| **Exhibit  10.8** |
|-------------------|
|              |
|                   |

 

**Standard Form of Agreement BetweenOwner and Design-Builder - Lump Sum**

 

*This document has important legalconsequences.  Consultation withan attorney is recommended with respect to its completion or modification.*

 

This**AGREEMENT** is made as of the8th  day of October in the yearof  2003, by and between thefollowing parties, for services in connection with the Project identifiedbelow.

 

**OWNER:**

*(Name and address)*

 

United Wisconsin GrainProducers, LLC

P.O. Box 247

Friesland, WI  53935

 

 

**DESIGN-BUILDER:**

*(Name and address)*

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

 

**PROJECT:**

*(Include Project name and location*

*as it will appear in the Contract*

*Documents)*

 

40 MGY Dry Grind EthanolPlant

 

 

In consideration of themutual covenants and obligations contained herein, Owner and Design-Builderagree as set forth herein.

 

DBIA Document No.525  •  **StandardForm of  Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998 Design-BuildInstitute of America

 

1

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**Article 1**

 

**Scopeof Work**

 

**1.1****                              **Design-Buildershall perform all design and construction services, and provide all material,equipment, tools and labor, necessary to complete the Work described in andreasonably inferable from the Contract Documents.

 

**Article 2**

 

**ContractDocuments**

 

**2.1**                               TheContract Documents are comprised of the following:

 

**.1**                                      All writtenmodifications, amendments and change orders to this Agreement issued inaccordance with DBIA Document No. 535, *Standard Form of General Conditions of ContractBetween Owner and Design-Builder* (1998 Edition) (“General Conditionsof Contract”);

 

**.2**                                      This Agreement,including all exhibits and attachments, executed by Owner and Design-Builder,said Exhibits being:

 

*Exhibit A – [*]*

*Exhibit B – [*]*

*Exhibit C – [*]*

*Exhibit D – [*]*

*Exhibit E – [*]*

* *

----

** Portion omitted pursuant to arequest for confidential treatment and filed separately with the Securities andExchange Commission.*

* *

**.3****                                     **WrittenSupplementary Conditions, consisting of two pages, to the General Conditions ofContract;

 

**.4****                                     **TheGeneral Conditions of Contract;

 

**.5**                                      ConstructionDocuments prepared and approved in accordance with Section 2.4 of theGeneral Conditions of Contract;

 

**.6**                                      Design-Builder’sDeviation List, if any, contained in Design-Builder’s Proposal, which shallspecifically identify any and all deviations from Owner’s Project Criteria;

 

**.7****                                     **Owner’sProject Criteria;

 

**.8**                                      Design-Builder’sProposal, except for the Deviation List, submitted in response to Owner’s Project Criteria; and

 

**.9**                                      The followingother documents, if any:  N/A

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998Design-Build Institute of America

 

2

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## **Article 3**

 

**Interpretationand Intent**

 

**3.1****                              **TheContract Documents are intended to permit the parties to complete the Work andall obligations required by the Contract Documents within the Contract Time(s)for the Contract Price. The Contract Documents are intended to be complementaryand interpreted in harmony so as to avoid conflict, with words and phrasesinterpreted in a manner consistent with construction and design industrystandards.  In the event of any inconsistency,conflict, or ambiguity between or among the Contract Documents, the ContractDocuments shall take precedence in the order in which they are listed inSection 2.1 hereof.

 

**3.2**                               Terms,words and phrases used in the Contract Documents, including this Agreement,shall have the meanings given them in the General Conditions of Contract. 

 

**3.3**                               TheContract Documents form the entire agreement between Owner and Design-Builderand by incorporation herein are as fully binding on the parties as if repeatedherein.  The Contract Documentssupercede any prior letters of intent between the parties, and such letters ofintent are now null and void.   No oralrepresentations or other agreements have been made by the parties except asspecifically stated in the Contract Documents. 

 

## **Article 4**

 

**Ownershipof Work Product**

 

**4.1****                               WorkProduct**.  All drawings,specifications and other documents and electronic data furnished byDesign-Builder to Owner under this Agreement (“Work Product”) are deemed to beinstruments of service and Design-Builder shall retain the ownership andproperty interests therein, including the copyrights thereto.  

 

**4.2****                               Owner’sLimited License Upon Payment in Full.** Upon Owner’s payment in full for all Work performed under the ContractDocuments, Design-Builder shall vest in Owner a limited license to use the WorkProduct in connection with Owner’s occupancy, repair, remodeling or enlargementof the Project and Design-Builder shall provide Owner with a copy of the “asbuilt” plans, conditioned on Owner’s express understanding that its use of theWork Product and its acceptance of the “as built” plans is at Owner’s sole riskand without liability or legal exposure to Design-Builder or anyone working byor through Design-Builder, including Design Consultants of any tier(collectively the “Indemnified Parties”), provided, however, that anyperformance guarantees and warranties (of equipment or otherwise) shall remainin effect according to the terms of this Agreement.  The limited license to use the work product shall be limited byand construed according to the terms contained in the License Agreement betweenOwner and ICM, Inc., attached hereto and made a part hereof as Exhibit D.

 

**4.3**                               **Owner’sLimited License Upon Owner’s Termination for Convenience or Design-Builder’sElection to Terminate. **If Ownerterminates the Project for its convenience as set forth in Article 8hereof, or if Design-Builder elects to terminate this Agreement in accordancewith Section 11.4 of the General Conditions of Contract, Design-Buildershall, then upon Owner’s payment in full of the amounts due Design-Builderunder the Contract Documents, vest in Owner a limited license to use the WorkProduct to complete the Project and subsequently occupy, repair, remodel orenlarge the Project, subject to the following: 

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998 Design-BuildInstitute of America

 

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**.1**                                      Use of the WorkProduct is at Owner’s sole risk without liability or legal exposure to anyIndemnified Party; provided, however, that any “pass through” warrantiesregarding equipment or express warranties regarding equipment provided by thisAgreement shall remain in effect according to their terms; and

 

**.2**                                      If the terminationfor convenience is by Owner or if Design-Builder elects to terminate thisAgreement in accordance with Section 11.4 of the General Conditions ofContract, then Owner agrees to pay Design-Builder the additional sum of OneMillion Dollars                 ($1,000,000.00)upon obtaining the Work Product in a suitable form to complete the project ascompensation for the limited right to use the Work Product in accordance withthis Article 4 if Owner proceeds to complete the Project through itsemployees, agents, or third parties. Additionally, Owner understands that Owner may have to pay thereasonable costs and expenses, plus overhead and profit margin in the amount offifteen percent (15%), attributable to completion of the Work Product if suchWork Product is not completed as of the date of termination.

 

The limited license touse the work product shall be limited by and construed according to the termscontained in the License Agreement between Owner and ICM, Inc., attached heretoand made a part hereof as Exhibit D.

 

**4.4**                               **Owner’sLimited License Upon Design-Builder’s Default.**  If this Agreement is terminated due toDesign-Builder’s default pursuant to Section 11.2 of the GeneralConditions of Contract and (i) it is determined that Design-Builder was indefault and (ii) Owner has fully satisfied all of its obligations under theContract Documents through the time of Design-Builder’s default, thenDesign-Builder shall grant Owner a limited license to use the Work Product inconnection with Owner’s completion and occupancy, repair, remodeling, orenlargement of the Project.  Thislimited license is conditioned on Owner’s express understanding that its use ofthe Work Product is at Owner’s sole risk and without liability or legalexposure to any Indemnified Party; provided, however, that any “pass through”warranties regarding equipment or express warranties regarding equipmentprovided by this Agreement shall remain in effect according to theirterms.  This limited license would grantOwner the ability to repair, remodel or expand the Project at Owner’sdiscretion. The limited license to use the work product shall be limited by andconstrued according to the terms contained in the License Agreement betweenOwner and ICM, Inc., attached hereto and made a part hereof as Exhibit D.

 

**4.5**                               **Owner’sIndemnification for Use of Work Product.**  If Owner uses the Work Product under any of the circumstancesidentified in this Article 4, Owner shall defend, indemnify and holdharmless the Indemnified Parties from and against any and all claims, damages,liabilities, losses and expenses, including attorneys’ fees, arising out of orresulting from the use of the Work Product; provided, however, that any “passthrough” warranties regarding equipment or express warranties regardingequipment provided by this Agreement shall remain in effect according to theirterms.

 

**Article 5**

 

**ContractTime**

 

**5.1**                               **Date ofCommencement. **The Work shallcommence within five (5) days of Design-Builder’s receipt of Owner’s writtenNotice to Proceed (“Date of Commencement”) unless the parties mutually agreeotherwise in writing.                                               Theparties agree that a valid Owner’s Notice to Proceed cannot be given until: 1)Owner has title to the real estate on which the project will be constructed; 2)a Letter of Commitment for all necessary financing to construct the project isreceived; 3) the Phase I and Phase II site work required of Owner, as describedin Exhibit “C” is completed along with Phase II redline drawings;  4) the air permit(s) and/or other applicable local, state or federalpermits necessary so that construction can begin, have been obtained; and 5) itappears

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998Design-Build Institute of America

 

4

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reasonable that financialclose on the Letter of Commitment will occur within sixty (60) days of theissuance of said Notice to Proceed.  

 

**5.2**                               **SubstantialCompletion and Final Completion**

 

**5.2.1****                    **IfDesign-Builder receives Owner’s Notice to Proceed by November 15, 2003,then Substantial Completion of the entire Work shall be achieved no later thanFour hundred eighty-five (485) calendar days after Design-Builder’s receipt ofa valid Owner’s Notice to Proceed.  

 

**5.2.2**                     Interimmilestones and/or Substantial Completion of identified portions of the Workshall be achieved as follows:  N/A

 

**5.2.3****                    **FinalCompletion of the Work or identified portions of the Work shall be achieved asexpeditiously as reasonably practicable. Final Completion of the Work shall occur within sixty (60) days ofSubstantial Completion.

 

**5.2.4**                     Allof the dates set forth in this Article 5 (“Contract Time(s)”) shall besubject to adjustment in accordance with the General Conditions of Contract.

 

**5.2.5****                    **IfDesign-Builder does not receive Owner’s Notice to Proceed by November 15,2004, Owner and Design-Builder mutually agree to re-negotiate in good faith theContract Times of Substantial Completion as described in Section 5.2.1,the Early Completion Bonus as described in Section 5.4, and the LiquidatedDamages as described in Section 5.5 herein.

 

**5.3****                               Timeis of the Essence.**  Owner andDesign-Builder mutually agree that time is of the essence with respect to thedates and times set forth in the Contract Documents.

 

**5.4**                               *Material omitted. 

 

**5.5****                               ***Material omitted.

 

**Article 6**

 

**ContractPrice**

 

**6.1**                               **ContractPrice.**  Owner shall payDesign-Builder in accordance with Article 6 of the General Conditions ofContract the sum of Forty-five Million Five Hundred Seventy-five Thousand Dollars($45,575,000) (“Contract Price”), subject to adjustments made in accordancewith the General Conditions of Contract. Unless otherwise provided in the Contract Documents, the Contract Priceis deemed to include all sales, use, consumer and other taxes mandated byapplicable Legal Requirements. 

 

**6.2****                               Markupsfor Changes.**  If the Contract Pricerequires an adjustment due to changes in the Work, and the cost of such changesis determined under Sections 9.4.1.3 or 9.4.1.4 of the General Conditions ofContract, the following markups shall be allowed on such changes: The partiesagree that changes shall not occur pursuant to Sections 9.4.1.3 or 9.4.1.4 ofthe General Conditions of Contract, but may occur pursuant to the otherprovisions therein.

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998 Design-BuildInstitute of America

 

5

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**Article 7**

 

**Procedurefor Payment**

 

**7.0****                               Paymentat Financial Close**.  As part of theContract Price, Owner shall pay Design-Builder Three Million Dollars($3,000,000) as soon as allowed by its organizational documents, the EscrowAgreement and any other relevant agreements or laws (such payment to possiblyoccur prior to Financial Close) as a mobilization fee. Provided, however, thatsaid payment, if not made earlier, shall be paid at Financial Close. FinancialClose is defined as Owner executing final loan documents obtaining allnecessary financing to construct the project and funds are available to paydisbursements. Said Three Million ($3,000,000) dollar payment shall be subjectto the retainage as provided by Article 7.2.1.

 

**7.1****                               ProgressPayments**

 

**7.1.1****                    **Design-Buildershall submit to Owner on the twenty-fifth ( 25th ) day of each month, beginning with the first monthafter the Date of Commencement, Design-Builder’s Application for Payment inaccordance with Article 6 of the General Conditions of Contract.

 

**7.1.2****                    **Ownershall make payment within ten (10) days after Owner’s receipt of each properlysubmitted and accurate Application for Payment in accordance withArticle 6 of the General Conditions of Contract, but in each case less thetotal of payments previously made, and less amounts properly withheld underSection 6.3 of the General Conditions of Contract. 

 

**7.2**                               **Retainage onProgress Payments **

 

**7.2.1**                     Ownerwill retain ten percent ( 10%) of each payment provided, however, that whenfifty percent (50%) of the Work ($22,787,500 aggregate payment) has beencompleted by Design-Builder, Owner will not retain any additional amounts fromDesign-Builder’s subsequent payments, unless there is less than $2,278,750total retainage.  Owner will alsoreasonably consider reducing retainage for Subcontractors completing their workearly in the Project.  

 

**7.2.2**                     UponSubstantial Completion of the entire Work or, if applicable, any portion of theWork, pursuant to Section 6.6 of the General Conditions of Contract, Ownershall release to Design-Builder all retained amounts relating, as applicable, tothe entire Work or completed portion of the Work, less an amount equal to thereasonable value of all remaining or incomplete items of Work as noted in theCertificate of Substantial Completion, provided that such payment shall only bemade if Design-Builder has met the Performance Guarantee Criteria listed inExhibit A.  

 

**7.3****                               FinalPayment.**  Design-Builder shallsubmit its Final Application for Payment to Owner in accordance withSection 6.7 of the General Conditions of Contract.  Owner shall make payment on Design-Builder’sproperly submitted and accurate Final Application for Payment within thirty(30) days after Owner’s receipt of the Final Application for Payment, providedthat Design-Builder has satisfied the requirements for final payment set forthin Section 6.7.2 of the General Conditions of Contract and Design-Builderhas met the Performance Guarantee Criteria listed in Exhibit A.

 

**7.4****                               Interest.**  Payments which are due and unpaid by Ownerto Design-Builder, whether progress payments or final payment, shall bearinterest commencing five (5) days after payment is due at the rate of eighteenpercent (18%) per annum.

 

**7.5****                               RecordKeeping and Finance Controls.**  Withrespect to changes in the Work performed on a cost basis by Design-Builderpursuant to the Contract Documents, Design-Builder shall keep full and detailedaccounts and exercise such controls as may be necessary for proper financialmanagement, using accounting and control systems in accordance with generallyaccepted accounting principles and as may be provided in the ContractDocuments.  During the performance ofthe Work and for a period of three (3) years after Final Payment, Owner andOwner’s accountants shall be afforded access from time to time, upon reasonablenotice, to Design-Builder’s records, books, correspondence, receipts,subcontracts, purchase orders, vouchers, memoranda and other data relating tochanges in the Work performed on a cost basis in

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998Design-Build Institute of America

 

6

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accordance with theContract Documents, all of which Design-Builder shall preserve for a period ofthree (3) years after Final Payment.

 

**Article 8**

 

**Terminationfor Convenience**

 

**8.1**                               Uponten (10) days’ written notice to Design-Builder, Owner may, for its convenienceand without cause, elect to terminate this Agreement.  In such event, Owner shall pay Design-Builder for the following:

 

**.1**                                      All Work executedand for proven loss, cost or expense in connection with the Work;

 

**.2**                                      The reasonablecosts and expenses attributable to such termination, including demobilizationcosts and amounts due in settlement of terminated contracts with Subcontractorsand Design Consultants; and 

 

**.3**                                      Overhead andprofit margin in the amount of fifteen percent ( 15 %) on the sum of items .1and .2 above, except that overhead and profit shall not be due regardingamounts due in settlement of terminated contracts with subcontractors anddesign consultants.

 

**8.2**                               Inaddition to the amounts set forth in Section 8.1 above, Design-Buildershall be entitled to receive one of the following as applicable:  NA

 

**8.3**                               IfOwner terminates this Agreement pursuant to Section 8.1 above and proceedsto design and construct the Project through its employees, agents or thirdparties, Owner’s rights to use the Work Product shall be as set forth inSection 4.3 hereof.

 

**Article 9**

 

**Representativesof the Parties**

 

**9.1****                               Owner’sRepresentatives**

 

**9.1.1**                     Ownerdesignates the individual listed below as its Senior Representative (“Owner’sSenior Representative”), which individual has the authority and responsibilityfor avoiding and resolving disputes under Section 10.2.3 of the GeneralConditions of Contract:  *(Identifyindividual’s name, title, address and telephone numbers)*

 

# **TBD**

 

**9.1.2**                     Ownerdesignates the individual listed below as its Owner’s Representative, whichindividual has the authority and responsibility set forth in Section 3.4of the General Conditions of Contract:  *(Identifyindividual’s name, title, address and telephone numbers)*

 

**TBD**

 

**9.2****                               Design-Builder’sRepresentatives**

 

**9.2.1**                     Design-Builderdesignates the individual listed below as its Senior Representative(“Design-Builder’s Senior Representative”), which individual has the authorityand responsibility for avoiding and resolving disputes underSection 10.2.3 of the General Conditions of Contract:  *(Identify individual’s name, title, address andtelephone numbers)*

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998 Design-BuildInstitute of America

 

7

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**Roland“Ron” Fagen, CEO and President**

**501 W. Highway 212**

**P.O. Box 159**

**Granite Falls, MN 56241**

**Telephone:  (320) 564-3324**

 

**9.2.2****                    **Design-Builderdesignates the individual listed below as its Design-Builder’s Representative,which individual has the authority and responsibility set forth inSection 2.1.1 of the General Conditions of Contract:  *(Identify individual’s name, title, address andtelephone numbers)*

 

**TBD**

 

**Article 10**

 

**Bondsand Insurance**

 

**10.1****                        Insurance.**  Design-Builder shall procure in accordancewith Article 5 of the General Conditions of Contract the followinginsurance coverage: A certificate of insurance will be provided prior tostarting construction.  Policy limitsshall be as follows:

 
| Commercial  General Liability:         |   |   |       |
|----------------------------------------|--------|--------|------------|
|                                   |   |   |       |
| General  Aggregate                     |   | $      | 2,000,000  |   |
| Products-Comp/Op  AGG                  |   | $      | 2,000,000  |   |
| Personal  & Adv Injury             |   | $      | 1,000,000  |   |
| Each  Occurrence                       |   | $      | 1,000,000  |   |
| Fire  Damage (Any one fire)            |   | $      | 50,000     |   |
| Med  Exp (Any one person)              |   | $      | 5,000      |   |
|                                   |   |   |       |
| Automobile  Liability:                 |   |   |       |
| Combined  Single Limit                 |   | $      | 1,000,000  |   |
|                                   |   |   |       |
| Excess  Liability – Umbrella Form |   |   |       |
| Each  Occurrence                       |   | $      | 20,000,000 |   |
| Aggregate                              |   | $      | 20,000,000 |   |
|                                   |   |   |       |
| Workers  Compensation and              |   |   |       |
| Employers’  Liability:            |   |   |       |
| Statutory  Limits:                     |   |   |       |
| Each  Accident                         |   | $      | 1,000,000  |   |
| Disease-Policy  Limit                  |   | $      | 1,000,000  |   |
| Disease-Each  Employee                 |   | $      | 1,000,000  |   |

 

Owner shall obtain abuilder’s risk policy naming Owner as the insured, with Design-Builder asadditional insured, in an amount not less than the Contract Price.  Owner shall also obtain Boiler and MachineryInsurance protecting Owner, Design-Builder, Design Consultants, Subcontractsand Subcontractors.

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998Design-Build Institute of America

 

8

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**Article 11**

 

**OtherProvisions**

 

**11.1**                        Otherprovisions, if any, are as follows: 

 

•                  Performance Guarantee:  The Design-Builder guarantees the Criterialisted in Exhibit A.  If there is aperformance shortfall, Design-Builder will pay all design and constructioncosts associated with making the necessary corrections.  Design-Builder retains the right to use itssole discretion in determining the method to remedy any performance relatedissues.

 

•                  Price Guarantee:  The Design-Builder guarantees the ContractPrice for the Work delineated by the Contract Documents.  Any and all price increases would require,in addition to Owner’s approval, the approval of Owner’s senior lender.

 

•                  Winter Construction:  Owner shall have no responsibility for anywinter construction related activities including, but not limited to, special materialcosts, sheltering, heating, and equipment rental, except that Owner shall payall the reasonable costs incurred for frost removal including, but not limitedto, equipment costs, equipment rental costs, and associated labor costs, sothat winter construction can proceed. 

 

•                  Design-Builder shall obtain orcooperate in obtaining a performance bond if such a bond is requested byOwner.  If the bond is obtained byDesign-Builder, Owner shall pay Design-Builder for the cost of the bond, pluspay Design-Builder a fee of 7.5%, said fee calculated by multiplying 7.5% onthe cost of the bond.  If purchased byOwner, Owner shall pay all costs of obtaining the bond.  

 

•                  Design-Builder warrants that withinsix (6) months following the date of Substantial Completion, the atmosphericemissions of the ethanol plant shall meet the requirements as currentlyprescribed, as of the date hereof, by the State of Wisconsin Department ofNatural Resources Bureau of Air Management. Verification shall be provided by a written report from Design-Builder.

 

 

In executing thisAgreement, Design-Builder represents that it has the necessary financialresources to fulfill its obligations under this Agreement and has the necessarycorporate approvals to execute this Agreement and perform the servicesdescribed herein.  Owner represents thatit has the necessary organizational approvals to execute this Agreement; thatOwner is seeking financing for the project and that Owner agrees to keep Design-Builderinformed of Owner’s progress in obtaining commitments for and closing on suchfinancing.

 

 
| **OWNER:**                             |   | **DESIGN-BUILDER:**              |
|----------------------------------------|--------|----------------------------------|
|                                   |   |                             |
| United Wisconsin Grain  Producers, LLC |   | Fagen, Inc.                      |
| *(Name of Owner)*                      |   | *(Name of Design-Builder)*       |
|                                   |   |                             |
| /s/ Kevin Roche                        |   | /s/ Roland “Ron” Fagen |
| *(Signature)*                          |   | *(Signature)*                    |
|                                   |   |                             |
| Kevin Roche                            |   | Roland “Ron” Fagen     |
| *(Printed Name)*                       |   | *(Printed Name)*                 |

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998 Design-BuildInstitute of America

 

9

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| President |    | CEO and President |
|-----------|---------|-------------------|
| *(Title)* |    | *(Title)*         |
|      |    |              |
| Date:     | 10-8-03 |              | Date: | 10-8-03 |
|           |         |                   |  |  |

 

DBIA Document No.525  •  **StandardForm of Agreement**

**BetweenOwner and Design-Builder – Lump Sum**

© 1998Design-Build Institute of America

 

10

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Design BuildContract

United WisconsinGrain Producers, LLC

October 8,2003

 

##### **EXHIBIT A**

 

* Material omitted.

 

Exh. A to UnitedWisconsin Grain Producers, LLC 

 

1

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Design Build Contract

United WisconsinGrain Producers, LLC

October 8,2003

 

# **EXHIBIT B**

 

* Material omitted.

 

Exh. A to UnitedWisconsin Grain Producers, LLC 

 

1

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Design BuildContract

United WisconsinGrain Producers, LLC

October 8,2003

 

**EXHIBITC**

 

* Material omitted.

 

Exh. A to UnitedWisconsin Grain Producers, LLC 

 

1

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Design BuildContract

United WisconsinGrain Producers, LLC

October 8,2003

 

**EXHIBIT D**

 

* Material Omitted

 

1

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Design BuildContract

United WisconsinGrain Producers, LLC

October 8,2003

 

###### **EXHIBIT “E”**

 

* Material omitted.

 

1

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|  |
|--|

 

**Standard Form of General Conditionsof Contract Between Owner and Design-Builder**

 

*This document has important legalconsequences.  Consultation withan attorney is recommended with respect to its completion or modification.*

 

**Tableof Contents**

 
| Article 1:  | General                                              |   |
|------------------|------------------------------------------------------|--------|
|             |                                                 |   |
| Article 2:  | Design-Builder’s Services and  Responsibilities |   |
|             |                                                 |   |
| Article 3:  | Owner’s Services and Responsibilities           |   |
|             |                                                 |   |
| Article 4:  | Hazardous Conditions and Differing Site  Conditions  |   |
|             |                                                 |   |
| Article 5:  | Insurance and Bonds                                  |   |
|             |                                                 |   |
| Article 6:  | Payment                                              |   |
|             |                                                 |   |
| Article 7:  | Indemnification                                      |   |
|             |                                                 |   |
| Article 8:  | Time                                                 |   |
|             |                                                 |   |
| Article 9:  | Changes to the Contract Price and Time               |   |
|             |                                                 |   |
| Article 10: | Contract Adjustments and Disputes                    |   |
|             |                                                 |   |
| Article 11: | Stop Work and Termination for Cause                  |   |
|             |                                                 |   |
| Article 12: | Miscellaneous                                        |   |

 

DBIA Document No.535  •  **StandardForm of General Conditions**

**ofContract Between Owner and Design-Builder**

© 1998 Design-BuildInstitute of America

 

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**Article 1**

# ** **

**General**

 

**1.1****                               MutualObligations**

 

**1.1.1****                    **Owner andDesign-Builder commit at all times to cooperate fully with each other, andproceed on the basis of trust and good faith, to permit each party to realizethe benefits afforded under the Contract Documents.

 

**1.2**                               **BasicDefinitions**

 

**1.2.1****                    ***Agreement*refers to the executed contract between Owner and Design-Builder under eitherDBIA Document No. 525, *Standard Form of Agreement Between Owner andDesign-Builder – C Lump Sum*(1998 Edition) or DBIA DocumentNo. 530, *Standard Form of Agreement Between Owner and Design-Builder C – CostPlus Fee with an Option for a Guaranteed Maximum Price*(1998Edition).

 

**1.2.2**                     *Day*or *Days*shall mean calendar days unless otherwise specifically noted in the ContractDocuments.

 

**1.2.3****                    ***DesignConsultant*is a qualified, licensed design professional who is notan employee of Design-Builder, but is retained by Design-Builder, or employedor retained by anyone under contract with Design-Builder or Subcontractor, tofurnish design services required under the Contract Documents.

 

**1.2.4****                    ***HazardousConditions* are any materials, wastes, substances and chemicalsdeemed to be hazardous under applicable Legal Requirements, or the handling,storage, remediation, or disposal of which are regulated by applicable LegalRequirements.

 

**1.2.5**                     *GeneralConditions of Contract* refer to this DBIA Document No. 535, *StandardForm of General Conditions of Contract Between Owner and Design-Builder*(1998 Edition).

 

**1.2.6****                    ***LegalRequirements*are all applicable federal, state and local laws,codes, ordinances, rules, regulations, orders and decrees of any government orquasi-government entity having jurisdiction over the Project or Site, thepractices involved in the Project or Site, or any Work.

 

**1.2.7**                     *Owner’sProject Criteria*are developed by or for Owner to describe Owner’sprogram requirements and objectives for the Project, including use, space,price, time, site and expandability requirements, as well as submittalrequirements and other requirements governing Design-Builder’s performance ofthe Work.  Owner’s Project Criteria mayinclude conceptual documents, design criteria, performance requirements andother Project-specific technical materials and requirements.

 

**1.2.8**                     *Site*is the land or premises on which the Project is located.

 

**1.2.9**                     *Subcontractor*is any person or entity retained by Design-Builder as an independent contractorto perform a portion of the Work and shall include materialmen and suppliers. 

 

**1.2.10**              *Sub-Subcontractor*is any person or entity retained by a Subcontractor as an independentcontractor to perform any portion of a Subcontractor’s Work and shall includematerialmen and suppliers.

 

**1.2.11**              *SubstantialCompletion* is the date on which the Work, or an agreed upon portionof the Work, is sufficiently complete so that Owner can occupy and use theProject or a portion thereof for its intended purposes.

 

**1.2.12**              *Work*is comprised of all Design-Builder’s design, construction and other servicesrequired by the Contract Documents, including procuring and furnishing allmaterials, equipment, services and labor reasonably inferable from the ContractDocuments.

 

**Article 2**

 

**Design-Builder’sServices andResponsibilities**

 

**2.1****                               GeneralServices**

 

**2.1.1**                     Design-Builder’sRepresentative shall be reasonably available to Owner and shall have thenecessary expertise and experience required to supervise the Work.  Design-Builder’s Representative shallcommunicate regularly with Owner and shall be vested with the authority to acton behalf of Design-Builder. Design-Builder’s Representative may be replaced only with the mutualagreement of Owner and Design-Builder.  

 

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**2.1.2**                     Design-Buildershall provide Owner with a monthly status report detailing the progress of theWork, including whether (i) the Work is proceeding according to schedule, (ii)discrepancies, conflicts, or ambiguities exist in the Contract Documents thatrequire resolution, (iii) health and safety issues exist in connection with theWork, and (iv) other items require resolution so as not to jeopardizeDesign-Builder’s ability to complete the Work for the Contract Price and withinthe Contract Time(s).

 

**2.1.3****                    **Design-Buildershall prepare and submit, at least three (3) days prior to the meetingcontemplated by Section 2.1.4 hereof, a schedule for the execution ofthe Work for Owner’s review and response. The schedule shall indicate the dates for the start and completionof the various stages of Work, including the dates when Owner information andapprovals are required to enable Design-Builder to achieve the ContractTime(s).  The schedule shall berevised as required by conditions and progress of the Work, but such revisionsshall not relieve Design-Builder of its obligations to complete the Work withinthe Contract Time(s), as such dates may be adjusted in accordance with theContract Documents.  Owner’s review ofand response to the schedule shall not be construed as relievingDesign-Builder of its complete and exclusive control over the means, methods,sequences and techniques for executing the Work.  

 

**2.1.4**                     Theparties will meet within seven (7) days after execution of the Agreement todiscuss issues affecting the administration of the Work and to implement thenecessary procedures, including those relating to submittals and payment, tofacilitate the ability of the parties to perform their obligations under theContract Documents.

 

**2.2**                               **DesignProfessional Services**

 

**2.2.1**                     Design-Buildershall, consistent with applicable state licensing laws, provide throughqualified, licensed design professionals employed by Design-Builder, orprocured from qualified, independent licensed Design Consultants, the necessarydesign services, including architectural, engineering and other designprofessional services, for the preparation of the required drawings,specifications and other design submittals to permit Design-Builder to completethe Work consistent with the Contract Documents.  Nothing in the Contract Documents is intended or deemed to createany legal or contractual relationship between Owner and any Design Consultant.

 

**2.3**                               **Standard of Care for Design ProfessionalServices**

 

**2.3.1**                     Thestandard of care for all design professional services performed to execute theWork shall be the care and skill ordinarily used by members of the designprofession practicing under similar conditions at the same time and locality ofthe Project.  Notwithstanding thepreceding sentence, if the parties agree upon specific performance standardsfor any aspect of the Work, which standards are to be set forth in an exhibitto the Agreement entitled “Performance Standard Requirements,” the designprofessional services shall be performed to achieve such standards. 

 

**2.4**                               **DesignDevelopment Services**

 

**2.4.1**                     Design-Builderand Owner shall, consistent with any applicable provision of the ContractDocuments, agree upon any interim design submissions that Owner may wish toreview, which interim design submissions may include design criteria, drawings,diagrams and specifications setting forth the Project requirements.   On or about the time of the scheduledsubmissions, Design-Builder and Owner shall meet and confer about thesubmissions, with Design-Builder identifying during such meetings, among otherthings, the evolution of the design and any significant changes or deviationsfrom the Contract Documents, or, if applicable, previously submitted designsubmissions.  Minutes of the meetingswill be maintained by Design-Builder and provided to all attendees forreview.  Following the design reviewmeeting, Owner shall review and approve the interim design submissions in atime that is consistent with the turnaround times set forth in Design-Builder’sschedule.

 

**2.4.2**                     Design-Buildershall submit to Owner Construction Documents setting forth in detail drawingsand specifications describing the requirements for construction of theWork.  The Construction Documents shallbe consistent with the latest set of interim design submissions, as suchsubmissions may have been modified in a design review meeting.  The parties shall have a design reviewmeeting to discuss, and Owner shall review and approve, the ConstructionDocuments in accordance with the procedures set forth Section 2.4.1above.  Design-Builder shall proceedwith

 

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construction inaccordance with the approved Construction Documents and shall submit one set ofapproved Construction Documents to Owner prior to commencement ofconstruction.  

 

**2.4.3**                     Owner’sreview and approval of interim design submissions and the ConstructionDocuments is for the purpose of mutually establishing a conformed set ofContract Documents compatible with the requirements of the Work.  Neither Owner’s review nor approval of anyinterim design submissions and Construction Documents shall be deemed totransfer any design liability from Design-Builder to Owner.

 

**2.4.4**                     Tothe extent not prohibited by the Contract Documents or Legal Requirements,Design-Builder may prepare interim design submissions and ConstructionDocuments for a portion of the Work to permit construction to proceed on thatportion of the Work prior to completion of the Construction Documents for theentire Work. 

 

**2.5**                               **Legal Requirements**

 

**2.5.1**                     Design-Buildershall perform the Work in accordance with all Legal Requirements and shallprovide all notices applicable to the Work as required by the LegalRequirements.

 

**2.5.2**                     TheContract Price and/or Contract Time(s) shall be adjusted to compensateDesign-Builder for the effects of any changes in the Legal Requirements enactedafter the date of the Agreement affecting the performance of the Work, or if aGuaranteed Maximum Price is established after the date of the Agreement, thedate the parties agree upon the Guaranteed Maximum Price.  Such effects may include, withoutlimitation, revisions Design-Builder is required to make to the ConstructionDocuments because of changes in Legal Requirements.

 

**2.6****                               GovernmentApprovals and Permits**

 

**2.6.1**                     Exceptas identified in an Owner’s Permit List attached as an exhibit to theAgreement, Design-Builder shall obtain and pay for all necessary permits,approvals, licenses, government charges and inspection fees required for theprosecution of the Work by any government or****quasi-government entityhaving jurisdiction over the Project.  

 

**2.6.2**                     Design-Buildershall provide reasonable assistance to Owner in obtaining those permits,approvals and licenses that are Owner’s responsibility.

 

**2.7**                               **Design-Builder’s Construction PhaseServices**

 

**2.7.1**                     Unlessotherwise provided in the Contract Documents to be the responsibility of Owneror a separate contractor, Design-Builder shall provide through itself orSubcontractors the necessary supervision, labor, inspection, testing, start-up,material, equipment, machinery, temporary utilities and other temporaryfacilities to permit Design-Builder to complete construction of the Projectconsistent with the Contract Documents.

 

**2.7.2****                    **Design-Buildershall perform all construction activities efficiently and with the requisiteexpertise, skill and competence to satisfy the requirements of the ContractDocuments.  Design-Builder shall at alltimes exercise complete and exclusive control over the means, methods, sequencesand techniques of construction.

 

**2.7.3**                     Design-Buildershall employ only Subcontractors who are duly licensed and qualified to performthe Work consistent with the Contract Documents.  Owner may reasonably object to Design-Builder’s selection of anySubcontractor, provided that the Contract Price and/or Contract Time(s) shallbe adjusted to the extent that Owner’s decision impacts Design-Builder’s costand/or time of performance.

 

**2.7.4**                     Design-Builderassumes responsibility to Owner for the proper performance of the Work ofSubcontractors and any acts and omissions in connection with suchperformance.  Nothing in the ContractDocuments is intended or deemed to create any legal or contractual relationshipbetween Owner and any Subcontractor or Sub-Subcontractor, including but notlimited to any third-party beneficiary rights.

 

**2.7.5**                     Design-Buildershall coordinate the activities of all Subcontractors.  If Owner performs other work on the Projector at the Site with separate contractors under Owner’s control, Design-Builderagrees to reasonably cooperate and coordinate its activities with those of suchseparate contractors so that the Project can be completed in an orderly and

 

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coordinated mannerwithout unreasonable disruption.

 

**2.7.6**                     Design-Buildershall keep the Site reasonably free from debris, trash and construction wastesto permit Design-Builder to perform its construction services efficiently,safely and without interfering with the use of adjacent land areas.  Upon Substantial Completion of the Work, ora portion of the Work, Design-Builder shall remove all debris, trash,construction wastes, materials, equipment, machinery and tools arising from theWork or applicable portions thereof to permit Owner to occupy the Project or aportion of the Project for its intended use.

 

**2.8****                               Design-Builder’sResponsibility for Project Safety**

 

**2.8.1**                     Design-Builderrecognizes the importance of performing the Work in a safe manner so as toprevent damage, injury or loss to (i) all individuals at the Site, whetherworking or visiting, (ii) the Work, including materials and equipmentincorporated into the Work or stored on-Site or off-Site, and (iii) all otherproperty at the Site or adjacent thereto. Design-Builder assumes responsibility for implementing and monitoringall safety precautions and programs related to the performance of theWork.  Design-Builder shall, prior tocommencing construction, designate a Safety Representative with the necessaryqualifications and experience to supervise the implementation and monitoring ofall safety precautions and programs related to the Work.  Unless otherwise required by the ContractDocuments, Design-Builder’s Safety Representative shall be an individualstationed at the Site who may have responsibilities on the Project in additionto safety.  The Safety Representativeshall make routine daily inspections of the Site and shall hold weekly safetymeetings with Design-Builder’s personnel, Subcontractors and others asapplicable.

 

**2.8.2**                     Design-Builderand Subcontractors shall comply with all Legal Requirements relating to safety,as well as any Owner-specific safety requirements set forth in the ContractDocuments, provided that such Owner-specific requirements do not violate anyapplicable Legal Requirement. Design-Builder will immediately report in writing any safety-relatedinjury, loss, damage or accident arising from the Work to Owner’sRepresentative and, to the extent mandated by Legal Requirements, to allgovernment or quasi-government authorities having jurisdiction oversafety-related matters involving the Project or the Work.

 

**2.8.3****                    **Design-Builder’sresponsibility for safety under this Section 2.8****is not intended in any wayto relieve Subcontractors and Sub-Subcontractors of their own contractual andlegal obligations and responsibility for (i) complying with all LegalRequirements, including those related to health and safety matters, and (ii)taking all necessary measures to implement and monitor all safety precautionsand programs to guard against injury, losses, damages or accidents resultingfrom their performance of the Work.

 

**2.9****                               Design-Builder’sWarranty**

 

**2.9.1****                    **Design-Builderwarrants to Owner that the construction, including all materials and equipmentfurnished as part of the construction, shall be new unless otherwise specifiedin the Contract Documents, of good quality, in conformance with the ContractDocuments and free of defects in materials and workmanship.  Design-Builder’s warranty obligationexcludes defects caused by abuse, alterations, or failure to maintain the Workby persons other than Design-Builder or anyone for whose acts Design-Buildermay be liable. Nothing in this warranty is intended to limit any manufacturer’swarranty which provides Owner with greater warranty rights than set forth inthis Section 2.9 or the Contract Documents.  Design-Builder will provide Owner with all manufacturers’ warrantiesupon Substantial Completion.

 

**2.10**                        **Correctionof Defective Work**

 

**2.10.1**              Design-Builderagrees to correct any Work that is found to not be in conformance with theContract Documents, including that part of the Work subject to Section 2.9hereof, within a period of one year from the date of Substantial Completion ofthe Work or any portion of the Work, or within such longer period to the extentrequired by the Contract Documents.

 

**2.10.2**              Design-Buildershall, within seven (7) days of receipt of written notice from Owner that theWork is not in conformance with the Contract Documents, take meaningful stepsto commence correction of such nonconforming Work, including the correction,removal or replacement of the nonconforming Work and any damage caused to otherparts of the Work affected by the nonconforming Work.  If Design-Builder

 

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fails to commence thenecessary steps within such seven (7) day period, Owner, in addition to anyother remedies provided under the Contract Documents, may provideDesign-Builder with written notice that Owner will commence correction of suchnonconforming Work with its own forces. If Owner does perform such corrective Work, Design-Builder shall beresponsible for all reasonable costs incurred by Owner in performing suchcorrection.  If the nonconforming Workcreates an emergency requiring an immediate response, the seven (7) day periodsidentified herein shall be deemed inapplicable.

 

**2.10.3**              Theone year period referenced in Section 2.10.1 above applies only toDesign-Builder’s obligation to correct nonconforming Work and is not intendedto constitute a period of limitations for any other rights or remedies Ownermay have regarding Design-Builder’s other obligations under the ContractDocuments.

 

**Article 3**

 

**Owner’sServices and Responsibilities**

 

**3.1**                               **Duty toCooperate**

 

**3.1.1**                     Ownershall, throughout the performance of the Work, cooperate with Design-Builderand perform its responsibilities, obligations and services in a timely mannerto facilitate Design-Builder’s timely and efficient performance of the Work andso as not to delay or interfere with Design-Builder’s performance of itsobligations under the Contract Documents.

 

**3.1.2**                     Ownershall provide timely reviews and approvals of interim design submissions andConstruction Documents consistent with the turnaround times set forth inDesign-Builder’s schedule.   

 

**3.2**                               **Furnishingof Services and Information**

 

**3.2.1**                     Unlessexpressly stated to the contrary in the Contract Documents, Owner shallprovide, at its own cost and expense, for Design-Builder’s information and usethe following, all of which Design-Builder is entitled to rely upon inperforming the Work:

 

**.1**                  Surveys describing the property,boundaries, topography and reference points for use during construction,including existing service and utility lines;

 

**.2**                  Geotechnical studies describingsubsurface conditions, and other surveys describing other latent or concealedphysical conditions at the Site;

 

**.3**                  Temporary and permanent easements,zoning and other requirements and encumbrances affecting land use, or necessaryto permit the proper design and construction of the Project and enableDesign-Builder to perform the Work; 

 

**.4**                  A legal description of the Site;

 

**.5**                  To the extent available, as-built andrecord drawings of any existing structures at the Site; and

 

**.6**                  To the extent available,environmental studies, reports and impact statements describing theenvironmental conditions, including Hazardous Conditions, in existence at theSite. 

 

**3.2.2**                     Owneris responsible for securing and executing all necessary agreements withadjacent land or property owners that are necessary to enable Design-Builder toperform the Work.  Owner is furtherresponsible for all costs, including attorneys’ fees, incurred in securingthese necessary agreements.

 

**3.3**                               **FinancialInformation**

 

**3.3.1**                     AtDesign-Builder’s request, Owner shall promptly furnish reasonable evidencesatisfactory to Design-Builder that Owner has adequate funds available andcommitted to fulfill all of Owner’s contractual obligations under the ContractDocuments.  If Owner fails to furnish suchfinancial information in a timely manner, Design-Builder may stop Work underSection 11.3 hereof or exercise any other right permitted under theContract Documents.  

 

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**3.3.2**                     Design-Buildershall cooperate with the reasonable requirements of Owner’s lenders or otherfinancial sources.  Notwithstanding the precedingsentence, after execution of the Agreement Design-Builder shall have noobligation to execute for Owner or Owner’s lenders or other financial sourcesany documents or agreements that require Design-Builder to assume obligationsor responsibilities greater than those existing obligations Design-Builder hasunder the Contract Documents.

 

**3.4**                               **Owner’sRepresentative**

 

**3.4.1**                     Owner’sRepresentative shall be responsible for providing Owner-supplied informationand approvals in a timely manner to permit Design-Builder to fulfill itsobligations under the Contract Documents. Owner’s Representative shall also provide Design-Builder with promptnotice if it observes any failure on the part of Design-Builder to fulfill itscontractual obligations, including any errors, omissions or defects in theperformance of the Work.

 

**3.5****                               GovernmentApprovals and Permits**

 

**3.5.1**                     Ownershall obtain and pay for all necessary permits, approvals, licenses, governmentcharges and inspection fees set forth in the Owner’s Permit List attached as anexhibit to the Agreement.  

 

**3.5.2**                     Ownershall provide reasonable assistance to Design-Builder in obtaining thosepermits, approvals and licenses that are Design-Builder’s responsibility.

 

**3.6****                               Owner’sSeparate Contractors**

 

**3.6.1****                    **Owner isresponsible for all work performed on the Project or at the Site by separatecontractors under Owner’s control. Owner shall contractually require its separate contractors to cooperatewith, and coordinate their activities so as not to interfere with, Design-Builderin order to enable Design-Builder to timely complete the Work consistent withthe Contract Documents. 

 

**Article 4**

 

**HazardousConditions and DifferingSite Conditions**

 

**4.1**                               **HazardousConditions**

 

**4.1.1**                     Unlessotherwise expressly provided in the Contract Documents to be part of the Work,Design-Builder is not responsible for any Hazardous Conditions encountered atthe Site.  Upon encountering anyHazardous Conditions, Design-Builder will stop Work immediately in the affectedarea and duly notify Owner and, if required by Legal Requirements, allgovernment or quasi-government entities with jurisdiction over the Project orSite.  

 

**4.1.2**                     Uponreceiving notice of the presence of suspected Hazardous Conditions, Owner shalltake the necessary measures required to ensure that the Hazardous Conditionsare remediated or rendered harmless. Such necessary measures shall include Owner retaining qualifiedindependent experts to (i) ascertain whether Hazardous Conditions have actuallybeen encountered, and, if they have been encountered, (ii) prescribe theremedial measures that Owner must take either to remove the HazardousConditions or render the Hazardous Conditions harmless.

 

**4.1.3**                     Design-Buildershall be obligated to resume Work at the affected area of the Project onlyafter Owner’s expert provides it with written certification that (i) theHazardous Conditions have been removed or rendered harmless and (ii) allnecessary approvals have been obtained from all government and quasi-governmententities having jurisdiction over the Project or Site.

 

**4.1.4**                     Design-Builderwill be entitled, in accordance with these General Conditions of Contract, toan adjustment in its Contract Price and/or Contract Time(s) to the extentDesign-Builder’s cost and/or time of performance have been adversely impactedby the presence of Hazardous Conditions.

 

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**4.1.5**                     Tothe fullest extent permitted by law, Owner shall indemnify, defend and holdharmless Design-Builder, Design Consultants, Subcontractors, anyone employeddirectly or indirectly for any of them, and their officers, directors, employeesand agents, from and against any and all claims, losses, damages, liabilitiesand expenses, including attorneys’ fees and expenses, arising out of orresulting from the presence, removal or remediation of Hazardous Conditions atthe Site.  

 

**4.1.6**                     Notwithstandingthe preceding provisions of this Section 4.1, Owner is not responsible forHazardous Conditions introduced to the Site by Design-Builder, Subcontractorsor anyone for whose acts they may be liable. Design-Builder shall indemnify, defend and hold harmless Owner andOwner’s officers, directors, employees and agents from and against all claims,losses, damages, liabilities and expenses, including attorneys’ fees andexpenses, arising out of or resulting from those Hazardous Conditions introducedto the Site by Design-Builder, Subcontractors or anyone for whose acts they maybe liable.

 

**4.2**                               **DifferingSite Conditions**

 

**4.2.1**                     Concealedor latent physical conditions or subsurface conditions at the Site that (i)materially differ from the conditions indicated in the Contract Documents or(ii) are of an unusual nature, differing materially from the conditionsordinarily encountered and generally recognized as inherent in the Work arecollectively referred to herein as “Differing Site Conditions.”  If Design-Builder encounters a DifferingSite Condition, Design-Builder will be entitled to an adjustment in theContract Price and/or Contract Time(s) to the extent Design-Builder’s costand/or time of performance are adversely impacted by the Differing Site Condition.

 

**4.2.2**                     Uponencountering a Differing Site Condition, Design-Builder shall provide promptwritten notice to Owner of such condition, which notice shall not be later thanfourteen (14) days after such condition has been encountered.  Design-Builder shall, to the extentreasonably possible, provide such notice before the Differing Site Conditionhas been substantially disturbed or altered.

 

**Article 5**

 

**Insuranceand Bonds**

 

**5.1****                               Design-Builder’sInsurance Requirements**

 

**5.1.1**                     Design-Builderis responsible for procuring and maintaining from insurance companiesauthorized to do business in the state in which the Project is located, andwith a minimum rating set forth in the Agreement, the following insurancecoverages for certain claims which may arise from or out of the performance ofthe Work and obligations under the Contract Documents:

 

**.1**                  Coverage for claims arising underworkers’ compensation, disability and other similar employee benefit lawsapplicable to the Work;

 

**.2**                  Coverage for claims by Design-Builder’semployees for bodily injury, sickness, disease, or death;

 

**.3**                  Coverage for claims by any personother than Design-Builder’s employees for bodily injury, sickness, disease, ordeath;

 

**.4**                  Coverage for usual personal injuryliability claims for damages sustained by a person as a direct or indirectresult of Design-Builder’s employment of the person, or sustained by any otherperson;

 

**.5**                  Coverage for claims for damages  (other than to the Work) because of injuryto or destruction of tangible property, including loss of use;

 

**.6**                  Coverage for claims of damagesbecause of personal injury or death, or property damage resulting fromownership, use and maintenance of any motor vehicle; and

 

**.7**                  Coverage for contractual liabilityclaims arising out of Design-Builder’s obligations under Section 7.4.1hereof.

 

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**5.1.2**                     Design-Builder’sliability insurance required by Section 5.1.1 above shall be written forthe coverage amounts set forth in the Agreement and shall include completedoperations insurance for the period of time set forth in the Agreement. 

 

**5.1.3**                     Design-Builder’sliability insurance set forth in Sections 5.1.1.1 through 5.1.1.7 above shallspecifically delete any design-build or similar exclusions that couldcompromise coverages because of the design-build delivery of the Project.

 

**5.1.4**                     Tothe extent Owner requires Design-Builder or any Design Consultant to provideprofessional liability insurance for claims arising from the negligentperformance of design services by Design-Builder or the Design Consultant, thecoverage limits, duration and other specifics of such insurance shall be as setforth in the Agreement.  Anyprofessional liability shall specifically delete any design-build or similarexclusions that could compromise coverages because of the design-build deliveryof the Project.  Such policies shall beprovided prior to the commencement of any design services hereunder.

 

**5.1.5**                     Priorto commencing any construction services hereunder, Design-Builder shall provideOwner with certificates evidencing that (i) all insurance obligations requiredby the Contract Documents are in full force and in effect and will remain ineffect for the duration required by the Contract Documents and (ii) noinsurance coverage will be canceled, renewal refused, or materially changedunless at least thirty (30) days prior written notice is given to Owner.

 

**5.2****                               Owner’sLiability Insurance**

 

**5.2.1**                     Ownershall procure and maintain from insurance companies authorized to do businessin the state in which the Project is located such liability insurance toprotect Owner from claims which may arise from the performance of Owner’sobligations under the Contract Documents or Owner’s conduct during the courseof the Project.

 

**5.3****                               Owner’sProperty Insurance**

 

**5.3.1**                     Unlessotherwise provided in the Contract Documents, Owner shall procure and maintainfrom insurance companies authorized to do business in the state in which theProject is located property insurance upon the entire Project to the fullinsurable value of the Project, including professional fees, overtime premiumsand all other expenses incurred to replace or repair the insured property.  The property insurance obtained by Ownershall include as additional insureds the interests of Owner, Design-Builder,Design Consultants, Subcontractors and Sub-Subcontractors, and shall insureagainst the perils of fire and extended coverage, theft, vandalism, maliciousmischief, collapse, flood, earthquake, debris removal and other perils orcauses of loss as called for in the Contract Documents.  The property insurance shall includephysical loss or damage to the Work, including materials and equipment intransit, at the Site or at another location as may be indicated inDesign-Builder’s Application for Payment and approved by Owner.

 

**5.3.2**                     Unlessthe Contract Documents provide otherwise, Owner shall procure and maintainboiler and machinery insurance that will include the interests of Owner,Design-Builder, Design Consultants, Subcontractors and Sub-Subcontractors.

 

**5.3.3**                     Priorto Design-Builder commencing any Work, Owner shall provide Design-Builder withcertificates evidencing that (i) all Owner’s insurance obligations required bythe Contract Documents are in full force and in effect and will remain ineffect until Design-Builder has completed all of the Work and has receivedfinal payment from Owner and (ii) no insurance coverage will be canceled,renewal refused, or materially changed unless at least thirty (30) days priorwritten notice is given to Design-Builder. Owner’s property insurance shall not lapse or be canceled if Owneroccupies a portion of the Work pursuant to Section 6.6.3 hereof.  Owner shall provide Design-Builder with thenecessary endorsements from the insurance company prior to occupying a portionof the Work.

 

**5.3.4**                     Anyloss covered under Owner’s property insurance shall be adjusted with Owner andDesign-Builder and made payable to both of them as trustees for the insureds astheir interests may appear, subject to any applicable mortgage clause.  All insurance proceeds received as a resultof any loss will be placed in a separate account and distributed in accordancewith such agreement as the interested parties may reach.  Any disagreement concerning the distributionof any proceeds will be resolved in accordance with Article 10 hereof.

 

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**5.3.5**                     Ownerand Design-Builder waive against each other and Owner’s separate contractors,Design Consultants, Subcontractors, agents and employees of each and all ofthem, all damages covered by property insurance provided herein, except suchrights as they may have to the proceeds of such insurance.  Design-Builder and Owner shall, whereappropriate, require similar waivers of subrogation from Owner’s separatecontractors, Design Consultants and Subcontractors and shall require each ofthem to include similar waivers in their contracts.

 

**5.4****                               Bondsand Other Performance Security**

 

**5.4.1**                     IfOwner requires Design-Builder to obtain performance and labor and materialpayment bonds, or other forms of performance security, the amount, form andother conditions of such security shall be as set forth in the Agreement.

 

**Article 6**

 

**Payment**

 

**6.1**                               **Schedule ofValues **

 

**6.1.1**                     Withinten (10) days of execution of the Agreement, Design-Builder shall submit forOwner’s review and approval a schedule of values for all of the Work.  The Schedule of Values will (i)subdivide the Work into its respective parts, (ii) include values for all itemscomprising the Work and (iii) serve as the basis for monthly progress paymentsmade to Design-Builder throughout the Work.

 

**6.2**                               **MonthlyProgress Payments**

 

**6.2.1****                    **Onor before the date established in the Agreement, Design-Builder shall submitfor Owner’s review and approval its Application for Payment requesting paymentfor all Work performed as of the date of the Application for Payment.  The Application for Payment shall beaccompanied by all supporting documentation required by the Contract Documentsand/or established at the meeting required by Section 2.1.4 hereof.

 

**6.2.2****                    **TheApplication for Payment may request payment for equipment and materials not yetincorporated into the Project, provided that (i) Owner is satisfied that the equipmentand materials are suitably stored at either the Site or another acceptablelocation, (ii) the equipment and materials are protected by suitable insuranceand (iii) upon payment, Owner will receive the equipment and materials free andclear of all liens and encumbrances.

 

**6.2.3**                     TheApplication for Payment shall constitute Design-Builder’s representation thatthe Work has been performed consistent with the Contract Documents, hasprogressed to the point indicated in the Application for Payment, and thattitle to all Work will pass to Owner free and clear of all claims, liens,encumbrances, and security interests upon the incorporation of the Work intothe Project, or upon Design-Builder’s receipt of payment, whichever occursearlier.

 

**6.3**                               **Withholdingof Payments**

 

**6.3.1**                     Onor before the date established in the Agreement, Owner shall pay Design-Builderall amounts properly due. If Owner determines that Design-Builder is notentitled to all or part of an Application for Payment, it will notifyDesign-Builder in writing at least five (5) days prior to the date payment isdue.  The notice shall indicate thespecific amounts Owner intends to withhold, the reasons and contractual basisfor the withholding, and the specific measures Design-Builder must take to rectifyOwner’s concerns.  Design-Builder andOwner will attempt to resolve Owner’s concerns prior to the date payment isdue.   If the parties cannot resolvesuch concerns, Design-Builder may pursue its rights under the ContractDocuments, including those under Article 10 hereof.

 

**6.3.2**                     Notwithstandinganything to the contrary in the Contract Documents, Owner shall payDesign-Builder all undisputed amounts in an Application for Payment within thetimes required by the Agreement.

 

**6.4****                               Rightto Stop Work and Interest**  

 

**6.4.1**                     IfOwner fails to pay Design-Builder any amount that becomes due, Design-Builder,in addition to all other remedies provided in the Contract Documents, may stopWork pursuant to Section 11.3 hereof. All payments due and unpaid shall bear interest at the rate set forth inthe Agreement.

 

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**6.5****                               Design-Builder’sPayment Obligations**

 

**6.5.1**                     Design-Builderwill pay Design Consultants and Subcontractors, in accordance with itscontractual obligations to such parties, all the amounts Design-Builder hasreceived from Owner on account of their work. Design-Builder will impose similar requirements on Design Consultantsand Subcontractors to pay those parties with whom they have contracted.  Design-Builder will indemnify and defendOwner against any claims for payment and mechanic’s liens as set forth in Section 7.3hereof.

 

**6.6****                               SubstantialCompletion**  

 

**6.6.1****                    **Design-Buildershall notify Owner when it believes the Work, or to the extent permitted in theContract Documents, a portion of the Work, is substantially complete.  Within five (5) days of Owner’s receipt ofDesign-Builder’s notice, Owner and Design-Builder will jointly inspect suchWork to verify that it is substantially complete in accordance with therequirements of the Contract Documents. If such Work is substantially complete, Owner shall prepare and issue aCertificate of Substantial Completion that will set forth (i) the date ofSubstantial Completion of the Work or portion thereof, (ii) the remaining itemsof Work that have to be completed before final payment, (iii) provisions (tothe extent not already provided in the Contract Documents) establishing Owner’sand Design-Builder’s responsibility for the Project’s security, maintenance,utilities and insurance pending final payment and (iv) an acknowledgment thatwarranties commence to run on the date of Substantial Completion, except as mayotherwise be noted in the Certificate of Substantial Completion.  

 

**6.6.2**                     UponSubstantial Completion of the entire Work or, if applicable, any portion of theWork, Owner shall release to Design-Builder all retained amounts relating, asapplicable, to the entire Work or completed portion of the Work, less an amountequal to the reasonable value of all remaining or incomplete items of Work asnoted in the Certificate of Substantial Completion. 

 

**6.6.3**                     Owner,at its option, may use a portion of the Work which has been determined to besubstantially complete, provided, however, that (i) a Certificate ofSubstantial Completion has been issued for the portion of Work addressing theitems set forth in Section 6.6.1 above, (ii) Design-Builder and Owner haveobtained the consent of their sureties and insurers, and to the extentapplicable, the appropriate government authorities having jurisdiction over theProject, and (iii) Owner and Design-Builder agree that Owner’s use or occupancywill not interfere with Design-Builder’s completion of the remaining Work.

 

**6.7****                               FinalPayment**

 

**6.7.1**                     Afterreceipt of a Final Application for Payment from Design-Builder, Owner shallmake final payment by the time required in the Agreement, provided thatDesign-Builder has completed all of the Work in conformance with the ContractDocuments. 

 

**6.7.2**                     Atthe time of submission of its Final Application for Payment, Design-Buildershall provide the following information: 

 

**.1**                  an affidavit that there are noclaims, obligations or liens outstanding or unsatisfied for labor, services,material, equipment, taxes or other items performed, furnished or incurred foror in connection with the Work which will in any way affect Owner’s interests; 

 

**.2**                  a general release executed byDesign-Builder waiving, upon receipt of final payment by Design-Builder, allclaims, except those claims previously made in writing to Owner and remainingunsettled at the time of final payment; 

 

**.3**                  consent of Design-Builder’s surety,if any, to final payment;

 

**.4**                  all operating manuals, warranties andother deliverables required by the Contract Documents; and 

 

**.5**                  certificates of insurance confirmingthat required coverages will remain in effect consistent with the requirementsof the Contract Documents.

 

**6.7.3**                     Uponmaking final payment, Owner waives all claims against Design-Builder exceptclaims relating to (i) Design-Builder’s failure to satisfy its paymentobligations, if such failure affects Owner’s interests, (ii) Design-Builder’sfailure to complete the Work consistent with the Contract Documents, includingdefects appearing after Substantial

 

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Completion and (iii) theterms of any special warranties required by the Contract Documents.

 

**Article 7**

 

**Indemnification**

 

**7.1****                               Patentand Copyright Infringement**

 

**7.1.1**                     Design-Buildershall defend any action or proceeding brought against Owner based on any claimthat the Work, or any part thereof, or the operation or use of the Work or anypart thereof, constitutes infringement of any United States patent orcopyright, now or hereafter issued. Owner shall give prompt written notice to Design-Builder of any suchaction or proceeding and will reasonably provide authority, information andassistance in the defense of same. Design-Builder shall indemnify and hold harmless Owner from and againstall damages and costs, including but not limited to attorneys’ fees andexpenses awarded against Owner or Design-Builder in any such action orproceeding.  Design-Builder agrees tokeep Owner informed of all developments in the defense of such actions.  

 

**7.1.2**                     IfOwner is enjoined from the operation or use of the Work, or any part thereof,as the result of any patent or copyright suit, claim, or proceeding,Design-Builder shall at its sole expense take reasonable steps to procure theright to operate or use the Work.  IfDesign-Builder cannot so procure such right within a reasonable time,Design-Builder shall promptly, at Design-Builder’s option and atDesign-Builder’s expense, (i) modify the Work so as to avoid infringement ofany such patent or copyright or (ii) replace said Work with Work that does notinfringe or violate any such patent or copyright.

 

**7.1.3**                     Sections7.1.1 and 7.1.2 above shall not be applicable to any suit, claim or proceedingbased on infringement or violation of a patent or copyright (i) relating solelyto a particular process or product of a particular manufacturer specified byOwner and not offered or recommended by Design-Builder to Owner or (ii) arisingfrom modifications to the Work by Owner or its agents after acceptance of the Work.  If the suit, claim or proceeding is basedupon events set forth in the preceding sentence, Owner shall defend, indemnifyand hold harmless Design-Builder to the same extent Design-Builder is obligatedto defend, indemnify and hold harmless Owner in Section 7.1.1 above.

 

**7.1.4**                     Theobligations set forth in this Section 7.1 shall constitute the soleagreement between the parties relating to liability for infringement ofviolation of any patent or copyright.  

 

**7.2**                               **Tax Claim Indemnification**

 

**7.2.1**                     If,in accordance with Owner’s direction, an exemption for all or part of the Workis claimed for taxes, Owner shall indemnify, defend and hold harmlessDesign-Builder from and against any liability, penalty, interest, fine, taxassessment, attorneys’ fees or other expenses or costs incurred byDesign-Builder as a result of any action taken by Design-Builder in accordancewith Owner’s directive.

 

**7.3**                               **Payment Claim Indemnification**

 

**7.3.1****                    **Providingthat Owner is not in breach of its contractual obligation to make payments toDesign-Builder for the Work, Design-Builder shall indemnify, defend and holdharmless Owner from any claims or mechanic’s liens brought against Owner oragainst the Project as a result of the failure of Design-Builder, or those forwhose acts it is responsible, to pay for any services, materials, labor,equipment, taxes or other items or obligations furnished or incurred for or inconnection with the Work.  Within three(3) days of receiving written notice from Owner that such a claim or mechanic’slien has been filed, Design-Builder shall commence to take the steps necessaryto discharge said claim or lien, including, if necessary, the furnishing of amechanic’s lien bond.  If Design-Builderfails to do so, Owner will have the right to discharge the claim or lien andhold Design-Builder liable for costs and expenses incurred, includingattorneys’ fees.

 

**7.4****                               Design-Builder’sGeneral Indemnification**

 

**7.4.1****                    **Design-Builder,to the fullest extent permitted by law, shall indemnify, hold harmless and defendOwner, its officers, directors, employees and agents from and against claims,losses, damages, liabilities, including attorneys’ fees and expenses, forbodily injury, sickness or death, and property damage or destruction (otherthan to the Work itself) to the extent resulting from the negligent acts or

 

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omissions ofDesign-Builder, Design Consultants, Subcontractors, anyone employed directly orindirectly by any of them or anyone for whose acts any of them may be liable.

 

**7.4.2**                     Ifan employee of Design-Builder, Design Consultants, Subcontractors, anyone employeddirectly or indirectly by any of them or anyone for whose acts any of them maybe liable has a claim against Owner, its officers, directors, employees, oragents, Design-Builder’s indemnity obligation set forth in Section 7.4.1above shall not be limited by any limitation on the amount of damages,compensation or benefits payable by or for Design-Builder, Design Consultants,Subcontractors, or other entity under any employee benefit acts, includingworkers’ compensation or disability acts.

 

**7.5****                               Owner’sGeneral Indemnification**

 

**7.5.1**                     Owner,to the fullest extent permitted by law, shall indemnify, hold harmless anddefend Design-Builder and any of Design-Builder’s officers, directors,employees, or agents from and against claims, losses, damages, liabilities,including attorneys’ fees and expenses, for bodily injury, sickness or death,and property damage or destruction (other than to the Work itself) to theextent resulting from the negligent acts or omissions of Owner, it’s officers,directors, employees, agents, and Owner’s separate contractors or anyone forwhose acts any of them may be liable.

 

**Article 8**

 

**Time**

 

**8.1****                               Obligationto Achieve the Contract Times**

 

**8.1.1**                     Design-Builderagrees that it will commence performance of the Work and achieve the ContractTime(s) in accordance with Article 5 of the Agreement.

 

**8.2****                               Delaysto the Work**

 

**8.2.1**                     IfDesign-Builder is delayed in the performance of the Work due to acts,omissions, conditions, events, or circumstances beyond its control and due tono fault of its own or those for whom Design-Builder is responsible, theContract Time(s) for performance shall be reasonably extended by ChangeOrder.  By way of example, events thatwill entitle Design-Builder to an extension of the Contract Time(s) includeacts or omissions of Owner or anyone under Owner’s control (including separatecontractors), changes in the Work, Differing Site Conditions, HazardousConditions, wars, floods, labor disputes, unusual delay in transportation,epidemics abroad, earthquakes, adverse weather conditions not reasonablyanticipated, and other acts of God.  

 

**8.2.2**                     Inaddition to Design-Builder’s right to a time extension for those events setforth in Section 8.2.1 above, Design-Builder shall also be entitled to anappropriate adjustment of the Contract Price provided, however, that theContract Price shall not be adjusted for those events set forth inSection 8.2.1 above that are beyond the control of both Design-Builder andOwner, including the events of war, floods, labor disputes, earthquakes,epidemics, adverse weather conditions not reasonably anticipated, and otheracts of God.  

 

**Article 9**

 

**Changesto the Contract Price and Time**

 

**9.1****                               ChangeOrders**

 

**9.1.1**                     AChange Order is a written instrument issued after execution of the Agreementsigned by Owner and Design-Builder, stating their agreement upon all of thefollowing:

 

**.1**                  The scope of the change in the Work;

 

**.2**                  The amount of the adjustment to theContract Price; and

 

**.3**                  The extent of the adjustment to theContract Time(s).

 

**9.1.2****                    **All changesin the Work authorized by applicable Change Order shall be performed under theapplicable conditions of the Contract Documents.  Owner and Design-Builder shall negotiate in good faith and asexpeditiously as possible the appropriate adjustments for such changes.

 

**9.1.3**                     IfOwner requests a proposal for a change in the Work from Design-Builder andsubsequently elects not to proceed with the change, a Change Order shall beissued to reimburse Design-Builder

 

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for reasonable costsincurred for estimating services, design services and services involved in the preparationof proposed revisions to the Contract Documents.

 

**9.2****                               WorkChange Directives**

 

**9.2.1**                     AWork Change Directive is a written order prepared and signed by Owner,directing a change in the Work prior to agreement on an adjustment in theContract Price and/or the Contract Time(s).

 

**9.2.2**                     Ownerand Design-Builder shall negotiate in good faith and as expeditiously aspossible the appropriate adjustments for the Work Change Directive.  Upon reaching an agreement, the partiesshall prepare and execute an appropriate Change Order reflecting the terms ofthe agreement.

 

**9.3****                               MinorChanges in the Work**

 

**9.3.1**                     Minorchanges in the Work do not involve an adjustment in the Contract Price and/orContract Time(s) and do not materially and adversely affect the Work, includingthe design, quality, performance and workmanship required by the ContractDocuments.  Design-Builder may makeminor changes in the Work consistent with the intent of the Contract Documents,provided, however that Design-Builder shall promptly inform Owner, in writing,of any such changes and record such changes on the documents maintained byDesign-Builder.

 

**9.4****                               ContractPrice Adjustments**

 

**9.4.1**                     Theincrease or decrease in Contract Price resulting from a change in the Workshall be determined by one or more of the following methods:

 

**.1**                  Unit prices set forth in theAgreement or as subsequently agreed to between the parties;

 

**.2**                  A mutually accepted, lump sum,properly itemized and supported by sufficient substantiating data to permitevaluation by Owner;

 

**.3**                  Costs, fees and any other markups setforth in the Agreement; and

 

**.4**                  If an increase or decrease cannot beagreed to as set forth in items .1 through .3 above and Owner issues a WorkChange Directive, the cost of the change of the Work shall be determined by thereasonable expense and savings in the performance of the Work resulting fromthe change, including a reasonable overhead and profit, as may be set forth inthe Agreement.  If the net result ofboth additions and deletions to the Work is an increase in the Contract Price,overhead and profit shall be calculated on the basis of the net increase to theContract Price.  If the net result ofboth additions and deletions to the Work is a decrease in the Contract Price,there shall be no overhead or profit adjustment to the Contract Price.  Design-Builder shall maintain a documented,itemized accounting evidencing the expenses and savings associated with suchchanges.

 

**9.4.2**                     Ifunit prices are set forth in the Contract Documents or are subsequently agreedto by the parties, but application of such unit prices will cause substantialinequity to Owner or Design-Builder because of differences in the character orquantity of such unit items as originally contemplated, such unit prices shallbe equitably adjusted.

 

**9.4.3**                     IfOwner and Design-Builder disagree upon whether Design-Builder is entitled to bepaid for any services required by Owner, or if there are any otherdisagreements over the scope of Work or proposed changes to the Work, Owner andDesign-Builder shall resolve the disagreement pursuant to Article 10hereof.  As part of the negotiationprocess, Design-Builder shall furnish Owner with a good faith estimate of thecosts to perform the disputed services in accordance with Owner’sinterpretations.  If the parties areunable to agree and Owner expects Design-Builder to perform the services inaccordance with Owner’s interpretations, Design-Builder shall proceed toperform the disputed services, conditioned upon Owner issuing a written orderto Design-Builder (i) directing Design-Builder to proceed and (ii) specifyingOwner’s interpretation of the services that are to be performed.  If this occurs, Design-Builder shall beentitled to submit in its Applications for Payment an amount equal to fifty

 

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percent (50%) of itsreasonable estimated direct cost to perform the services, and Owner agrees topay such amounts, with the express understanding that (i) such payment byOwner does not prejudice Owner’s right to argue that it has no responsibilityto pay for such services and (ii) receipt of such payment by Design-Builderdoes not prejudice Design-Builder’s right to seek full payment of the disputedservices if Owner’s order is deemed to be a change to the Work.

 

**9.5**                               **Emergencies**

 

**9.5.1**                     Inany emergency affecting the safety of persons and/or property, Design-Buildershall act, at its discretion, to prevent threatened damage, injury orloss.  Any change in the Contract Priceand/or Contract Time(s) on account of emergency work shall be determined asprovided in this Article 9.

 

**Article 10**

 

**ContractAdjustments and Disputes**

 

**10.1**                        **Requests for Contract Adjustments andRelief**

 

**10.1.1**              Ifeither Design-Builder or Owner believes that it is entitled to relief againstthe other for any event arising out of or related to the Work or Project, suchparty shall provide written notice to the other party of the basis for itsclaim for relief.  Such notice shall, ifpossible, be made prior to incurring any cost or expense and in accordance withany specific notice requirements contained in applicable sections of theseGeneral Conditions of Contract.  In theabsence of any specific notice requirement, written notice shall be givenwithin a reasonable time, not to exceed twenty-one (21) days, after theoccurrence giving rise to the claim for relief or after the claiming partyreasonably should have recognized the event or condition giving rise to therequest, whichever is later.  Suchnotice shall include sufficient information to advise the other party of thecircumstances giving rise to the claim for relief, the specific contractualadjustment or relief requested and the basis of such request. 

 

**10.2**                        **Dispute Avoidance and Resolution**

 

**10.2.1****             **The parties arefully committed to working with each other throughout the Project and agree tocommunicate regularly with each other at all times so as to avoid or minimizedisputes or disagreements.  If disputesor disagreements do arise, Design-Builder and Owner each commit to resolvingsuch disputes or disagreements in an amicable, professional and expeditiousmanner so as to avoid unnecessary losses, delays and disruptions to theWork.  

 

**10.2.2**              Design-Builderand Owner will first attempt to resolve disputes or disagreements at the fieldlevel through discussions between Design-Builder’s Representative and Owner’sRepresentative.

 

**10.2.3****             **If a dispute ordisagreement cannot be resolved through Design-Builder’s Representative andOwner’s Representative, Design-Builder’s Senior Representative and Owner’sSenior Representative, upon the request of either party, shall meet as soon asconveniently possible, but in no case later than thirty (30) days after such arequest is made, to attempt to resolve such dispute or disagreement.  Prior to any meetings between the SeniorRepresentatives, the parties will exchange relevant information that willassist the parties in resolving their dispute or disagreement.  

 

**10.2.4**              Ifafter meeting the Senior Representatives determine that the dispute ordisagreement cannot be resolved on terms satisfactory to both parties, theparties shall submit the dispute or disagreement to non-binding mediation.  The mediation shall be conducted by amutually agreeable impartial mediator, or if the parties cannot so agree, amediator designated by the American Arbitration Association (“AAA”) pursuant toits Construction Industry Mediation Rules. The mediation will be governed by and conducted pursuant to a mediationagreement negotiated by the parties or, if the parties cannot so agree, byprocedures established by the mediator. 

 

**10.3**                        **Arbitration**

 

**10.3.1****             **Any claims,disputes or controversies between the parties arising out of or relating to theAgreement, or the breach thereof, which have not been resolved in accordancewith the procedures set forth in Section 10.2 above shall be decided byarbitration in accordance with the Construction Industry Arbitration Rules ofthe AAA then in effect, unless the parties mutually agree otherwise. 

 

**10.3.2****             **The award of thearbitrator(s) shall be final and binding upon the parties without the right ofappeal to the courts.  Judgment may beentered

 

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upon it in accordancewith applicable law by any court having jurisdiction thereof.

 

**10.3.3**              Design-Builderand Owner expressly agree that any arbitration pursuant to thisSection 10.3 may be joined or consolidated with any arbitration involvingany other person or entity (i) necessary to resolve the claim, dispute orcontroversy, or (ii) substantially involved in or affected by such claim,dispute or controversy.  BothDesign-Builder and Owner will include appropriate provisions in all contractsthey execute with other parties in connection with the Project to require suchjoinder or consolidation.

 

**10.3.4**              Theprevailing party in any arbitration, or any other final, binding disputeproceeding upon which the parties may agree, shall be entitled to recover fromthe other party reasonable attorneys’ fees and expenses incurred by theprevailing party.

 

**10.4****                        Dutyto Continue Performance**

 

**10.4.1****             **Unless providedto the contrary in the Contract Documents, Design-Builder shall continue toperform the Work and Owner shall continue to satisfy its payment obligations toDesign-Builder, pending the final resolution of any dispute or disagreementbetween Design-Builder and Owner. 

 

**10.5**                        **CONSEQUENTIALDAMAGES**

 

**10.5.1**              NOTWITHSTANDINGANYTHING HEREIN TO THE CONTRARY (EXCEPT AS SET FORTH IN SECTION 10.5.2BELOW), NEITHER DESIGN-BUILDER NOR OWNER SHALL BE LIABLE TO THE OTHER FOR ANYCONSEQUENTIAL LOSSES OR DAMAGES, WHETHER ARISING IN CONTRACT, WARRANTY, TORT(INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, INCLUDING BUT NOTLIMITED TO LOSSES OF USE, PROFITS, BUSINESS, REPUTATION OR FINANCING.

 

**10.5.2**              Theconsequential damages limitation set forth in Section 10.5.1 above is notintended to affect the payment of liquidated damages, if any, set forth inArticle 5 of the Agreement, which both parties recognize has been established,in part, to reimburse Owner for some damages that might otherwise be deemed tobe consequential.

 

**Article 11**

 

**StopWork and Termination for Cause**

 

**11.1****                        Owner’sRight to Stop Work**

 

**11.1.1**              Ownermay, without cause and for its convenience, order Design-Builder in writing tostop and suspend the Work.  Suchsuspension shall not exceed sixty (60) consecutive days or aggregate more thanninety (90) days during the duration of the Project.

 

**11.1.2**              Design-Builderis entitled to seek an adjustment of the Contract Price and/or Contract Time(s)if its cost or time to perform the Work has been adversely impacted by anysuspension of stoppage of work by Owner.

 

**11.2****                        Owner’sRight to Perform and Terminate for Cause**

 

**11.2.1**              IfDesign-Builder persistently fails to (i) provide a sufficient number of skilledworkers, (ii) supply the materials required by the Contract Documents, (iii)comply with applicable Legal Requirements, (iv) timely pay, without cause,  Design Consultants or Subcontractors, (v)prosecute the Work with promptness and diligence to ensure that the Work iscompleted by the Contract Time(s), as such times may be adjusted, or (vi)perform material obligations under the Contract Documents, then Owner, inaddition to any other rights and remedies provided in the Contract Documents orby law, shall have the rights set forth in Sections 11.2.2 and 11.2.3below.  

 

**11.2.2**              Uponthe occurrence of an event set forth in Section 11.2.1 above, Owner mayprovide written notice to Design-Builder that it intends to terminate theAgreement unless the problem cited is cured, or commenced to be cured, withinseven (7) days of Design-Builder’s receipt of such notice.  If Design-Builder fails to cure, orreasonably commence to cure, such problem, then Owner may give a second writtennotice to Design-Builder of its intent to terminate within an additional seven(7) day period.  If Design-Builder,within such second seven (7) day period, fails to cure, or reasonably commenceto cure, such problem, then Owner may declare the Agreement terminated fordefault by providing written notice to Design-Builder of such declaration.  

 

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**11.2.3**              Upondeclaring the Agreement terminated pursuant to Section 11.2.2 above, Ownermay enter upon the premises and take possession, for the purpose of completingthe Work, of all materials, equipment, scaffolds, tools, appliances and otheritems thereon, which have been purchased or provided for the performance of theWork, all of which Design-Builder hereby transfers, assigns and sets over toOwner for such purpose, and to employ any person or persons to complete theWork and provide all of the required labor, services, materials, equipment andother items.  In the event of suchtermination, Design-Builder shall not be entitled to receive any furtherpayments under the Contract Documents until the Work shall be finally completedin accordance with the Contract Documents. At such time, if the unpaid balance of the Contract Price exceeds thecost and expense incurred by Owner in completing the Work, such excess shall bepaid by Owner to Design-Builder. Notwithstanding the preceding sentence, if the Agreement establishes aGuaranteed Maximum Price, Design-Builder will only be entitled to be paid forWork performed prior to its default.  IfOwner’s cost and expense of completing the Work exceeds the unpaid balance ofthe Contract Price, then Design-Builder shall be obligated to pay thedifference to Owner.  Such costs andexpense shall include not only the cost of completing the Work, but alsolosses, damages, costs and expense, including attorneys’ fees and expenses,incurred by Owner in connection with the reprocurement and defense of claimsarising from Design-Builder’s default, subject to the waiver of consequentialdamages set forth in Section 10.5 hereof. 

 

**11.2.4**              IfOwner improperly terminates the Agreement for cause, the termination for causewill be converted to a termination for convenience in accordance with theprovisions of Article 8 of the Agreement.

 

**11.3****                        Design-Builder’sRight to Stop Work**

 

**11.3.1**              Design-Buildermay, in addition to any other rights afforded under the Contract Documents orat law, stop work for the following reasons:

 

**.1**                  Owner’s failure to provide financialassurances as required under Section 3.3 hereof; or

 

**.2**                  Owner’s failure to pay amountsproperly due under Design-Builder’s Application for Payment. 

 

**11.3.2**              Shouldany of the events set forth in Section 11.3.1 above occur, Design-Builderhas the right to provide Owner with written notice that Design-Builder willstop work unless said event is cured within seven (7) days from Owner’s receiptof Design-Builder’s notice.  If Ownerdoes not cure the problem within such seven (7) day period, Design-Builder maystop work.  In such case, Design-Buildershall be entitled to make a claim for adjustment to the Contract Price andContract Time(s) to the extent it has been adversely impacted by suchstoppage.  

 

**11.4****                        Design-Builder’sRight to Terminate for Cause**

 

**11.4.1**              Design-Builder,in addition to any other rights and remedies provided in the Contract Documentsor by law, may terminate the Agreement for cause for the followingreasons:  

 

**.1**                  The Work has been stopped for sixty(60) consecutive days, or more than ninety (90) days during the duration of theProject, because of court order, any government authority having jurisdictionover the Work, or orders by Owner under Section 11.1.1 hereof, providedthat such stoppages are not due to the acts or omissions of Design-Builder oranyone for whose acts Design-Builder may be responsible.

 

**.2**                  Owner’s failure to provideDesign-Builder with any information, permits or approvals that are Owner’sresponsibility under the Contract Documents which result in the Work beingstopped for sixty (60) consecutive days, or more than ninety (90) days duringthe duration of the Project, even though Owner has not ordered Design-Builderin writing to stop and suspend the Work pursuant to Section 11.1.1 hereof.

 

**.3**                  Owner’s failure to cure the problemsset forth in Section 11.3.1 above after Design-Builder has stopped theWork.

 

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**11.4.2**              Uponthe occurrence of an event set forth in Section 11.4.1 above,Design-Builder may provide written notice to Owner that it intends to terminatethe Agreement unless the problem cited is cured, or commenced to be cured,within seven (7) days of Owner’s receipt of such notice.  If Owner fails to cure, or reasonablycommence to cure, such problem, then Design-Builder may give a second writtennotice to Owner of its intent to terminate within an additional seven (7) dayperiod.  If Owner, within such secondseven (7) day period, fails to cure, or reasonably commence to cure, suchproblem, then Design-Builder may declare the Agreement terminated for defaultby providing written notice to Owner of such declaration.  In such case, Design-Builder shall beentitled to recover in the same manner as if Owner had terminated the Agreementfor its convenience under Article 8 of the Agreement.

 

**11.5****                        Bankruptcyof Owner or Design-Builder**

 

**11.5.1**              Ifeither Owner or Design-Builder institutes or has instituted against it a caseunder the United States Bankruptcy Code (such party being referred to as the“Bankrupt Party”), such event may impair or frustrate the Bankrupt Party’sability to perform its obligations under the Contract Documents.  Accordingly, should such event occur:

 

**.1**                  The Bankrupt Party, its trustee orother successor, shall furnish, upon request of the non-Bankrupt Party,adequate assurance of the ability of the Bankrupt Party to perform all futurematerial obligations under the Contract Documents, which assurances shall beprovided within ten (10) days after receiving notice of the request; and

 

**.2**                  The Bankrupt Party shall file anappropriate action within the bankruptcy court to seek assumption or rejectionof the Agreement within sixty (60) days of the institution of the bankruptcyfiling and shall diligently prosecute such action.

 

If the Bankrupt Partyfails to comply with its foregoing obligations, the non-Bankrupt Party shall beentitled to request the bankruptcy court to reject the Agreement, declare theAgreement terminated and pursue any other recourse available to thenon-Bankrupt Party under this Article 11.

 

**11.5.2**              Therights and remedies under Section 11.5.1 above shall not be deemed tolimit the ability of the non-Bankrupt Party to seek any other rights andremedies provided by the Contract Documents or by law, including its ability toseek relief from any automatic stays under the United States Bankruptcy Code orthe right of Design-Builder to stop Work under any applicable provision ofthese General Conditions of Contract.

 

**Article 12**

 

**Miscellaneous**

 

**12.1**                        **Assignment**

 

**12.1.1**              NeitherDesign-Builder nor Owner shall, without the written consent of the otherassign, transfer or sublet any portion or part of the Work or the obligationsrequired by the Contract Documents.

 

**12.2****                        Successorship**

 

**12.2.1**              Design-Builderand Owner intend that the provisions of the Contract Documents are binding uponthe parties, their employees, agents, heirs, successors and assigns.

 

**12.3****                        GoverningLaw**

 

**12.3.1**              TheAgreement and all Contract Documents shall be governed by the laws of the placeof the Project, without giving effect to its conflict of law principles.

 

**12.4****                        Severability**

 

**12.4.1**              Ifany provision or any part of a provision of the Contract Documents shall befinally determined to be superseded, invalid, illegal, or otherwiseunenforceable pursuant to any applicable Legal Requirements, such determinationshall not impair or otherwise affect the validity, legality, or enforceabilityof the remaining provision or parts of the provision of the Contract Documents,which shall remain in full force and effect as if the unenforceable provisionor part were deleted. 

 

**12.5****                        No Waiver**

 

**12.5.1**              Thefailure of either Design-Builder or Owner to insist, in any one or moreinstances, on the performance of any of the obligations required

 

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by the other under theContract Documents shall not be construed as a waiver or relinquishment of suchobligation or right with respect to future performance.

 

**12.6****                        Headings**

 

**12.6.1**              Theheadings used in these General Conditions of Contract, or any other ContractDocument, are for ease of reference only and shall not in any way be construedto limit or alter the meaning of any provision.

 

**12.7****                        Notice**

 

**12.7.1**              Wheneverthe Contract Documents require that notice be provided to the other party,notice will be deemed to have been validly given (i) if delivered in person tothe individual intended to receive such notice, (ii) four (4) days after beingsent by registered or certified mail, postage prepaid to the address indicatedin the Agreement or (iii) if transmitted by facsimile, by the time stated in amachine generated confirmation that notice was received at the facsimile numberof the intended recipient.

 

**12.8****                        Amendments**

 

**12.8.1**              TheContract Documents may not be changed, altered, or amended in any way except inwriting signed by a duly authorized representative of each party.

 

DBIA Document No.535  •  **StandardForm of General Conditions**

**ofContract Between Owner and Design-Builder**

© 1998 Design-BuildInstitute of America

 

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**SUPPLEMENTARYCONDITIONSUNITED WISCONSIN GRAIN PRODUCERS, LLCOctober 8, 2003**

 

These Supplementary Conditions amend or supplement the Standard Form ofGeneral Conditions of Contract between Owner and Design-Builder (DBIA DocumentNo. 535, 1998 Edition) and other provisions of the Contract Documents asindicated below.  All provisions, whichare not so amended or supplemented, remain in full force and effect.

 

**SC – 1.2 Basic Definitions**

 

The terms used in these Supplementary Conditions which are defined inthe Standard Form of General Conditions of Contract between Owner and Design-Builder(DBIA Document No. 535, 1998 Edition) have the meanings assigned to them in theGeneral Conditions.

 

**SC –1.2.1 Agreement**

 

Delete Section 1.2.1of the General Conditions in its entirety and insert the following in itsplace:

 

*Agreement* refers to the executed StandardForm of Agreement between Owner and Design-Builder – Lump Sum (DBIA DocumentNo. 525, 1998 Edition).

 

**SC –1.2.11 Substantial Completion**

 

Amend Section 1.2.11 of the General Conditions by striking out thefollowing words: or an agreed upon portion of the Work.

 

Add the followinglanguage at the end of Section 1.2.11 of the General Conditions.  Substantial Completion shall be attained atthe point in time when the Facility is ready to begin operation for itsintended use (ethanol production).

 

As so amended,Section 1.2.11 reads as follows:

 

*Substantial Completion* is the date onwhich the Work is sufficiently complete so that Owner can occupy and use theProject for its intended purposes. Substantial Completion shall be attained at the point in time when theFacility is ready to begin operation for its intended use (ethanol production).

 

**SC –2.2.1**

 

Amend Section 2.2.1of the General Conditions by adding to the end of 2.2.1:  - Except as provided by Exhibit D – Licenseof Proprietary Property of ICM, Inc. whereby ICM, Inc. has joined for purposesonly of that Exhibit.

 

**SC –2.3.1**

 

Amend the second sentence of Section 2.3.1 of the GeneralConditions by striking out the words: Performance Standard Requirements; andinserting the following: Exhibit A: Performance Guarantee Criteria; and as soamended, Section 2.3.1 reads as follows:

 

The standard of care for all design professional services performed toexecute the Work shall be the care and skill ordinarily used by members of thedesign profession practicing under similar conditions at the same time andlocality of the Project. Notwithstanding the preceding sentence, if the parties agree uponspecific performance standards for any aspect of the Work, which standards areto be set forth in an

 

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**SUPPLEMENTARY CONDITIONSUNITED WISCONSIN GRAIN PRODUCERS, LLCOctober 8, 2003**

 

exhibit to the Agreement entitled “Exhibit A: Performance GuaranteeCriteria,” the design professional services shall be performed to achieve suchstandards.

 

**SC –2.6.1**

 

Amend Section 2.6.1of the General Conditions by striking out the words: an Owner’s Permit List;and inserting the following: Exhibit C: Owner’s Responsibilities; and as soamended, Section 2.6.1 reads as follows:

 

Except as identified inExhibit C: Owner’s Responsibilities List attached as an exhibit to theAgreement, Design-Builder shall obtain and pay for all necessary permits,approvals, licenses, government charges and inspection fees required for theprosecution of the Work by any government or quasi-government entity havingjurisdiction over the Project.

 

**SC – 2.10.1**

 

Amend Section 2.10.1of the General Conditions by striking out the words from the sixth line of thatSection: “or any portion of the Work”; and as so amended, Section 2.10.1reads as follows:

 

Design-Builder agrees tocorrect any Work that is found to not be in conformance with the ContractDocuments, including that part of the Work subject to Section 2.9 hereof,within a period of one year from the date of Substantial Completion of theWork, or within such longer period to the extent required by the ContractDocuments.

 

**SC –3.5.1**

 

Amend Section 3.5.1 of the General Conditions by striking out thewords: the Owner’s Permit List; and inserting the following: Exhibit C: Owner’sResponsibilities; and as so amended, Section 3.5.1 reads as follows:

 

Owner shall obtain and pay for all necessary permits, approvals,licenses, government charges and inspection fees set forth in Exhibit C:Owner’s Responsibilities attached as an exhibit to the Agreement.

 

**SC –6.4.1**

 

Amend the first sentence of Section 6.4.1 of the GeneralConditions by inserting the phrase: in accordance with Section 6.3 above;and as so amended, Section 6.4.1 reads as follows:

 

If Owner fails to pay Design-Builder any amount that becomes due, inaccordance with Section 6.3 above, Design-Builder, in addition to allother remedies provided in the Contract Documents, may stop Work pursuant toSection 11.3 hereof.  All paymentsdue and unpaid shall bear interest at the rate set forth in the Agreement.

 

**SC –6.6.1**

 

Amend Section 6.6.1 of the General Conditions by striking out thewords from the second and third lines of that Section: “, or to the extentpermitted in the Contract Documents, a portion of the Work,”; and by strikingout the words from the twelfth and thirteenth lines of that Section: “orportion thereof”; and as

 

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**SUPPLEMENTARY CONDITIONSUNITED WISCONSIN GRAIN PRODUCERS, LLCOctober 8, 2003**

 

so amended, Section 6.6.1 reads as follows:

 

Design-Builder shall notify Owner when it believes the Work issubstantially complete.  Within five (5)days of Owner’s receipt of Design-Builder’s notice, Owner and Design-Builderwill jointly inspect such Work to verify that it is substantially complete inaccordance with the requirements of the Contract Documents.  If such Work is substantially complete,Owner shall prepare and issue a Certificate of Substantial Completion that willset forth (i) the date of Substantial Completion of the Work, (ii) theremaining items of Work that have to be completed before final payment, (iii)provisions (to the extent not already provided in the Contract Documents)establishing Owner’s and Design-Builder’s responsibility for the Project’ssecurity, maintenance, utilities and insurance pending final payment and (iv)an acknowledgment that warranties commence to run on the date of SubstantialCompletion, except as may otherwise be noted in the Certificate of SubstantialCompletion.

 

**SC –6.6.2**

 

Amend Section 6.6.2 of the General Conditions by striking out thewords from the second line of that Section: “or, if applicable, any portion of the Work”; and by striking out thewords from the fifth line of that Section: “or completed portion of the Work”;and as so amended, Section 6.6.2 reads as follows:

 

Upon Substantial Completion of the entire Work, Owner shall release toDesign-Builder all retained amounts relating, as applicable, to the entireWork, less an amount equal to the reasonable value of all remaining orincomplete items of Work as noted in the Certificate of Substantial Completion.

 

**SC –11.3.2**

 

Delete Section 11.3.2 of the General Conditions in its entiretyand insert the following in its place:

 

Should any of the events set forth in Section 11.3.1 above occur,Design-Builder has the right to provide Owner with written notice thatDesign-Builder will stop work unless said event is cured within seven (7) daysfrom Owner’s receipt of Design-Builder’s notice.  If Owner fails to cure, or reasonably commence to cure, suchproblem, then Design-Builder may give a second written notice to Owner of itsintent to stop work within an additional seven (7) day period.  If Owner, within such second seven (7) dayperiod, fails to cure, or reasonably commence to cure, such problem, thenDesign-Builder may stop work.  In suchcase, Design-Builder shall be entitled to make a claim for adjustment to theContract Price and Contract Time(s) to the extent it has been adversely impactedby such stoppage.

 

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