Document:

Exhibit 10.38

 

EMPLOYMENT AGREEMENT made in Montreal, on March 8, 2012 (the “Effective Date”).

 

	
BY   AND BETWEEN:
    	
ENERKEM   CORPORATION, a corporation incorporated under the laws of   Delaware, having a place of business at 1010 Sherbrooke Street West, Suite   1610, Montréal, Québec, H3A 2R7, Canada;
    
	
 
    	
 
    
	
 
    	
(hereinafter,   the “Corporation”)
    
	
 
    	
 
    
	
AND:
    	
TIMOTHY   J. CESAREK, domiciled and residing at 21126 King River   Point, Kingwood TX 77346;
    
	
 
    	
 
    
	
 
    	
(hereinafter,   the “Executive”)
    

 

WHEREAS the Corporation desires to employ the Executive on a full-time basis and the Executive wishes to be employed by the Corporation;

 

WHEREAS the Parties consequently desire to enter into this Employment Agreement setting forth the terms and conditions of the employment of the Executive with the Corporation from and after the Effective Date and the benefits attaching thereto.

 

NOW, THEREFORE, the Parties agree as follows:

 

1.                                      INTERPRETATION

 

1.1                               Definitions. Where used herein or in any amendments hereto or in any communication required or permitted to be given hereunder, the following words and phrases shall have the following meanings, respectively, unless the context otherwise requires:

 

1.1.1                     “Affiliate” means any Person which controls, is controlled by, or is under common control with a Party; and “control” means the ownership of at least fifty percent (50%) of the voting share capital of such entity or any other comparable equity or ownership interest;

 

1.1.2                     “Agreement” shall mean this Employment Agreement and all instruments supplemental hereto or any amendment or confirmation hereof; “herein”, “hereof”, “hereto”, “hereunder” and similar expressions mean and refer to this Agreement and not to any particular Article, Section, Subsection or other subdivision; “Article”, “Section”, “Subsection” or other subdivision of this Agreement means and refers to the specified Article, Section, Subsection or other subdivision of this Agreement;

 

1.1.3                     “Base Salary” shall have the meaning attributed thereto in Article 4;

 

1.1.4                     “Basic Payments” shall mean an amount equal to the aggregate of:

 

(a)                                  earned but unpaid Base Salary;

 

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(b)                                  unpaid business expense reimbursement;

 

(c)                                  amounts with respect to accrued but unused vacation days;

 

1.1.5                     “Business” shall mean all business and operations relating to the preparation and conversion of various carbon-rich feedstock, such as biomass, municipal solid waste and other waste material into synthetic gas, the conditioning and reforming of synthetic gas; and the use or conversion of synthetic gas for the production of steam, electricity, fuels and/or chemicals;

 

1.1.6                     “Cause” shall mean the occurrence of any one of the following acts or events by or relating to the Executive:

 

(a)                                  habitual inability to carry out functions of employment due to alcohol or drug related causes;

 

(b)                                  any material breach of this Agreement by the Executive not cured within ten (10) days after written notice thereof (provided however that no notice shall be given in the event of a breach by the Executive of any of the restrictive covenants which are set forth in Articles 9, 10, 11, 12, 13, 14 and 15);

 

(c)                                  theft or fraud of or from the Corporation or any other act of dishonesty;

 

(d)                                  failure by the Executive to act honestly and in the best interest of the Corporation;

 

(e)                                  any failure by the Executive to follow the reasonable and lawful directions of the CEO or any failure to act in the best interest of the Corporation;

 

(f)                                    any behaviour of the Executive or any conviction of a crime (other than traffic violations and minor misdemeanours), causing harm or damage to the Corporation’s public image or relations with authorities;

 

(g)                                 any actions or omissions on the part of the Executive constituting gross misconduct or negligence resulting in material harm to the Corporation;

 

(h)                                 the Executive or any member of the Executive’s family making personal profit out of or in connection with a transaction or a business opportunity in which the Corporation is involved or to which it is associated, without making disclosure to and seeking the prior written consent of the CEO; or

 

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(i)                                    any act or omission of the Executive which, pursuant to applicable law, constitutes just and sufficient cause or serious reason for termination of employment without notice, payment in lieu of notice or any indemnity whatsoever;

 

1.1.7                     “CEO” shall mean the President of the Corporation;

 

1.1.8                     “Change of Control” shall mean the occurrence of either (i) the acquisition by a Person or Persons whether or not they are acting in concert, directly or indirectly, by way of take-over bid, amalgamation, merger or other similar procedure, of issued shares of the Corporation (or the Corporation’s parent company, Enerkem Inc.) representing more than fifty percent (50%) of the votes attaching to all previously outstanding voting shares of the Corporation (or the Corporation’s parent company, Enerkem Inc.); or (ii) the acquisition by a Person or Persons whether or not they are acting in concert, directly or indirectly, of all or substantially all of the assets of the Corporation (or the Corporation’s parent company, Enerkem Inc.). If required for compliance with Section 409A, in no event will a Change of Control be deemed to have occurred if such acquisition or transaction is not also a “change in the ownership or effective control of” the Corporation (or the Corporation’s parent company, Enerkem Inc.) or “a change in the ownership of a substantial portion of the assets of” the Corporation (or the Corporation’s parent company, Enerkem Inc.) as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder);

 

1.1.9                     “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended;

 

1.1.10              “Confidential Information” shall mean, all knowledge, data, information or materials in whatever form (oral, written, machine-readable or otherwise) pertaining to, relating to or otherwise concerning the Corporation, its Affiliates including, without limiting the generality of the preceding, its business (including the Business), activities, customers (including the Customers), prospective customers, suppliers, distributors, employees, consultants, stockholders, officers or directors that is acquired or disclosed to the Executive by the Corporation, its Affiliates, or their officers, directors, stockholders, employees, consultants, agents, customers (including the Customers), prospective customers, suppliers or distributors; provided however, that the phrase “Confidential Information” shall not include information that:

 

(a)                                  is in the public domain or is generally known in the industry in which the Corporation operates, without any fault or responsibility of the Executive; or

 

(b)                                  is approved by the CEO for disclosure by the Executive prior to its actual disclosure;

 

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1.1.11              “Consulting Services Agreement” shall have the meaning set forth in Section 5.2.

 

1.1.12              “Corporation” shall have the meaning set forth in the preamble;

 

1.1.13              “Customer” shall mean any and all Persons having purchased the Corporation’s (or the Corporation’s Affiliates) goods or services in connection with the Business at any time during the two (2) years preceding the termination of the Executive’s employment or with whom the Corporation (or a Corporation’s Affiliate) is in negotiation at the time the Executive’s employment is terminated with a view to selling or providing goods or services, in connection with the Business, to such Person;

 

1.1.14              “Effective Date” shall have the meaning set forth in the preamble;

 

1.1.15              “Executive” shall have the meaning set forth in the preamble;

 

1.1.16              “Good Reason” shall mean the occurrence of any one of the following acts or events without the prior written consent of the Executive:

 

(a)                                  a material reduction in the Executive’s duties (including responsibilities and/or authorities), provided that such reduction does not directly result from the Executive’s substandard performance of his duties; or

 

(b)                                  the material breach by the Corporation of this Agreement;

 

provided, however, that in any case, the Executive must (A) provide the Corporation with written notice of the occurrence of such act or event within thirty (30) days after such act or event first occurs, (B) allow the Corporation thirty (30) days to cure such act or event, and (C) if the Corporation does not cure such act or event within such period, the Executive’s resignation is effective not later than sixty (60) days after the conclusion of such cure period.

 

1.1.17              “Incapacity” shall mean any medical condition whatsoever (including physical or mental illness) which leads to the Executive’s absence from his job functions for a continuous period of six (6) months without the Executive being able to resume functions at the expiration of such period and unsuccessful attempts to return to work for periods of less than fifteen (15) days shall not interrupt the calculation of such six (6) month period. If required for compliance with Section 409A, in no event will the Executive’s Incapacity be deemed to have occurred unless the Executive is considered “disabled”, as determined under Section 409A(a)(2)(c)(i) of the Code and Treasury Regulations Section 1.409A-3(i)(4);

 

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1.1.18              “Intellectual Property Rights” shall mean all registered and unregistered intellectual property rights including, without limiting the generality of the foregoing, all intellectual property rights attached to:

 

(a)                                  all inventions, patentable or not patentable, patents, trademarks, trade names, works, copyrights, industrial designs, trade secrets, integrated circuits topographies and any similar or equivalent rights to any of the foregoing anywhere in the world; and

 

(b)                                  all domestic and foreign registrations, applications and renewals thereof for registration of the foregoing;

 

1.1.19              “Involuntary Termination” shall have the meaning attributed thereto in Section 19.2;

 

1.1.20              “Option” shall have the meaning attributed thereto in Section 6.1;

 

1.1.21              “Parties” shall mean, collectively, the Corporation and the Executive;

 

1.1.22              “Person” shall mean an individual, corporation, company, cooperative, partnership, trust, unincorporated association, entity with juridical personality or governmental authority or body; and pronouns which refer to a Person shall have a similarly extended meaning;

 

1.1.23              “Plan” shall have the meaning attributed thereto in Section 6.1;

 

1.1.24              “Section 409A” shall mean Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect;

 

1.1.25              “Severance Benefit” shall have the meaning attributed thereto in Section 19.2;

 

1.1.26              “Suppliers” means any Person who provides or has provided, to Enerkem or any of its Affiliates, in the last two (2) year period prior to the termination of this Agreement, goods, including feedstock and equipment, or services, including services in the field of engineering;

 

1.1.27              “Territory” means Canada, the United States of America and any country into which the Executive develops business relations in the course of his employment by the Corporation;

 

1.1.28              “Works” shall mean all discoveries, inventions, improvements, innovations, processes, integrated circuits topographies, codes, software, know-how, recipes, technology, formulas, drawings, specifications for products, materials and equipment, data, works of authorship, process development and ideas including all related documentation on whatever support it is, of which the Executive is solely or jointly, in whole or in part, an inventor, discoverer, author, conceiver or originator and which (i)

 

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is directly or indirectly related to the Business or to the Corporation’s or any of its Affiliates’ demonstrably anticipated processes, research or development which the Executive had access to or knowledge of or (ii) results from the use of equipment, supplies, facilities, Confidential Information or Intellectual Property Rights of the Corporation or any of its Affiliates.

 

1.2                               Preamble. The preamble hereof shall form an integral part of this Agreement.

 

1.3                               Currency. Unless otherwise specified, an amount in currency is in U.S. dollars.

 

1.4                               Time and Day. Unless otherwise specified, a reference to time is to the time in Montréal, Province of Québec, Canada;

 

1.5                               Statutory Reference. Unless the context otherwise requires, a legislative or regulatory reference refers to it as it may be amended, re-enacted or replaced or, if repealed and not replaced, to it as it is in effect immediately before it is repealed.

 

1.6                               Extended Meaning. Unless the context otherwise requires, words importing gender include both genders and vice versa and words importing the singular include the plural and vice versa.

 

1.7                               Entire Agreement. This Agreement, including all documents attached hereto or specifically referred to, constitutes the entire agreement between the Parties relating to its subject matter and supersedes all prior agreements, quotes, discussions, negotiations and representations, whether oral or written, related to its subject matter.

 

1.8                               Headings and Reference. The division of this Agreement into articles, sections, paragraphs and other subdivisions and the insertion of headings are for convenience of reference only and will not affect the interpretation of this Agreement. “Article”, “Section”, “Subsection” or “Exhibit” refers to the specified article, paragraph, subparagraph, other subdivision or schedule of or to this Agreement.

 

2.                                      DUTIES

 

2.1                               Position. The Executive shall hold the full-time position of Senior Vice-President Business Development — North America.

 

2.2                               Direct Report. The Executive shall report to the CEO. The Corporation reserves the rights to modify the reporting relationship from time to time.

 

2.3                               Duties and Responsibilities. The Executive’s duties and responsibilities shall include, in addition to those inherent to the Executive’s title and normally pertaining to such title, those compatible with the Executive’s position and which the CEO may delegate to him from time to time.

 

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2.4                               Rules and Policies. The Executive shall comply in all material respects with all applicable rules and policies of the Corporation made known to him, from time to time.

 

3.                                      TERM

 

The Executive’s employment shall commence on March 8, 2012. This Agreement is hereby concluded for an indeterminate term. The Executive is employed as an employee at will.

 

4.                                      SALARY

 

The Executive shall receive an annual base salary of TWO HUNDRED AND SIXTY-FIVE THOUSAND DOLLARS ($265,000), less applicable legal deductions, to be paid in accordance with the Corporation’s standard payroll practices in force from time to time (hereinafter, the “Base Salary”). The Base Salary shall be subject to review and adjustment from time to time by the Corporation, at the Corporation’s sole discretion.

 

5.                                      BONUS

 

5.1                               Annual Bonus. The Executive shall be eligible to receive an annual bonus representing up to thirty-five percent (35%) of his Base Salary, the whole subject to attainment of certain milestones mutually agreed upon annually by the Executive and the CEO. To be eligible to any bonus hereunder, the Executive must actively be employed on the date the bonus is paid.

 

5.2                               First Year Bonus. Notwithstanding Section 5.1, the bonus for the Executive’s first year of employment shall be calculated starting on the effective date (as defined thereunder) of the consulting services agreement entered into between the Executive and the Corporation, (the “Consulting Services Agreement”) (such Consulting Services Agreement is now terminated).

 

5.3                               Payment. The earned bonus shall be paid within sixty (60) days following the approval, by the Board of Directors of the Corporation, of the Corporation’s audited annual financial statements but in any event no later than six (6) months following the Corporation’s fiscal year end. For greater certainty, no interest shall be payable by the Corporation on the amount of the bonus.

 

6.                                      LONG TERM INCENTIVE PLAN

 

6.1                               Stock Options. Provided that Enerkem Inc. makes an initial public offering of its shares and that the Executive is still a full-time employee of the Corporation at the date of the grant as provided below, the Corporation’s parent company, Enerkem Inc., will grant the Executive:

 

(i)                                    an initial stock option to purchase 10,818 common shares of Enerkem Inc. on the date on which Enerkem Inc. makes an initial public offering of its shares, which option will vest as follows: twenty-five percent (25%) of such option will vest on the first (1st) anniversary of the Effective Date of

 

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this Agreement and the remaining will vest in equal monthly amounts (2.083%) over the following three (3) years; and

 

(ii)                                a second stock option to purchase 8,667 common shares of Enerkem Inc. on a date that is no later than six (6) months after the date on which Enerkem Inc. makes an initial public offering of its shares (or if the six-month period ends during a blackout period, as defined in Enerkem Inc.’s Insider Trading Policy, no later than the day immediately following the end of such blackout period), which option will vest as follows: twenty-five percent (25%) of such option will vest on the first (1st) anniversary of the date of the grant and the remaining will vest in equal monthly amounts (2.083%) over the following three (3) years.

 

The foregoing grants shall be granted pursuant to Enerkem Inc.’s then-effective equity incentive plan (the “Plan”) and will have an exercise price equal to one hundred percent (100%) of the fair market value of the underlying shares on the date of grant (as determined under the Plan, this Agreement and consistent with Section 409A) (each option being individually referred to as the “Option” and collectively as the “Options”). Each Option shall expire no later than on the seventh (7th) anniversary of the date of the grant, unless earlier terminated in accordance with the Plan and the applicable option agreement to be entered into between the Executive and Enerkem Inc.

 

6.2                               Vesting in the Event of a Change of Control. In the event of a Change of Control, and subject to Executive’s employment through such time, fifty percent (50%) of the Option that would remain unvested as of the date of such Change of Control will vest immediately prior to the closing of such Change of Control. In addition, if the Option is assumed, continued or substituted by a successor or acquiring entity in the Change of Control, and if the Executive’s employment is terminated by the Corporation (or any successor thereto) without Cause or if the Executive resigns for Good Reason, in either case on or within one hundred and eighty (180) days following the date of such Change of Control, the unvested portion of the Option shall vest immediately upon such resignation for Good Reason or termination without Cause and the outstanding vested Option may be exercised by the Executive for a period of up to ninety (90) days following the date of such termination without Cause or resignation for Good Reason (failing which such Option shall expire and be null and void), provided that in no event shall the Option remain outstanding for a period longer than the original term of the Option.

 

7.                                      BENEFITS AND VACATION

 

7.1                               Business Expenses. All reasonable business expenses incurred by the Executive during his employment in connection with the performance of his duties shall be reimbursed by the Corporation, upon submission of invoices or other supporting documentation, in accordance with the Corporation’s policies. If any reimbursements are subject to Section 409A: (a) any such reimbursements will be

 

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paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement will not be subject to liquidation or exchange for another benefit.

 

7.2                               Vacation. The Executive shall be eligible to accrue up to four (4) weeks of paid vacation per fiscal year of the Corporation (commencing on April 1st, 2012), to be taken at such times and intervals mutually agreed upon between the Executive and the CEO and in accordance with the Corporation’s policies.

 

7.3                               No Carry-Forward. Unless otherwise required by applicable wage and hour law, the Executive shall not be entitled to carry forward any vacation days in the years subsequent to the year during which the Executive accrued such vacation.

 

7.4                               Insurance Coverage. The Employee shall be entitled to participate in the Corporation’s benefit programs and plans which are presently granted (see Appendix 1 hereto) or which, at any time during his employment, may be granted to employees of the Corporation, the whole in accordance with the terms and conditions set forth in the programs or plans that the Corporation may institute from time to time. The Corporation benefit programs premium will be paid by the Corporation.

 

7.5                               No Other Benefits. The Executive shall not be entitled to any other benefits or rights except as specifically set forth herein or as required by applicable law.

 

8.                                      LOYALTY

 

8.1                               Loyalty. The Executive shall act with diligence, loyalty and honesty and shall make all necessary efforts to promote the Corporation’s legitimate interests.

 

8.2                               No Other Employment. The Executive agrees to devote his full business time, his skills and best efforts to the Business and affairs of the Corporation. For greater certainty but without limiting the generality of the foregoing, it is understood that the Executive shall not be employed with respect or in relation to, any Person other than the Corporation. The Executive represents that he is not a party to any non- competition or other agreement with any former employer that would bar or restrict his ability to perform his duties to the Corporation, as described herein. The Executive further represents that he has not disclosed (and will not disclose) to the Corporation or use on behalf of the Corporation any trade secrets or confidential information of any former employer.

 

8.3                               Boards of Directors. Without limiting the generality of the foregoing, the Executive may serve on other boards of directors, subject to the prior approval of the CEO of the Corporation. For greater certainty, nothing in this Section 8.3 shall limit or restrict in any way the obligations of the Executive under Articles 9, 10, 11, 12, 14 and 15 hereof.

 

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9.                                      CONFIDENTIALITY

 

9.1                               Confidentiality. The Executive shall not, whether directly or indirectly, use, divulge, diffuse, sell, transfer, reproduce, give, circulate or otherwise distribute to any Person or otherwise make public any Confidential Information.

 

9.2                               Confidential Information. Any document, material or Work composed, assembled or produced, directly or indirectly by the Executive or the Corporation and containing Confidential Information (including, without limitation, all notes, extracts, text or references from which any Confidential Information can be implicitly or otherwise revealed or understood) shall be deemed to be Confidential Information within the meaning of this Agreement and shall be subject to the terms and conditions of this Article 9.

 

9.3                               Return of Confidential Information. Confidential Information and all embodiments thereof (including any reproduction) shall remain the sole property of the Corporation and shall be returned to the Corporation immediately upon request to this effect or immediately after the termination of the Executive’s employment.

 

9.4                               Permitted Use of Confidential Information. Notwithstanding Section 9.1 above, the Executive shall have the right to use Confidential Information as required in the performance of his duties, provided that he shall at all times take necessary, useful and desirable measures to prevent the unauthorized use or disclosure of Confidential Information.

 

9.5                               Disclosure Required by Governmental Body or Law. Anything to the contrary herein notwithstanding, disclosure of Confidential Information shall not be precluded if such disclosure is in response to a valid order of a governmental body or is otherwise required by law; provided however that the Executive shall, if reasonably possible, first have given prompt notice thereof to the Corporation and shall have, as reasonably possible, fully cooperated in the Corporation’s attempt, if any, to obtain a “protective order” from the appropriate governmental body.

 

10.                               WORKS

 

10.1                        Property. In consideration of the compensation that the Executive receives from the Corporation, all Works (including all data and records pertaining thereto) that the Executive may, directly or indirectly, invent, discover, author, originate or conceive during his employment and the period under Section 19.2 as applicable and all Intellectual Property Rights relating thereto shall be the sole and exclusive property of the Corporation.

 

10.2                        Obligations. With respect to Works made or conceived by the Executive, whether directly or indirectly, during his employment and the period under Section 19.2 as applicable, the Executive shall perform the following:

 

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10.2.1              promptly disclose and describe in detail such Works in writing to the Corporation with the intention that the Corporation shall have full knowledge and ownership of such Works and practical applications of such Works;

 

10.2.2              assign (and the Executive does hereby assign) to the Corporation or such Person designated by the Corporation, without further compensation (but at the Corporation’s expense), upon request and in the manner prescribed by the Corporation, all right, title and interest in and to said Works and to Intellectual Property Rights related to said Works throughout the world and waive (and the Executive does hereby waive) any and all other rights that are non assignable relating thereto, including but not limited to moral rights in all copyrightable Works or any non-economic rights relating thereto;

 

10.2.3              deliver promptly to the Corporation, upon request and in the form and manner prescribed by the Corporation (without compensation to the Executive but at the Corporation’s expense), all written instruments and documentation relating to said Works and Intellectual Property Rights and do such acts as deemed necessary by the Corporation to obtain, maintain and transfer all rights and title thereto to the Corporation; and

 

10.2.4              give reasonable assistance that may be required by the Corporation or the Person designated by the Corporation pursuant to Subsection 10.2.2 to enable it to protect or exploit the Works and Intellectual Property Rights in any country of the world.

 

11.                               OBLIGATION OF NON-COMPETITION

 

The Executive shall not, during his employment and for a period of eighteen (18) months (twelve (12) months under the circumstances described in Section 19.2.1 and fifteen (15) months under the circumstances described in Section 19.2.2) following the termination of his employment in all or part of the Territory, on his own behalf or on behalf of any Person, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any Person, carry on or be employed by, enter into any discussions regarding employment with, be engaged in, or have any financial interest in any business developing, using, licensing, commercializing or providing products or services, which is covered by the definition of “Business” as contained herein or which competes with the Business. The term “compete” as used herein means to engage, directly or indirectly, either as a proprietor, partner, employee, agent, consultant, director, officer, stockholder or in any other capacity or manner whatsoever.

 

12.                               OBLIGATIONS OF NON-SOLICITATION OF CUSTOMERS AND NON- INTERFERENCE

 

12.1                        Non-Solicitation of Customers.

 

12.1.1              The Executive shall not, during his employment and for a period of eighteen (18) months (twelve (12) months under the circumstances

 

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described in Section 19.2.1 and fifteen (15) months under the circumstances described in Section 19.2.2) following the termination of his employment, on his own behalf or on behalf of any Person, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any Person, for any purpose which is in competition, in whole or in part, with the Business, solicit any Customer or procure or assist in the soliciting of any Customer.

 

12.1.2              The Executive shall not, during his employment and for a period of eighteen (18) months (twelve (12) months under the circumstances described in Section 19.2.1 and fifteen (15) months under the circumstances described in Section 19.2.2) following the termination of his employment, on his own behalf or in behalf of any Person, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any Person, for any purpose which is in competition, in whole or in part, with the Business, accept or procure or assist in the acceptance of any business from any Customer or supply or procure or assist the supply of any goods or services to any Customer, in all or part of the Territory.

 

12.2                        Non-Interference.

 

12.2.1              The Executive shall not, during his employment and for a period of eighteen (18) months (twelve (12) months under the circumstances described in Section 19.2.1 and fifteen (15) months under the circumstances described in Section 19.2.2) following the termination of his employment, on his own behalf or on behalf of any Person, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any Person, interfere or attempt to interfere with the Business or persuade or attempt to persuade any Customer to discontinue or adversely alter such Person’s relationship with the Corporation.

 

12.2.2              The Executive shall not, during his employment and for a period of eighteen (18) months (twelve (12) months under the circumstances described in Section 19.2.1 and fifteen (15) months under the circumstances described in Section 19.2.2) following the termination of his employment, on his own behalf or on behalf of any Person, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any Person, take advantage of or derive a benefit from any business opportunities relating to the Business that the Executive became aware of during his employment with the Corporation, even if the Corporation did not take advantage or exploit such opportunities.

 

13.                               OBLIGATIONS OF NON-SOLICITATION OF SUPPLIERS

 

For the duration of this Agreement, and in case of the termination of this Agreement for any reason whatsoever, for a period of eighteen (18) months (twelve (12) months under the

 

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circumstances described in Section 19.2.1 and fifteen(15) months under the circumstances described in Section 19.2.2) following the termination of his employment, the Employee shall not, on his own behalf or in behalf of any Person, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any Person, solicit any Supplier or procure or assist in the soliciting of any Supplier, for any purpose which competes with the Business.

 

14.                               OBLIGATION OF NON-SOLICITATION OF EMPLOYEES AND CONSULTANTS

 

The Executive shall not, during his employment and for a period of eighteen (18) months (twelve (12) months under the circumstances described in Section 19.2.1 and fifteen (15) months under the circumstances described in Section 19.2.2) following the termination of his employment, on his own behalf or on behalf of any Person, whether directly or indirectly, in any capacity whatsoever, alone, through or in connection with any Person, solicit the employment or service of or otherwise entice away from the employment or service of the Corporation, any individual who is employed by the Corporation or any Person whose consulting services are retained by the Corporation in the eighteen (18) month period preceding the termination of the Executive’s employment, whether or not such individual or Person would commit any breach of his or her contract of employment or services agreement by reason of leaving the service of the Corporation.

 

15.                               NON-DISPARAGEMENT

 

The Executive shall not, during his employment and for a period of thirty-six (36) months following the termination of his employment, engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks (including, without limitation, the repetition or distribution of derogatory rumors, allegations, negative reports or comments) which are disparaging, deleterious or damaging to the integrity or reputation of the Corporation, its Affiliates and their respective officers, directors, stockholders, employees, consultants, agents, customers (including the Customers), prospective customers, suppliers or distributors.

 

16.                               ENFORCEMENT

 

16.1                        Violations. The Executive acknowledges that the restrictions contained in Articles 9, 11, 12, 13, 14, and 15 of this Agreement, in view of the nature of the Business in which the Corporation is engaged and the Executive’s knowledge and expertise in relation thereto, are reasonable and necessary in order to protect the legitimate interests of the Corporation and that any violation thereof would result in irreparable injuries to the Corporation and that damages alone would be an inadequate remedy for any violation of the aforementioned restrictions. The Executive further acknowledges that in the event of a violation of any of these restrictions, the Corporation shall be entitled to obtain from any Court of competent jurisdiction temporary, interlocutory and permanent injunctive relief, which rights shall be cumulative and in addition to any other rights or remedies to which the Corporation may be entitled. Without limiting the generality of the foregoing, the Executive expressly agrees that the character, duration and geographical scope of the non-competition provisions set forth in Article 11 are

 

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reasonable in light of the circumstances as they exist on the date hereof and that any violation thereof would result in irreparable injuries to the Corporation and that damages alone would be an inadequate remedy for any violation of such provisions.

 

16.2                        Damages. In case of breach by the Executive of Articles 9, 11, 12, 13, 14 or 15, the Executive shall, upon demand, pay to the Corporation, as damages, the sum of ONE THOUSAND AND FIVE HUNDRED ($1,500) for each day during which said breach continues. The Corporation shall be entitled, instead of requiring the payment provided in this Section 16.2 as a result of said breach, to obtain injunctive or other relief to prevent the continuation of such violation in the future.

 

16.3                        Survival. It is expressly agreed by the Parties hereto that the provisions of Articles 9, 10, 11, 12, 13, 14, 15, and 16 shall survive the termination of the Executive’s employment.

 

17.                               PROPERTY OF THE CORPORATION

 

The Executive acknowledges that any document, equipment or any other property of the Corporation or its Affiliates including, without limitation, any file, Work, document, sample, model, plan, mark-up, film or estimate, directly or indirectly related to the Business, which may be removed from the premises or taken from computers of the Corporation or any of its Affiliates, shall remain the exclusive property of the Corporation or its Affiliates and shall be returned immediately upon request or after the termination of this Agreement.

 

18.                               TERMINATION OF EMPLOYMENT

 

18.1                        Termination Events. The Executive’s employment may be terminated in any of the following eventualities:

 

18.1.1              at any time, for Cause, on simple written notice from the Corporation to the Executive, without any other notice or any pay in lieu of notice, severance pay or any indemnity whatsoever, except as may otherwise be required by applicable law;

 

18.1.2              at any time, upon the death or the Incapacity of the Executive, on simple written notice from the Corporation to the Executive in the case of Incapacity, without any notice, any pay in lieu of notice, severance pay or any indemnity whatsoever, except as may otherwise be required by applicable law;

 

18.1.3              at any time, by the Executive, on thirty (30) days written notice from the Executive to the Corporation, specifying the intention of the Executive to resign, without any severance pay or any indemnity whatsoever, except as may otherwise be required by applicable law or, in the case of resignation for Good Reason, as provided in Article 19 below; or

 

14

 

18.1.4              at any time, by the Corporation, without Cause, on simple written notice from the Corporation to the Executive, without any other notice or any pay in lieu of notice, Severance Benefit or other severance pay or any indemnity whatsoever, except as may otherwise be required by applicable law or as provided in Article 19 below.

 

18.2                        Resignations. Upon or following the termination of the Executive’s employment for any reason, the Executive agrees to deliver appropriate resignations from all offices and directorship positions with the Corporation and any of its Affiliates, if, as and when requested by the Corporation.

 

19.                               PAYMENTS UPON TERMINATION OF EMPLOYMENT

 

19.1                        Basic Payments. Should the Executive’s employment be terminated at any time a) by the Corporation for Cause, b) upon the death or the Incapacity of the Executive or c) upon the Executive’s resignation, the Corporation shall pay to the Executive (or his estate), within ten (10) days following the termination of his employment, in one lump sum (less statutory deductions at source), the Basic Payments. The Executive shall not be entitled to receive any pay in lieu of notice, severance pay or any indemnity whatsoever other than the Basic Payments.

 

19.2                        Payments in Case of Involuntary Termination. If the Executive’s employment is terminated at any time (a) by the Corporation without Cause or (b) upon the Executive’s resignation for Good Reason within one hundred and eighty (180) days following the date of a Change of Control (each, an “Involuntary Termination”), the Corporation shall pay to the Executive the following payment depending on the date of the Involuntary Termination, in each case less statutory deductions at source (the “Severance Benefit”):

 

19.2.1              three (3) months of Base Salary, if the date of Involuntary Termination is between three (3) months and six (6) months following the effective date (as defined thereunder) of the Consulting Services Agreement;

 

19.2.2              six (6) months of Base Salary, if the date of Involuntary Termination is between six (6) months and fifteen (15) months following the effective date (as defined thereunder) of the Consulting Services Agreement;

 

19.2.3              twelve (12) months of Base Salary, if the date of Involuntary Termination is between fifteen (15) months and twenty-four (24) months following the effective date (as defined thereunder) of the Consulting Services Agreement; or

 

19.2.4              twelve (12) months of Base Salary plus one (1) month of Base Salary per year of service completed beyond twenty-four (24) months, up to an aggregate maximum of eighteen (18) months of Base Salary, if the date of Involuntary Termination is after twenty-four (24) months following the effective date (as defined thereunder) of the Consulting Services Agreement.

 

15

 

19.3                        Irrevocable General Release of Claims. The Severance Benefit is conditioned upon (i) the Executive delivering to the Corporation an effective, irrevocable general release of claims in favour of the Corporation in a form acceptable to the Corporation within sixty (60) days following the Executive’s Involuntary Termination, and (ii) the Executive’s continuing to comply with the Executive’s obligations under Articles 9, 10, 11, 12, 14 and 15 of this Agreement. The Corporation will pay to the Executive the Severance Benefit payable pursuant to Section 19.2 within ten (10) days following receipt of such effective, irrevocable general release of claims. Notwithstanding any other provision of this Agreement to the contrary, in the event that the Severance Benefit is subject to Section 409A, provided that the Executive has delivered such effective, irrevocable general release of claims within such sixty (60) day period, the Corporation will pay to the Executive such Severance Benefit on the sixtieth (60th) day following such Involuntary Termination.

 

19.4                        No Other Payments. The Executive recognizes and accepts that the Corporation shall not, in any case, be responsible for any additional amount, indemnity in lieu of notice, severance pay or other damages arising from the termination of his employment, except for those specifically provided for herein.

 

19.5                        Additional Release. In addition to the irrevocable general release of claims required as per the terms of Section 19.3, the Executive shall give to the Corporation a full and satisfactory release upon receipt of the amounts described in this Article 19.

 

20.                               MISCELLANEOUS

 

20.1                        Compliance with Section 409A. It is intended that all of the Severance Benefit and other payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), the Executive’s right to receive any installment payments under this Agreement will be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder will at all times be considered a separate and distinct payment. If the Corporation determines that the Severance Benefit provided under this Agreement or any other payments owed to the Executive because of his Separation from Service (as defined below) constitute “deferred compensation” under Section 409A and if the Executive is a “specified employee” of the Corporation, as such term is defined in Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit and other payments will be delayed as follows: on the earlier to occur of (a) the date that is

 

16

 

six (6) months and one (1) day after the Executive’s Separation from Service, and (b) the date of the Executive’s death, the Corporation will pay to the Executive a lump sum amount equal to the amount of the Severance Benefit and other payments that would have been made on or prior to such date but for this delay required for compliance with Section 409A, with the balance paid thereafter as originally scheduled. For greater certainty, no interest shall be payable by the Corporation on the amount of the Severance Benefit or other payments so deferred. To the extent that any amount under this Agreement is subject to Section 409A, all references to “termination of employment”, “Involuntary Termination” or similar references shall be deemed to be “Separation from Service” within the meaning of Section 409A and the Treasury Regulations thereunder.

 

20.2                        Indemnity. The Corporation shall provide an indemnity to the Executive, in his capacity as an officer of the Corporation, in substantially the same form as provided to other officers of the Corporation from time to time.

 

20.3                        No Contradiction. The restrictive covenants set forth in this Agreement shall not be deemed to be in contradiction with the restrictive covenants set forth in any stockholder agreement in respect of the Corporation to which the Executive may become a party from time to time. Such covenants shall be in addition one to the other.

 

20.4                        Amendments. No amendment shall be binding unless expressly provided in an instrument duly executed by the Parties.

 

20.5                        Severability. Any Section, Subsection or other subdivision of this Agreement or any other provision of this Agreement which is, or becomes, illegal, invalid or unenforceable shall be severed herefrom and shall be ineffective to the extent of such illegality, invalidity or unenforceability and shall not affect or impair the remaining provisions hereof, which provisions shall otherwise remain in full force and effect.

 

20.6                        Waiver. No waiver, whether by conduct or otherwise, of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provisions (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in an instrument duly executed by the Parties to be bound thereby.

 

20.7                        Assignment. This Agreement and the Executive’s rights and obligations hereunder may not be assigned by the Executive. The Corporation may assign its rights together with its obligations hereunder in connection with any sale, transfer or other disposition of all or substantially all of its business and assets; and such rights and obligations shall inure to and be binding upon any successor to all or substantially all of the business and assets of the Corporation, whether by merger, purchase of stocks or assets, reorganization or otherwise.

 

17

 

20.8                        Governing Law. This Agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware.

 

20.9                        Jurisdiction. Any legal action or proceeding with respect to this Agreement shall be brought exclusively in the courts of the State of Delaware and, by execution and delivery of this Agreement, the Executive and the Corporation irrevocably consent to the jurisdiction of those courts.

 

20.10                 Independent Legal Advice. The Executive acknowledges that he has been afforded an opportunity to obtain independent legal advice with respect to this Agreement and that he understands the nature and the consequences of this Agreement.

 

20.11                 Language. The Parties acknowledge that they have requested and are satisfied that this Agreement be drawn up in the English language. Les parties aux présentes reconnaissent avoir requis que la présente entente soit rédigée en anglais.

 

IN WITNESS WHEREOF, this Agreement has been executed by the Parties on the date and at the place first above-mentioned.

 

 

	
 
    	
 
    	
ENERKEM   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Timothy J. Cesarek
    	
 
    	
Signature:   
    	
/s/   Vincent Chornet
    
	
TIMOTHY J. CESAREK
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   
    	
Vincent   Chornet
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:   
    	
C.E.O.
    
						

 

18

 

APPENDIX 1
 INSURANCE COVERAGE

 

See attached document.

 

19

 

20

 

21

 

22

 

23

 

24

 

25

 

26

 

 

27

 

28

 

29

 

30

 

31

 

 

32

 

33

 

34

 

35

 

36

 

 

37

 

38

 

39

 

40

 

41

 

42Exhibit 10.39

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

	
ASSISTANCE AGREEMENT

 
    
	
1.  Award No.

DE-EE0002882

 
    	
2.   Modification No.

008
    	
3.   Effective Date

12/28/2009
    	
4.  CFDA No.

81.087
    
	
5.   Awarded To

ENERKEM   MISSISSIPPI BIOFUELS LLC

Attn:   DIRK ANDREAS

1010   SHERBROOKE ST. WEST SUITE 1610

MONTREAL   QC H3A 2R7

 
    	
6.   Sponsoring Office

Energy   Effcy & Renewable Energy
    	
7.   Period of Performance

12/28/2009   through

05/31/2012
    
	
8.   Type of Agreement

o   Grant

x  Cooperative Agreement

o   Other

 
    	
9.   Authority

109-58,   Energy Policy Act 

111-5,   Recovery Act

 
    	
 

(2009)

(2005)
    	
10.   Purchase Request or Funding Document No.

12EE001815
    
	
11.   Remittance Address

ENERKEM   MISSISSIPPI BIOFUELS LLC Attn: DIRK ANDREAS

1010   SHERBROOKE ST. WEST

SUITE   1610

MONTREAL   QC H3A 2R7

 
    	
12. Total Amount

Govt. Share 

Cost Share

Total
    	
 

:

:

:
    	
 

     $50,000,000.00

     $[ * ]

     $[ * ]
    	
13.   Funds Obligated

This   action  :         $0.00

Total            :$50,000,000.00
    
	
14.   Principal Investigator

Danny   Vaughn

Phone:   662-297-7415
    	
15.   Program Manager

Glenn   M. Doyle

Phone:   720-356-1521
    	
16.   Administrator

Golden   Field Office

U.S.   Department of Energy

Golden   Field Office 1617 Cole Blvd.

Golden   CO 80401-3393

 
    
	
17.   Submit Payment Requests To

OR   for Golden

U.S.   Department of Energy

Oak   Ridge Financial Service Center

P.O. Box   4517

Oak   Ridge TN 37831

 
    	
18.   Paying Office

OR   for Golden

U.S.   Department of Energy

Oak   Ridge Financial Service Center

P.O. Box   4517

Oak   Ridge TN 37831
    	
19.   Submit Reports To
    
	
20.   Accounting and Appropriation Data

See   Schedule

 
    
	
21.   Research Title and/or Description of Project

RECOVERY   ACT - HETEROGENEOUS FEED BIOREFINERY PROJECT

 
    
	
For the Recipient
    	
For the United States of America
    
	
 

22.   Signature of Person Authorized to Sign

 
    	
 

25.   Signature of Grants/Agreements Officer

 

Signature   on File

 
    
	
23.   Name and Title

 
    	
24.   Date Signed

 
    	
26.  Name of Officer

Melissa   Y. Wise

 
    	
27.  Date Signed

02/06/2012
    
													

 

 

	
CONTINUATION   SHEET
    	
 
    	
REFERENCE   NO. OF DOCUMENT BEING CONTINUED

DE-EE0002882/008
    	
 
    	
PAGE
    2
    	
 
    	
OF
    2
    

 

NAME OF OFFEROR OR CONTRACTOR

ENERKEM MISSISSIPPI BIOFUELS LLC

 

	
ITEM NO.
   (A)
    	
 
    	
SUPPLIES/SERVICES
   (B)
    	
 
    	
QUANTITY
   (C)
    	
 
    	
UNIT
   (D)
    	
 
    	
UNIT PRICE
   (E)
    	
 
    	
AMOUNT
   (F)
    
	
 
    	
 
    	
DUNS   Number: 830512609

The   purposes of this modification are to:

 

1)   Delete and replace the Special Terms and Conditions to incorporate the   following changes:

a.   Delete and Replace Provision 7, “Rebudgeting and Recovery of Indirect Costs”,   and

b.   Add Provision 35,”Reopener Term”; and 

 

2)   Assign Art Wiselogel as the Program Official to facilitate the review of   invoices.

 

All   other terms and conditions remain unchanged.

 

In   Block 7 of the Assistance Agreement, the Period of Performance reflects the   beginning of the Project Period through the end of the current Budget Period,   shown as 12/28/2009 through 05/31/2012. For multiple Budget Periods, see   Special Terms and Conditions, Provision 4, “Award Project Period and Budget   Periods.” 

 

DOE   Award Administrator: Brenda Dias

E-mail:   brenda.dias@go.doe.gov

Phone:   720-356-1519

 

DOE   Project Officer: Glenn Doyle

E-mail:   glenn.doyle@go.doe.gov

Phone:   720-356-1521

 

Recipient   Business Officer: Jocelyn Auger

E-mail:   jauger@enerkem.com

Phone:   514-875-0284 ext. 262

 

Recipient   Principal Investigator: Danny Vaughn 

E-mail:   dvaughn@enerkem.com

Phone:   662-297-7415 

 

“Electronic   signature or signatures as used in this document means a method of signing an   electronic message that— 

(A)    Identifies and authenticates a particular person as the source of the   electronic message; 

(B)    Indicates such person’s approval of the information contained in the   electronic message; and,

(C)    Submission via FedConnect constitutes electronically signed documents.” ASAP:   NO Extent Competed: COMPETED Davis-Bacon Act: YES
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
JULY   2004
    

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

 

Table of Contents

 

	
Number
    	
 
    	
Subject
    	
 
    	
Page
    
	
 
    	
1.
    	
 
    	
RESOLUTION   OF CONFLICTING CONDITIONS
    	
 
    	
1
    
	
 
    	
2.
    	
 
    	
AWARD   AGREEMENT TERMS AND CONDITIONS
    	
 
    	
1
    
	
 
    	
3.
    	
 
    	
AUTHORIZATION   OF AWARD DOCUMENTS
    	
 
    	
1
    
	
 
    	
4.
    	
 
    	
AWARD   PROJECT PERIOD AND BUDGET PERIODS
    	
 
    	
1
    
	
 
    	
5.
    	
 
    	
PAYMENT   PROCEDURES — REIMBURSEMENT THROUGH THE AUTOMATED CLEARING HOUSE (ACH) VENDOR   INQUIRY PAYMENT ELECTRONIC REPORTING SYSTEMS (VIPERS)
    	
 
    	
2
    
	
 
    	
6.
    	
 
    	
COST   SHARING FFRDC NOT INVOLVED
    	
 
    	
3
    
	
 
    	
7.
    	
 
    	
REBUDGETING   AND RECOVERY OF INDIRECT COSTS
    	
 
    	
3
    
	
 
    	
8.
    	
 
    	
FINAL   INCURRED COST AUDIT
    	
 
    	
4
    
	
 
    	
9.
    	
 
    	
STATEMENT   OF FEDERAL STEWARDSHIP
    	
 
    	
4
    
	
 
    	
10.
    	
 
    	
STATEMENT   OF SUBSTANTIAL INVOLVEMENT
    	
 
    	
4
    
	
 
    	
11.
    	
 
    	
SITE   VISITS
    	
 
    	
5
    
	
 
    	
12.
    	
 
    	
REPORTING   REQUIREMENTS
    	
 
    	
5
    
	
 
    	
13.
    	
 
    	
PUBLICATIONS
    	
 
    	
6
    
	
 
    	
14.
    	
 
    	
FEDERAL,   STATE, AND MUNICIPAL REQUIREMENTS
    	
 
    	
6
    
	
 
    	
15.
    	
 
    	
INTELLECTUAL   PROPERTY PROVISIONS AND CONTACT INFORMATION
    	
 
    	
6
    
	
 
    	
16.
    	
 
    	
CONTINUATION   APPLICATION AND FUNDING
    	
 
    	
7
    
	
 
    	
17.
    	
 
    	
LOBBYING   RESTRICTIONS
    	
 
    	
8
    
	
 
    	
18.
    	
 
    	
NOTICE   REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS — SENSE OF   CONGRESS
    	
 
    	
8
    
	
 
    	
19.
    	
 
    	
PROPERTY
    	
 
    	
8
    
	
 
    	
20.
    	
 
    	
DECONTAMINATION   AND/OR DECOMMISSIONING (D&D) COSTS
    	
 
    	
9
    
	
 
    	
21.
    	
 
    	
AT   RISK FOR FINANCIAL CAPABILITY
    	
 
    	
9
    
	
 
    	
22.
    	
 
    	
FUNDING   OF BUDGET PERIODS
    	
 
    	
9
    
	
 
    	
23.
    	
 
    	
INSOLVENCY,   BANKRUPTCY OR RECEIVERSHIP
    	
 
    	
10
    
	
 
    	
24.
    	
 
    	
NOTICE   REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS — SENSE OF   CONGRESS
    	
 
    	
10
    
	
 
    	
25.
    	
 
    	
NATIONAL   ENVIRONMENTAL POLICY ACT (NEPA) REQUIREMENTS
    	
 
    	
10
    
	
 
    	
26.
    	
 
    	
INDEMNITY
    	
 
    	
11
    
	
 
    	
27.
    	
 
    	
SPECIAL   PROVISIONS RELATING TO WORK FUNDED UNDER AMERICAN RECOVERY AND REINVESTMENT   ACT OF 2009 (MAY 2009)
    	
 
    	
11
    
	
 
    	
28.
    	
 
    	
REPORTING   AND REGISTRATION REQUIREMENTS UNDER SECTION 1512 OF THE RECOVERY ACT
    	
 
    	
15
    
	
 
    	
29.
    	
 
    	
REQUIRED   USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS — SECTION 1605 OF   THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
    	
 
    	
16
    
	
 
    	
30.
    	
 
    	
REQUIRED   USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS (COVERED UNDER   INTERNATIONAL AGREEMENTS) — SECTION 1605 OF THE AMERICAN RECOVERY AND   REINVESTMENT ACT OF 2009
    	
 
    	
18
    

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

i

 

Table of Contents

(continued)

 

	
Number
    	
 
    	
Subject
    	
 
    	
Page
    
	
 
    	
31.
    	
 
    	
RECOVERY   ACT TRANSACTIONS LISTED IN SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND   RECIPIENT RESPONSIBILITIES FOR INFORMING SUBRECIPIENTS
    	
 
    	
22
    
	
 
    	
32.
    	
 
    	
WAGE   RATE REQUIREMENTS UNDER SECTION 1606 OF THE RECOVERY ACT
    	
 
    	
23
    
	
 
    	
33.
    	
 
    	
DAVIS   BACON ACT AND CONTRACT WORK HOURS AND SAFETY STANDARDS ACT
    	
 
    	
23
    
	
 
    	
34.
    	
 
    	
CONTINGENCY
    	
 
    	
33
    
	
 
    	
35.
    	
 
    	
REOPENER   TERM
    	
 
    	
34
    

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

ii

 

1.              RESOLUTION OF CONFLICTING CONDITIONS

 

Any apparent inconsistency between Federal statutes and regulations and the terms and conditions contained in this award must be referred to the DOE Award Administrator for guidance.

 

2.              AWARD AGREEMENT TERMS AND CONDITIONS

 

This award/agreement consists of the Grant and Cooperative Agreement Cover Page, plus the following:

a.               Special Terms and Conditions.

b.              Attachments:

 

	
Attachment Number
    	
 
    	
Title
    
	
1.
    	
 
    	
Intellectual Property Provisions
    
	
2.
    	
 
    	
Statement of Project Objectives
    
	
3.
    	
 
    	
Federal Assistance Reporting Checklist and Instructions
    
	
4.
    	
 
    	
Budget Pages (SF 424A)
    
	
5.
    	
 
    	
Requirements for Contingency Funds for Integrated Biorefinery   Projects
    
	
6.
    	
 
    	
Executed Novation Agreement
    

 

c.               Applicable program regulations

d.              DOE Assistance Regulations, 10 CFR Part 600 at http://ecfr.gpoaccess.gov.

e.               If the award is for research and the award is for a university or non-profit, the Research Terms & Conditions and the DOE Agency Specific Requirements at http://www.nsf.gov/bfa/dias/policy/rtc/index.jsp apply.

f.                 Application/proposal as approved by DOE.

g.              National Policy Assurances to Be Incorporated as Award Terms in effect on date of award at http://management.energy.gov/business doe/1374.htm.

 

3.              ELECTRONIC AUTHORIZATION OF AWARD DOCUMENTS

 

Acknowledgement of award documents by the Recipient’s authorized representative through electronic systems used by the Department of Energy, specifically FedConnect, constitutes the Recipient’s acceptance of the terms and conditions of the award. Acknowledgement via FedConnect by the Recipient’s authorized representative constitutes the Recipient’s electronic signature.

 

4.              AWARD PROJECT PERIOD AND BUDGET PERIODS

 

The Project Period for this award is 12/28/2009 through 09/30/2013, consisting of the following Budget Periods:

 

	
Budget Period
    	
 
    	
Start Date
    	
 
    	
End Date
    
	
1
    	
 
    	
12/28/2009
    	
 
    	
05/31/2012
    
	
2
    	
 
    	
06/01/2012
    	
 
    	
09/30/2013
    

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THEOMITTED PORTIONS.

 

1

 

5.              PAYMENT PROCEDURES — REIMBURSEMENT THROUGH THE AUTOMATED CLEARING HOUSE (ACH) VENDOR INQUIRY PAYMENT ELECTRONIC REPORTING SYSTEMS (VIPERS)

 

a.               Method of Payment. Payment will be made by reimbursement through ACH.

 

b.              Requesting Reimbursement. Requests for reimbursements must be made electronically through Department of Energy’s Oak Ridge Financial Service Center (ORFSC) VIPERS. To access and use VIPERS, you must enroll at https://finweb.oro.doe.gov/vipers.htm. Detailed instructions on how to enroll are provided on the web site.

 

For non-construction awards, you must submit a Standard Form (SF) 270, “Request for Advance or Reimbursement,” at https://finweb.oro.doe.gov/vipers.htm and attach a file containing appropriate supporting documentation. The file attachment must show the total Federal share claimed on the SF 270, the non-Federal share claimed for the billing period if cost sharing is required, and cumulative expenditures to date (both Federal and non-Federal) for each of the following categories: salaries/wages and fringe benefits; equipment; travel; participant/training support costs, if any; other direct costs, including subawards/contracts; and indirect costs. For construction awards, you must submit a SF 271, “Outlay Report and Request for Reimbursement for Construction Programs,” through VIPERS.

 

c.               Timing of submittals. Submittal of the SF 270 or SF 271 should coincide with your normal billing pattern, but not more frequently than every two weeks. Requests for reimbursement must be limited to the amount of disbursements made during the billing period for the Federal share of direct project costs and the proportionate share of any allowable indirect costs incurred during that billing period.

 

d.              Adjusting payment requests for available cash. You must disburse any funds that are available from repayments to and interest earned on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries, credits, discounts, and interest earned on any of those funds before requesting additional cash payments from DOE.

 

e.               Payments. The DOE approving official will approve the invoice as soon as practical, but not later than 30 days after your request is received, unless the billing is improper. Upon receipt of an invoice payment authorization from the DOE approving official, the ORFSC will disburse payment to you. You may check the status of payments at the VIPER web site. All payments are made by electronic funds transfer to the bank account identified on the ACH Vendor/Miscellaneous Payment Enrollment Form (SF 3881) that you filed.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

2

 

6.              COST SHARING FFRDC NOT INVOLVED

 

a.               Total Estimated Project Cost is the sum of the Federal Government share and Recipient share of the estimated project costs. The Recipient’s cost share must come from non-Federal sources unless otherwise allowed by law. By accepting Federal funds under this award, you agree that you are liable for your percentage share of total allowable project costs, on a budget period basis, even if the project is terminated early or is not funded to its completion. This cost is shared as follows:

 

	
Budget Period
    	
 
    	
DOE Cost Share 
   $ / %
    	
 
    	
Recipient Cost
   Share
   $ / %
    	
 
    	
Total Estimated
   Costs
    
	
1
    	
 
    	
$[ * ] / 50%
    	
 
    	
$[ * ] / 50%
    	
 
    	
$[ * ] / 100%
    
	
Total   Project
    	
 
    	
$[ * ] / 50%
    	
 
    	
$[ * ] / 50%
    	
 
    	
$[ * ] / 100%
    

 

b.              If you discover that you may be unable to provide cost sharing of at least the amount identified in paragraph a of this Article, you should immediately provide written notification to the DOE Award Administrator, indicating whether you will continue or phase out the project. If you plan to continue the project, the notification must describe how replacement cost sharing will be secured.

 

c.               You must maintain records of all project costs that you claim as cost sharing, including in-kind costs, as well as records of costs to be paid by DOE. Such records are subject to audit.

 

d.              Failure to provide the cost sharing required by this Article may result in the subsequent recovery by DOE of some or all the funds provided under the award.

 

7.              REBUDGETING AND RECOVERY OF INDIRECT COSTS

 

a.               If actual allowable indirect costs are less than those budgeted and funded under the award, you may use the difference to pay additional allowable direct costs during the project period. If at the completion of the award the Government’s share of total allowable costs (i.e., direct and indirect), is less than the total costs reimbursed, you must refund the difference.

 

b.              Recipients are expected to manage their indirect costs. DOE will not amend an award solely to provide additional funds for changes in indirect cost rates. DOE recognizes that the inability to obtain full reimbursement for indirect costs means the Recipient must absorb the underrecovery. Such underrecovery may be allocated as part of the organization’s required cost sharing.

 

c.               The Recipient shall not be reimbursed on this project for any final indirect costs that are in excess of the following designated indirect rate ceilings or specific amounts. In addition, the Recipient shall neither count costs in excess of the application of the rate ceilings or specific amounts as cost share, nor allocate such costs to other federally

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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sponsored project, unless approved by the Contracting Officer. This restriction does not apply to subrecipients’ indirect costs.

 

Ceiling on Indirect Costs: $0

 

8.              FINAL INCURRED COST AUDIT

 

In accordance with 10 CFR 600, DOE reserves the right to initiate a final incurred cost audit on this award. If the audit has not been performed or completed prior to the closeout of the award, DOE retains the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final audit.

 

9.              STATEMENT OF FEDERAL STEWARDSHIP

 

DOE will exercise normal Federal stewardship in overseeing the project activities performed under this award. Stewardship activities include, but are not limited to, conducting site visits; reviewing performance and financial reports; providing technical assistance and/or temporary intervention in unusual circumstances to correct deficiencies which develop during the project; assuring compliance with terms and conditions; and reviewing technical performance after project completion to ensure that the award objectives have been accomplished.

 

10.       STATEMENT OF SUBSTANTIAL INVOLVEMENT

 

1.               Government Insight

 

In order to adequately monitor project progress and provide technical direction and/or redirection to the Recipient, DOE must be provided an adequate level of insight into various Recipient activities. Government Insight activities by DOE include attendance at Recipient meetings, reviews and tests, as well as access for DOE’s consultants to perform independent evaluations of Recipient’s plans and processes. Recipient shall notify the DOE Project Officer of meetings, reviews, and tests in sufficient time to permit DOE participation, and provide all appropriate documentation for DOE review.

 

2.               Specific activities to be conducted by DOE

 

a.               Risk Evaluation —DOE will review the Recipient’s initial Risk Mitigation Plan (RMP) for quality and completeness. DOE will also monitor updates to the RMP and actions taken by the Recipient during the performance of its award to mitigate risks and improve the probability of successful execution of the integrated Biorefinery project. At DOE’s discretion, additional independent risk analyses of the project by DOE consultants may be requested.

 

b.              Independent Engineering Assessments —DOE will engage a private, independent engineering (IE) firm to assist in assessing the progress of the project and provide timely and accurate reports to DOE. The Recipient will ensure that the IE has

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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access to any and all relevant documentation sufficient to allow the IE to provide independent evaluations to DOE on the progress of the project. Such documentation includes but is not limited to the following:

 

·                  Drawings and specifications

·                  Construction and Execution plans

·                  Resource loaded schedules

·                  Design functions and requirements for the site final design review

·                  Risk management plans

·                  Value management and engineering studies and/or plans

·                  Acquisition strategies

·                  Project execution plans

·                  Project controls including earned value management systems

·                  Qualifications of the integrated project team.

·                  Financial strategy for funding the construction project

·                  Updated marketing and business plan

·                  Invoices submitted to DOE

 

DOE will evaluate the quality and completeness of information and documentation provided by the Recipient to DOE and its consultants in order to allow DOE to provide technical direction and/or redirection to the Recipient about how best to achieve the purposes of the award. Consultants to DOE may not provide technical direction and/or redirection to the Recipient.

 

11.       SITE VISITS

 

DOE’s authorized representatives have the right to make site visits at reasonable times to review project accomplishments and management control systems and to provide technical assistance, if required. You must provide, and must require your subawardees to provide, reasonable access to facilities, office space, resources, and assistance for the safety and convenience of the government representatives in the performance of their duties. All site visits and evaluations must be performed in a manner that does not unduly interfere with or delay the work.

 

12.       REPORTING REQUIREMENTS

 

a.               Requirements. The reporting requirements for this award are identified on the Federal Assistance Reporting Checklist, DOE F 4600.2, attached to this award. Failure to comply with these reporting requirements is considered a material noncompliance with the terms of the award. Noncompliance may result in withholding of future payments, suspension or termination of the current award, and withholding of future awards. A willful failure to perform, a history of failure to perform, or unsatisfactory performance of this and/or other financial assistance awards, may also result in a debarment action to preclude future awards by Federal agencies.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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b.              Dissemination of scientific/technical reports. Scientific/technical reports submitted under this award will be disseminated on the Internet via the DOE Information Bridge (www.osti.gov/bridge), unless the report contains patentable material, protected data or SBIR/STTR data. Citations for journal articles produced under the award will appear on the DOE Energy Citations Database (www.osti.gov/energycitations).

 

c.               Restrictions. Reports submitted to the DOE Information Bridge must not contain any Protected Personal Identifiable Information (PII), limited rights data (proprietary data), classified information, information subject to export control classification, or other information not subject to release.

 

13.       PUBLICATIONS

 

a.               You are encouraged to publish or otherwise make publicly available the results of the work conducted under the award.

 

b.              An acknowledgment of DOE support and a disclaimer must appear in the publication of any material, whether copyrighted or not, based on or developed under this project, as follows:

 

Acknowledgment: “This material is based upon work supported by the Department of Energy [National Nuclear Security Administration] [add name(s) of other agencies, if applicable] under Award Number(s) [enter the award number(s)].”

 

Disclaimer: “This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof.

 

The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.”

 

14.       FEDERAL, STATE, AND MUNICIPAL REQUIREMENTS

 

You must obtain any required permits and comply with applicable federal, state, and municipal laws, codes, and regulations for work performed under this award.

 

15.       INTELLECTUAL PROPERTY PROVISIONS AND CONTACT INFORMATION

 

a.               The intellectual property provisions applicable to this award are provided as an attachment to this award or are referenced in the Agreement Cover Page.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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b.              Questions regarding intellectual property matters should be referred to the DOE Award Administrator identified and the Patent Counsel designated as the service provider for the DOE office that issued the award.

 

Patent Counsel for the Golden Field Office is Julia Moody, who may be reached at julia.moody@go.doe.gov or 720-356-1699.

 

16.       CONTINUATION APPLICATION AND FUNDING

 

a.               Continuation Application. A continuation application is a non-competitive application for an additional budget period within a previously approved project period. At least 60 days before the end of each budget period, your continuation application must be submitted to the DOE Project Officer and the DOE Award Administrator identified in the Assistance Agreement, to be eligible to receive a continuation award for the next budget period. The continuation application must include the following information:

 

1.               Application for Federal Assistance, SF-424.

 

2.               A continuation report, which must provide a summary of the progress towards meeting the objectives of the award, including any significant findings, conclusions, or developments, a comparison of actual accomplishment with the objectives established for the reporting period (milestones, deliverables, decision point criteria and stage gates), reasons for slippage if goals were not met, an estimate of any unobligated balances remaining at the end of the budget period, and when applicable an explanation of cost overruns or underruns. A description of your plans for the award during the upcoming budget period and any variance from the DOE approved objectives needs to be included in the continuation application package.

 

3.               A detailed budget and supporting justification for the upcoming budget period with the supporting documentation below, including an estimate of DOE funds expected to be remaining at the end of the current budget period:

 

a)              Budget Information — Non Construction Programs, SF-424A.

 

b)             Cost Reasonableness Determination, PMC 123.1 (Excel Version).

 

4.               Environmental Checklist, EF1, (This form should be completed on-line at https://www.eere-pmc.energy.gov/).

 

5.               Commitment Letters from Third Parties Contributing to Cost Sharing, if applicable.

 

6.               Statement of Project Objectives (SOPO), if revision is required.

 

b.              Continuation Funding. Continuation funding is contingent on: (1) availability of funds; (2) meeting the objectives, milestones, deliverables, decision point criteria and 

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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stage gates of your award and obtaining approval from DOE to continue work on the project (DOE authorizing either Pass or Redirect through a stage-gate review); (3) submittal of required reports; or (4) compliance with the terms and conditions of the award.

 

17.       LOBBYING RESTRICTIONS

 

By accepting funds under this award, you agree that none of the funds obligated on the award shall be expended, directly or indirectly, to influence congressional action on any legislation or appropriation matters pending before Congress, other than to communicate to Members of Congress as described in 18 U.S.C. 1913. This restriction is in addition to those prescribed elsewhere in statute and regulation.

 

18.       NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS — SENSE OF CONGRESS

 

It is the sense of the Congress that, to the greatest extent practicable, all equipment and products purchased with funds made available under this award should be American-made.

 

19.       PROPERTY

 

Real property and equipment acquired by the Recipient shall be subject to the rules set forth in 10 CFR 600.130-137, 10 CFR 600.231-233, or 10 CFR 600.320-324, as applicable.

 

Consistent with the goals and objectives of this project, the Recipient may continue to use Recipient acquired property beyond the Period of Performance, without obligation, during the period of such use, to extinguish DOE’s conditional title to such property as described in 10 CFR 600.132-135, 10 CFR 600.231-233, or 600.321-324, subject to the following:  (a) the Recipient continues to utilize such property for the objectives of the project as set forth in the Statement of Project Objectives; (b) DOE retains the right to periodically ask for, and the Recipient agrees to provide, reasonable information concerning the use and condition of the property; and (c) the Recipient follows the property disposition rules set forth in the applicable sections of 10 CFR Part 600, if the property is no longer used by the Recipient for the objectives of the project, and the fair market value of property exceeds $5,000.

 

Once the per unit fair market value of the property is less than $5,000, pursuant to the applicable sections of 10 CFR Part 600, DOE’s residual interest in the property shall be extinguished and the Recipient shall have no further obligation to the DOE with respect to the property.

 

The regulations as set forth in 10 CFR Part 600 and the requirements of this article shall also apply to property in the possession of any team member, sub-recipient or other entity 

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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where such property was acquired in whole or in part with funds provided by DOE under this award or where such property was counted as cost-sharing under the award.

 

20.       DECONTAMINATION AND/OR DECOMMISSIONING (D&D) COSTS

 

Notwithstanding any other provisions of this Agreement, the Government shall not be responsible for or have any obligation to the Recipient for (i) Decontamination and/or Decommissioning (D&D) of any of the Recipient’s facilities, or (ii) any costs which may be incurred by the Recipient in connection with the D&D of any of its facilities due to the performance of the work under this Agreement, whether said work was performed prior to or subsequent to the effective date of the Agreement.

 

21.       AT RISK FOR FINANCIAL CAPABILITY

 

You have been determined to be at risk for financial capability based on your DUN & Bradstreet score of DS. This rating indicates that the information available does not permit D&B to classify your company within their rating key.

 

Based on this determination the following requirements, as listed below, have been incorporated into this award:

 

ACH Payment Method.

 

You may report any change in circumstances that impact DOE’s determination of your financial capability. If you feel that your circumstances have changed to this degree, you may request a re-evaluation at any time after 6 months from the initial determination. Please provide a written request and support to the DOE Award Administrator.

 

DOE will remove this provision by modification to the award if the conditions that prompted it have been corrected, as approved by the Contracting Officer.

 

22.       FUNDING OF BUDGET PERIODS

 

DOE has obligated $50,000,000 for completion of the project authorized by this agreement; however, only $[ * ] is available for work performed by the Recipient during Budget Period 1 of the project. For Budget Period 2, the remainder or $[ * ] will be available contingent upon the submission by the Recipient of a continuation application and written approval of the continuation application by the DOE Contracting Officer.

 

In the event that the Recipient does not submit a continuation application for subsequent Budget Periods, or DOE disapproves a continuation application for subsequent Budget Periods, the maximum DOE liability to the Recipient is the funds that are available for the current approved Budget Period. In such event, DOE reserves the right to deobligate any remaining funds.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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23.       INSOLVENCY, BANKRUPTCY OR RECEIVERSHIP

 

a.               You shall immediately notify the DOE of the occurrence of any of the following events: (i) you or your parent’s filing of a voluntary case seeking liquidation or reorganization under the Bankruptcy Act; (ii) your consent to the institution of an involuntary case under the Bankruptcy Act against you or your parent; (iii) the filing of any similar proceeding for or against you or your parent, or your consent to the dissolution, winding-up or readjustment of your debts, appointment of a receiver, conservator, trustee, or other officer with similar powers over you, under any other applicable state or federal law; or (iv) your insolvency due to its inability to pay debts generally as they become due.

 

b.              Such notification shall be in writing and shall: (i) specifically set out the details of the occurrence of an event referenced in paragraph (a); (ii) provide the facts surrounding that event; and (iii) provide the impact such event will have on the project being funded by this award.

 

c.               Upon the occurrence of any of the four events described in paragraph a. of this provision, DOE reserves the right to conduct a review of your award to determine your compliance with the required elements of the award (including such items as cost share, progress towards technical project objectives, and submission of required reports). If the DOE review determines that there are significant deficiencies or concerns with your performance under the award, DOE reserves the right to impose additional requirements, as needed, including (i) change of payment method; or (ii) institute payment controls.

 

d.              Failure of the Recipient to comply with this provision may be considered a material noncompliance of this financial assistance award by the Contracting Officer.

 

24.       NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS — SENSE OF CONGRESS

 

It is the sense of the Congress that, to the greatest extent practicable, all equipment and products purchased with funds made available under this award should be American-made.

 

25.       NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) REQUIREMENTS

 

You are restricted from taking any action using federal funds, which would have an adverse affect on the environment or limit the choice of reasonable alternatives prior to DOE/NNSA providing either a NEPA clearance or a final NEPA decision regarding the project.

 

Prohibited actions include: All activities outside of the Budget Period 1 scope of work are subject to additional NEPA review and are prohibited at this time.

 

This restriction does not preclude you from: Budget Period 1. If you move forward with activities that are not authorized for federal funding by the DOE Contracting Officer in 

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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advance of the final NEPA decision, you are doing so at risk of not receiving federal funding and such costs may not be recognized as allowable cost share.

 

If this award includes construction activities, you must submit an environmental evaluation report/evaluation notification form addressing NEPA issues prior to DOE initiating the NEPA process.

 

26.       INDEMNITY

 

The Recipient shall indemnify the Government and its officers, agents, or employees for any and all liability, including litigation expenses and attorneys’ fees, arising from suits, actions, or claims of any character for death, bodily injury, or loss of or damage to property or to the environment, resulting from the project, except to the extent that such liability results from the direct fault or negligence of Government officers, agents or employees, or to the extent such liability may be covered by applicable allowable costs provisions.

 

27.       SPECIAL PROVISIONS RELATING TO WORK FUNDED UNDER AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (May 2009)

 

Preamble

 

The American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, (Recovery Act) was enacted to preserve and create jobs and promote economic recovery, assist those most impacted by the recession, provide investments needed to increase economic efficiency by spurring technological advances in science and health, invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits, stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive State and local tax increases. Recipients shall use grant funds in a manner that maximizes job creation and economic benefit.

 

The Recipient shall comply with all terms and conditions in the Recovery Act relating generally to governance, accountability, transparency, data collection and resources as specified in Act itself and as discussed below.

 

Recipients should begin planning activities for their first tier subrecipients, including obtaining a DUNS number (or updating the existing DUNS record), and registering with the Central Contractor Registration (CCR).

 

Be advised that Recovery Act funds can be used in conjunction with other funding as necessary to complete projects, but tracking and reporting must be separate to meet the reporting requirements of the Recovery Act and related guidance. For projects funded by sources other than the Recovery Act, Contractors must keep separate records for Recovery Act funds and to ensure those records comply with the requirements of the Act.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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The Government has not fully developed the implementing instructions of the Recovery Act, particularly concerning specific procedural requirements for the new reporting requirements. The Recipient will be provided these details as they become available. The Recipient must comply with all requirements of the Act. If the recipient believes there is any inconsistency between ARRA requirements and current award terms and conditions, the issues will be referred to the Contracting Officer for reconciliation.

 

Definitions

 

For purposes of this clause, Covered Funds means funds expended or obligated from appropriations under the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5. Covered Funds will have special accounting codes and will be identified as Recovery Act funds in the grant, cooperative agreement or TIA and/or modification using Recovery Act funds. Covered Funds must be reimbursed by September 30, 2015.

 

Non-Federal employer means any employer with respect to covered funds — the contractor, subcontractor, grantee, or recipient, as the case may be, if the contractor, subcontractor, grantee, or recipient is an employer; and any professional membership organization, certification of other professional body, any agent or licensee of the Federal government, or any person acting directly or indirectly in the interest of an employer receiving covered funds; or with respect to covered funds received by a State or local government, the State or local government receiving the funds and any contractor or subcontractor receiving the funds and any contractor or subcontractor of the State or local government; and does not mean any department, agency, or other entity of the federal government.

 

Recipient means any entity that receives Recovery Act funds directly from the Federal government (including Recovery Act funds received through grant, loan, or contract) other than an individual and includes a State that receives Recovery Act Funds.

 

Special Provisions

 

A.  Flow Down Requirement

 

Recipients must include these special terms and conditions in any subaward.

 

B.  Segregation of Costs

 

Recipients must segregate the obligations and expenditures related to funding under the Recovery Act. Financial and accounting systems should be revised as necessary to segregate, track and maintain these funds apart and separate from other revenue streams. No part of the funds from the Recovery Act shall be commingled with any other funds or used for a purpose other than that of making payments for costs allowable for Recovery Act projects.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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C.  Prohibition on Use of Funds

 

None of the funds provided under this agreement derived from the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, may be used by any State or local government, or any private entity, for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool.

 

D.  Access to Records

 

With respect to each financial assistance agreement awarded utilizing at least some of the funds appropriated or otherwise made available by the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, any representative of an appropriate inspector general appointed under section 3 or 8G of the Inspector General Act of 1988 (5 U.S.C. App.) or of the Comptroller General is authorized —

 

(1)          to examine any records of the contractor or grantee, any of its subcontractors or subgrantees, or any State or local agency administering such contract that pertain to, and involve transactions that relate to, the subcontract, subcontract, grant, or subgrant; and

 

(2)          to interview any officer or employee of the contractor, grantee, subgrantee, or agency regarding such transactions.

 

E.  Publication

 

An application may contain technical data and other data, including trade secrets and/or privileged or confidential information, which the applicant does not want disclosed to the public or used by the Government for any purpose other than the application. To protect such data, the applicant should specifically identify each page including each line or paragraph thereof containing the data to be protected and mark the cover sheet of the application with the following Notice as well as referring to the Notice on each page to which the Notice applies:

 

Notice of Restriction on Disclosure and Use of Data

 

The data contained in pages — of this application have been submitted in confidence and contain trade secrets or proprietary information, and such data shall be used or disclosed only for evaluation purposes, provided that if this applicant receives an award as a result of or in connection with the submission of this application, DOE shall have the right to use or disclose the data here to the extent provided in the award. This restriction does not limit the Government’s right to use or disclose data obtained without restriction from any source, including the applicant.

 

Information about this agreement will be published on the Internet and linked to the website www.recovery.gov, maintained by the Accountability and Transparency Board. The Board may exclude posting contractual or other information on the website on a case-by-case basis when necessary to protect national security or to protect information that is not subject to disclosure under sections 552 and 552a of title 5, United States Code.

 

F.  Protecting State and Local Government and Contractor Whistleblowers.

 

The requirements of Section 1553 of the Act are summarized below. They include, but are not limited to:

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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Prohibition on Reprisals: An employee of any non-Federal employer receiving covered funds under the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing, including a disclosure made in the ordinary course of an employee’s duties, to the Accountability and Transparency Board, an inspector general, the Comptroller General, a member of Congress, a State or Federal regulatory or law enforcement agency, a person with supervisory authority over the employee (or other person working for the employer who has the authority to investigate, discover or terminate misconduct), a court or grant jury, the head of a Federal agency, or their representatives information that the employee believes is evidence of:

 

·  gross management of an agency contract or grant relating to covered funds;

·  a gross waste of covered funds;

·  a substantial and specific danger to public health or safety related to the implementation or use of covered funds;

·  an abuse of authority related to the implementation or use of covered funds; or

·  as violation of law, rule, or regulation related to an agency contract (including the competition for or negotiation of a contract) or grant, awarded or issued relating to covered funds.

 

Agency Action: Not later than 30 days after receiving an inspector general report of an alleged reprisal, the head of the agency shall determine whether there is sufficient basis to conclude that the non-Federal employer has subjected the employee to a prohibited reprisal. The agency shall either issue an order denying relief in whole or in part or shall take one or more of the following actions:

 

·   Order the employer to take affirmative action to abate the reprisal.

·  Order the employer to reinstate the person to the position that the person held before the reprisal, together with compensation including back pay, compensatory damages, employment benefits, and other terms and conditions of employment that would apply to the person in that position if the reprisal had not been taken.

·  Order the employer to pay the employee an amount equal to the aggregate amount of all costs and expenses (including attorneys’ fees and expert witnesses’ fees) that were reasonably incurred by the employee for or in connection with, bringing the complaint regarding the reprisal, as determined by the head of a court of competent jurisdiction.

 

Nonenforceablity of Certain Provisions Waiving Rights and remedies or Requiring Arbitration: Except as provided in a collective bargaining agreement, the rights and remedies provided to aggrieved employees by this section may not be waived by any agreement, policy, form, or condition of employment, including any predispute arbitration agreement. No predispute arbitration agreement shall be valid or enforceable if it requires arbitration of a dispute arising out of this section.

 

Requirement to Post Notice of Rights and Remedies: Any employer receiving covered funds under the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, shall post notice of the rights and remedies as required therein. (Refer to section 1553 of the American Recovery and

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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Reinvestment Act of 2009, Pub. L. 111-5, www.Recovery.gov, for specific requirements of this section and prescribed language for the notices.).

 

G.             RESERVED

 

H.            False Claims Act

 

Recipient and sub-recipients shall promptly refer to the DOE or other appropriate Inspector General any credible evidence that a principal, employee, agent, contractor, sub-grantee, subcontractor or other person has submitted a false claim under the False Claims Act or has committed a criminal or civil violation of laws pertaining to fraud, conflict of interest, bribery, gratuity or similar misconduct involving those funds.

 

I.                 Information in Support of Recovery Act Reporting

 

Recipient may be required to submit backup documentation for expenditures of funds under the Recovery Act including such items as timecards and invoices. Recipient shall provide copies of backup documentation at the request of the Contracting Officer or designee.

 

J.                Availability of Funds

 

Funds appropriated under the Recovery Act and obligated to this award are available for reimbursement of costs until September 30, 2015.

 

28.       REPORTING AND REGISTRATION REQUIREMENTS UNDER SECTION 1512 OF THE RECOVERY ACT

 

a.               This award requires the recipient to complete projects or activities which are funded under the American Recovery and Reinvestment Act of 2009 (Recovery Act) and to report on use of Recovery Act funds provided through this award. Information from these reports will be made available to the public.

 

b.              The reports are due no later than ten calendar days after each calendar quarter in which the Recipient receives the assistance award funded in whole or in part by the Recovery Act.

 

c.               Recipients and their first-tier subrecipients must maintain current registrations in the Central Contractor Registration (http://www.ccr.gov) at all times during which they have active federal awards funded with Recovery Act funds. A Dun and Bradstreet Data Universal Numbering System (DUNS) Number (http://www.dnb.com) is one of the requirements for registration in the Central Contractor Registration.

 

d.              The recipient shall report the information described in section 1512(c) of the Recovery Act using the reporting instructions and data elements that will be provided online at http://www.FederalReporting.gov and ensure that any information that is pre-filled is corrected or updated as needed.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

15

 

29.       REQUIRED USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS — SECTION 1605 OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

 

If the Recipient determines at any time that any construction, alteration, or repair activity on a public building or public works will be performed during the course of the project, the Recipient shall notify the Contracting Officer prior to commencing such work and the following provisions shall apply.

 

(a)          Definitions. As used in this award term and condition—

 

(1)          Manufactured good means a good brought to the construction site for incorporation into the building or work that has been—

 

(i)             Processed into a specific form and shape; or

 

(ii)          Combined with other raw material to create a material that has different properties than the properties of the individual raw materials.

 

(2)          Public building and public work means a public building of, and a public work of, a governmental entity (the United States; the District of Columbia; commonwealths, territories, and minor outlying islands of the United States; State and local governments; and multi-State, regional, or interstate entities which have governmental functions). These buildings and works may include, without limitation, bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, pumping stations, heavy generators, railways, airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, and canals, and the construction, alteration, maintenance, or repair of such buildings and works.

 

(3)          Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements.

 

(b)         Domestic preference. (1) This award term and condition implements Section 1605 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) (Pub. L. 111—5), by requiring that all iron, steel, and manufactured goods used in the project are produced in the United States except as provided in paragraph (b)(3) of this section and condition.

 

(2)          This requirement does not apply to the material listed by the Federal Government as follows:

 

None.

 

(3)          The award official may add other iron, steel, and/or manufactured goods to the list in paragraph (b)(2) of this section and condition if the Federal Government determines that—

 

(i)             The cost of the domestic iron, steel, and/or manufactured goods would be unreasonable. The cost of domestic iron, steel, or manufactured goods used in the project is unreasonable when the cumulative cost of such material will increase the cost of the overall project by more than 25 percent;

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

16

 

(ii)          The iron, steel, and/or manufactured good is not produced, or manufactured in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or

 

(iii)       The application of the restriction of section 1605 of the Recovery Act would be inconsistent with the public interest.

 

(c)          Request for determination of inapplicability of Section 1605 of the Recovery Act . (1)(i) Any recipient request to use foreign iron, steel, and/or manufactured goods in accordance with paragraph (b)(3) of this section shall include adequate information for Federal Government evaluation of the request, including—

 

(A)      A description of the foreign and domestic iron, steel, and/or manufactured goods;

 

(B)        Unit of measure;

 

(C)        Quantity;

 

(D)       Cost;

 

(E)         Time of delivery or availability;

 

(F)         Location of the project;

 

(G)        Name and address of the proposed supplier; and

 

(H)       A detailed justification of the reason for use of foreign iron, steel, and/or manufactured goods cited in accordance with paragraph (b)(3) of this section.

 

(ii)          A request based on unreasonable cost shall include a reasonable survey of the market and a completed cost comparison table in the format in paragraph (d) of this section.

 

(iii)       The cost of iron, steel, and/or manufactured goods material shall include all delivery costs to the construction site and any applicable duty.

 

(iv)      Any recipient request for a determination submitted after Recovery Act funds have been obligated for a project for construction, alteration, maintenance, or repair shall explain why the recipient could not reasonably foresee the need for such determination and could not have requested the determination before the funds were obligated. If the recipient does not submit a satisfactory explanation, the award official need not make a determination.

 

(2)          If the Federal Government determines after funds have been obligated for a project for construction, alteration, maintenance, or repair that an exception to section 1605 of the Recovery Act applies, the award official will amend the award to allow use of the foreign iron, steel, and/or relevant manufactured goods. When the basis for the exception is nonavailability or public interest, the amended award shall reflect adjustment of the award amount, redistribution of budgeted funds, and/or other actions taken to cover costs associated with acquiring or using the foreign iron, steel, and/or relevant manufactured goods. When the basis for the exception is the

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

17

 

unreasonable cost of the domestic iron, steel, or manufactured goods, the award official shall adjust the award amount or redistribute budgeted funds by at least the differential established in 2 CFR 176.110(a).

 

(3)          Unless the Federal Government determines that an exception to section 1605 of the Recovery Act applies, use of foreign iron, steel, and/or manufactured goods is noncompliant with section 1605 of the American Recovery and Reinvestment Act.

 

(d)         Data. To permit evaluation of requests under paragraph (b) of this section based on unreasonable cost, the Recipient shall include the following information and any applicable supporting data based on the survey of suppliers:

 

Foreign and Domestic Items Cost Comparison

 

	
Description
    	
 
    	
Unit of
   Measure
    	
 
    	
Quantity
    	
 
    	
Cost
   (dollars)*
    
	
Item   1:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Foreign steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Domestic steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Item   2:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Foreign steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Domestic steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

List name, address, telephone number, email address, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.

 

Include other applicable supporting information.

 

*Include all delivery costs to the construction site.

 

30.       REQUIRED USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS (COVERED UNDER INTERNATIONAL AGREEMENTS) — SECTION 1605 OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

 

(a) Definitions. As used in this award term and condition—

 

Designated country — (1) A World Trade Organization Government Procurement Agreement country (Aruba, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, and United Kingdom;

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

18

 

(2)          A Free Trade Agreement (FTA) country (Australia, Bahrain, Canada, Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore); or

 

(3)          A United States-European Communities Exchange of Letters (May 15, 1995) country: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, and United Kingdom.

 

Designated country iron, steel, and/or manufactured goods — (1) Is wholly the growth, product, or manufacture of a designated country; or

 

(2) In the case of a manufactured good that consist in whole or in part of materials from another country, has been substantially transformed in a designated country into a new and different manufactured good distinct from the materials from which it was transformed.

 

Domestic iron, steel, and/or manufactured good — (1) Is wholly the growth, product, or manufacture of the United States; or

 

(2) In the case of a manufactured good that consists in whole or in part of materials from another country, has been substantially transformed in the United States into a new and different manufactured good distinct from the materials from which it was transformed. There is no requirement with regard to the origin of components or subcomponents in manufactured goods or products, as long as the manufacture of the goods occurs in the United States.

 

Foreign iron, steel, and/or manufactured good means iron, steel and/or manufactured good that is not domestic or designated country iron, steel, and/or manufactured good.

 

Manufactured good means a good brought to the construction site for incorporation into the building or work that has been—

 

(1)          Processed into a specific form and shape; or

 

(2)          Combined with other raw material to create a material that has different properties than the properties of the individual raw materials.

 

Public building and public work means a public building of, and a public work of, a governmental entity (the United States; the District of Columbia; commonwealths, territories, and minor outlying islands of the United States; State and local governments; and multi-State, regional, or interstate entities which have governmental functions). These buildings and works may include, without limitation, bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, pumping stations, heavy generators, railways, airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, and canals, and the construction, alteration, maintenance, or repair of such buildings and works.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

19

 

Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements.

 

(b)         Iron, steel, and manufactured goods. (1) The award term and condition described in this section implements—

 

(i)             Section 1605(a) of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111—5) (Recovery Act), by requiring that all iron, steel, and manufactured goods used in the project are produced in the United States; and

 

(ii)          Section 1605(d), which requires application of the Buy American requirement in a manner consistent with U.S. obligations under international agreements. The restrictions of section 1605 of the Recovery Act do not apply to designated country iron, steel, and/or manufactured goods. The Buy American requirement in section 1605 shall not be applied where the iron, steel or manufactured goods used in the project are from a Party to an international agreement that obligates the recipient to treat the goods and services of that Party the same as domestic goods and services. This obligation shall only apply to projects with an estimated value of $7,443,000 or more.

 

(2)          The recipient shall use only domestic or designated country iron, steel, and manufactured goods in performing the work funded in whole or part with this award, except as provided in paragraphs (b)(3) and (b)(4) of this section.

 

(3)          The requirement in paragraph (b)(2) of this section does not apply to the iron, steel, and manufactured goods listed by the Federal Government as follows:

 

None.

 

(4)          The award official may add other iron, steel, and manufactured goods to the list in paragraph (b)(3) of this section if the Federal Government determines that—

 

(i)             The cost of domestic iron, steel, and/or manufactured goods would be unreasonable. The cost of domestic iron, steel, and/or manufactured goods used in the project is unreasonable when the cumulative cost of such material will increase the overall cost of the project by more than 25 percent;

 

(ii)          The iron, steel, and/or manufactured good is not produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality; or

 

(iii)       The application of the restriction of section 1605 of the Recovery Act would be inconsistent with the public interest.

 

(c)          Request for determination of inapplicability of section 1605 of the Recovery Act or the Buy American Act. (1)(i) Any recipient request to use foreign iron, steel, and/or manufactured goods in accordance with paragraph (b)(4) of this section shall include adequate information for Federal Government evaluation of the request, including—

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

20

 

(A)      A description of the foreign and domestic iron, steel, and/or manufactured goods;

 

(B)        Unit of measure;

 

(C)        Quantity;

 

(D)       Cost;

 

(E)         Time of delivery or availability;

 

(F)         Location of the project;

 

(G)        Name and address of the proposed supplier; and

 

(H)       A detailed justification of the reason for use of foreign iron, steel, and/or manufactured goods cited in accordance with paragraph (b)(4) of this section.

 

(ii)          A request based on unreasonable cost shall include a reasonable survey of the market and a completed cost comparison table in the format in paragraph (d) of this section.

 

(iii)       The cost of iron, steel, or manufactured goods shall include all delivery costs to the construction site and any applicable duty.

 

(iv)      Any recipient request for a determination submitted after Recovery Act funds have been obligated for a project for construction, alteration, maintenance, or repair shall explain why the recipient could not reasonably foresee the need for such determination and could not have requested the determination before the funds were obligated. If the recipient does not submit a satisfactory explanation, the award official need not make a determination.

 

(2)          If the Federal Government determines after funds have been obligated for a project for construction, alteration, maintenance, or repair that an exception to section 1605 of the Recovery Act applies, the award official will amend the award to allow use of the foreign iron, steel, and/or relevant manufactured goods. When the basis for the exception is nonavailability or public interest, the amended award shall reflect adjustment of the award amount, redistribution of budgeted funds, and/or other appropriate actions taken to cover costs associated with acquiring or using the foreign iron, steel, and/or relevant manufactured goods. When the basis for the exception is the unreasonable cost of the domestic iron, steel, or manufactured goods, the award official shall adjust the award amount or redistribute budgeted funds, as appropriate, by at least the differential established in 2 CFR 176.110(a).

 

(3)          Unless the Federal Government determines that an exception to section 1605 of the Recovery Act applies, use of foreign iron, steel, and/or manufactured goods other than designated country iron, steel, and/or manufactured goods is noncompliant with the applicable Act.

 

(d)         Data. To permit evaluation of requests under paragraph (b) of this section based on unreasonable cost, the applicant shall include the following information and any applicable supporting data based on the survey of suppliers:

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

21

 

Foreign and Domestic Items Cost Comparison

 

	
Description
    	
 
    	
Unit of
   Measure
    	
 
    	
Quantity
    	
 
    	
Cost
   (dollars)*
    
	
Item   1:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Foreign steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Domestic steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Item   2:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Foreign steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Domestic steel, iron, or manufactured good
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

List name, address, telephone number, email address, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.

 

Include other applicable supporting information.

 

*Include all delivery costs to the construction site.

 

31.       RECOVERY ACT TRANSACTIONS LISTED IN SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND RECIPIENT RESPONSIBILITIES FOR INFORMING SUBRECIPIENTS

 

(a)          To maximize the transparency and accountability of funds authorized under the American Recovery and Reinvestment Act of 2009 (Pub. L. 111—5) (Recovery Act) as required by Congress and in accordance with 2 CFR 215.21 “Uniform Administrative Requirements for Grants and Agreements” and OMB Circular A—102 Common Rules provisions, recipients agree to maintain records that identify adequately the source and application of Recovery Act funds. OMB Circular A—102 is available at http://www.whitehouse.gov/omb/circulars/a102/a102.html.

 

(b)         For recipients covered by the Single Audit Act Amendments of 1996 and OMB Circular A—133, “Audits of States, Local Governments, and Non-Profit Organizations,” recipients agree to separately identify the expenditures for Federal awards under the Recovery Act on the Schedule of Expenditures of Federal Awards (SEFA) and the Data Collection Form (SF— SAC) required by OMB Circular A—133. OMB Circular A—133 is available at http://www.whitehouse.gov/omb/circulars/a133/a133.html. This shall be accomplished by identifying expenditures for Federal awards made under the Recovery Act separately on the SEFA, and as separate rows under Item 9 of Part III on the SF—SAC by CFDA number, and inclusion of the prefix “ARRA-” in identifying the name of the Federal program on the SEFA and as the first characters in Item 9d of Part III on the SF—SAC.

 

(c)          Recipients agree to separately identify to each subrecipient, and document at the time of subaward and at the time of disbursement of funds, the Federal award number, CFDA

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

22

 

number, and amount of Recovery Act funds. When a recipient awards Recovery Act funds for an existing program, the information furnished to subrecipients shall distinguish the subawards of incremental Recovery Act funds from regular subawards under the existing program.

 

(d)         Recipients agree to require their subrecipients to include on their SEFA information to specifically identify Recovery Act funding similar to the requirements for the recipient SEFA described above. This information is needed to allow the recipient to properly monitor subrecipient expenditure of ARRA funds as well as oversight by the Federal awarding agencies, Offices of Inspector General and the Government Accountability Office.

 

32.       WAGE RATE REQUIREMENTS UNDER SECTION 1606 OF THE RECOVERY ACT

 

(a)          Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code.

 

Pursuant to Reorganization Plan No. 14 and the Copeland Act, 40 U.S.C. 3145, the Department of Labor has issued regulations at 29 CFR parts 1, 3, and 5 to implement the Davis-Bacon and related Acts. Regulations in 29 CFR 5.5 instruct agencies concerning application of the standard Davis-Bacon contract clauses set forth in that section. Federal agencies providing grants, cooperative agreements, and loans under the Recovery Act shall ensure that the standard Davis-Bacon contract clauses found in 29 CFR 5.5(a) are incorporated in any resultant covered contracts that are in excess of $2,000 for construction, alteration or repair (including painting and decorating).

 

(b)         For additional guidance on the wage rate requirements of section 1606, contact your awarding agency. Recipients of grants, cooperative agreements and loans should direct their initial inquiries concerning the application of Davis-Bacon requirements to a particular federally assisted project to the Federal agency funding the project. The Secretary of Labor retains final coverage authority under Reorganization Plan Number 14.

 

33.       DAVIS BACON ACT AND CONTRACT WORK HOURS AND SAFETY STANDARDS ACT

 

If the Recipient determines at any time that any construction, alteration, or repair activity as defined by 29 CFR 5.2(j) (http://cfr.vlex.com/vid/5-2-definitions-19681309) will be performed during the course of the project, the Recipient shall notify the Contracting Officer prior to commencing such work and the following provisions shall apply. A modification to the award

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

23

 

which incorporates the appropriate Davis-Bacon wage rate determination(s) will constitute the Contracting Officer’s approval to proceed.

 

Definitions:  For purposes of this provision, “Davis Bacon Act and Contract Work Hours and Safety Standards Act,” the following definitions are applicable:

 

(1)          “Award” means any grant, cooperative agreement or technology investment agreement made with Recovery Act funds by the Department of Energy (DOE) to a Recipient. Such Award must require compliance with the labor standards clauses and wage rate requirements of the Davis-Bacon Act (DBA) for work performed by all laborers and mechanics employed by Recipients (other than a unit of State or local government whose own employees perform the construction) Subrecipients, Contractors, and subcontractors.

 

(2)          “Contractor” means an entity that enters into a Contract. For purposes of these clauses, Contractor shall include (as applicable) prime contractors, Recipients, Subrecipients, and Recipients’ or Subrecipients’ contractors, subcontractors, and lower-tier subcontractors. “Contractor” does not mean a unit of State or local government where construction is performed by its own employees.”

 

(3)          “Contract” means a contract executed by a Recipient, Subrecipient, prime contractor, or any tier subcontractor for construction, alteration, or repair. It may also mean (as applicable) (i) financial assistance instruments such as grants, cooperative agreements, technology investment agreements, and loans; and, (ii) Sub awards, contracts and subcontracts issued under financial assistance agreements. “Contract” does not mean a financial assistance instrument with a unit of State or local government where construction is performed by its own employees.

 

(4)          “Contracting Officer” means the DOE official authorized to execute an Award on behalf of DOE and who is responsible for the business management and non-program aspects of the financial assistance process.

 

(5)          “Recipient” means any entity other than an individual that receives an Award of Federal funds in the form of a grant, cooperative agreement, or technology investment agreement directly from the Federal Government and is financially accountable for the use of any DOE funds or property, and is legally responsible for carrying out the terms and conditions of the program and Award.

 

(6)          “Subaward” means an award of financial assistance in the form of money, or property in lieu of money, made under an award by a Recipient to an eligible Subrecipient or by a Subrecipient to a lower-tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include the Recipient’s procurement of goods and services to carry out the program nor does it include any form of assistance which is excluded from the definition of “Award” above.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

24

 

 

(7)   “Subrecipient” means a non-Federal entity that expends Federal funds received from a Recipient to carry out a Federal program, but does not include an individual that is a beneficiary of such a program.

 

(a)   Davis Bacon Act

 

(1)   Minimum wages.

 

(i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and, without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the Contractor and such laborers and mechanics.

 

Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph (a)(1)(iv) of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in § 5.5(a)(4). Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein, provided that the employer’s payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under paragraph (a)(1)(ii) of this section) and the Davis-Bacon poster (WH-1321) shall be posted at all times by the Contractor and its subcontractors at the site of the work in a prominent and accessible place where it can be easily seen by the workers.

 

(ii)(A) The Contracting Officer shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the Contract shall be classified in conformance with the wage determination. The Contracting Officer shall approve an additional classification and wage rate and fringe benefits therefore only when the following criteria have been met:

 

(1)           The work to be performed by the classification requested is not performed by a classification in the wage determination;

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

25

 

(2)           The classification is utilized in the area by the construction industry; and

 

(3)           The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination.

 

(B)   If the Contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the Contracting Officer agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken shall be sent by the Contracting Officer to the Administrator of the Wage and Hour Division, U.S. Department of Labor, Washington, DC 20210. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification action within 30 days of receipt and so advise the Contracting Officer or will notify the Contracting Officer within the 30-day period that additional time is necessary.

 

(C)   In the event the Contractor, the laborers or mechanics to be employed in the classification or their representatives, and the Contracting Officer do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the Contracting Officer shall refer the questions, including the views of all interested parties and the recommendation of the Contracting Officer, to the Administrator for determination. The Administrator, or an authorized representative, will issue a determination within 30 days of receipt and so advise the Contracting Officer or will notify the Contracting Officer within the 30-day period that additional time is necessary.

 

(D)  The wage rate (including fringe benefits where appropriate) determined pursuant to paragraphs (a)(1)(ii)(B) or (C) of this section, shall be paid to all workers performing work in the classification under this Contract from the first day on which work is performed in the classification.

 

(iii)          Whenever the minimum wage rate prescribed in the Contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the Contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof.

 

(iv)          If the Contractor does not make payments to a trustee or other third person, the Contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, provided that the Secretary of Labor has found, upon the written request of the Contractor, that the applicable standards of the Davis-Bacon Act have been met. The Secretary of Labor may require the Contractor to set aside in a separate account assets for the meeting of obligations under the plan or program.

 

(2)   Withholding. The Department of Energy or the Recipient or Subrecipient shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld from the Contractor under this Contract or any other

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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Federal contract with the same prime contractor, or any other federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the Contractor or any subcontractor the full amount of wages required by the Contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), all or part of the wages required by the Contract, the Department of Energy, Recipient, or Subrecipient, may, after written notice to the Contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased.

 

(3)   Payrolls and basic records.

 

(i)    Payrolls and basic records relating thereto shall be maintained by the Contractor during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work (or under the United States Housing Act of 1937, or under the Housing Act of 1949, in the construction or development of the project). Such records shall contain the name, address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in section 1 (b)(2)(B) of the Davis-Bacon Act), daily and weekly number of hours worked, deductions made, and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1 (b)(2)(B) of the Davis-Bacon Act, the Contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs.

 

(ii)   (A) The Contractor shall submit weekly for each week in which any Contract work is performed a copy of all payrolls to the Department of Energy if the agency is a party to the Contract, but if the agency is not such a party, the Contractor will submit the payrolls to the Recipient or Subrecipient (as applicable), applicant, sponsor, or owner, as the case may be, for transmission to the Department of Energy. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. Instead, the payrolls

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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shall only need to include an individually identifying number for each employee (e.g., the last four digits of the employee’s social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH-347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The prime Contractor is responsible for the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the full social security number and current address of each covered worker, and shall provide them upon request to the Department of Energy if the agency is a party to the Contract, but if the agency is not such a party, the Contractor will submit them to the Recipient or Subrecipient (as applicable), applicant, sponsor, or owner, as the case may be, for transmission to the Department of Energy, the Contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a subcontractor to provide addresses and social security numbers to the prime contractor for its own records, without weekly submission to the sponsoring government agency (or the Recipient or Subrecipient (as applicable), applicant, sponsor, or owner).

 

(B)   Each payroll submitted shall be accompanied by a “Statement of Compliance,” signed by the Contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the Contract and shall certify the following:

 

(1) That the payroll for the payroll period contains the information required to be provided under § 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under § 5.5 (a)(3)(i) of Regulations, 29 CFR part 5, and that such information is correct and complete;

 

(2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the Contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3;

 

(3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the Contract.

 

(C)   The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submission of the “Statement of Compliance” required by paragraph (a)(3)(ii)(B) of this section.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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(D)  The falsification of any of the above certifications may subject the Contractor or subcontractor to civil or criminal prosecution under section 1001 of title 18 and section 3729 of title 31 of the United States Code.

 

(iii)  The Contractor or subcontractor shall make the records required under paragraph (a)(3)(i) of this section available for inspection, copying, or transcription by authorized representatives of the Department of Energy or the Department of Labor, and shall permit such representatives to interview employees during working hours on the job. If the Contractor or subcontractor fails to submit the required records or to make them available, the Federal agency may, after written notice to the Contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR 5.12.

 

(4)   Apprentices and trainees—

 

(i)    Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the Contractor as to the entire work force under the registered program. Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a Contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman’s hourly rate) specified in the Contractor’s or subcontractor’s registered program shall be observed. Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice’s level of progress, expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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applicable apprentice classification, fringes shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the Contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved.

 

(ii)   Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be greater than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee’s level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In the event the Employment and Training Administration withdraws approval of a training program, the Contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved.

 

(iii)  Equal employment opportunity. The utilization of apprentices, trainees, and journeymen under this part shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended and 29 CFR part 30.

 

(5)   Compliance with Copeland Act requirements. The Contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in this Contract.

 

(6)   Contracts and Subcontracts. The Recipient, Subrecipient, the Recipient’s, and Subrecipient’s contractors and subcontractor shall insert in any Contracts the clauses contained herein in(a)(1) through (10) and such other clauses as the Department of Energy may by appropriate instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The Recipient shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all of the paragraphs in this clause.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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(7)   Contract termination: debarment. A breach of the Contract clauses in 29 CFR 5.5 may be grounds for termination of the Contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.12.

 

(8)   Compliance with Davis-Bacon and Related Act requirements. All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are herein incorporated by reference in this Contract.

 

(9)   Disputes concerning labor standards. Disputes arising out of the labor standards provisions of this Contract shall not be subject to the general disputes clause of this Contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the Recipient, Subrecipient, the Contractor (or any of its subcontractors), and the contracting agency, the U.S. Department of Labor, or the employees or their representatives.

 

(10) Certification of eligibility.

 

(i)    By entering into this Contract, the Contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the Contractor’s firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).

 

(ii)   No part of this Contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).

 

(iii)  The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C. 1001.

 

(b)   Contract Work Hours and Safety Standards Act. As used in this paragraph, the terms laborers and mechanics include watchmen and guards.

 

(1)   Overtime requirements. No Contractor or subcontractor contracting for any part of the Contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.

 

(2)   Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (b)(1) of this section, the Contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such Contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (b)(1) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (b)(1) of this section.

 

(3)   Withholding for unpaid wages and liquidated damages. The Department of Energy or the Recipient or Subrecipient shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the Contractor or subcontractor under any such contract or any other Federal contract with the same prime Contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such Contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (b)(2) of this section.

 

(4)   Contracts and Subcontracts. The Recipient, Subrecipient, and Recipient’s and Subrecipient’s contractor or subcontractor shall insert in any Contracts, the clauses set forth in paragraph (b)(1) through (4) of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The Recipient shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (b)(1) through (4) of this section.

 

(5)   The Contractor or subcontractor shall maintain payrolls and basic payroll records during the course of the work and shall preserve them for a period of three years from the completion of the Contract for all laborers and mechanics, including guards and watchmen, working on the Contract. Such records shall contain the name and address of each such employee, social security number, correct classifications, hourly rates of wages paid, daily and weekly number of hours worked, deductions made, and actual wages paid. The records to be maintained under this paragraph shall be made available by the Contractor or subcontractor for inspection, copying, or transcription by authorized representatives of the Department of Energy and the Department of Labor, and the Contractor or subcontractor will permit such representatives to interview employees during working hours on the job.

 

(c)   Recipient Responsibilities for Davis Bacon Act

 

(1)   On behalf of the Department of Energy (DOE), Recipient shall perform the following functions:

 

(i)    Obtain, maintain, and monitor all Davis Bacon Act (DBA) certified payroll records submitted by the Subrecipients and Contractors at any tier under this Award;

 

(ii)   Review all DBA certified payroll records for compliance with DBA requirements, including applicable DOL wage determinations;

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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(iii)  Notify DOE of any non-compliance with DBA requirements by Subrecipients or Contractors at any tier, including any non-compliances identified as the result of reviews performed pursuant to paragraph (ii) above;

 

(iv)  Address any Subrecipient and any Contractor DBA non-compliance issues; if DBA non-compliance issues cannot be resolved in a timely manner, forward complaints, summary of investigations and all relevant information to DOE;

 

(v)   Provide DOE with detailed information regarding the resolution of any DBA non-compliance issues;

 

(vi)  Perform services in support of DOE investigations of complaints filed regarding noncompliance by Subrecipients and Contractors with DBA requirements;

 

(vii)    Perform audit services as necessary to ensure compliance by Subrecipients and Contractors with DBA requirements and as requested by the Contracting Officer; and

 

(viii)   Provide copies of all records upon request by DOE or DOL in a timely manner.

 

(d)   Rates of Wages

 

The minimum wages to be paid laborers and mechanics under this award involved in performance of work at the project site, as determined by the Secretary of Labor to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work in the pertinent locality, are found at http://www.wdol.gov/, by clicking on “Selecting DBA WDs”. The Wage Determination Number(s) and General Decision Number(s) specific to this award are found below. These wage rates are minimum rates and are not intended to represent the actual wage rates that the Contractor may have to pay.

 

34.  CONTINGENCY

 

A.    Contingency Requirement. A minimum amount of Contingency is required for awards selected under Funding Opportunity Announcement DE-FOA-0000096. “Contingency” is defined in the Appendix as: “a provision in the Project Management Plan to mitigate cost and/or schedule risk.” Contingency funds must be (a) liquid, (b) immediately available, and (c) unrestricted funds dedicated exclusively to the Project for the purpose of mitigating project performance baseline risk. Contingency funds may come from a variety of sources, as approved by the Contracting Officer on a case-by-case basis in accordance with the Appendix to these Terms and Conditions (Attachment 5).

 

B.    Minimum Amount of Contingency. Initial Contingency funds shall be not less than 25 percent of the Total Project Cost that begins with Budget Period 2, as more specifically described in Section B(2) of the Appendix to these Terms and Conditions (Attachment 5).

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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C.    Contingency Not Counted Toward Cost Share or DOE Reimbursement. Contingency is in addition to the Total Project Cost and cannot count toward cost share or result in reimbursement by DOE above the share approved in the award.

 

D.    Appendix. All of the terms and conditions set forth in this provision shall be further subject to the requirements and clarifications of Attachment 5.

 

35.          REOPENER TERM

 

(a)           At the time the total budget cost for this award was established, agreement could not be reached on indirect rates. However, agreement was reached on a total estimated budget cost that includes a dollar amount for indirect costs and this amount is subject to adjustment in accordance with the provisions of this term and other administrative provisions of the award.

 

(b)           Within ninety (90) days from Feb. 1, 2012, you shall submit a revised indirect rate proposal, specific to Recipient’s organization, to the Contracting Officer and Cognizant Auditor for determination of a provisional billing rate.

 

(c)           If the approved provisional billing rates result in amounts for indirect costs that are substantially lower the amount budgeted, you agree to commence negotiations to revise the budget and the total estimated cost for this award.

 

(d)           Should you fail to submit the information in paragraph (b), or should there be no agreement as to the amount of the adjustment contemplated by this term, then the Contracting Officer may make a unilateral determination and modify the award accordingly.

 

[ * ] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

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