Exhibit 10.2


 


THE ASSOCIATED GENERAL
CONTRACTORS OF AMERICA


AGC DOCUMENT NO. 205


STANDARD SHORT FORM AGREEMENT


BETWEEN OWNER AND CONTRACTOR


(Where the Contract Price is a Lump Sum)


 


	
  This Agreement is made this

  	
  25th

  	
  day of

  	
  January

  	
  ,

  	
    2006

  	
  ,  by and
  between

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Day)

  	
   

  	
   (Month)

  	
   

  	
   (Year)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OWNER,

  	
    Little Sioux Corn Processors ~ 4808 “F” Avenue ~ Marcus,
  Iowa 51035

  	
  and

  
	
  (Name and address)

  
	
  CONTRACTOR,

  	
    McC Inc. ~ 7900 69th Avenue ~ Greenfield,
  Minnesota 55373.

  	
   

  
	
  (Name and address)

  
	
  PROJECT:

  	
    100 MGPY Grain Handling Exp. (Phase I) &
  Existing Silo Modification (Phase II).

  	
   

  
	
  (Description of Project and
  Location)

  
	
  ARCHITECT/ENGINEER:

  	
    Larson Eng of Wisconsin ~ 1500 N. Casaloma Drive, Suite 302
  ~ Appleton, WI 54913.

  	
   

  
	
  (Name and address)

  
																		



 


1.              THE WORK Contractor shall furnish construction
administration and management services and use Contractor’s best efforts to perform the
Work in an expeditious manner consistent with the Contract Documents.
Contractor shall provide all labor, materials, equipment and services necessary
to complete the Work, as described in Exhibit A, all of which shall be
provided in full accord with and reasonably inferable from the Contract
Documents as being necessary to produce the indicated results


 


2.              CONTRACT PRICE As full compensation for performance by
Contractor of the Work, Owner shall pay Contractor the lump sum price of Five Million Six Hundred Seventy Three Thousand
Twenty Five Dollars ($5,673,025.00).
The lump sum price is hereinafter referred to as the Contract price, which shall
be subject to increase or decrease as provided in the Agreement.


 


3.              INSURANCE Prior to the start of the Work, Contractor
shall purchase and maintain insurance coverage and limits of liability as set
forth in Exhibit E, that will protect Contractor from claims arising out
of Contractor operations under this Agreement, whether the operations are by
Contractor, or any of Contractor’s consultants or subcontractors or anyone
directly or indirectly employed by any of them, or by anyone for whose acts any
of them may be liable.


 


4.              BONDS Performance and Payment Bonds o are ý are
not required of Contractor. Such bonds shall be issued by a surety licensed in
the state of the location of the Project and must be acceptable to Owner. The
penal sum of the Payment Bond shall equal the penal sum of the Performance
Bond.


 


5.              EXHIBITS the following Exhibits are incorporated by
reference and made part of this Agreement:


 


•                  EXHIBIT A:
The Work, McC Inc. Proposal #05048-3, dated 2/07/2006 (4) page(s).


 


•                  EXHIBIT B:
Contract Documents (Attach a complete listing by title, date and number of
pages.)


Equipment List, Rev C, Dated 2/07/2006 (8) page(s).


Process Flow Diagram “F1”, Rev B, Dated 2/7/2006 (1) page(s).


 


•                  EXHIBIT C:
Progress Schedule,  Complete 100 M Grain Expansion May 1,
2007; Complete remodel of existing silos September 1, 2007 pages.


 


•                  EXHIBIT D:
Alternates and Unit Prices, include dates when alternates and unit prices no
longer apply, To be issued thru Change Orders.


 


•                  EXHIBIT E:
Insurance Provisions,                                                                         (  ) page(s).


 


•                  EXHIBIT F:
Warranty, See McC Inc. Limited Warranty (2) page(s).


 


AGC DOCUMENT NO. 205 • STANDARD SHORT FORM AGREEMENT BETWEEN
OWNER AND CONTRACTOR


(Where the Contract Price is a Lump Sum)


©
2000, The Associated General Contractors of America. All rights reserved


 


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6 CONTRACT’S RESPONSIBLITIES Contractor shall be responsible for supervision and coordination of the
Work, including the construction means, methods, techniques, sequences and
procedures utilized, unless the Contract Documents give other specific
instructions.


 


6.1  Owner shall obtain and pay for all necessary
permits, licenses and renewals pertaining to the Work. Contractor will supply
necessary drawings required to obtain any permits required.


 


6.2 Contractor
shall pay all applicable taxes legally enacted when bids are received or
negotiations concluded for the Work provided by Contractor.


 


6.3 In the event that Owner elects to perform work
at the Worksite directly or by others retained by Owner, Contractor and Owner
shall coordinate the activities of all forces at the Worksite and shall agree
upon fair and reasonable schedules and operational procedures for Worksite
activities. Owner shall require each separate contractor to cooperate with
Contractor and assist with the coordination of activities and the review of
construction schedules and operations. The Contract Price and Contract Time
shall be equitably adjusted, as mutually agreed by the parties, for changes
made necessary by the coordination of construction activities, and the
construction schedule shall be revised accordingly.


 


6.4 In order
to facilitate its responsibilities for completion of the Work in accordance with
and as reasonably inferable from the Contract Documents, prior to commencing
the Work, Contractor shall examine and compare the drawings and specifications
with information furnished by Owner pursuant to Paragraph 7.2; relevant field
measurements made by Contractor; and any visible conditions at the Worksite
affecting the Work.


 


6.5  WARRANTY


 


6.5.1 The
Work shall be executed in accordance with the Contract Documents in a
workmanlike manner. Contractor warrants that all materials and equipment shall
be new unless otherwise specified, of good quality, in conformance with the
Contract Documents, and free from defective workmanship and materials.
Contractor further warrants that the Work will be free from material defects
not intrinsic in the design or materials required in the Contract Documents.
Contractor’s warranty does not include remedies for defects or damages caused
by normal wear and tear during normal usage, use for a purpose for which the
Project was not intended, improper or insufficient maintenance, modifications
performed by Owner or others retained by Owner, or abuse. The Work shall be executed in accordance with
the Contract documents in a workmanlike manner. Contractor warrants that allmaterials and equipment shall be new unless otherwise specified, of good
quality, in conformance with the Contract Documents, and free from defective
workmanship and materials. Contractor further warrants that the Work will be
free from material defects not intrinsic in the design or materials required in
the Contract Documents. Contractor’s warranty does not include remedies for
defects or damages caused by normal wear and tear during normal usage, use for
a purpose for which the Project was not intended, improper or insufficient
maintenance, modifications performed by Owner or others retained by Owner, or
abuse.


 


6.5.2 If,
prior to the Date of Substantial Completion and within one year after the date
of Substantial Completion of the Work, any portion of the Work is found to be
not in conformance with the Contract Documents (“Defective Work”), Owner shall
promptly notify Contractor in writing. Unless Owner provides written acceptance
of the condition, Contractor shall promptly correct the Defective Work at its
own cost and time and bear the expense of additional services required for
correction of any Defective Work for which it is responsible.


 


6.6 SAFETY Contractor
shall have overall responsibility for safety precautions and programs in the
performance of the Work, except that Contractor’s subcontractors shall also be
responsible for the safety of persons or property in the performance of their
work, and for compliance with the provisions of applicable laws and
regulations. Contractor shall seek to avoid injury, loss or damage to persons
or property by taking reasonable steps to protect its employees and other
persons at the Worksite; materials and equipment stored at on-site or off-site
locations for use in the Work; and property located at the site and adjacent to
Work areas, whether or not the property is part of the Work.


 


6.7 HAZARDOUS MATERIALS A Hazardous Material is any substance or material identified now or in
the future as hazardous under any federal, state or local law or regulation, or
any other substance or material which may be considered hazardous or
otherwise subject to statutory or regulatory requirement governing handling,
disposal and/or clean-up. Contractor shall not be obligated to commence or
continue work until any Hazardous Material discovered at the Worksite has been
removed, or rendered or determined to be harmless by Owner as certified by


 


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an
independent testing laboratory and approved by the appropriate government
agency. If Contractor incurs additional costs and/or is delayed due to the presence
or remediation of Hazardous Material, Contractor shall be entitled to an
equitable adjustment in the Contract Price and/or the Contract Time.


 


6.8 MATERIALS BROUGHT TO THE WORKSITE Contractor shall be responsible for the proper
delivery, handling, application, storage, removal and disposal of all materials
and substances brought to the Worksite by Contractor in accordance with the
Contract Documents and used or consumed in the performance of the Work.


 


6.9 SUBMITTALS Contractor shall submit to Owner and,
if directed, to its Architect/Engineer for review and approval all shop
drawings, samples, product data and similar submittals required by the Contract
Documents. Contractor shall be responsible to Owner for the accuracy and
conformity of its submittals to the Contract Documents. Contractor shall
prepare and deliver its submittals to Owner in a manner consistent with the Schedule of
the Work and in such time and sequence so as not to delay the performance of
the Work or the work of Owner and others retained by Owner. When Contractor
delivers its submittals to Owner, Contractor shall identify in writing for each
submittal all changes, deviations or substitutions from the requirements of the
Contract Documents. The approval of any Contractor submittal shall not be
deemed to authorize deviations, substitutions or changes in the requirements of
the Contact Documents unless express written approval is obtained from Owner
specifically authorizing such deviation, substitution or change. Further, Owner
shall not make any change, deviation or substitution through the submittal
process without specifically identifying and authorizing such deviation to
Contractor. Owner shall be responsible for review and approval of submittals
with reasonable promptness to avoid causing delay. Contractor shall perform all
Work strictly in accordance with approved submittals. Owner’s approval does not
relieve Contractor from responsibility for Defective Work resulting from errors
or omissions of any kind on the approved Shop Drawings.


 


6.10 SITE CONDITIONS If the
conditions at the Worksite are (a) subsurface or other physical conditions
which are materially different from those indicated in the Contract Documents,
or (b) unusual or unknown physical conditions which are materially different
from conditions ordinarily encountered and generally recognized as inherent in
Work provided for in the Contract Documents, Contractor shall stop Work and
give immediate written notice of the condition to Owner and the
Architect/Engineer. Contractor shall not be required to perform any work
relating to the unknown condition without the written mutual agreement of the
parties. Any change in the Contract Price and/or Contract Time as a result of
the unknown condition shall be made by Change Order.


 


6.11 CUTTING, FITTING AND PATCHING Contractor
shall perform cutting, fitting and patching necessary to coordinate the
various parts of the Work and to prepare its Work for the work of Owner or
others retained by Owner.


 


6.12 CLEANING UP Contractor shall regularly remove debris and waste materials at the
Worksite resulting from the Work. Prior to discontinuing Work in an area,
Contractor shall clean the area and remove all rubbish and its construction
equipment, tools, machinery, waste and surplus materials. Contractor shall
minimize and confine dust and debris resulting from construction activities. At
the completion of the Work, Contractor shall remove from the Worksite all
construction equipment, tools, surplus materials, waste materials and debris.


 


7 OWNER’S RESPONSIBILITIES Any
information or services to be provided by Owner shall be provided in a timely
manner so as not to delay the Work.


 


7.1 FINANCIAL INFORMATION Prior to
commencement of the Work and thereafter at the written request of Contractor,
Owner shall provide Contractor with evidence of Project financing. Evidence of
such financing shall be a condition precedent to Contractor’s commencing or
continuing the Work. Contractor shall be notified prior to any material change
in Project financing.


 


7.2 WORKSITE INFORMATION Owner shall
provide at Owner’s expense and with reasonable promptness the following, which
Contractor shall be entitled to rely upon for its accuracy and completeness:


 


.1 information
describing the physical characteristics of the site, including surveys, site
evaluations, legal descriptions, data or drawings depicting existing
conditions, subsurface and environmental studies, reports and investigations;


 


.2 tests, inspections and other reports dealing
with environmental matters, hazardous material and other existing conditions,
including structural, mechanical and chemical tests, required by the Contract
Documents or by law; and


 


.3 any other information or services requested
in writing by Contractor that are relevant to Contractor’s performance of the
Work and under Owner’s control.


 


The information required by this Paragraph shall be provided in reasonable
detail. Legal descriptions shall include easements, title restrictions,
boundaries, and zoning restrictions. Worksite descriptions shall include
existing buildings and other construction and all other pertinent site
conditions. Adjacent property descriptions shall include structures, streets,
sidewalks, allies, and other features relevant to the Work. Utility details
shall include available services, lines at the Worksite and adjacent thereto
and connection points. The information shall include public and private
information, subsurface


 


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information, grades, contours, and elevations, drainage data, exact
locations and dimensions, and benchmarks that can be used by Contractor in
laying out the Work.


 


7.3 BUILDING PERMIT, FEES AND APPROVALS Except for those required of Contractor pursuant to this Agreement, Owner
shall secure and pay for all other permits, approvals, easements, assessments
and fees required for the development, construction, use or occupancy of
permanent structures or for permanent changes in existing facilities, including
the building permit.


 


8 SUBCONTRACTS Work not performed by Contractor with
its own forces shall be performed by subcontractors. Contractor will provide to
Owner a list of all subcontractors/material suppliers prior to the time that
the subcontractor/material supplier commences work. Contractor agrees to bind
every subcontractor and material supplier (and require every subcontractor to
so bind its subcontractors and material suppliers) to all the provisions of
this Agreement and the Contract Documents as they apply to the subcontractor’s
and material supplier’s portions of the Work. Contractor will provide waivers
of liens from subcontractors/material suppliers as part of the application
for payment under Paragraph 14.2.


 


9 CONTRACT TIME


 


9.1 DATE OF COMMENCEMENT The Date of Commencement is the date of this Agreement as first written
on page one of this Agreement, unless otherwise set forth below: (Insert here any special provisions concerning notices to proceed and
the Date of Commencement.) Periodic shutdowns will be
necessary during construction. Contractor and Owner shall coordinate necessary
shutdowns as not to interfere with construction schedule and minimize
plant operation.


 


9.2 TIME Substantial
Completion of Phase I shall be achieved in May 1, 2007, Phase II
by September 30, 2007. Unless otherwise specified in the Certificate of Substantial
Completion, the Work shall be finally complete within                 
(     ) days after the date of Substantial Completion,
subject to adjustments as provided for in the Contract Documents. Time limits stated above are of the essence
of the Agreement.


 


10  SCHEDULE OF THE WORK Before submitting the first application for
payment, Contractor shall submit, for review by the Architect/Engineer and
approval by Owner, a Schedule of the Work that shall show the dates on which
Contractor plans to begin and to complete various parts of the Work, including
dates on which information and approvals are required from Owner.


 


11  DELAYS AND EXTENSIONS OF TIME


 


11.1 If
Contractor is delayed at any time in the commencement or progress of the Work
by any cause beyond the control of Contractor, Contractor shall be entitled to
an equitable extension of the Contract Time. In addition, if Contractor incurs
additional costs as a result of such delay, Contractor shall be entitled to an
equitable adjustment in the Contract Price, subject to the mutual waiver of
consequential damages herein. Examples of causes beyond the control of
Contractor include, but are not limited to, the following: acts or omissions of
Owner or others retained by Owner; changes in the Work or the sequencing of the
Work ordered by Owner, or arising from decisions of Owner that impact the time
of performance of the Work; labor disputes not involving Contractor; fire;
encountering Hazardous Materials; adverse weather conditions not reasonably
anticipated; concealed or unknown conditions; delay authorized by Owner pending
dispute resolution.


 


11.2 To the extent a delay in the progress
of the Work is caused by adverse weather conditions not reasonably anticipated,
fire, unusual transportation delays, general labor disputes impacting the
Project but not specifically related to the Worksite, governmental agencies, or
unavoidable accidents or circumstances, Contractor shall only be entitled to
its actual costs without fee and an extension of the Date of Substantial
Completion and/or Final Completion.


 


11.3 In the event
delays to the Work are encountered for any reason, Contractor shall provide
prompt written notice to Owner of the cause of such delays after Contractor
first recognizes the delay. Owner and Contractor agree to undertake reasonable
steps to mitigate the effect of such delays.


 


11.4 NOTICE OF DELAY CLAIMS If Contractor
requests an equitable extension of Contract Time and/or an equitable adjustment
in Contract Price as a result of a delay, Contractor shall give Owner written
notice of the claim. If Contractor causes delay in the completion of the Work,
Owner shall be entitled to recover its additional costs, subject to the mutual
waiver of consequential damages herein.


 


12 ALLOWANCES All allowances stated in the Contract
Documents shall be included in the Contract Price. While Owner may direct
the amounts of, and particular material suppliers or subcontractors for,
specific allowance items, if Contractor reasonably objects to a material
supplier or subcontractor, it shall not be required to contract with them.
Owner shall select allowance items in a timely manner so as not to delay the
Work. Allowances shall include the costs of materials and equipment delivered
to the Worksite less applicable trade discounts and including requisite taxes,
unloading and handling at the Worksite, and labor and installation, unless
specifically stated otherwise. Contractor’s overhead and profit for the
allowances shall be included in the Contract Price, but not in the allowances.
The Contract Price shall be adjusted by Change Order to reflect the actual
costs when they are greater than or less


 


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than the allowances.


 


13  CHANGES


 


13.1 Contractor may request and/or
Owner may order changes in the Work or the timing or sequencing of
performance of the Work that impacts the Contract Price or the Contract Time.
All such changes in the Work that affect Contract Time or Contract Price shall
be formalized in a Change Order.


 


13.2 Owner and Contractor shall negotiate in
good faith an appropriate adjustment to the Contract Price and/or the Contract
Time and shall conclude these negotiations as expeditiously as possible.
Acceptance of the Change Order and any adjustment in the Contract Price and/or
Contract Time shall not be unreasonably withheld.


 


13.3 COST OR CREDIT DETERMINATION


 


13.3.1 An increase or decrease in the Contract
Price and/or the Contract Time resulting from a change in the Work shall be determined
by one or more of the following methods:


 


.1  unit prices set forth in this Agreement or as subsequently agreed;


 


.2 
a mutually
accepted, itemized lump sum;


 


.3 
costs
calculated on a basis agreed upon by Owner and Contractor plus a fee (either a lump
sum or a fee based on a percentage of cost) to which they agree; or


 


.4 
by the method
provided below: Change Order (Lump Sum)


 


13.4 UNIT PRICES
If unit prices are included in the Contract Documents or are subsequently
agreed to by the parties, but the character or quantity of such unit price
items as originally contemplated is so different in a proposed Change Order
that the original unit prices will cause substantial inequity to Owner or
Contractor, such unit prices shall be equitably adjusted.


 


13.5 PERFORMANCE OF CHANGED WORK Contractor
shall not be obligated to perform Changed Work until a Change Order has
been executed by Owner and Contractor.


 


14  PAYMENT


 


14.1 SCHEDULE OF VALUES Within
twenty-one (21) days from the date of execution of this Agreement, Contractor
shall prepare and submit to Owner, and if directed, its Architect/Engineer, a schedule of
values apportioned to the various divisions or phases of the Work. Each line
item contained in the schedule of values shall be assigned a monetary price
such that the total of all items shall equal the Contract Price.


 


14.2 PROGRESS PAYMENTS Contractor
shall submit to Owner and, if directed, its Architect/Engineer a monthly
application for payment no later than the 15th  day
of the calendar month for the preceding thirty (30) days. Contractor’s
applications for payment shall be itemized and supported by Contractor’s schedule of
values and any other substantiating data as required by this Agreement. Payment
applications shall include payment requests on account of properly authorized
Change Orders. Owner shall pay the amount otherwise due on any payment
application, less any amounts as set forth below, no later than twenty (20)
days after Contractor has submitted a complete and accurate payment application.
Owner may deduct, from any progress payment, such amounts as may be
retained pursuant to Paragraph 14.4.


 


14.3 RETAINAGE From
each progress payment made prior to Substantial Completion Owner may retain
Five percent ( 5 %)
of the amount otherwise due after deduction of any amounts as provided in
Paragraph 14.4 of this Agreement.


 


14.4 ADJUSTMENT OF CONTRACTOR’S PAYMENT APPLICATION Owner may adjust or reject a payment application or nullify a
previously approved payment application, in whole or in part, as may reasonably
be necessary to protect Owner from loss or damage based upon the following, to
the extent that Contractor is responsible there for under this Agreement:


 


.1 Contractor’s
repeated failure to perform the Work as required by the Contract Documents;


 


.2 loss or damage for which Owner may be
liable arising out of or relating to this Agreement and caused by Contractor to
Owner or to others retained by Owner;


 


.3 Contractor’s failure to properly pay
Subcontractors for labor, materials or equipment furnished in connection with
the Work following receipt of such payment from Owner


 


.4 Defective Work not corrected in a timely
fashion;


 


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.5 reasonable evidence of delay in performance of
the Work such that the Work will not be completed within the Contract Time, and


 


.6 reasonable evidence demonstrating that the
unpaid balance of the Contract Price is insufficient to fund the cost to
complete the Work


 


Owner
shall give written notice to Contractor at the time of disapproving or
nullifying an application for payment of the specific reasons therefor. When
the above reasons for disapproving or nullifying an application for payment are
removed, payment shall be made for the amounts previously withheld


 


14.5 PAYMENT DELAY If for any
reason not the fault of Contractor, Contractor does not receive a progress
payment from Owner within seven (7) days after the time such payment is
due, Contractor, upon giving seven (7) days’ written notice to Owner, and
without prejudice to and in addition to any other legal remedies, may stop
Work until payment of the full amount owing to Contractor has been received.
The Contract Price and Contract Time shall be equitably adjusted by Change
Order for reasonable cost and delay resulting from shutdown, delay and
start-up.


 


14.6 SUBSTANTIAL COMPLETION When Substantial Completion of the Work or a designated portion thereof
is achieved, Contractor shall prepare a Certificate of Substantial Completion
that shall establish the date of Substantial Completion, and the respective
responsibilities of Owner and Contractor for interim items such as security,
maintenance, utilities, insurance and damage to the Work, and fixing the time
for completion of all items on the list accompanying the Certificate. The
Certificate of Substantial Completion shall be submitted by Contractor to Owner
for written acceptance of responsibilities assigned in the Certificate. Unless
otherwise provided in the Certificate of Substantial Completion, warranties
required by the Contract Documents shall commence on the date of Substantial
Completion of the Work or a designated portion.


 


14.6.1 Upon acceptance by Owner of the Certificate of Substantial Completion,
Owner shall pay to Contractor the remaining retainage held by Owner for the
Work described in the Certificate of Substantial Completion less a sum equal to
two hundred percent (200%) of the estimated cost of completing or correcting
remaining items on that part of the Work, as agreed to by Owner and
Contractor as necessary to achieve final completion. Uncompleted items shall be
completed by Contractor in a mutually agreed time frame. Owner shall pay
Contractor monthly the amount retained for unfinished items as each item is
completed.


 


14.7 FINAL COMPLETION When final completion has been achieved, Contractor shall prepare for
Owner’s acceptance a final application for payment stating that to the best of
Contractor’s knowledge, and based on Owner’s inspections, the Work has reached
final completion in accordance with the Contract Documents.


 


14.7.1 Final
payment of the balance of the Contract Price shall be made to Contractor within
twenty (20) days after Contractor has submitted to the Owner a complete and
accurate application for final payment and the following submissions:


 


.1 an affidavit
declaring any indebtedness connected with the Work, e.g. payrolls or invoices
for materials or equipment, to have been paid, satisfied or to be paid with the
proceeds of final payment, so as not to encumber Owner’s property;


 


.2 as-built
drawings and Operation / Maintenance manuals.


 


.3 
release of any
liens, conditioned on final payment being received;


 


.4 consent of any surety, if applicable; and


 


.5 a report of any accidents or injuries
experienced by Contractor or its Subcontractors at the Worksite.


 


14.8  Claims not reserved in writing with the making
of final payment shall be waived except for claims relating to liens or similar
encumbrances, warranties, Defective Work and latent defects.


 


14.9   LATE PAYMENT Payments due but unpaid shall bear interest
from the date payment is due at the prime rate prevailing at the place of the
Project.


 


15  INDEMNITY


 


15.1 To the
fullest extent permitted by law, Contractor shall defend, indemnify and hold
Owner, Owner’s officers, directors, members, consultants, agents and employees
and the Architect/Engineer harmless from all claims for bodily injury and
property damage, other than to the Work itself and other property insured under
Exhibit E, that may arise from the performance of the Work to the
extent of the negligence attributed to such acts or omissions by Contractor,
subcontractors or anyone employed directly or indirectly by any of them or by
anyone for whose acts any of them may be liable. Contractor shall not be
required to defend, indemnify or hold harmless Owner, Architect/Engineer or
others retained by Owner for any acts, omissions or negligence of Owner,
Architect/Engineer or others retained by Owner.


 


15.2 To the
fullest extent permitted by law, Owner shall defend, indemnify and hold
harmless Contractor, its officers, directors or members, subcontractors or
anyone


 


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employed
directly or indirectly by any of them or anyone for whose acts any of them may be
liable from all claims for bodily injury and property damage, other than
property insured under Exhibit E, that may arise from the performance
of work by Owner, Architect/Engineer or others retained by Owner, to the extent
of the negligence attributed to such acts or omissions by Owner,
Architect/Engineer or others retained by Owner.


 


16  MUTUAL WAIVER OF
CONSEQUENTIAL DAMAGES Owner
and Contractor agree to waive all claims against each other for any
consequential damages that may arise out of or relate to this Agreement.
Owner agrees to waive damages including but not limited to Owner’s loss of use
of the Project, any rental expenses incurred, loss of income, profit or
financing related to the Project, as well as the loss of business, loss of
financing, principal office overhead and expenses, loss of profits not related
to this Project, or loss of reputation. Contractor agrees to waive damages
including but not limited to loss of business, loss of financing, principal
office overhead and expenses, loss of profits not related to this Project, loss
of bonding capacity or loss of reputation. This Paragraph shall not be
construed to preclude contractual provisions for liquidated damages when such
provisions relate to direct damages only. The provisions of this Paragraph
shall also apply to the termination of this Agreement and shall survive such
termination.


 


17  NOTICE TO CURE AND
TERMINATION


 


17.1 NOTICE TO CURE A DEFAULT If Contractor persistently refuses or fails to supply enough properly
skilled workers, proper materials, and/or equipment to maintain the approved Schedule of
the Work in accordance with Article 6, or fails to make prompt payment to
its workers, subcontractors or material suppliers, disregards laws, ordinances,
rules, regulations or orders of any public authority having jurisdiction, or is
otherwise guilty of a material breach of a provision of this Agreement,
Contractor may be deemed in default. If Contractor fails within seven (7) working
days after written notification to commence and continue satisfactory
correction of such default with diligence and promptness, then Owner, without
prejudice to any other rights or remedies, shall have the right to take
reasonable steps it deems necessary to correct deficiencies and charge the cost
to Contractor who shall be liable for such payments including reasonable
overhead, profit and attorneys’ fees.


 


17.2 TERMINATION BY OWNER If, within seven (7) days of receipt of a notice to cure pursuant
to Paragraph 17.1, Contractor fails to commence and satisfactorily continue
correction of the default set forth in the notice to cure, Owner may notify
Contractor that it intends to terminate this Agreement for default absent
appropriate corrective action within fourteen (14) additional days. After the
expiration of the additional fourteen (14) day period, Owner may terminate
this Agreement by written notice absent appropriate corrective action.
Termination for default is in addition to any other remedies available to Owner
under Paragraph 17.1. If Owner’s costs arising out of Contractor’s failure to
cure, including the cost of completing the Work and reasonable attorney fees,
exceed the unpaid Contract Price, Contractor shall be liable to Owner for such
excess costs. If Owner’s costs are less than the unpaid Contract Price, Owner
shall pay the difference to Contractor. In the event Owner exercises its rights
under this Paragraph, upon the request of Contractor, Owner shall furnish to
Contractor a detailed accounting of the costs incurred by Owner.


 


17.3 TERMINATION BY CONTRACTOR Upon seven (7) days’ written notice to
Owner, Contractor may terminate this Agreement if the Work has been
stopped for a thirty (30) day period through no fault of Contractor for any of
the following reasons:


 


.1 under court order or order of other
governmental authorities having jurisdiction;


 


.2 as a result of the declaration of a national
emergency or other governmental act during which, through no act or fault of
Contractor, materials are not available; or


 


17.4  In addition, upon seven (7) days’ written
notice to Owner, Contractor may terminate the Agreement if Owner:


 


.1 fails to furnish reasonable evidence that
sufficient funds are available and committed for the entire cost of the Project
in accordance with Paragraph 7.1, or


 


.2 assigns this Agreement over Contractor’s reasonable
objection, or


 


.3 fails to pay Contractor in accordance with
this Agreement and Contractor has complied with the notice provisions of
Paragraph 14.5, or


 


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.4 
otherwise
materially breaches this Agreement


 


17.5 Upon termination by Contractor pursuant to this Agreement, Contractor
shall be entitled to recover from Owner payment for all Work executed and for
any proven loss, cost or expense in connection with the Work, including all
demobilization costs plus reasonable overhead and profit.


 


17.6 OBLIGATIONS ARISING BEFORE TERMINATION Even after termination the provisions of this
Agreement still apply to any Work performed, payments made, events occurring,
costs charged or incurred or obligations arising before the termination date


 


18  CLAIMS AND DISPUTE RESOLUTION


 


18.1  CLAIMS FOR ADDITIONAL COST
OR TIME Except as
provided in Paragraphs 11.2 and 11.4 for any claim for an increase in the
Contract Price and/or the Contract Time, Contractor shall give Owner written
notice of the claim within fourteen (14) days after the occurrence giving rise
to the claim or within fourteen (14) days after Contractor first recognizes the
condition giving rise to the claim, whichever is later. Except in an emergency,
notice shall be given before proceeding with the Work. Any change in the
Contract Price and/or the Contract Time resulting from such claim shall be
authorized by Change Order.


 


18.2 WORK CONTINUANCE AND PAYMENT Unless otherwise agreed in writing, Contractor
shall continue the Work and maintain the Schedule of the Work during any
dispute resolution proceedings. If Contractor continues to perform, Owner shall
continue to make payments in accordance with the Agreement.


 


18.3 INITIAL DISPUTE RESOLUTION PROCESSES If a dispute arises out of or relates to this Agreement or its breach, the
parties shall endeavor to settle the dispute first through direct discussions.
If the dispute cannot be settled through direct discussions, the parties shall
endeavor to settle the dispute by mediation under the current Construction
Industry Mediation Rules of the American Arbitration Association before
recourse to any binding dispute resolution procedures.


 


	
  OWNER:

  	
  LSCP, LLLP

  	
   

  
	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ Stephen G. Roe

  	
   

  
	
   

  	
   

  	
   

  
	
  PRINT NAME:

  	
  Stephen G. Roe

  	
   

  
	
   

  	
   

  	
   

  
	
  PRINT TITLE:

  	
  President/CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  ASSEST:

  	
  /s/ Gary Grotjohn

  	
   

  
						



 


18.4   OTHER DISPUTE PROCESSES If neither direct discussions nor mediation successfully resolve the
dispute, the parties agree that the following shall be used to resolve the
dispute.


 


(Check one selection only)


 


ý Arbitration Arbitration shall be
pursuant to the Construction Industry Rules of the American Arbitration
Association unless the parties mutually agree otherwise. A written demand for
arbitration shall be filed with the American Arbitration Association and the
other party to the Agreement within a reasonable time after the dispute or
claim has arisen, but in no event after the applicable statute of limitations
for a legal or equitable proceeding has run. The arbitration award shall be
final. This agreement to arbitrate shall be governed by the Federal Arbitration
Act and judgment upon the award may be confirmed in any court having
jurisdiction.


 


o Litigation Action may be filed in
the appropriate state or federal court located in the jurisdiction in which the
Project is located.


 


19 ASSIGNMENT Neither Owner nor Contractor shall
assign its interest in this Agreement without the written consent of the other
except as to the assignment of proceeds. The terms and conditions of this Agreement
shall be binding upon both parties, their partners, successors, assigns and
legal representatives. Neither party to this Agreement shall assign the
Agreement as a whole without written consent of the other.


 


20 GOVERNING LAW This Agreement shall be governed by the law in effect at the location of
the Project.


 


21 JOINT DRAFTING The parties expressly agree that this Agreement was jointly drafted, and
that they both had opportunity to negotiate terms and to obtain assistance of
counsel in reviewing terms prior to execution. This Agreement shall be
construed neither against nor in favor of either party, but shall be construed
in a neutral manner.


 


	
  CONTRACTOR: 

  	
  McC Inc.

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Dan
  Shefland

  	
   

  
	
   

  	
   

  
	
  PRINT NAME: 

  	
  Dan Shefland

  	
   

  
	
   

  	
   

  
	
  PRINT TITLE:

  	
  Engineering
  Man.

  	
   

  
	
   

  	
   

  
	
  ASSEST:

  	
  /s/ Rick J.
  Holthaus

  	
   

  
							



 


8

















 





 


7900 69th Avenue –
Greenfield, Minnesota 55373 ~ Phone: (763) 477-4774 ~ Fax: (763) 477-5174


 


PROJECT WARRANTY


 


McC Inc. warrants its
workmanship and supplied equipment to be free from defts for one (1) year
from acceptance of the workmanship. And/or supplied equipment by Owner. [Handwritten initials: DS 2/14/06    SR 2/16/06]


 


Failed Equipment:


 


If
a piece of equipment fails during normal use/operation the owner is to notify
McC Inc. so a replacement part can be shipped. The failed part is to
be shipped by the owner back to the manufacturer for evaluation of the failed
part.


 


In
all cases labor can be performed by either McC Inc. or plant maintenance
crew(s). Costs for labor, equipment and material will be handled as follows:


 


•                  If
it is determined by the manufacturer that misuses, modification or improper
maintenance is the cause of failure, the owner (plant) will be responsible to
pay for all replacement costs (labor, material and equipment).


 


•                  If
it is determined that the part failed do to a manufacturing defect then
costs for replacement will be provided by McC Inc. If it was necessary for
plant maintenance to perform the replacement work then reimbursement for
the actual (no mark-up) costs for labor and equipment will be made to the plant
from McC Inc.


 


Workmanship:


 


McC
Inc. will correct any installation of equipment which creates a recognized
jobsite hazard or causes undue restriction of equipment capacity. McC Inc. will
correct any structural deterioration and/or failure.


 


Maintenance:


 


We
expect that all facilities will properly maintain equipment to the recommended
manufacturers’ specifications. Recommended maintenance for equipment can be
obtained from all manufacturers.


 


Wear Items:


 


The
construction materials provided by McC Inc. are based on project budgets and
specifications. Due to high impact/volume areas it may be necessary to
replace certain items more often. Replacement of these impact/wear areas is the
owner’s responsibility.


 


This
Project Warranty excludes any remedy for damages or defects caused by abuse,
modifications not executed by McC, Inc., improper or insufficient
maintenance, improper operation, or normal wear and tear and normal usage.
[Handwritten: Beyond the limits
of the contractors insurance coverage. DS 2/14/06  SR 2/16/06]