on page 1 of thisLicense Agreement.

 
| OWNER:                                       | DESIGN/BUILDER:                                |
|----------------------------------------------|------------------------------------------------|
|  

Little Sioux Corn Processors, LP     |  

ICM,  Inc.                             |
|  

By:  /s/ Steven G. Roe          |  

By:  /s/  Dave Vander Griend |
|  

Title:  President               |  

Title:  C.E.O.                    |
|  

Date Signed:   December 1, 2004 |  

Date Signed:   December 6, 2004   |
|  

Address for giving notices:          |  

Address for giving notices:            |
|  

 

                        |  

301  N First Street                    |
|  

                                |  

Colwich, KS  67030                |

 

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**ExhibitD**

**to**

**AgreementBetween Owner and Design/Builder**

**On theBasis of a Stipulated Price**

 

**INSURANCE**

 

**DESIGN/BUILDER will maintain thefollowing coverage and limits:**

 

1.             Commercial GeneralLiability

                $1,000,000 limitper occurrence

                $2,000,000 perannual aggregate

 

2.             Commercial AutoLiability Insurance

$1,000,000 per accident

 

3.             WorkersCompensation

                Statutory statecoverage

                EmployersLiability $1,000,000

 

4.             Umbrella (Excess)Liability

                $5,000,000 peroccurrence

 

**OWNER will maintain the followingcoverage and limits:**

 

1.             Commercial GeneralLiability

                $1,000,000 limitper occurrence

                $2,000,000 perannual aggregate

 

2.             Commercial AutoLiability Insurance

$1,000,000 per accident

 

3.             WorkersCompensation

                Statutory statecoverage

                EmployersLiability $500,000

 

4.             Umbrella (Excess)Liability

                $5,000,000 peroccurrence

 

5.             Builder’s Risk

                Limit to be notless than the contract price

 

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**GENERALCONDITIONS OF THE**

**CONTRACTBETWEEN**

**OWNERAND DESIGN/BUILDER**

 

**ARTICLE 1—DEFINITIONS**

 

***1.01       DefinedTerms***

 

      A.    Wherever used in these General Conditions or in the otherContract Documents the following terms have the meanings indicated which areapplicable to both the singular and plural thereof:

 

                   1.*       **Agreement—***TheAgreement Between Owner and Design/Builder on the Basis of a Stipulated Pricecovering the Work.  Other ContractDocuments are incorporated into the Agreement and made a part thereof asprovided therein.

 

                   2.*       **Applicationfor Payment—***The form which is to be used byDESIGN/BUILDER in requesting progress or final payments and which is to beaccompanied by such supporting documentation as is required by the ContractDocuments.

 

                   3.*       **Asbestos—***Anymaterial that contains more than one percent (1%) asbestos and is friable or isreleasing asbestos fibers into the air above current action levels establishedby the United States Occupational Safety and Health Administration.

 

                   4.*       **Bonds—***Performanceand payment bonds and other instruments of security.

 

                   5.*       **Cash FlowProjection—***A schedule prepared by DESIGN/BUILDERestimating that portion of the Contract Price to be due during each month ofperformance.

 

                   6.*       **Change Order—***Awritten order which is signed by DESIGN/BUILDER and OWNER which authorizes anaddition, deletion or revision in the Work, or an adjustment in the ContractPrice or the Contract Times, issued on or after the Effective Date of theAgreement.

 

                    7.*     **Construction—***The performingor furnishing of labor, the furnishing and incorporating of materials andequipment into the Work and the furnishing of services (other than DesignProfessional Services) and documents, all as required by the ContractDocuments.  Construction includes thematerials and equipment incorporated into the Project.

 

                    8.*     **Construction Subagreement—***Awritten agreement between DESIGN/BUILDER and a construction contractor forprovision of Construction.

 

                    9.*     **Contract Documents—***TheAgreement and related exhibits, the Notice to Proceed, these GeneralConditions, the Specifications and the Drawings together with all ChangeOrders, and Written Amendments, issued on or after the Effective Date of theAgreement.

 

                   10.*    **ContractPrice—***The moneys payable by OWNER to DESIGN/BUILDER forcompletion of the Work in accordance with the Contract Documents.

 

                   11.*    **ContractTimes—***The number of days or the dates stated in theAgreement (i) to achieve Substantial Completion, and (ii) to complete the Workso that it is ready for final payment of the Contract Price in accordance withparagraph 13.08.

 

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                   12.*     **defective—***Anadjective which when modifying the term Construction refers to Constructionthat is unsatisfactory, faulty or deficient, in that it does not conform to theContract Documents, or does not meet the requirements of any inspection,reference standard, test or approval referred to in the Contract Documents, orhas been damaged prior to OWNER’s final payment.

 

                   13.*     **DESIGN/BUILDER—***ICM,Inc., a Kansas corporation.

 

                   14.*     **DesignSubagreement—***A written agreement between DESIGN/BUILDERand a design professional for provision of Design Professional Services.

 

                   15.*     **DesignProfessional Services—***Services provided by or forlicensed design professionals during Construction, or operational phases of theProject, including the development of drawings, Specifications, and otherdesign submittals specified by the Contract Documents and required to beperformed by licensed design professionals..

 

                   16.*     **Drawings—***Thoseportions of the Contract Documents prepared by or for DESIGN/BUILDER andapproved by OWNER consisting of drawings, diagrams, illustrations, schedulesand other data which show the scope, extent, and character of the Work.

 

                   17.*     **EffectiveDate of the Agreement—***The date indicated in the Agreementon which it becomes effective, but if no such date is indicated it means thedate on which the Agreement is signed and delivered by the last of the twoparties to sign and deliver.

 

                   18.*     **Engineer—***Aduly licensed individual or entity designated by DESIGN/BUILDER to perform orfurnish specified Design Professional Services in connection with the Work.

 

                    19.*   **Hazardous Condition—***Thepresence at the Site of Asbestos, Hazardous Waste, PCB’s, Petroleum Products orRadioactive Materials in such quantities or circumstances that there is adanger to persons or property.

 

                   20.*    **HazardousWaste—***The term Hazardous Waste shall have the meaningprovided in Section 1004 of the Solid Waste Disposal Act (42 USC Section 6903).

 

                   21.*    **Laws andRegulations; Laws or Regulations—***Any and all applicablelaws, rules, regulations, ordinances, codes, permits, and orders of any and allgovernmental bodies, agencies, authorities and courts having jurisdiction.

 

                   22.*    **Liens—***Charges,security interests or encumbrances upon real property or personal property.

 

                   23.    ***Notice to Proceed—***Awritten notice given by OWNER to DESIGN/BUILDER fixing the date on which theContract Times will commence to run.

 

                   24.*    **OWNER—***Thepublic body, or authority, individual or entity with whom DESIGN/BUILDER hasentered into the Agreement and for whom the Work is to be provided.

 

                   25.*     **PCBs—***Polychlorinatedbiphenyls.

 

                   26.*     **Petroleum—***Petroleum,including crude oil or any fraction thereof which is liquid at standardconditions of temperature and pressure (60 degrees Fahrenheit and 14.7 poundsper square inch 

 

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                   absolute), suchas oil, petroleum, fuel oil, oil sludge, oil refuse, gasoline, kerosene, andoil mixed with other non-Hazardous Wastes and crude oils.

 

                   27.*     **Project—***TheConstruction to be provided under the Contract Documents as provided inparagraph 1.01 of the Agreement.

 

                   28.*     **RadioactiveMaterial—***Source, special nuclear, or byproduct materialas defined by the Atomic Energy Act of 1954 (42 USC Section 2011 et seq.) asamended from time to time.

 

                   29.*    **Schedule ofValues—***A schedule prepared by DESIGN/BUILDER andacceptable to OWNER indicating that portion of the Contract Price to be paidfor each major component of the Work.

 

                   30.*    **Site—***Landsor other areas designated in the Contract Documents as being furnished by OWNERfor the performance of the Construction, storage, or access.

 

                   31.*    **Specifications—***Thoseportions of the Contract Documents prepared by or for DESIGN/BUILDER andapproved by OWNER consisting of written technical descriptions of materials,equipment, construction systems, standards and workmanship as applied to theConstruction and certain administrative details applicable thereto.

 

                   32.*    **Subcontractor—***Anindividual or entity other than a Supplier or Engineer having a direct contractwith DESIGN/BUILDER or with any other Subcontractor for the performance of apart of the Work.

 

                   33.*   *[not used]

 

                   34.*    **SubstantialCompletion—***The time at which the Construction (or aspecified part) has progressed to the point where it is sufficiently complete,in accordance with the Contract Documents, so that ethanol can be produced atthe capacity of 52 million gallons per year. The terms “substantially complete” and “substantially completed” asapplied to the Construction refer to Substantial Completion of Construction.

 

                     35.*    **Supplier—***Amanufacturer, fabricator, supplier, distributor, materialman or vendor having adirect contract with DESIGN/BUILDER or with any Subcontractor to furnishmaterials or equipment to be incorporated in the Work by DESIGN/BUILDER or anySubcontractor.

 

                   36.*     **Work—***Theentire completed construction or the various separately identifiable partsthereof required to be performed or furnished under the ContractDocuments.  Work includes and is theresult of performing or furnishing Design Professional Services andConstruction required by the Contract Documents.

 

                   37.*     **WrittenAmendment—***A written amendment of the Contract Documents,signed by OWNER and DESIGN/BUILDER on or after the Effective Date of theAgreement and normally dealing with the nonengineering or nontechnical ratherthan strictly design or construction-related aspects of the Contract Documents.

 

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**ARTICLE 2—PRELIMINARY MATTERS**

 

***2.01     Commencementof Contract Times; Notice to Proceed***

 

                A.            The Contract Times will commence torun on the day indicated in the Notice to Proceed.  A Notice to Proceed may be given at any timewithin the period of time set forth in Section 9.07 of the Agreement.

 

***2.02     Startingthe Work***

 

       A.     DESIGN/BUILDER shall start to perform the Work on the date whenthe Contract Times commence to run.

 

***2.03     BeforeStarting Construction***

 

       A.     DESIGN/BUILDER shall submit the following for review within ten(10) days after commencement of the Contract Times:

 

                            1.      Apreliminary progress schedule indicating the times (number of days or dates)for starting and completing the various stages in the design and constructionof the Work;

 

                    2.     Apreliminary Schedule of Values for all of the Work, which will includequantities and prices of items aggregating the Contract Price and willsubdivide the Work into component parts in sufficient detail acceptable toOWNER to serve as the basis for progress payments during performance of theWork.  Such prices will include a prorata amount of overhead and profit applicable to each item of Work; and

 

                    3.     Apreliminary Cash Flow Projection.

 

      B.     Before any Work is started, DESIGN/BUILDER and OWNER shall eachdeliver to the other, with copies to each additional insured, certificates ofinsurance (and other evidence of insurance which either of them or anyadditional insured may reasonably request) which DESIGN/BUILDER and OWNERrespectively are required to purchase and maintain in accordance withparagraphs 5.02.A, 5.04.A and 5.04.B.

 

***2.04       InitialConference***

 

      A.    Within twenty (20) days after the Contract Times start to run, aconference by telephone or in person with OWNER, DESIGN/BUILDER and others asappropriate will be held to establish a working understanding among the partiesas to the Work and to discuss the design concepts, schedules referred to inparagraph 2.03.A, processing Applications for Payment, maintaining requiredrecords, items required pursuant to paragraph 8.01.A.6 and other matters.

 

***2.05       InitiallyAcceptable Schedules***

 

      A.    At least ten (10) days before submission of the first Applicationfor Payment a conference by telephone or in person with DESIGN/BUILDER, OWNERand others as appropriate will be held to review for acceptability theschedules submitted in accordance with paragraph 2.03.A.  DESIGN/BUILDER shall have an additional ten(10) days to make corrections and adjustments and to complete and resubmit theschedules.  No progress payment shall bemade to DESIGN/BUILDER until the schedules are submitted to and acceptable toOWNER as provided below. The progress 

 

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schedule will be acceptable to OWNER as providing an orderly progressionof the Work to completion within the Contract Times, but such acceptance willneither impose on OWNER responsibility for the sequencing, scheduling orprogress of the Work nor interfere with or relieve DESIGN/BUILDER fromDESIGN/BUILDER’s full responsibility therefor. The format and structure of the progress schedule will be acceptable toOWNER.  OWNER’s acceptance shall not bedeemed to confirm that the schedule is a reasonable plan for performing theWork.  DESIGN/BUILDER’s Schedule ofValues and Cash Flow Projection will be acceptable to OWNER as to form andsubstance.

 

**ARTICLE 3—CONTRACT DOCUMENTS: INTENT, AMENDING, REUSE**

 

***3.01     Intent***

 

       A.     The Contract Documents comprise the entire agreement betweenOWNER and DESIGN/BUILDER concerning the Work. The Contract Documents are complementary; what is called for by one isas binding as if called for by all.  TheContract Documents will be construed in accordance with the laws of the Stateof Kansas.  Except as otherwise requiredby applicable Laws and Regulations, the Contract Documents shall govern theobligations of the parties regarding the Work and Project.

 

       B.     It is the intent of the Contract Documents to describe afunctionally complete Project to be designed and constructed in accordance withthe Contract Documents.  Any Work,materials or equipment that may reasonably be inferred from the ContractDocuments or from prevailing custom or trade usage as being required to producethe intended result will be furnished and performed whether or not specificallycalled for.  When words or phrases whichhave a well-known technical or construction industry or trade meaning are usedto describe work, materials or equipment, such words or phrases shall beinterpreted in accordance with that meaning.

 

***3.02     References***

 

       A.     Reference to standards, specifications, manuals or codes of anytechnical society, organization or association, or to the Laws or Regulationsof any governmental authority, whether such reference be specific or byimplication, shall mean the latest standard, specification, manual, code orLaws or Regulations in effect on the Effective Date of the Agreement except asmay be otherwise specifically stated in the Contract Documents.

 

      B.     No provision of any standard, specification, manual, code orinstruction shall be effective to change the duties and responsibilities ofOWNER, DESIGN/BUILDER or any of their subcontractors, consultants, agents, oremployees from those set forth in the Contract Documents, nor shall it beeffective to assign to OWNER any duty or authority to supervise or direct thefurnishing or performance of the Work or any duty or authority to undertakeresponsibility inconsistent with the provisions of Article 8 or any otherprovision of the Contract Documents.

 

***3.03******                    ******Amending and SupplementingContract Documents***

 

      A.    The Contract Documents may be amended to provide for additions,deletions and revisions in the Work or to modify the terms and conditionsthereof in one or more of the following ways:

 

                     1.    AChange Order; or

 

                     2.    A formalWritten Amendment.

 

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***3.04******                     ******Reuseof Documents***

 

         A.   All documents including Drawings and Specifications prepared orfurnished by DESIGN/BUILDER pursuant to the Contract Documents are instrumentsof service in respect of the Project and DESIGN/BUILDER shall retain anownership and property interest therein whether or not the Project iscompleted.  OWNER may make and retaincopies for information and reference in connection with the use and occupancyof the Project by OWNER and others; however, such documents are not intended orrepresented to be suitable for reuse by OWNER or others on extensions of theProject or on any other project.  Anyreuse without written verification or adaptation by DESIGN/BUILDER for thespecific purpose intended will be at OWNER’s sole risk and without liability orlegal exposure to DESIGN/BUILDER, and OWNER shall indemnify and hold harmlessDESIGN/BUILDER, Subcontractors, and Engineer from all claims, damages, lossesand expenses including attorneys’ fees arising out of or resultingtherefrom.  Any such verification oradaptation will entitle DESIGN/BUILDER to further compensation at rates to beagreed upon by OWNER and DESIGN/BUILDER.

 

       B.     In addition to paragraph 3.04.A, all documents includingDrawings and Specifications prepared or furnished by DESIGN/BUILDER pursuant tothe Contract Documents are subject to the use and disclosure restrictions setforth in Exhibit C attached to the Agreement. Nothing contained in paragraph 3.04.A. shall be construed or interpretedas granting OWNER any rights or interest in the PROPRIETARY PROPERTY (asdefined in Exhibit C) other than as expressly provided in Exhibit C attached tothe Agreement.

 

**ARTICLE 4—AVAILABILITY OF LANDS; DIFFERING SITE CONDITIONS; REFERENCEPOINTS; HAZARDOUS CONDITIONS**

 

***4.01     Availabilityof Lands***

 

       A.     OWNER shall furnish, as indicated in the Contract Documents, thelands upon which the Construction is to be performed, rights-of-way andeasements for access thereto, and such other lands which are designated for theuse of DESIGN/BUILDER.

 

      B.     Upon reasonable written request, OWNER shall furnishDESIGN/BUILDER with a correct statement of record legal title and legaldescription of the lands upon which the Construction is to be performed andOWNER’s interest therein.  OWNER shallidentify any encumbrances or restrictions not of general application butspecifically related to use of lands so furnished with which DESIGN/BUILDERwill have to comply in performing the Work. Easements for permanent structures or permanent changes in existingfacilities will be obtained and paid for by OWNER, unless otherwise provided inthe Contract Documents.

 

      C.     OWNER shall provide any of its lands and access thereto that maybe required for temporary construction facilities or storage of materials andequipment.

 

***4.02       DifferingSite Conditions***

 

      A.    DESIGN/BUILDER shall promptly, and before the conditions aredisturbed, give a written notice to OWNER of (i) subsurface or latent physicalconditions at the Site which differ materially from those indicated in theOWNER’s geotechnical report for the Project site or the land and gradingspecifications required by DESIGN/BUILDER, or (ii) unknown physical conditionsat the Site, of an 

 

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unusual nature, which differ materially from those ordinarilyencountered and generally recognized as inhering in work of the charactercalled for by the Contract Documents.

 

      B.     OWNER will investigate the site conditions promptly afterreceiving the notice.  If the conditionsdo materially so differ and cause an increase or decrease in the DESIGN/BUILDER’scost of performing any part of the Work, an equitable adjustment shall be madeunder this clause and the Contract Price modified in writing by Change Order inaccordance with Article 9.

 

      C.     No request by DESIGN/BUILDER for an equitable adjustment underparagraph 4.02 shall be allowed unless DESIGN/BUILDER has given the writtennotice required; provided that the time prescribed in paragraph 9.02.A forgiving written notice may be extended by OWNER.

 

***4.03       ReferencePoints ***

 

      A.    DESIGN/BUILDER shall be responsible for laying out theconstruction and shall protect and preserve the reference points established byOWNER pursuant to paragraph 8.01.A.6.e and shall make no changes or relocationswithout the prior written approval of OWNER. DESIGN/BUILDER shall report to OWNER whenever any reference point orproperty monument is lost or destroyed or requires relocation because ofnecessary changes in grades or locations, and shall be responsible for theaccurate replacement or relocation of such reference points or propertymonuments by professionally qualified personnel.

 

***4.04     HazardousConditions***

 

       A.     OWNER represents and warrants that there is no HazardousCondition or materials that could create a Hazardous Condition existing at theSite as of the Effective Date of the Agreement that has not been previouslydisclosed in writing by OWNER to DESIGN/BUILDER and that OWNER will beresponsible for any Hazardous Condition encountered at the Site which was notidentified in the Contract Documents to be within the scope of the Work.  OWNER shall not be responsible for materialscreating a Hazardous Condition brought to the Site by DESIGN/BUILDER,Subcontractors, Suppliers or anyone else for whom DESIGN/BUILDER isresponsible.

 

       B.     DESIGN/BUILDER and any affected Subcontractor shall immediately(i) stop all Construction in connection with such Hazardous Condition and in anyarea affected thereby (except in an emergency as required by paragraph 6.15),and (ii) notify OWNER (and thereafter confirm such notice in writing).  OWNER shall promptly determine the necessityof retaining a qualified expert to evaluate such Hazardous Condition or takecorrective action, if any. DESIGN/BUILDER shall not be required to resume Construction inconnection with such Hazardous Condition or in any such affected area untilafter OWNER has obtained any required permits related thereto and delivered toDESIGN/BUILDER special written notice (i) specifying that such HazardousCondition and any affected area is or has been rendered safe for the resumptionof Construction, or (ii) specifying any special conditions under which suchConstruction may be resumed safely.  IfOWNER and DESIGN/BUILDER cannot agree as to entitlement to or the amount orextent of an adjustment, if any, in Contract Price as a result of suchConstruction stoppage or such special conditions under which Construction isagreed by DESIGN/BUILDER to be resumed, either party may make a claim thereforas provided in Article 9.

 

       C.     To the fullest extent permitted by Laws and Regulations, OWNERshall indemnify and hold harmless DESIGN/BUILDER, Subcontractors, Suppliers,Engineers and the officers, directors, employees, agents, other consultants andsubcontractors of each and any of them from and against all 

 

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claims, costs, losses and damages (including but not limited to allreasonable fees and charges of engineers, architects, attorneys and otherprofessionals and all court or arbitration or other dispute resolution costs)arising out of or resulting from such Hazardous Condition.  Nothing in this paragraph 4.04.C shallobligate OWNER to indemnify any individual or any entity, includingDESIGN/BUILDER, from and against the consequences of that individual’s orentity’s own negligence or willful misconduct. OWNER shall not be obligated to indemnify or hold harmlessDESIGN/BUILDER, Subcontractors, Suppliers or any other individual or any entityfor any such claim, cost, loss or damage arising out of or resulting frommaterials creating a Hazardous Condition brought to the Site by DESIGN/BUILDER,Subcontractors, Suppliers or any other party for whom DESIGN/BUILDER isresponsible.  DESIGN/BUILDER shallindemnify and hold harmless OWNER and OWNER’s officers, directors, employees,agents, other consultants and subcontractors and any of them from and againstall claims, costs, losses and damages (including but not limited to allreasonable fees and charges of engineers, architects, attorneys and otherprofessionals and all court or arbitration or other dispute resolution costs)arising out of or resulting from materials creating a Hazardous Conditionbrought to the Site by DESIGN/BUILDER, Subcontractors, Suppliers or any otherparty for whom DESIGN/BUILDER is responsible.

 

**ARTICLE 5—BONDS AND INSURANCE**

 

***5.01       Performance,Payment and Other Bonds***

 

       A.     DESIGN/BUILDER shall not be required to furnish a performance,payment or any other Bonds.

 

***5.02     DESIGN/BUILDER’sLiability Insurance***

 

       A.     DESIGN/BUILDER shall purchase and maintain such CommercialGeneral Liability (subject to customary exclusions in respect of professionalliability), Automobile Liability and Worker’s Compensation insurance as isappropriate for the Work being performed and furnished and as will provideprotection from claims set forth below which may arise out of or result fromDESIGN/BUILDER’s performance and furnishing of the Work and DESIGN/BUILDER’sother obligations under the Contract Documents, whether it is to be performedor furnished by DESIGN/BUILDER, any Subcontractor or Supplier, or by anyonedirectly or indirectly employed by any of them to perform or furnish any of theWork, or by anyone for whose acts any of them may be liable:

 

                    1.     Claimsunder workers’ compensation, disability benefits and other similar employeebenefit acts;

 

                    2.     Claimsfor damages because of bodily injury, occupational sickness or disease, ordeath of DESIGN/BUILDER’s employees;

 

                    3.     Claimsfor damages because of bodily injury, sickness or disease, or death of anyperson other than DESIGN/BUILDER’s employees;

 

                     4.      Claims for damages insured by customarypersonal injury liability coverage which are sustained (i) by any person as aresult of an offense directly or indirectly related to the employment of suchperson by DESIGN/BUILDER, or (ii) by any other person for any other reason;

 

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                   5.       Claims for damages, other than to theWork itself, because of injury to or destruction of tangible property whereverlocated other than claims under paragraph 5.02.A.7. below, including loss ofuse resulting therefrom;

 

                   6.       Claims for damages because of bodilyinjury or death of any person or property damage arising out of the ownership,maintenance or use of any motor vehicle; and

 

                   7.       Claims for professional errors andomissions arising from the Design Professional Services provided for theProject.

 

                   B.     The policies of insurance required byparagraph 5.02.A shall:

 

                   1.       With respect to insurance required byparagraphs 5.02.A.3 through 5.02.A.6 inclusive, include as additional insuredsOWNER and any other persons or entities identified in writing by OWNER, all ofwhom shall be listed as additional insureds, and include coverage for therespective officers and employees of all such additional insureds;

 

                   2.       Include at least the specific coveragesand be written for not less than the limits of liability set forth in Exhibit Dor required by Laws or Regulations, whichever is greater;

 

                   3.       Include completed operations insurance;

 

                   4.       Include contractual liability insurancecovering DESIGN/BUILDER’s indemnity obligations under paragraphs 6.06, 6.10 and6.19;

 

                   5.       Contain a provision or endorsement thatthe coverage afforded will not be cancelled, materially changed or renewalrefused until at least thirty (30) days prior written notice has been given toOWNER and each other additional insured to whom a certificate of insurance hasbeen issued (and the certificates of insurance furnished by the DESIGN/BUILDERpursuant to paragraph 5.08.B will so provide);

 

      6.       Remain in effect at least until final payment and at all timesthereafter when DESIGN/BUILDER may be correcting, removing or replacing defectiveConstruction in accordance with paragraphs 12.06 and 12.07;

 

                   7.      With respect to completed operationsinsurance, remain in effect for at least one year after final payment (andDESIGN/BUILDER shall furnish OWNER and each other additional insured to whom acertificate of insurance has been issued evidence satisfactory to OWNER and anysuch additional insured of continuation of such insurance at final payment);and

 

                   8.      DESIGN/BUILDER shall maintain in effectall insurance coverage required under this paragraph at the DESIGN/BUILDER’Ssole expense with insurance companies (and policies) approved by OWNER andlawfully authorized to do business in the jurisdiction in which the Project islocated.  If the DESIGN/BUILDER fails toobtain or maintain any insurance coverage required under this Agreement, theOWNER may purchase such coverage and charge the expense to the DESIGN/BUILDER,or terminate this Agreement for cause in accordance with paragraph 14.02 below.

 

 

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***5.03        OWNER’s LiabilityInsurance***

 

       A.     In addition to the insurance required to be provided byDESIGN/BUILDER under paragraph 5.02, OWNER, at OWNER’s option, may purchase andmaintain at OWNER’s expense OWNER’s own liability insurance as will protectOWNER against claims which may arise from operations under the ContractDocuments.

 

***5.04     PropertyInsurance***

 

       A.   OWNER shall purchase and maintain property insurance upon theConstruction at the Site in the amount of the full replacement cost thereof atthe OWNER’s sole expense with insurance companies (and policies) approved byDESIGN/BUILDER and lawfully authorized to do business in the jurisdiction inwhich the Project is located (subject to such deductible amounts as may beagreed to by OWNER and DESIGN/BUILDER or as may be required by Laws andRegulations).  This insurance will:

 

                    1.     Includethe interests of OWNER, DESIGN/BUILDER, Subcontractors, and any other personsor entities listed as an insured or additional named insured;

 

                      2.     Bewritten on a Builder’s Risk “all-risk” or equivalent policy form that shall atleast include insurance for physical loss and damage to the Construction,temporary buildings, falsework and all materials and equipment in transit, andshall insure against at least the following perils or causes of loss:  fire, lightning, extended coverage, theft,vandalism and malicious mischief, earthquake, collapse, debris removal,demolition occasioned by enforcement of Laws and Regulations, water damage,flood, system testing, and such other perils or causes of loss as may be agreedin writing by DESIGN/BUILDER and OWNER;

 

                   3.       Include expenses incurred in the repairor replacement of any insured property (including but not limited to fees andcharges of engineers and architects);

 

                   4.       Cover materials and equipment stored atthe Site or at another location that was agreed to in writing by OWNER prior tobeing incorporated in the Construction, provided that such materials andequipment have been included in an Application for Payment approved by OWNER;and

 

5.       Be maintained in effectuntil final payment is made unless otherwise agreed to in writing by OWNER andDESIGN/BUILDER with thirty (30) days written notice to each other additionalinsured to whom a certificate of insurance has been issued.

 

      B.     OWNER shall purchase and maintain such boiler and machineryinsurance or additional property insurance as DESIGN/BUILDER may reasonablyrequire or required by Laws and Regulations which will include the interests ofOWNER, DESIGN/BUILDER, Subcontractors, and other individuals and entitieslisted as an insured or additional insured.

 

                         C.     Allthe policies of insurance (and the certificates or other evidence thereof)required to be purchased and maintained by OWNER in accordance with paragraph5.04 will contain a provision or endorsement that the coverage afforded willnot be cancelled or materially changed or renewal refused until at least thirty(30) days prior written notice has been given to DESIGN/BUILDER and to eachother additional insured to whom a certificate of insurance has been issued.

 

       D.     OWNER shall not be responsible for purchasing and maintainingany property insurance to protect the interests of DESIGN/BUILDER,Subcontractors, Suppliers, Engineers or others in the Work to the extent of anydeductible amounts agreed to by OWNER and DESIGN/BUILDER.  The 

 

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risk of loss within such identified deductible amounts will be borne byDESIGN/BUILDER, Subcontractor or others suffering any such loss and if any ofthem wishes property insurance coverage within the limits of such deductibleamount, each may purchase and maintain it at the purchaser’s own expense.

 

       E.      If DESIGN/BUILDER requests in writing that other special insurancebe included in the property insurance policies provided under paragraph 5.04,OWNER shall, if possible, include such insurance, and the cost thereof will becharged to DESIGN/BUILDER by appropriate Change Order or Written Amendment.  Prior to commencement of the Work at theSite, OWNER shall in writing advise DESIGN/BUILDER whether or not such otherinsurance has been procured by OWNER.

 

***5.05        Waiverof Subrogation Rights***

 

      A.     OWNER and DESIGN/BUILDER intend that all policies purchased inaccordance with paragraph 5.04 will protect OWNER, DESIGN/BUILDER, Engineers,Subcontractors, others who may have a financial interest in the Project, andall other individuals or entities listed as insureds or additional insureds insuch policies and will provide primary coverage for all losses and damagescaused by the perils or causes of loss covered thereby.  All such policies shall contain provisions tothe effect that in the event of payment of any loss or damage the insurers willhave no rights of recovery against any of the insureds or additional insuredsthereunder.  Each party waives all rightsagainst the other party and its officers, directors, employees, members, andagents for all losses and damages caused by, arising out of or resulting fromany of the perils or causes of loss covered by such policies and any otherproperty insurance applicable to the Work.

 

***5.06       Receiptand Application of Proceeds***

 

      A.    Any insured loss under the policies of insurance required byparagraph 5.04 will be adjusted with OWNER and made payable to OWNER asfiduciary for the benefit of insureds, as their interests may appear, subjectto the requirements of any applicable mortgage clause and of paragraph5.06.B.  OWNER shall deposit in a separateaccount any money so received, and shall distribute it in accordance with suchagreement as the parties in interest may reach. If no other special agreement is reached the damaged Work shall berepaired or replaced, the moneys so received applied on account thereof and theWork and the cost thereof covered by an appropriate Change Order or WrittenAmendment.

 

      B.     OWNER as fiduciary shall have power to adjust and settle anyloss with the insurers unless one of the parties in interest shall object inwriting within fifteen (15) days after the occurrence of loss to OWNER’sexercise of this power.  If suchobjection be made, OWNER as fiduciary shall make settlement with the insurersin accordance with such agreement as the parties in interest may reach.  If no such agreement among the parties in interestis reached, OWNER as fiduciary shall adjust and settle the loss with theinsurers and, if required in writing by any party in interest, OWNER asfiduciary shall give bond for the proper performance of such duties..

 

***5.07       Acceptanceof Insurance; Option to Replace***

 

       A.    If either party has any objection to the coverage afforded by orother provisions of the insurance required to be purchased and maintained bythe other party in accordance with Article 5 on the basis of their notcomplying with the Contract Documents, the objecting party shall so notify theother party in writing within thirty (30) days after receipt of thecertificates (or other evidence requested) required by paragraph 2.03.B.  OWNER and DESIGN/BUILDER shall each provideto the 

 

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other such additional information in respect of insurance provided asthe other may reasonably request.  Ifeither party does not purchase or maintain all of the insurance required ofsuch party by the Contract Documents, such party shall notify the other partyin writing of such failure to purchase prior to the start of the Work, or ofsuch failure to maintain prior to any change in the required coverage.  Without prejudice to any other right orremedy, the other party may elect to obtain equivalent insurance to protectsuch other party’s interests at the expense of the party who was supposed toprovide such coverage, and a Change Order or Written Amendment shall be issuedto adjust the Contract Price accordingly.

 

***5.08******              ******Licensed Sureties andInsurers; Certificates of Insurance***

 

       A.     All insurance required by the Contract Documents to be purchasedand maintained by OWNER or DESIGN/BUILDER shall be obtained from insurancecompanies that are duly licensed or authorized in the jurisdiction in which theProject is located to issue insurance policies for the limits and coverages sorequired.  Such insurance companies shallalso meet such additional requirements and qualifications as may be agreed inwriting by DESIGN/BUILDER and OWNER.

 

      B.      DESIGN/BUILDER shall deliver to OWNER, with copies to eachadditional insured, certificates of insurance (and other evidence of insurancerequested by OWNER or any other additional insured) which DESIGN/BUILDER isrequired to purchase and maintain in accordance with paragraph 5.02.A.  OWNER shall deliver to DESIGN/BUILDER, withcopies to each additional insured, certificates of insurance (and otherevidence of insurance requested by DESIGN/BUILDER or any other additionalinsured) which OWNER is required to purchase and maintain in accordance withparagraphs 5.04.A and 5.04 B.

 

**ARTICLE 6—DESIGN/BUILDER’S RESPONSIBILITIES**

 

***6.01       DesignProfessional Services***

 

      A.*    **Standard of Care**:*  DESIGN/BUILDER shall perform or furnishDesign Professional Services and related services in all phases of theProject.  The standard of care for allsuch services performed or furnished under this Agreement will be the care andskill ordinarily used by members of the engineering profession practicing undersimilar conditions at the same time and locality.  Notwithstanding the foregoing, DESIGN/BUILDERshall perform or furnish Design Professional Services under this Agreement toachieve the Performance Criteria set forth in Exhibit A.

 

      B.*     **Preliminary Design Phase**:*  During the preliminary design phase,DESIGN/BUILDER shall:

 

                   1.       Consult with OWNER to understand OWNER’srequirements for the Project and review available data.

 

                   2.       Advise OWNER as to the necessity of OWNERproviding or obtaining from others additional reports, data or services of thetypes provided in paragraph 8.01.A.6.a-g and assist OWNER in obtaining suchreports, data, or services.

 

                   3.       Identify and analyze requirements ofgovernmental authorities having jurisdiction to approve the portions of theProject designed or specified by DESIGN/BUILDER with whom consultation is to beundertaken in connection with the Project.

 

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                   4.       Obtain such additional geotechnical andrelated information which it deems necessary for performance of the Work.

 

                   C.*    *[not used]

 

      D.     ***Construction Phase***.  During Construction, DESIGN/BUILDER shallprovide Engineering and Design Professional Services as necessary to completethe Project.

 

      E.*     **Operational Phase**:*  During the operational phase, DESIGN/BUILDERshall:

 

                   1.      Provide assistance in connection with thestart-up, testing, refining and adjusting of any equipment or system.

 

Other than assistance normally provided in the industry after finalpayment, nothing in this paragraph 6.01.E. shall be interpreted or construed asobligating DESIGN/BUILDER to perform or provide such assistance to OWNER afterfinal payment and acceptance of the Work under paragraph 13.08 below.

 

***6.02     Supervisionof Construction***

 

      A.    DESIGN/BUILDER shall supervise, inspect and direct theConstruction competently and efficiently, devoting such attention thereto andapplying such skills and expertise as may be necessary to provide theConstruction in accordance with the Contract Documents.  A representative of the DESIGN/BUILDER shallbe located at the construction site from the later of (i) the date that is five(5) days after the date the Notice to Proceed is provided by OWNER toDESIGN/BUILDER in accordance with Section 8.07 of the Agreement, or (ii) January10, 2005, until the date of Substantial Completion.  DESIGN/BUILDER shall be solely responsiblefor the means, methods, techniques, sequences and procedures employed for theprovision of Construction. DESIGN/BUILDER shall be responsible to see that the completedConstruction complies accurately with the Contract Documents and shall keepOWNER advised as to the quality and progress of the Construction.

 

 

***6.03       Labor,Materials and Equipment***

 

      A.    DESIGN/BUILDER shall provide competent, suitably qualified personnelto survey and lay out the Construction and perform Construction as required bythe Contract Documents. DESIGN/BUILDER shall at all times maintain gooddiscipline and order at the Site.

 

       B.     Unless otherwise specified in the Contract Documents, DESIGN/BUILDERshall furnish or cause to be furnished and assume full responsibility formaterials, equipment, labor, transportation, construction equipment andmachinery, tools, appliances, fuel, power, light, heat, telephone, water,sanitary facilities, temporary facilities and all other facilities andincidentals necessary for the furnishing, performance, testing, start-up andcompletion of the Work.  DESIGN/BUILDERwill direct the checkout of utilities and operations of systems and equipment.

 

       C.     All materials and equipment incorporated into the Work shall beof good quality and new.  All warrantiesand guarantees specifically called for by the Contract Documents shallexpressly run to the benefit of OWNER. If reasonably required by OWNER, DESIGN/BUILDER shall furnishsatisfactory evidence (including reports of required tests) as to the kind andquality of materials and equipment.  Allmaterials and equipment shall be applied, installed, connected, erected, used,cleaned and conditioned in accordance with instructions of the applicableSupplier.

 

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***6.04     ProgressSchedule***

 

       A.     DESIGN/BUILDER shall adhere to the progress schedule establishedin accordance with paragraph 2.05.A as it may be adjusted from time to time.

 

                   1.      DESIGN/BUILDER shall submit to OWNER foracceptance proposed adjustments in the progress schedule that will not changethe Contract Times.  Such adjustmentswill conform generally to the progress schedule then in effect.

 

                   2.      Proposed adjustments in the progressschedule that will change the Contract Times shall be submitted in accordancewith the requirements of Article 11. Such adjustments may only be made by a Change Order or WrittenAmendment.

 

***6.05     ConcerningSubcontractors, Suppliers and Others***

 

       A.     DESIGN/BUILDER shall not employ any Subcontractor, Engineer,Supplier or other individual or entity against whom OWNER may have reasonableobjection.  DESIGN/BUILDER shall not berequired to employ any Subcontractor, Engineer, Supplier or other individual orentity to furnish or perform any of the Work against whom DESIGN/BUILDER hasreasonable objection.

 

      B.     DESIGN/BUILDER shall be fully responsible to OWNER for all actsand omissions of the Subcontractors, Engineers, Suppliers and other individualsor entities performing or furnishing any of the Work under a direct or indirectcontract with DESIGN/BUILDER.  Nothing inthe Contract Documents shall create for the benefit of any such Subcontractor,Engineer, Supplier or other individual or entity any contractual relationshipbetween OWNER and any such Subcontractor, Engineer, Supplier or otherindividual or entity, nor shall it create any obligation on the part of OWNERto pay or to see to the payment of any moneys due any such Subcontractor, Engineer,Supplier or other individual or entity except as may otherwise be required byLaws and Regulations.

 

      C.     DESIGN/BUILDER shall be solely responsible for scheduling andcoordinating Subcontractors, Engineers, Suppliers and other individuals andentities performing or furnishing any of the Work under a direct or indirectcontract with DESIGN/BUILDER. DESIGN/BUILDER shall require all Subcontractors, Engineers, Suppliersand such other individuals and entities performing or furnishing any of theWork to communicate with the OWNER through DESIGN/BUILDER.

 

      D.     All services performed or provided to and material and equipmentsupplied to DESIGN/BUILDER by a Subcontractor or Supplier will be pursuant toan appropriate Design Subagreement or Construction Subagreement betweenDESIGN/BUILDER and the Subcontractor, Engineer or Supplier which specificallybinds the Subcontractor, Engineer or Supplier to the applicable terms andconditions of the Contract Documents for the benefit of OWNER.  Whenever any such agreement is with aSubcontractor, Engineer or Supplier who is listed as an additional insured onthe property insurance provided in paragraph 5.04.A or 5.04.B, the agreementbetween the DESIGN/BUILDER and the Subcontractor, Engineer or Supplier willcontain provisions whereby the Subcontractor, Engineer or Supplier waives allrights against OWNER, DESIGN/BUILDER, and all other additional insureds for alllosses and damages caused by any of the perils or causes of loss covered bysuch policies and any other property insurance applicable to the Work.  If the insurers on any such policies requireseparate waiver forms to be signed by any Subcontractor, Engineer or Supplier,DESIGN/BUILDER will obtain the same.

 

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***6.06       PatentFees and Royalties***

 

       A.     DESIGN/BUILDER shall pay all license fees and royalties andassume all costs incident to the use in the performance of the Work or theincorporation in the Work of any invention, design, process, product or device(other than any increased license fees, royalties and costs arising out of orresulting from a Change Order) which is the subject of patent rights orcopyrights held by others.  To thefullest extent permitted by Laws and Regulations,  DESIGN/BUILDER shall indemnify and holdharmless OWNER, from and against all claims, costs, losses and damages(including but not limited to all reasonable fees and charges of engineers,architects, attorneys and other professionals and all court or arbitration orother dispute resolution costs) arising out of or resulting from anyinfringement of patent rights or copyrights incident to the use in theperformance of the Work or resulting from the incorporation in the Work of anyinvention, design, process, product or device.

 

***6.07     Permitsand Utilities***

 

       A.     Unless otherwise provided in the Contract Documents, OWNER shallobtain and pay for all necessary permits and licenses.  DESIGN/BUILDER shall assist OWNER, whennecessary, in obtaining such permits and licenses.  OWNER shall pay all governmental charges andinspection fees necessary for the prosecution of the Construction, which areapplicable on the Effective Date of the Agreement.  OWNER shall pay all charges of utility ownersfor connections to the Work, OWNER shall pay all charges of such utility ownersfor capital costs related thereto and OWNER shall pay for all charges for useor consumption of such utilities relating to the performance of the Work.

 

***6.08     Lawsand Regulations***

 

       A.     DESIGN/BUILDER shall give all notices and comply with all Lawsand Regulations of the place of the Project which are applicable to furnishingand performance of the Work.  OWNER shallnot be responsible for monitoring DESIGN/BUILDER’s compliance with any Laws orRegulations.

 

      B.     If DESIGN/BUILDER performs any Work knowing or having reason toknow that it is contrary to Laws or Regulations, DESIGN/BUILDER shall bear allcosts arising therefrom.

 

      C.     Changes in Laws and Regulations not known on the Effective Dateof the Agreement having an effect on the cost or time of performance may be thesubject of a claim under Article 9.

 

***6.09       Taxes***

 

      A.    OWNER shall pay to DESIGN/BUILDER all sales, consumer, use, grossreceipts and other similar taxes which are applicable during the performance ofthe Work and are either paid by DESIGN/BUILDER or are required to be reimbursedby DESIGN/BUILDER to its Subcontractors, Suppliers, or Engineers.

 

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***6.10       Useof Site and Other Areas***

 

       A.     DESIGN/BUILDER shall confine construction equipment, the storageof materials and equipment and the operations of construction workers to thoselands and areas permitted by the OWNER and other land and areas permitted byLaws and Regulations, rights-of-way, permits and easements, and shall not unreasonablyencumber the premises with construction equipment or other materials orequipment.  DESIGN/BUILDER shall beresponsible for any damage to any such land or area, or to the owner oroccupant thereof or of any adjacent land or areas, resulting from theperformance of the Construction. Notwithstanding the foregoing sentence, DESIGN/BUILDER shall not beresponsible for, or any damage relating to, restoration of the landscaping orseeding of any such land or area and DESIGN/BUILDER shall only be responsiblefor restoring such land or area to the condition of such land or area at thetime DESIGN/BUILDER completed the original construction of the plant.  Should any claim be made by any such owner oroccupant because of the performance of the Construction, DESIGN/BUILDER shallpromptly settle with such other party by negotiation or otherwise resolve theclaim by arbitration or other dispute resolution proceeding or at law.  DESIGN/BUILDER shall, to the fullest extentpermitted by Laws and Regulations, indemnify and hold harmless OWNER and anyonedirectly or indirectly employed by OWNER from and against all claims, costs,losses and damages (including, but not limited to, all reasonable fees ofengineers, architects, attorneys and other professionals and court andarbitration or other dispute resolution costs) arising out of or resulting fromany claim or action, legal or equitable, brought by any such owner or occupantagainst OWNER, or any other party indemnified hereunder to the extent caused byor based upon DESIGN/BUILDER’s performance of the Construction.

 

       B.     During the performance of the Construction, DESIGN/BUILDER shallkeep the premises free from accumulations of waste materials, rubbish and otherdebris resulting from the Construction. At the completion of the Construction, DESIGN/BUILDER shall remove allwaste materials, rubbish and debris from and about the premises as well as alltools, appliances, construction equipment, temporary construction and machineryand surplus materials.  DESIGN/BUILDERshall leave the Site clean and ready for occupancy by OWNER at SubstantialCompletion.  DESIGN/BUILDER shall restoreto original condition all property not designated for alteration by theContract Documents.

 

       C.     DESIGN/BUILDER shall not load nor permit any part of anystructure to be loaded in any manner that will endanger the structure, norshall DESIGN/ BUILDER subject any part of the Work or adjacent property tostresses or pressures that will endanger it.

 

***6.11     RecordDocuments***

 

       A.     DESIGN/BUILDER shall maintain at its office one record copy ofall Drawings, Specifications, Written Amendments, and Change Orders, in goodorder and annotated to show all changes made during Construction.  These record documents will be available toOWNER for reference.  Unless otherwiseprovided herein, upon completion of the Work, these record documents, includinga reproducible set of record drawings, will be delivered to OWNER.  DESIGN/BUILDER shall not be obligated toprovide to OWNER (i) an electronic copy of any Drawings or Specifications, or(ii) any isometrics or piping models. Within 180 days after the date of successful completion of theperformance test set forth in Exhibit A, DESIGN/BUILDER shall provided to OWNERa copy of the final As-Built Drawings and operation and maintenance manuals.

 

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**6.12****           *****Safetyand Protection***

 

       A.     DESIGN/BUILDER shall be responsible for initiating, maintainingand supervising all safety precautions and programs in connection with theConstruction.  DESIGN/BUILDER shall takeall necessary precautions for the safety of, and shall provide the necessaryprotection to prevent damage, injury or loss to:

 

                   1.      All persons on the Site or who may beaffected by the Construction;

 

                   2.      All Work and materials and equipment to beincorporated therein, whether in storage on or off the Site; and

 

                   3.       Other property at the Site or adjacentthereto, including trees, shrubs, lawns, walks, pavements, roadways,structures, utilities and underground facilities not designated for removal,relocation or replacement in the course of construction.

 

Notwithstanding the foregoing, DESIGN/BUILDER shall not be responsiblefor initiating, maintaining or supervising any safety precautions or programsrelating to the operation of the plant or any person on the Site who is not anemployee of DESIGN/BUILDER or one of its Subcontractors or Suppliers.  OWNER shall not be responsible forinitiating, maintaining and supervising any safety precautions and programs inconnection with the Construction or any person on the Site who is an employeeof DESIGN/BUILDER or one of its Subcontractors or Suppliers.

 

      B.     DESIGN/BUILDER shall comply with applicable Laws and Regulationsof any public body having jurisdiction for safety of persons or property or toprotect them from damage, injury or loss; and shall erect and maintain allnecessary safeguards for such safety and protection.  DESIGN/BUILDER shall notify owners ofadjacent property and of underground facilities and utility owners whenprosecution of the Work may affect them, and shall cooperate with them in theprotection, removal, relocation and replacement of their property.  All damage, injury or loss to any propertycaused, directly or indirectly, in whole or in part, by DESIGN/BUILDER, anySubcontractor, Supplier or any other individual or entity directly orindirectly employed by any of them to perform or furnish any of the Work oranyone for whose acts any of them may be liable, shall be remedied byDESIGN/BUILDER.  DESIGN/BUILDER’s dutiesand responsibilities for safety and for protection of the construction shallcontinue until (i) such time as all the Work is completed and OWNER has issueda notice to DESIGN/BUILDER in accordance with paragraph 13.09 that the Work isacceptable or, (ii) in the event DESIGN/BUILDER is excluded from the Site underparagraph 13.05.B. after Substantial Completion, the date DESIGN/BUILDER isexcluded from the Site.

 

***6.13      ***[not used]

 

***6.14       HazardCommunication Programs ***

 

      A.    DESIGN/BUILDER shall be responsible for coordinating any exchangeof material safety data sheets or other hazard communication informationrequired to be made available to or exchanged between or among employers at theSite in accordance with Laws or Regulations.

 

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***6.15     Emergencies***

 

       A.     In emergencies affecting the safety or protection of persons orthe construction or property at the Site or adjacent thereto, DESIGN/BUILDER,without special instruction or authorization from OWNER, is obligated to act toprevent threatened damage, injury or loss. DESIGN/BUILDER shall give OWNER prompt written notice if DESIGN/BUILDERbelieves that any significant changes in the Construction or variations fromthe Contract Documents have been caused thereby.  If a change in the Contract Documents isrequired because of the action taken by DESIGN/BUILDER in response to such anemergency, a Change Order will be issued to document the consequences of suchaction.

 

***6.16      ***[not used]

 

***6.17       Continuingthe Work***

 

      A.    DESIGN/BUILDER shall carry on the Work and adhere to the progressschedule during all disputes or disagreements with OWNER.  No Work shall be delayed or postponed pendingresolution of any disputes or disagreements, except as DESIGN/BUILDER and OWNERmay otherwise agree in writing or as otherwise provided in the ContractDocuments.

 

***6.18******                    ******DESIGN/BUILDER’s GeneralWarranty and Guarantee***

 

      A.    DESIGN/BUILDER warrants and guarantees to OWNER that allConstruction will be in accordance with the Contract Documents and will not be *defective*. DESIGN/BUILDER’s warranty and guarantee hereunderexcludes defects or damage caused by:

 

                   1.       Abuse, modification or impropermaintenance or operation by persons other than DESIGN/BUILDER, Subcontractorsor Suppliers; or

 

                   2.       Normal wear and tear under normal usage.

 

      B.     DESIGN/BUILDER’s obligation to perform and complete the Work inaccordance with the Contract Documents shall be absolute.  Except as provided in paragraph 12.08, noaction by OWNER will constitute an acceptance of Work that is not in accordancewith the Contract Documents or a release of DESIGN­/BUILDER’s obligation toperform the Work in accordance with the Contract Documents, including but notlimited to the following:

 

                   1.       Observations by OWNER;

 

                   2.       The making of any progress or final pay­ment;

 

                   3.      The issuance of a certificate ofSubstantial Completion;

 

                   4.      Use or occupancy of the Work or any partthereof by OWNER;

 

                   5.      Any acceptance by OWNER or any failure todo so;

 

                   6.      Any review and approval of a Submittal;

 

                   7.      Any inspection, test or approval byothers; or

 

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                     8.   Any correction of defective Construction byOWNER.

 

       C.  DESIGN/BUILDER shall, at final completion, assign to OWNER allmanufacturer’s warranties for materials and equipment incorporated into theProject; provided, however, in the event of a claim by OWNER againstDESIGN/BUILDER, OWNER shall use its best efforts to cooperate withDESIGN/BUILDER in the enforcement of any applicable warranty.

 

**6.19     *Indemnification***

 

OWNER and DESIGN/BUILDER are and will be throughout the term of theAgreement independent contractors as to each other.  Each party recognizes that it shall be solelyresponsible for its own conduct, including without limitation its own fault, asto any aspect of the Agreement.  In theevent any claim is made or any action is filed by a third party arising out ofthis Agreement or the services to be performed under it, the parties anticipatethat each will defend said claim or action on its own behalf, and will pay,settle, or otherwise dispose of any demand or judgment against it consistentwith the provisions of the Kansas comparative negligence statute, K.S.A.§60-258a, in effect on the date of this Agreement.  In the event either party is made to respondin damages for the fault of the other party, then the other party agrees toindemnify and hold harmless the first party (including its officers, directors,employees, and agents) from any payment that it has to make, including withoutlimitation the payment of reasonable attorneys’ fees incurred in resisting,settling, or otherwise disposing of the demand, on account of the other party’sfault.  In regard to the indemnityobligation in this paragraph 6.19 or any other provision of the GeneralConditions, neither party shall make a payment for which indemnity will besought from the other party without first providing such other party writtennotice of the claim and an opportunity to assume the defense.

 

**ARTICLE 7—OTHER CONSTRUCTION**

 

***7.01       RelatedConstruction at Site***

 

      A.    OWNER may perform other Work related to the Project at the Siteby OWNER’s own forces, or let other direct contracts therefor or have otherwork performed by utility owners. Written notice thereof will be given to DESIGN/BUILDER prior to startingany such other work.

 

       B.     DESIGN/BUILDER shall afford each other contractor who is a partyto such a direct contract and each utility owner (and OWNER, if OWNER isperforming the additional work with OWNER’s employees) proper and safe accessto the Site and a reasonable opportunity for the introduction and storage ofmaterials and equipment and the execution of such other work and shall properlyconnect and coordinate the Construction with theirs.  DESIGN/BUILDER shall do all cutting, fittingand patching of the Work that may be required to make its several parts cometogether properly and integrate with such other work.  DESIGN/BUILDER shall not endanger any work ofothers by cutting, excavating or otherwise altering their work and will onlycut or alter their work with the written consent of OWNER and the others whosework will be affected.

 

       C.     If the proper execution or results of any part of DESIGN/BUILDER’sWork depends upon work performed or services provided by others under thisArticle 7, DESIGN/BUILDER shall inspect such other work and appropriateinstruments of service and promptly report to OWNER in writing any delays,defects or deficiencies in such other work or services that render it unavailableor unsuitable for the proper execution and results of DESIGN/BUILDER’sWork.  DESIGN/BUILDER’s failure so toreport will constitute an acceptance of such other work as fit and proper forintegration with 

 

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DESIGN/BUILDER’s Work except for latent or nonapparent defects anddeficiencies in such other work.

 

**ARTICLE 8—OWNER’S RESPONSIBILITIES**

 

***8.01     General***

 

      A.     OWNER shall do the following in a timely manner so as not todelay the services of DESIGN/BUILDER.

 

                   1.       Designate in writing a person to act asOWNER’s representative with respect to the services to be rendered under thisAgreement.

 

                   2.       Provide such legal services as OWNER mayrequire with regard to land use and governmental permitting issues pertainingto the Project including any such land use or governmental permitting issuesthat may be raised by DESIGN/BUILDER.

 

                   3.       If requested in writing byDESIGN/BUILDER, furnish reasonable evidence satisfactory to DESIGN/BUILDER,that sufficient funds are available and committed for the entire cost of theProject.  Unless such reasonable evi­denceis furnished, DESIGN/BUILDER is not required to commence or continue any Work,or may, if such evidence is not presented within a reasonable time, stop Workupon fifteen (15) days’ notice to the Owner.

 

                   4.       Make payments to DESIGN/BUILDER promptlywhen they are due as provided in Article 13.

 

                   5.       Furnish lands and easements as set forthin paragraph 4.01.A.

 

                   6.       Furnish to DESIGN/BUILDER, as re­quiredfor performance of DESIGN/BUILDER’s services the following, all of whichDESIGN/BUILDER may use and rely upon in performing services under thisAgreement:

 

a.     Environmental assessmentand impact statements;

 

b.    Property, boundary,easement, right-of-way, topographic and utility surveys;

 

c.     Property descriptions;

 

d.    Zoning, deed and other landuse re­strictions;

 

e.     Engineering surveys toestablish refer­ence points for design and construction which in OWNER’sjudgment are necessary to enable DESIGN/BUILDER to  proceed with the Work;

 

f.     Assistance in filingdocuments required to obtain necessary approvals of governmental authoritieshaving jurisdiction over the Project; and

 

g.    Subsurface data.

 

                   7.      [not used].

 

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                   8.      Provide information known to or in thepossession of OWNER relating to the presence of materials and substances at thesite which could create a Hazardous Condition.

 

                   9.      Perform all items designated as OWNER’sresponsibilities in the Agreement and Exhibit B.

 

***8.02****** ******  Scope of OWNER’s Safety and Hazardous Waste Responsibilities***

 

       A.     OWNER shall not supervise, direct or have control or authorityover, nor be responsible for, DESIGN/BUILDER’s means, methods, techniques,sequences or procedures of Construction or the safety precautions and programsincident thereto, or for any failure of DESIGN/BUILDER to comply with Laws andRegulations applicable to the furnishing or perfor­mance of the Work.  OWNER will not be responsible forDESIGN/BUILDER’s failure to perform or furnish the Work in accordance with theContract Documents.

 

**ARTICLE 9—CHANGES IN THE WORK; CLAIMS**

 

***9.01******                    ******General—Rights andObligations***

 

      A.    Without invalidating the Agreement, OWNER may, at any time orfrom time to time, request additions, deletions or revisions in the Work withinthe general scope of the contract by a Written Amendment or a ChangeOrder.  If DESIGN/BUILDER agrees to suchWritten Amendment or Change Order, which agreement shall not be unreasonably withheld,DESIGN/BUILDER shall promptly proceed with the Work involved which will beperformed under the applicable provisions of the Contract Documents (except asotherwise specifi­cally provided).

 

***9.02       Noticeof Intent to Make Claim***

 

      A.    If OWNER and DESIGN/BUILDER are unable to agree as to the extent,if any, of an adjust­ment in the Contract Price or an adjustment of theContract Times that should be allowed as a result of any order of OWNERpursuant to paragraph 9.01.A or other occurrence for which the ContractDocuments provide that such adjustment(s) may be made, a claim may be madetherefor.  Written notice of intent tomake such a claim shall be submitted to the other party promptly and in noevent more than thirty (30) days after the start of the occurrence or eventgiving rise to the claim.

 

***9.03       ClaimDocumentation***

 

      A.    Substantiating documentation shall be submitted by the claimingparty within thirty (30) days after delivery of the notice required byparagraph 9.02.A.

 

***9.04       Decision***

 

      A.    The other party shall render a decision on the claim no more thanthirty (30) days after the receipt of the substantiating documentation requiredby paragraph 9.03.A.   This decision willbe final and binding unless the claiming party gives notice of intention toexercise its rights under Article 15 within thirty (30) days of receipt of thedecision and exercises such rights within thirty (30) days of giving the noticeof intent.

 

***9.05       TimeLimit Extension***

 

      A.    The time limits of paragraphs 9.03.A and 9.04.A may be extendedby mutual agreement.

 

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***9.06       Exceptions***

 

       A.     DESIGN/BUILDER shall not be entitled to an increase in theContract Price with respect to any Work performed that is not contemplated bythe Contract Documents as amended, modified and supplemented as provided inparagraph 3.03.

 

***9.07     Executionof Change Orders***

 

      A.      OWNER and DESIGN/BUILDER shall execute appropriate ChangeOrders or Written Amendments covering:

 

                   1.      changes in the Work which are (i) orderedby OWNER pursuant to paragraph 9.01, (ii) required because of acceptance of *defective* Construction under paragraph 12.08 or correcting *defective* Work under paragraph 12.09 or (iii) agreed to bythe parties; and

 

                   2.      changes in the Contract Price or ContractTimes which are agreed to by the parties.

 

**ARTICLE 10—CHANGE OF CONTRACT PRICE**

 

***10.01   General***

 

       A.     The Contract Price constitutes the total com­pensation (subjectto authorized adjustments) payable to DESIGN/BUILDER for performing the Work.

 

      B.     The Contract Price may only be changed by a Change Order or by aWritten Amendment.  Any claim for anadjustment in the Contract Price shall be based on written notice delivered bythe party making the claim to the other party promptly in accordance withparagraph 9.02.A.

 

      C.     The value of any Work covered by a Change Order or of any claimfor an increase or decrease in the Contract Price will be determined asfollows:

 

                   1.       By a mutually agreed lump sum (which mayinclude an allowance for overhead and profit not necessari­ly in accordancewith paragraph 10.02); or

 

                   2.       Where agreement to a lump sum is notreached under paragraph 10.01.C.1, on the basis of the Cost of the Work(determined as provided in paragraph 10.02) plus a DESIGN/BUILDER’s Fee forover­head and profit (determined as provided in para­graph 10.02.C).

 

***10.02     Costof the Work***

 

      A.*    **Costs Included**:*  The term Cost of the Work means the sum ofall costs necessarily incurred and paid by DESIGN/BUILDER in the proper perfor­manceof work authorized only by a Change Order or Written Amendment (together “ChangeOrder Work”).  Except as otherwise may beagreed to in writing by OWNER, such costs shall be in amounts no higher thanthose prevailing in the locality of the Project, shall include only thefollowing items and shall not include any of the costs itemized in paragraph10.02.B:

 

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                   1.       Payroll costs for employees in the directemploy of DESIGN/BUILDER in the performance of the Change Order Work under thethen current schedule of job classifications and hourly rates ofDESIGN/BUILDER.

 

                   2.      Cost of all materials and equipment fur­nishedand incorporated in the Change Order Work, including costs of transportationand storage thereof, and Suppliers’ field services required in connectiontherewith.

 

                   3.      Payments made by DESIGN/BUILDER toSubcontractors for Change Order Work performed or furnished by Subcontractors.

 

                   4.      Payments made by DESIGN/BUILDER toEngineers (not employees of DESIGN/BUILDER or its affiliates) for DesignProfessional Services provid­ed or furnished by Engineers under a DesignSubagreement for Change Order Work.

 

                   5.      Costs of special consultants (includingbut not limited to testing laboratories and surveyors, but excluding employeesof DESIGN/BUILDER or its affiliates) employed for services specifically relatedto Change Order Work.

 

                   6.      Supplemental costs including the followingitems:

 

                                a.      Theproportion of necessary transportation, travel and subsistence expenses of DE­SIGN/BUILDER’semployees incurred in discharge of duties connected with Change Order Work.

 

                            b.    Cost,including transportation and maintenance, of all materials, supplies, equip­ment,machinery, appliances, office and tempo­rary facilities at the Site and handtools not owned by the workers, which are consumed in the performance of ChangeOrder Work, and cost less market value of such items used but not con­sumedwhich remain the property of DESIGN/BUILDER.

 

                            c.     Rentalsof all Work equipment and machinery and the parts thereof whether rented from DESIGN/BUILDERor others in accordance with rental agreements approved by OWNER, and the costsof transportation, loading, unloading, installation, dismantling and removalthereof—all in accordance with the terms of said rental agreements.  The rental of any such equipment, machineryor parts shall cease when the use thereof is no longer neces­sary for ChangeOrder Work.

 

                            d.    Sales,consumer, use or similar taxes related to Change Order Work, paid byDESIGN/BUILDER or required to be reimbursed by DESIGN/BUILDER to itsSubcontractors, Suppliers, or Engineers.

 

      B.*     **Costs Excluded**:*  The term Cost of the Work shall not includeany of the following:

 

                     1.      Payroll costs and other compensation ofDESIGN/BUILDER’s officers, executives, princi­pals (of partnerships and soleproprietorships), general managers, architects, attorneys, auditors,accountants, purchasing and contracting agents, expediters, timekeepers, clerksand other personnel employed by DESIGN/BUILDER whether at the Site or inDESIGN/BUILDER’s principal or a branch office for general administration of theWork and not specifically included in the agreed 

 

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upon schedule of job classifications referred to in paragraph 10.02.A.1— all of which are to be considered administrative costs covered by theDESIGN/BUILDER’s fee.

 

                     2.      Expenses of DESIGN/BUILDER’s princi­paland branch offices other than DESIGN/BUILDER’s office at the Site.

 

                     3.      Any part of DESIGN/BUILDER’s capitalexpenses, including interest on DESIGN/BUILDER’s capital employed for the Workand charges against DESIGN/BUILDER for delinquent payments.

 

                    4.     Costsdue to the negligence of DESIGN/BUILDER, any Subcontractor, or anyone directlyor indirectly employed by any of them or for whose acts any of them may beliable, including but not limited to, the correction of *defective*Work, disposal of materials or equipment wrongly sup­plied and making good anydamage to property.

 

                      5.    Otheroverhead or general expense costs of any kind and the costs of any item notspecifically and expressly included in paragraph 10.02.A.

 

       C.*  **Fee**:*

 

                                                1.   A mutually agreed fee or, in the event theparties can not agree upon a fee, DESIGN/BUILDER’s fee for overhead and profiton Change Orders priced by paragraph 10.01.C.2 (whether additive or deductive)shall be fifteen percent (15%) of the Cost of the Change Order Work forsubcontracts, materials and equipment.

 

                              2.    Whenboth additions and credits are involved in any one change, the adjustment inDESIGN/BUILDER’s fee shall be computed on the basis of the net change inaccordance with paragraph 10.02.C.1 above.

 

      D.*     **Documentation**:*  Whenever the cost of any Work is to bedetermined pursuant to paragraphs 10.02.A and 10.02.B, DESIGN/BUILDER willestab­lish and maintain records thereof in accordance with generally acceptedaccounting practices and submit in a form acceptable to OWNER an itemized costbreakdown together with supporting data.

 

**ARTICLE 11—CHANGE OF CONTRACT TIMES**

 

***11.01     General***

 

        A.   The Contract Times may only be changed by a Change Order or aWritten Amendment.  Any claim for anadjustment of the Contract Times shall be based on written notice pursuant toparagraph 9.02.

 

        B.    All Contract Times are of the essence of the Agreement.

 

***11.02******              ******Time Extensions***

 

***       ***A.    Where DESIGN/BUILDER is prevented fromcompleting any part of the Work within the Contract Times due to delay beyondthe control of DESIGN/BUILDER, the Contract Times will be extended in an amountequal to the time lost due to such delay if a claim is made therefor asprovided in Article 9.  Delays beyond thecontrol of DESIGN/BUILDER shall include, but not be limited to, 

 

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acts or neglect by OWNER, governmental agencies, acts or neglect ofutility owners or other contractors performing other construction work ascontemplated by Article 7, fires, floods, epidemics, abnormal weatherconditions or acts of God.  Delaysattributable to and within the control of a Subcontractor or Supplier shall bedeemed to be delays within the control of DESIGN/BUILDER.

 

         B.   Nothingin this paragraph 11.02 bars a change in Contract Price pursuant to Article 10to compensate for the direct costs incurred by DESIGN/BUILDER due to delay,interference, or disruption directly attributable to actions or inactions ofOWNER.  However, OWNER shall not beliable to DESIGN/BUILDER for costs or damages arising out of or resulting from(i) delays caused by or within the control of DESIGN/BUILDER, or (ii) delaysbeyond the control of both parties including but not limited to fires, floods,epidemics, abnormal weather conditions, acts of God or acts or neglect bygovernmental agencies, utility owners, or other contractors performing otherwork as contemplated by Article 7.

 

**ARTICLE 12—TESTS AND INSPECTIONS; CORRECTION, REMOVAL OR ACCEPTANCE OF *DEFECTIVE* CONSTRUCTION**

 

***12.01     Noticeof Defects***

 

        A.   Each party shall give the other prompt written notice of all *defective* Construction of which such party has actualknowledge.  All *defective*Construction may be rejected, corrected or accepted as provided in this Article12.

 

***12.02     Accessto Construction***

 

      A.   Upon advance notice to and approval by DESIGN/BUILDER, which willnot be unreasonably withheld, OWNER, other representatives and personnel ofOWNER, independent testing laboratories and governmental agencies withjurisdictional interests will have access to the Construction at the Site atreasonable times for their observation, inspecting and testing.  DESIGN/BUILDER shall provide them proper andsafe conditions for such access and advise them of DESIGN/BUILDER’s Site safetyprocedures and programs so that they may comply therewith as applicable.

 

 

 

***12.03   Testsand Inspections***

 

      A.      If the Contract Documents or Laws or Regulations of any publicbody having jurisdiction require any part of the Construction specifically tobe inspected, tested or approved, DESIGN/BUILDER shall assume fullresponsibility for arranging and obtaining such inspections, tests orapprovals, pay all costs in connection therewith, and furnish OWNER therequired certificates of inspection or approval.  DESIGN/BUILDER shall also be responsible forarranging and obtaining and shall pay all costs in connection with anyinspections, tests or approvals required for OWNER’s acceptance of materials orequipment to be incorporated in the Construction or of materials, mix designs,or equipment submitted for approval prior to DESIGN/BUILDER’s purchase thereoffor incorporation in the Construction. Nothing in this paragraph shall be interpreted or construed asobligating DESIGN/BUILDER to obtain, furnish or pay the costs of any permit,inspection, test or approval required by the applicable State or the UnitedStates Environmental Protection Agency for the construction or operation of theProject (including, without limitation, any atmospheric emissions compliancereports), all of which shall be the responsibility of OWNER.

 

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      B.      DESIGN/BUILDER shall give OWNER reasonable notice of theplanned schedule for all required inspections, tests or approvals.

 

      C.      If any Construction (or the construction work of others) thatis required to be inspected, tested or approved is covered by DESIGN/BUILDERwithout written concurrence of OWNER, it must, if requested by OWNER, beuncovered for observation at DESIGN/BUILDER’s expense unless DESIGN/BUILDER hasgiven OWNER timely notice of DESIGN/BUILDER’s intention to cover the same andOWNER has not acted with reasonable promptness in response to such notice.

 

***12.04   UncoveringConstruction***

 

      A.      If any Construction is covered contrary to the written requestof OWNER, it must, if requested by OWNER, be uncovered for OWNER’s observationand recovered at DESIGN/BUILDER’s expense.

 

      B.     If OWNER considers it necessary or advisable that coveredConstruction be observed by OWNER or inspected or tested by others,DESIGN/BUILDER, at OWNER’s request, shall uncover, expose or otherwise makeavailable for observation, inspection or testing as OWNER may require, thatportion of the Construction in question, furnishing all necessary labor,material and equipment.  If it is foundthat such Construction is *defective*,DESIGN/BUILDER shall pay all costs caused by or resulting from such uncovering,exposure, observation, inspection and testing (including but not limited to allreasonable fees and charges of engineers and other professionals) and OWNERshall be entitled to an appropriate decrease in the Contract Price, and, if theparties are unable to agree as to the amount thereof, may make a claim thereforas provided in Article 9.  Ifhowever, such Construction is not found to be *defective*,DESIGN/BUILDER shall be allowed an increase in the Contract Price directlyattributable to such uncovering, exposure, observation, inspection, testing, replacementand rework; and, if the parties are unable to agree as to the amount or extentthereof, DESIGN/BUILDER may make a claim therefor as provided in Article 9.

 

***12.05******       ******OWNER May Stop the Construction***

 

      A.    If the Construction is *defective*, orDESIGN/BUILDER fails to supply sufficient skilled workers or suitable materialsor equipment, or fails to furnish or perform the Construction in such a waythat the completed Construction will conform to the Contract Documents, OWNERmay order DESIGN/BUILDER to stop Construction or any portion thereof, until thecause for such order has been eliminated; however, this right of OWNER to stopConstruction will not give rise to any duty on the part of OWNER to exercisethis right for the benefit of DESIGN/BUILDER or any other party.

 

***12.06******       ******Correction or Removal ofDefective Construction***

 

       A.     Prior to acceptance and final payment under paragraph 13.09below, OWNER will have authority to disapprove or reject *defective*Construction and will have authority to require special inspection or testingof the Construction whether or not the Construction is fabricated, installed orcompleted.  DESIGN/BUILDER shallpromptly, either correct all *defective*Construction, whether or not fabricated, installed or completed, or, if theConstruction has been rejected by OWNER, remove it from the Site and replace itwith non-defective Construction. DESIGN/BUILDER shall bear all costs of such correction or removal(including but not limited to reasonable fees and charges of engineers,architects, attorneys and other professionals, all court or arbitration orother dispute resolution costs, and all costs of repair or replacement of workof others) made necessary thereby. Nothing in this 

 

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paragraph shall be interpreted or construed as requiring DESIGN/BUILDERto correct or remove and replace defective Construction accepted by OWNERpursuant to paragraph 12.08 below.

 

***12.07   CorrectionPeriod***

 

       A.     If within one (1) year after the date of Substantial Completionor such longer period of time as may be prescribed by Laws or Regulations or bythe terms of any applicable special guarantee required by the ContractDocuments or by any specific provision of the Contract Documents, anyConstruction is found to be *defective*,DESIGN/BUILDER shall promptly, without cost to OWNER and in accordance withOWNER’s written instructions, (i) correct such *defective*Construction, or, if it has been rejected by OWNER, remove it from the Site andreplace it with Construction that is not *defective*, and(ii) satisfactorily correct or remove and replace any damage to otherConstruction or the work of others resulting therefrom.  If DESIGN/BUILDER does not promptly complywith the terms of such instructions, or in an emergency where delay would causeserious risk of loss or damage, OWNER may have the *defective*Construction corrected or the rejected Construction removed and replaced, andall costs and damages caused by or resulting from such removal and replacement(including but not limited to all reasonable fees and charges of engineers,architects, attorneys and other professionals, all court or arbitration orother dispute resolution costs, and all costs of repair or replacement of workof others) will be paid by DESIGN/BUILDER, subject to the provisions ofparagraph 16.06.  Nothing in thisparagraph shall be interpreted or construed as requiring DESIGN/BUILDER tocorrect or remove and replace defective Construction accepted by OWNER pursuantto paragraph 12.08 below.

 

       B.  Where *defective* Construction (anddamage to other Construction resulting therefrom) has been corrected, removedor replaced under this paragraph 12.07, the correction period hereunder withrespect to such Construction will be extended for an additional period of one(1) year after such correction or removal and replacement has beensatisfactorily completed.

 

***12.08******           ******Acceptance of DefectiveConstruction***

 

      A.     If, instead of requiring correction or removal and replacementof *defective* Construction, OWNER prefers toaccept it, OWNER may do so.  If any suchacceptance occurs prior to final payment, a Change Order will be issuedincorporating the necessary revisions in the Contract Documents with respect tothe Construction; and OWNER shall be entitled to an appropriate decrease in theContract Price, and, if the parties are unable to agree as to the amountthereof, OWNER may make a claim therefor as provided in Article 15, subject tothe provisions of paragraph 16.06 below. If the acceptance occurs after final payment, an appropriate amount willbe paid by DESIGN/BUILDER to OWNER, and, if the parties are unable to agree asto the amount thereof, OWNER may make a claim therefor as provided in Article15, subject to the provisions of paragraph 16.06 below.  Notwithstanding the foregoing, any defectiveConstruction known by OWNER and not disclosed to DESIGN/BUILDER at the time ofacceptance and final payment under paragraph 13.09 shall be deemed to beaccepted by OWNER and DESIGN/BUILDER shall have no obligation to correct, orremove and replace such defect, or make any payment to OWNER with respectthereto.

 

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**ARTICLE 13—PAYMENTS TO DESIGN/BUILDER AND COMPLETION**

 

***13.01   Scheduleof Values***

 

       A.     The Schedule of Values established as provided in paragraph2.05.A will serve as the basis for progress payments and will be incorporatedinto a form of Application for Payment acceptable to OWNER.

 

***13.02   Applicationfor Progress Payment***

 

        A.    At least ten (10) days before the date established for eachprogress payment (but not more often than once a month), DESIGN/BUILDER shallsubmit to OWNER for review and approval an Application for Payment filled outand signed by DESIGN/BUILDER covering the Work completed as of the date of theApplication and accompanied by such supporting documentation as is required bythe Contract Documents or as is reasonably requested by OWNER’s primary lenderfor the Project.  The amount of retainagewith respect to progress payments will be as stipulated in the Agreement.

 

        B.    With each Application for Payment, DESIGNBUILDER shall submitinterim lien waivers for all subcontractors and first tier suppliers with acontract value in excess of $5,000.00. The interim lien waivers shall be effective through the immediatelypreceding payment.  OWNER may withholdfrom any progress payment the amount applicable to any lien waivers notreceived for any preceding Application for Payment for which payment was madeby OWNER.

 

***13.03     DESIGN/BUILDER’sWarranty of Title***

 

      A.    DESIGN/BUILDER warrants and guarantees that title to allconstruction materials and equipment covered by any Application for Payment,whether incorporated in the Project or not, will pass to OWNER no later thanthe time of payment free and clear of all Liens.  This paragraph 13.03.A does not apply to anydocuments covered by paragraph 3.04.

 

***13.04******       ******Progress Payments***

 

      A.    Progress payments shall be made by the OWNER to theDESIGN/BUILDER according to the following procedure:

 

                     1.      OWNER will, within ten (10) days ofreceipt of each Application for Payment, either indicate in writing itsacceptance of the Application and state that the Application is being processedfor payment, or return the Application to DESIGN/BUILDER indicating in writingits reasons for refusing to accept the Application and the exact amount(s) indispute.  All undisputed amounts willbecome due and be paid by OWNER to DESIGN/BUILDER not more than ten (10) daysafter OWNER’s acceptance or rejection of such Application, as the case may be.

 

                      2.     Ifthe OWNER should fail to pay the DESIGN/BUILDER at the time the payment of anyamount becomes due, then DESIGN/BUILDER may, at any time thereafter, uponserving written notice that DESIGN/BUILDER will stop the Work within seven (7)days after receipt of the notice by the OWNER, and after such seven (7) dayperiod, stop the Work until payment of the amount owing has been received,including interest thereon.  Writtennotice shall be deemed to have been duly served if sent by certified mail tothe last known business address of the OWNER.

 

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                      3.     Paymentsdue but unpaid shall bear interest at the rate specified in the Agreement.  Any disputed payment shall be due at the timemutually determined by the parties or, if applicable, the time determined bythe arbitrator under paragraph 15.01.

 

                      4.     NoProgress Payment nor any partial or entire use or occupancy of the Project bythe OWNER shall constitute an acceptance of any Work not in accordance with theContract Documents.

 

       B.     OWNER may refuse to make the whole or any part of any suchpayment or, because of subsequently discovered evidence or the results ofsubsequent inspections or tests, nullify any previous payment, to the extentthat is reasonably necessary to protect OWNER from loss because:

 

                            1.     TheWork is *defective*, or completed Work has beendamaged, requiring correction or replacement;

 

                            2.     TheContract Price has been reduced by Written Amendment or Change Order;

 

                            3.     OWNERhas been required to correct *defective* Workor complete Work in accordance with paragraph 12.09.A;

 

                            4.     OWNERhas actual knowledge of the occurrence of any of the events enumerated inparagraphs 14.02.A.1 through A.3 inclusive;

 

                            5.     Claimshave been made against OWNER on account of DESIGN/BUILDER’s performance orfurnishing of the Work;

 

                            6.     Theprovisions of paragraph 13.02.B are applicable; or

 

                            7.     Lienshave been filed in connection with the Work, except where DESIGN/BUILDER hasdelivered a specific Bond satisfactory to OWNER to secure the satisfaction anddischarge of such Liens.

 

***13.05   Substantial Completion***

 

***     ***A.    When DESIGN/BUILDER considers theConstruction ready for its intended use DESIGN/BUILDER shall notify OWNER inwriting that the Construction is substantially complete (except for itemsspecifically listed by DESIGN/BUILDER as incomplete) and request that OWNERissue a certificate of Substantial Completion. Within a reasonable time thereafter, OWNER and DESIGN/BUILDER shall makean inspection of the Construction to determine the status of completion.  If OWNER does not consider the Constructionsubstantially complete, OWNER will notify DESIGN/BUILDER in writing giving thereasons therefor.  If OWNER considers theConstruction substantially complete, OWNER will prepare and deliver toDESIGN/BUILDER a certificate of Substantial Completion which shall fix the dateof Substantial Completion.  There shallbe attached to the certificate a list of items to be completed or corrected beforefinal payment.  Such list of items to becompleted or corrected may be amended by OWNER for a period of sixty (60) daysfollowing the date DESIGN/BUILDER requests that OWNER issue a certificate ofSubstantial Completion and DESIGN/BUILDER shall not be responsible forcompleting or correcting items not listed by OWNER within such time.  At the time of delivery of the certificate ofSubstantial Completion OWNER will deliver to DESIGN/BUILDER a writtendetermination as to division of responsibilities pending final payment betweenOWNER and DESIGN/BUILDER with respect to security, operation, safety,maintenance, heat, utilities, insurance and warranties and guarantees.

 

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      B.     OWNER will have the right to exclude DESIGN/BUILDER from theSite after the date of Substantial Completion, but OWNER will allowDESIGN/BUILDER reasonable access to complete or correct items on the list ofitems to be completed.

 

***13.06     Final Inspection***

 

***     ***A.    Upon written notice from DESIGN/BUILDER thatthe entire Construction or an agreed portion thereof is complete, OWNER willmake a final inspection with DESIGN/BUILDER and will notify DESIGN/BUILDER inwriting of all particulars in which this inspection reveals that theConstruction is incomplete or *defective*.  DESIGN/BUILDER shall immediately take suchmeasures as are necessary to complete such Construction or remedy suchdeficiencies.

 

***13.07     Final Application for Payment***

 

***     ***A.  After DESIGN/BUILDER has completed all suchcorrections to the satisfaction of OWNER and delivered in accordance with theContract Documents all maintenance and operating instructions, schedules,guarantees, certificates or other evidence of insurance required by paragraph5.08.B, certificates of inspection, marked-up record documents (as provided in paragraph6.11) and other documents, DESIGN/BUILDER may make application for finalpayment of the Contract Price following the procedure for progresspayments.  Such final Application forPayment shall be accompanied (unless previously delivered) by:  (i) all documentation called for in theContract Documents, including but not limited to the evidence of insurancerequired by subparagraph 5.02.B.7, (ii) consent of the surety, if any, to finalpayment, and (iii) complete and legally effective releases or waivers(satisfactory to OWNER) of all Liens arising out of or filed in connection withthe Work.  In lieu of such releases orwaivers of Liens and as approved by OWNER, DESIGN/BUILDER may furnish receiptsor releases in full and an affidavit of DESIGN/BUILDER that: (i) thereleases and receipts include all labor, services, material and equipment forwhich a Lien could be filed, and (ii) all payrolls, material and equipmentbills and other indebtedness connected with the Work for which OWNER or OWNER’sproperty might in any way be responsible have been paid or otherwisesatisfied.  If any Subcontractor orSupplier fails to furnish such a release or receipt in full, DESIGN/BUILDER mayfurnish a Bond or other collateral satisfactory to OWNER to indemnify OWNERagainst any Lien.

 

*** 13.08    FinalPayment and Acceptance***

 

***     ***A.    If OWNER is satisfied that the Work has beencompleted and DESIGN/BUILDER’s other obligations under the Contract Documentshave been fulfilled, OWNER will, within ten (10) days after receipt of such finalApplication for Payment, give written notice to DESIGN/BUILDER that the Work isacceptable.  Otherwise, OWNER will returnthe Application to DESIGN/BUILDER, indicating in writing the reasons forrefusing to process final payment, in which case DESIGN/BUILDER shall make thenecessary corrections and resubmit the Application.  Thirty (30) days after the presentation byDESIGN/BUILDER to OWNER of an acceptable Application and accompanyingdocumentation, in appropriate form and substance and with OWNER’s notice ofacceptability, the final payment under section 4.01C. of the Agreement shallbecome due and payable by OWNER to DESIGN/BUILDER.

 

      B.     If, through no fault of DESIGN/BUILDER, final completion of theWork is significantly delayed, OWNER shall, upon receipt of DESIGN/BUILDER’sfinal Application for Payment, and without terminating the Agreement, makepayment of the balance due for that portion of the Work 

 

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fully completed and accepted.  Ifthe remaining balance to be held by OWNER for Work not fully completed orcorrected is less than the retainage stipulated in the Agreement, the writtenconsent of the surety to the payment of the balance due for that portion of theWork fully completed and accepted shall be submitted by DESIGN/BUILDER to OWNERwith the Application for such payment. Such payment shall be made under the terms and conditions governingfinal payment, except that it shall not constitute a waiver of claims.

 

***13.09   Waiverof Claims***

 

       A.     The making and acceptance of final payment of the Contract Pricewill constitute:

 

                            1.     Awaiver of all claims by OWNER against DESIGN/BUILDER, except claims arisingfrom unsettled Liens, from *defective*Construction appearing after final inspection pursuant to paragraph 13.06, fromfailure to comply with the Contract Documents or the terms of any specialguarantees specified therein, or from DESIGN/BUILDER’s continuing obligationsunder the Contract Documents; and

 

                            2.     awaiver of all claims by DESIGN/BUILDER against OWNER other than thosepreviously made in writing and still unsettled, or from OWNER’s continuingobligations under the Contract Documents.

 

**ARTICLE 14—SUSPENSION OF WORK AND TERMINATION**

 

***14.01   OwnerMay Suspend Work***

 

       A.     At any time and without cause, OWNER may suspend the Work or anyportion thereof for a period of not more than ninety (90) days by notice inwriting to DESIGN/BUILDER which will fix the date on which Work will beresumed.  DESIGN/BUILDER shall resume theWork on the date so fixed. DESIGN/BUILDER may be allowed an adjustment in the Contract Price or anextension of the Contract Times, or both, directly attributable to any suchsuspension if DESIGN/BUILDER makes a claim therefor as provided in Article9.  If requested by DESIGN/BUILDER inconnection with the performance of the Work, OWNER shall suspend operations ofthe plant and OWNER shall be responsible for any and all costs associated withsuch suspension.

 

***14.02   OWNERMay Terminate for Cause***

 

       A.    The occurrence of any one or more of the following eventsjustifies termination for cause:

 

1.        DESIGN/BUILDERpersistently fails to perform the Work in accordance with the ContractDocuments (including, but not limited to, failure to supply sufficient skilledworkers or suitable materials or equipment or failure to adhere to the progressschedule established under paragraph 2.05.A as revised from time to time.)

 

2. DESIGN/BUILDER intentionally orwillfully disregards Laws or Regulations of any public body havingjurisdiction.

 

3. DESIGN/BUILDER otherwisebreaches or violates in any material way any provisions of the ContractDocuments.

 

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                     4.      DESIGN/BUILDER fails to timely pay itsConsultants or Subcontractors any undisputed amounts.

 

                     5.      DESIGN/BUILDER files a voluntary petitionof bankruptcy, or an involuntary petition of bankruptcy is filed that is notdismissed within 90 days after the date of such filing.

 

      B.     OWNER may, after giving DESIGN/BUILDER written notice of theoccurrence of an event in paragraph 14.02.A and twenty (20) days therefrom toremedy such event (or, if such event is not capable of being remedied withinsuch twenty (20) days, such number of days as is reasonably needed to remedysuch event), and to the extent permitted by Laws and Regulations, terminate theservices of DESIGN/BUILDER, exclude DESIGN/BUILDER from the Site and takepossession of the Work incorporate in the Work all materials and equipmentstored at the Site or elsewhere for which OWNER has paid DESIGN/BUILDER andfinish the Work as OWNER may deem expedient. In such case DESIGN/BUILDER shall not be entitled to receive any furtherpayment other than reimbursement for DESIGN/BUILDER’s payments toSubcontractors and Suppliers for labor, services, equipment and materials priorto the date of termination, but only to the extent not previously paid byOWNER.  If the unpaid balance of theContract Price exceeds all reasonable costs incurred by OWNER resulting fromcompleting the Work (including but not limited to all reasonable fees andcharges of engineers, architects, attorneys and other professionals and allcourt or arbitration or other dispute resolution costs) such excess will bepaid to DESIGN/BUILDER.  If all reasonablecosts incurred by OWNER to complete the Work (including but not limited to allreasonable fees and charges of engineers, architects, attorneys and otherprofessionals and all court or arbitration or other dispute resolution costs)exceed the unpaid balance of the Contract Price, DESIGN/BUILDER shall pay thedifference to OWNER subject to the provisions of paragraph 16.06.  When exercising any rights or remedies underthis paragraph OWNER shall be required to obtain a reasonable price for theWork performed.

 

      C.     Where DESIGN/BUILDER’s services have been so terminated byOWNER, the termination will not affect any rights or remedies of OWNER againstDESIGN/BUILDER then existing or which may thereafter accrue.  Any payment of moneys due DESIGN/BUILDER byOWNER will not release DESIGN/BUILDER from liability.

 

      D.     Nothing in this paragraph shall be interpreted or construed asrequiring DESIGN/BUILDER to perform any additional services after suchtermination including, without limitation, the creation of any drawings,specifications or any other document necessary to complete the Work.

 

***14.03     OWNERMay Terminate for Convenience***

 

       A.     Prior to the date on which concrete is first poured at the Siteby DESIGN/BUILDER, OWNER may, without cause and without prejudice to any otherright or remedy of OWNER, elect to terminate the Agreement upon twenty (20)days written notice to DESIGN/BUILDER. In such case, DESIGN/BUILDER shall be paid (without duplication of anyitems) for:

 

       1.      Completed and acceptable Work executed in accordance with theContract Documents prior to the effective date of termination, including fairand reasonable sums for overhead and profit on such Work;

 

       2.      Expenses sustained prior to the effective date of terminationin performing services and furnishing labor, materials or equipment as requiredby the Contract Documents in connection with uncompleted Work, plus fair andreasonable sums for overhead and profit on such expenses;

 

 

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       3.      Amounts paid in settlement of terminated contracts withSubcontractors, Engineers, Suppliers and others (including but not limited toall reasonable fees and charges of engineers, architects, attorneys and otherprofessionals and all court or arbitration or other dispute resolution costsincurred in connection with termination of contracts with Subcontractors,Engineers and Suppliers); and

 

                    4.      Reasonable expenses directly attributableto termination.

 

       B.  Except as otherwise provided in the Agreement, DESIGN/BUILDER shallnot be paid on account of loss of anticipated profits or revenue or othereconomic loss arising out of or resulting from such termination.

 

***14.04******           ******DESIGN/BUILDER May StopWork or Terminate***

 

      A.     If, through no act or fault of DESIGN/BUILDER, the Work issuspended for a period of more than ninety (90) days by OWNER or under an orderof court or other public authority, or OWNER fails to act on any Applicationfor Payment within ten (10) days after it is submitted or OWNER fails for ten(10) days to pay DESIGN/BUILDER any sum finally determined to be due, thenDESIGN/BUILDER may, upon seven (7) days written notice to OWNER, and providedOWNER does not remedy such suspension or failure within that time, terminatethe Agreement and recover from OWNER payment on the same terms as provided in paragraph14.03.  In lieu of terminating theAgreement and without prejudice to any other right or remedy, if OWNER hasfailed for ten days to pay DESIGN/BUILDER any sum finally determined to be due,DESIGN/BUILDER may upon seven (7) days written notice to OWNER stop the Workuntil payment is made of all such amounts due DESIGN/BUILDER, includinginterest thereon.  The provisions of thisparagraph 14.04.A are not intended to preclude DESIGN/BUILDER from making claimunder Article 9 for an increase in Contract Price or Contract Times orotherwise for expenses or damage directly attributable to DESIGN/BUILDER’sstopping Work as permitted by this paragraph.

 

      B.

 

 

**ARTICLE 15—DISPUTE RESOLUTION**

 

***15.01 Dispute Resolution Agreement***

 

     A.  OWNER and DESIGN/BUILDER agree that they willfirst submit any and all unsettled claims, counterclaims, disputes and othermatters in question between them arising out of or relating to the ContractDocuments or the breach thereof (“disputes”), to mediation by a mutually agreeable,impartial mediator, or if the parties cannot so agree, a mediator designated bythe American Arbitration Association (“AAA”) pursuant to its ConstructionIndustry Mediation Rules,  prior toeither of them initiating against the other a demand for arbitration pursuantto paragraph 15.01.B through 15.01.E, unless delay in initiating arbitrationwould irrevocably prejudice one of the parties. Any time limits within which to file a demand for arbitration shall besuspended with respect to a dispute submitted to mediation within those sameapplicable time limits and shall remain suspended until 10 days after thetermination of the mediation.  Themediator of any dispute submitted to mediation under this Agreement shall notserve as arbitrator of such dispute unless otherwise agreed.

 

      B.     All claims, disputes and other matters in question between OWNERand DESIGN/BUILDER arising out of or relating to the Contract Documents or thebreach thereof (except for claims which 

 

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have been waived by the making or acceptance of final payment asprovided by paragraph 13.09) will be decided by binding arbitration inaccordance with the Construction Industry Arbitration Rules of the AAA then ineffect, subject to the limitations of this paragraph 15.01.  The arbitrator shall have the discretion toaward reasonable attorneys’ fees and costs to the prevailing party.  This agreement so to arbitrate and any otheragreement or consent to arbitrate entered into in accordance herewith asprovided in this paragraph 15.01 will be specifically enforceable under theprevailing law of any court having jurisdiction.

 

       C.  Notice of the demand for arbitration will be filed in writing withthe other party to the Agreement and with the designated arbitrationentity.  The demand for arbitration willbe made within a reasonable time after the claim, dispute or other matter inquestion has arisen, and in no event shall any such demand be made after the datewhen institution of legal or equitable proceedings based on such claim, disputeor other matter in question would be barred by the applicable statute oflimitations.

 

       D.  Except as provided in paragraph 15.01.E below, no arbitrationarising out of or relating to the Contract Documents shall include byconsolidation, joinder or in any other manner any other individual or` entitywho is not a party to this contract unless:

 

                   1.      the inclusion of such other individual orentity is necessary if complete relief is to be afforded among those who are alreadyparties to the arbitration, and

 

                   2.      such other individual or entity issubstantially involved in a question of law or fact which is common to thosewho are already parties to the arbitration and which will arise in suchproceedings, and

 

                   3.      the written consent of the otherindividual or entity sought to be included and of OWNER and DESIGN/BUILDER hasbeen obtained for such inclusion, which consent shall make specific referenceto this paragraph; but no such consent shall constitute consent to arbitrationof any dispute not specifically described in such consent or to arbitrationwith any party not specifically identified in such consent.

 

       E.   Notwithstanding paragraph 15.01.D, if a claim, dispute or othermatter in question between OWNER and DESIGN/BUILDER involves the Work of aSubcontractor, Supplier or Engineer either OWNER or DESIGN/BUILDER may joinsuch entity as a party to the arbitration between OWNER and DESIGN/BUILDERhereunder.  DESIGN/BUILDER shall includein all subcontracts required by paragraph 6.05.D a specific provision wherebythe Subcontractor consents to being joined in an arbitration between OWNER andDESIGN/BUILDER involving the Work of such Subcontractor.  Nothing in this paragraph 15.01.E nor in theprovision of such subcontract consenting to joinder shall create any claim,right or cause of action in favor of Subcontractor, Supplier or Engineeragainst OWNER.

 

       F.   Notwithstanding the foregoing, the provisions of this Article 15shall not apply to any claim by DESIGN/BUILDER of any breach or threatenedbreach of any covenant contained in Exhibit C of the Agreement or theprovisions thereof.

 

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**ARTICLE 16—MISCELLANEOUS**

 

***16.01     GivingNotice***

 

      A.    Whenever any provision of the Contract Documents requires thegiving of written notice, it will be deemed to have been validly given:

 

                      1.     Ifdelivered in person to the individual or to a member of the firm or to anofficer of the corporation for whom it is intended;

 

                      2.     Ifdelivered at or sent by registered or certified mail, postage prepaid, to thelast business address known to the giver of the notice; or

 

                    3.     Iftransmitted by facsimile, the time at which a machine generated confirmationstates the notice was received at the facsimile telephone number of theintended recipient last known by the sender.

 

***16.02   Computationof Times***

 

       A.     When any period of time is referred to in the Contract Documentsby days, it will be computed to exclude the first and include the last day ofsuch period.  If the last day of any suchperiod falls on a Saturday or Sunday or on a day made a legal holiday by thelaw of the applicable jurisdiction, such day will be omitted from thecomputation.

 

       B.     A calendar day of twenty-four hours measured from midnight tothe next midnight will constitute a day.

 

***16.03   Noticeof Claim***

 

       A.     Should OWNER or DESIGN/BUILDER suffer injury or damage to personor property because of any error, omission or act of the other party or of anyof the other party’s employees or agents or others for whose acts the otherparty is legally liable, claim will be made in writing to the other partywithin a reasonable time of the first observance of such injury or damage.  The provisions of this paragraph 16.03.Ashall not be construed as a substitute for or a waiver of the provisions of anyapplicable statute of limitations or repose.

 

***16.04   CumulativeRemedies***

 

       A.     Except as provided in paragraph 16.06 of the General Conditionsbelow, the duties and obligations imposed by these General Conditions and therights and remedies available hereunder to the parties hereto, and, inparticular but without limitation, any general or specific warranties,guarantees and indemnities imposed upon a party and all of the rights andremedies available to the other party thereunder, are in addition to, and arenot to be construed in any way as a limitation of, any rights and remediesavailable to any or all of them which are otherwise imposed or available byLaws or Regulations, by special warranty or guarantee or by other provisions ofthe Contract Documents, and the provisions of this paragraph will be aseffective as if repeated specifically in the Contract Documents in connectionwith each particular duty, obligation, right and remedy to which they apply.

 

 

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***16.05     Survivalof Obligations***

 

      A.   All representations, indemnifications, warranties and guaranteesmade in, required by or given in accordance with the Contract Documents, aswell as all continuing obligations indicated in the Contract Documents, willsurvive final payment, completion and acceptance of the Work and termination orcompletion of the Agreement.

 

***16.06*****     *Limitation on OWNER’s Recovery of Damages and Waiver of ConsequentialDamages***

 

        A.    OWNER’s maximum cumulative recovery, for the Project as a whole,of damages from DESIGN/BUILDER under the Contract Documents (including, withoutlimitation, OWNER’s correction of *defective*Construction under paragraph 12.07.A., acceptance of *defective*Construction under paragraph 12.08 and/or termination for cause under paragraph14.02) shall be limited to $1,000,000.00.

 

        B.    Notwithstanding any other provision of the Contract Documents,each party hereby waives all claims against the other party and such other party’semployees and agents for any consequential damages that may arise out of orrelate to a breach of the Contract Documents or the performance of the Workwhether arising in contract, warranty, tort (including negligence), strictliability or otherwise, including but not limited to losses of use, profits,business, reputation or financing; provided, however, DESIGN/BUILDER does notwaive any claim against OWNER or OWNER’s employees or agents for anyconsequential damages that may arise out of or relate to a breach of theLicense Agreement attached hereto as Exhibit C.

 

 

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