Document:

Exhibit 10

Exhibit

10.3

 

AGREEMENT BETWEEN

 

OWNER AND DESIGN BUILDER

 

THIS AGREEMENT

made

as of this 20th day of November in the year of 2001.

 

BETWEEN the

Owner:

 

Great Plains Ethanol, LLC

P.O. Box 172

Lennox, SD 57039

 

And the Design Builder:

 

Broin and Associates Inc.

2209 East 57 Street North

Sioux Falls, SD 57104

 

For the following Project:

 

Great Plains Ethanol, LLC located near

Chancellor, SD.  The construction of a

40 MMGPY dry mill fuel ethanol processing plant

 

The Owner and Design Builder, in

consideration of the mutual covenants hereinafter set forth, agree as follows:

 

1

 

ARTICLE 1 –

GENERAL PROVISIONS

 

1.1          BASIC DEFINITIONS

 

1.1.1        The Contract Documents consist of this Agreement, the Design

Builder’s Exhibits and written addenda identified in Article 14, the

Construction Documents approved by the Owner and Modifications issued after

execution of this Agreement.  A

Modification is a Change Order or a written amendment to this Agreement signed

by both parties, or a Construction Change Directive issued by the Owner in

accordance with Paragraph 8.3.

 

1.1.2        The term “Work” means the construction and services provided

by the Design Builder to fulfill the Design Builder’s obligations.

 

1.2          EXECUTIONS, CORRELATION AND INTENT

 

1.2.1        It is the intent of the Owner and Design Builder that the

Contract Documents include all items necessary for proper execution and

completion of the Work.  The Contract

Documents are complementary, and what is required by one shall be as binding as

if required by all; performance by the Design Builder shall be required only to

the extent consisted with and reasonably inferable from the Contract Documents

as being necessary to produce the intended results.  Words that have well-known technical or construction industry

meanings are used in the Contract Documents in accordance with such recognized

meanings.

 

1.2.2        If the Design Builder believes or is advised by another

design professional retained by the Design Builder to provide services on the

Project that implementation of any instruction received from the Owner would

cause a violation of any applicable law, the Design Builder shall notify the

Owner in writing.  Neither the Design

Builder nor another design professional retained by the Design Builder shall be

obligated to perform any act which either believes will violate any applicable

law.

 

1.2.3        Nothing contained in this Agreement

shall create a contractual relationship between the Owner and any person or

entity other than the Design Builder.

 

1.3          OWNERSHIP AND USE OF DOCUMENTS

 

1.3.1        Drawings, specifications, and other

documents and electronic date furnished by the Design

Builder and other design professional retained by the Design Builder, are

instruments of service.  The Design

Builder and other providers of professional services shall retain all common

law, statutory and other reserved rights, including copyright in those

instruments of service furnished by them. 

Drawings, specifications, and other documents and electronic data are

furnished for use solely with respect to this Agreement.  The Owner shall be permitted to retain

copies, including reproducible copies, of the drawings, specifications, and

other documents and electronic data furnished by the Design Builder for

information and reference in connection with the Project except as provided in

Subparagraphs 1.3.2 and 1.3.3.

 

1.3.2        Drawings, specifications, and other documents and electronic

data furnished by the Design Builder shall not be used by the Owner or others

on other projects, for additions to 

 

2

 

this Project or for completion

of this Project by others, except by agreement in writing and with appropriate

compensation to the Design Builder.

 

1.3.3        Submission or distribution of the Design Builder’s documents

to meet official regulatory requirements or for similar purposes in connection

with the Project is not to be construed as publication in derogation of the

rights reserved in Subparagraph 1.3.1.

 

ARTICLE 2 –

OWNER

 

2.1                               The Owner

shall designate a representative authorized to act on the Owner’s behalf with

respect to the Project.  The Owner or

such authorized representative shall examine documents submitted by the Design

Builder and shall render decisions in a timely manner and in accordance with

the schedule accepted by the Owner.  The

Owner may obtain independent review of the Contract Documents by a separate

architect, engineer, contractor, or cost estimator under contract to or employed

by the Owner.  Such independent review

shall be undertaken at the Owner’s expense in a timely manner and shall not

delay the orderly progress of the Work.

 

2.2                               The

Owner shall cooperate with the Design Builder in securing building and other

permits, licenses and inspections.  The

Owner shall not be required to pay the fees for such permits, licenses and

inspections unless the cost of such fees is excluded from the Design Builder’s

Scope of Services.

 

2.3                               The

Owner shall furnish services of land surveyors, geotechnical engineers, and

other consultants for subsoil, air and water conditions, when such services are

deemed necessary by the Design Builder to properly carry out the design

services required by this Agreement.

 

2.4                               The

Owner shall disclose, to the extent known to the Owner, the results and reports

of prior tests, inspections or investigations conducted for the Project

involving: structural or mechanical systems; chemical; air and water pollution;

hazardous materials; or other environmental and subsurface conditions.  The Owner shall disclose all information

known to the Owner regarding the presence of pollutants at the Project’s site.

 

2.5                               The

Owner shall furnish all legal, accounting and insurance counseling services as

may be necessary at any time for the Project, including such auditing services

as the Owner may require to verify the Design Builder’s Applications for

Payment.

 

2.6                               Those

services, information, surveys and reports required by Paragraphs 2.3 through

2.5 which are within the Owner’s control shall be furnished at the Owner’s

expense.  The Design Builder shall be

entitled to rely upon the accuracy and completeness thereof, except to the

extent the Owner advises the Design Builder to the contrary in writing.

 

2.7                               If the

Owner requires the Design Builder to maintain any special insurance coverage,

policy, amendment, or rider, the Owner shall pay the additional cost thereof,

except as otherwise stipulated in this Agreement.

 

2.8                               If the

Owner observes or otherwise becomes aware of a fault of defect in the Work or

nonconformity with the Design Builder’s Scope of Services or the Construction

Documents, the Owner shall give prompt written notice thereof to the Design

Builder.

 

3

 

2.9                               The

Owner shall promptly upon the request of the Design Builder, furnish to the

Design Builder reasonable evidence that financial arrangements have been made

to fulfill the Owner’s obligations under the Contract.

 

2.10                        The

Owner shall communicate with persons or entities employed or retained by the

Design Builder through the Design Builder, unless otherwise directed by the

Design Builder.

 

ARTICLE 3 –

DESIGN BUILDER

 

3.1          SERVICES AND RESPONSIBILITIES

 

3.1.1        Standard of Care: Design Builder shall perform or furnish

Design Professional Services and related services in all phases of the

project.  The standard of care for all

such services performed or furnished under this Agreement will be the care and

skill ordinarily used by members of the engineering profession practicing under

similar conditions at the same time and locality.

 

3.1.2        The Design Builder shall be responsible to the Owner for acts

and omissions of the Design Builder’s employees, subcontractors and their

agents and employees, and other persons, including other design professionals,

performing any portion of the Design Builder’s obligations under this

Agreement.

 

3.2          BASIC SERVICES

 

3.2.1        The Design Builder’s Basic Services are described below and

in Article 14.

 

3.2.2        The Design Builder shall designate a representative

authorized to act on the Design Builder’s behalf with respect to the Project.

 

3.2.3        The Design Builder, with the assistance of the Owner, shall

file documents required to obtain necessary approvals of governmental

authorities having jurisdiction over the Project.

 

3.2.4        Unless otherwise provided in the Contract Documents, the

Design Builder shall provide or cause to be provided and shall pay for design

services, labor, materials, equipment, tools, construction equipment and

machinery, water, heat, utilities, transportation and other facilities and

services necessary for proper execution and completion of the Work, whether

temporary or permanent and whether or not incorporated or to be incorporated in

the Work.

 

3.2.5        Design Builder shall supervise, inspect and direct the

Construction competently and efficiently, devoting such attention thereto and

applying such skills and expertise as may be necessary to provide the

Construction in accordance with the Contract Documents.  Design Builder shall be solely responsible

for the means, methods, techniques, sequences and procedures employed for the

provision of Construction.  Design

Builder shall be responsible to see that the complete Construction complies

accurately with the Contract Documents and shall keep Owner advised as to the

quality and progress of the Construction.

 

4

 

3.2.6        The Design Builder shall keep the Owner informed of the

progress and quality of the Work.

 

3.2.7        The Design Builder shall be responsible for correcting Work

which does not conform to the Contract Documents.

 

3.2.8        The Design Builder warrants to the Owner that materials and

equipment furnished under the Contract will be of good quality and new unless

otherwise required or permitted by the Contract Documents, that the construction

will be free from faults and defects, and that the construction will conform

with the requirements of the Contract Documents.  Construction not conforming to these requirements, including

substitutions not properly approved by the Owner, shall be corrected in

accordance with Article 9.

 

3.2.9        The Design Builder shall pay all state sales, consumer, use

and similar taxes which had been legally enacted prior to the date of this

Agreement, and shall secure and pay for building and other permits and governmental

fees, licenses and inspections necessary for the proper execution and

completion of the Work which are either customarily secured after execution of

a contract for construction or are legally required prior to the date of this

Agreement.

 

3.2.10      Laws and Regulations

 

1.           Design Builder shall give all notices

and comply with all Laws and Regulations of the place of the Project which are

applicable to furnishing and performance of the Work.  Except where otherwise expressly required by applicable Laws and

Regulations, Owner shall not be responsible for monitoring Design Builder’s

compliance with any Laws or Regulations.

 

2.           If  Design

Builder performs any Work knowing or having reason to know that it is contrary

to Laws or Regulations, Design Builder shall bear all costs arising therefrom.

 

3.           Changes in Laws and Regulations not

known or foreseeable on the date of receipt of Proposals having an effect on

the cost or time of performance may be the subject of a claim under Article 8.

 

3.2.11      Design Builder shall pay all license fees and royalties and

assume all costs incident to the use in the performance of the Work or the

incorporation in the Work of any invention, design, process, product or device

which is subject of patent rights or copyrights held by others.  If a particular invention, design, process,

product or device is specified in the Conceptual Documents for use in the

performance of the Construction and if to the actual knowledge of Owner its use

is subject to patent rights or copyrights calling for the payment of any

license fee or royalty to others, the existence of such rights shall be

disclosed by Owner in the Conceptual Documents.  To the fullest extent permitted by Laws and Regulations, Design

Builder shall indemnify and hold harmless Owner, from and against all claims,

costs, losses and damages (including but not limited to all fees and charges of

engineers, architects, attorneys and other professionals and all court or

arbitration or other dispute resolution costs) arising out of or resulting from

any infringement of patent rights or copyrights incident to the use in the

performance of the Work or resulting from the 

 

5

 

incorporation in the Work of any

invention, design, process, product or device not specified in the Conceptual

Documents.

 

3.2.12      Use of Site and Other Areas

 

1.           Design Builder shall confine

construction equipment, the storage of materials  and equipment and the operations of construction workers to those

lands and areas permitted by the Owner and other land and areas permitted by

Laws and Regulations, rights-of-way, permits and easements, and shall not

unreasonably encumber the premises with construction equipment or other

materials or equipment.  Design Builder

shall assume full responsibility for any damage to any such land or area, or to

the owner or occupant thereof or of any adjacent land or areas, resulting from

the performance of the Construction. 

Should any claim be made by any such owner or occupant because of the

performance of the Construction, Design Builder shall promptly settle with such

other party by negotiation or otherwise resolve the claim by arbitration or

other dispute resolution proceeding or at law. 

Design Builder shall, to the fullest extent permitted by Laws and

Regulations, indemnify and hold harmless Owner, Owner’s Consultants and anyone

directly or indirectly employed by any of them from and against all claims,

costs, losses and damages (including, but not limited to, fees of engineers,

architects, attorneys and other professionals and court and arbitration or

other dispute resolution costs) arising out of or resulting from any claim or

action, legal or equitable, brought by any such owner or occupant against

Owner, or any other party indemnified hereunder to the extent caused by or

based upon Design Builder’s performance of the Construction.

 

2.           During the performance of the

Construction, Design Builder shall keep the premises free from accumulations of

waste materials, rubbish and other debris resulting from the Construction.  At the completion of the Construction Design

Builder shall remove all waste materials, rubbish and debris from and about the

premises as well as all tools, appliances, construction equipment, temporary

construction and machinery and surplus materials.  Design Builder shall leave the Site clean and ready for occupancy

by Owner at Substantial Completion. 

Design Builder shall restore to original condition all property not

designated for alteration by the Contract Documents.

 

3.           Design Builder shall not load nor

permit any part of any structure to be loaded in any manner that will endanger

the structure, nor shall Design Builder subject any part of the Work or

adjacent property to stresses or pressures that will endanger it.

 

3.2.13      The Design Builder shall notify the Owner when the Design

Builder believes that the Work or an agreed upon portion thereof is

substantially completed.  If the Owner

concurs, the Design Builder shall issue a Certificate of Substantial Completion

which shall establish the Date of Substantial Completion, shall state the

responsibility of each party for security, maintenance, heat, utilities, damage

to the Work and insurance, shall include a list of items to be completed or

corrected and shall fix the time within which the Design Builder shall complete

items listed therein.  Disputes between

the Owner and Design Builder regarding the Certificate of Substantial

Completion shall be resolved in accordance with provisions of Article 10.

 

6

 

3.2.14      The Design Builder shall maintain at the site for the Owner one

record copy of the drawings, specifications, product data, samples, shop

drawings, Change Orders and other modifications, in good order and regularly

updated to record the completed construction. 

These shall be delivered to the Owner upon completion of construction

and prior to final payment.

 

3.2.15      Unless otherwise provided in the Contract Documents, Design

Builder shall directly or through one or more Subcontractors obtain and pay for

all permits and licenses necessary for construction.  Owner shall assist Design Builder, when necessary, in obtaining

such permits and licenses.  Design

Builder shall pay all governmental charges and inspection fees necessary for

the prosecution of the Construction, which are applicable on the date of this

Agreement.  The Owner is responsible for

paying any and all utility company connection charges and/or capital costs

related thereto.

 

3.2.16      Design Builder’s General Warranty and Guarantee

 

1.           Design Builder warrants and

guarantees to Owner that all Construction will be in accordance with the

Contract Documents and will not be defective. 

This warranty shall be effective for a period of twelve months from the

date of substantial completion and will cover all labor and materials to

correct any deficiencies.  Design

Builder’s warranty and guarantee hereunder excludes defects or damage caused

by:

 

a.             Abuse, modification or improper maintenance or operation

by persons other than Design/Builder, Subcontractors or Suppliers; or

 

b.             Normal wear and tear under normal usage.

 

2.           Design Builder’s obligation to

perform and complete the Work in accordance with the Contract Documents shall

be absolute.  None of the following will

constitute an acceptance of Work that is not in accordance with the Contract

Documents or a release of Design Builder’s obligation to perform the Work in

accordance with the Contract Documents:

 

a.             Observations by Owner;

 

b.             The making of any progress or final payment;

 

c.             The issuance of a certificate of Substantial Completion;

 

d.             Use or occupancy of the Work or any part thereof by

Owner;

 

e.             Any acceptance by Owner or any failure to do so;

 

f.              Any review and approval of a Submittal;

 

g.             Any inspection, test or approval by others; or

 

h.             Any correction of defective Construction by Owner.

 

7

 

3.2.17      Operational Phase: During the Operations Phase, Design Builder

shall:

 

1.           Provide assistance in connection with

the start-up, testing, refining and adjusting of any equipment or system.

 

2.           Assist Owner in training staff to

operate and maintain the Project.

 

3.           Assist Owner in developing systems

and procedures for control of the operation and maintenance of and record keeping

for the Project.

 

3.3          ADDITIONAL SERVICES

 

3.3.1        The services described in this Paragraph 3.3 are not included

in Basic Services unless so identified in Article 14, and they shall be paid

for by the Owner as provided in this Agreement, in addition to the compensation

for Basic Services.  The services

described in this Paragraph 3.3 shall be provided only if authorized or

confirmed in writing by the Owner.

 

3.3.2        Making revisions in drawings, specifications, and other

documents or electronic data when such revisions are required by the enactment

or revision of codes, laws or regulations subsequent to the preparation of such

documents or electronic data.

 

3.3.3        Providing consultation concerning replacement of Work damaged

by fire or other cause during construction, and furnishing services required in

connection with the replacement of such Work.

 

3.3.4        Providing services in connection with a public hearing,

arbitration proceeding or legal proceeding, except where the Design Builder is

a party thereto.

 

3.3.5        Providing coordination of construction performed by the

Owner’s own forces or separate contractors employed by the Owner, and

coordination of services required in connection with construction performed and

equipment supplied by Owner.

 

3.3.6        Submitting Construction Documents for review and approval by

the Owner.  Construction Documents may

include drawings, specifications, and other documents and electronic data

setting forth in detail the requirements for construction of the Work.

 

3.3.7        Preparing a set of reproducible record documents or

electronic data showing significant changes in the Work made during

construction.

 

3.3.8        Providing additional assistance for training personnel,

preparing manuals or consulting during operation outside of the Scope of Basic

Services.

 

ARTICLE 4 –

TIME

 

4.1                               Unless

otherwise indicated, the Owner and the Design Builder shall perform their

respective obligations as expeditiously as is consistent with reasonable skill

and care and the orderly progress of the Project.

 

8

 

4.2                               Time

limits stated in the Contract Documents are of the essence.  The Work to be performed under this

Agreement shall commence upon receipt of a Notice To Proceed unless otherwise

agreed and, subject to authorized Modifications, Substantial Completion shall

be achieved on or before the date established in Article 14.

 

4.3                               Substantial

Completion is the stage in the progress of the Work when the Work or designated

portion thereof is sufficiently complete in accordance with the Contract

Documents so the Owner can occupy or utilize the Work for its intended use.

 

4.4                               Based on

the Design Builder’s Scope of Services, a construction schedule shall be

provided consistent with Paragraph 4.2 above.

 

4.5                               If the

Design Builder is delayed at any time in the progress of the Work by an act or

neglect of the Owner, Owner’s employees, or separate contractors employed by

the Owner, or by changes ordered in the Work, or by labor disputes, fire,

unusual delay in deliveries, adverse weather conditions not reasonably

anticipatable, unavoidable casualties or other causes beyond the Design

Builder’s control, or by delay authorized by the Owner pending arbitration, or

by other causes which the Owner and Design Builder agree may justify delay,

then Contract Time shall be reasonably extended by Change Order.

 

ARTICLE 5 –

PAYMENTS

 

5.1          PROGRESS PAYMENTS

 

5.1.1        The Design Builder shall deliver to the Owner itemized

Applications for Payment in such detail as indicated in Article 14.

 

5.1.1.1     Application shall be made on AIA forms 6702 and 6703 or similar

documents.  Two percent retainage shall

be held by the owner on up to fifty percent value of the completed work after

which no retainage will be held.

 

5.1.2        Within ten (10) days of the Owner’s receipt of a properly

submitted and correct Application for Payment, the Owner shall make payment to

the Design Builder.

 

5.1.3        The Application for Payment shall constitute a representation

by the Design Builder to the Owner that the design and construction have

progressed to the point indicated; the quality of Work covered by the

application is in accordance with the Contract Documents; and the Design

Builder is entitled to payment in the amount requested.

 

5.1.4        Upon receipt of payment from the Owner, the Design Builder

shall promptly pay the other design professionals and each contractor the

amount to which each is entitled in accordance with the terms of their

respective contracts.

 

5.1.5        The Owner shall have no obligation under this Agreement to pay

or to be responsible in any way for payment to another design professional, or

a contractor performing portions of the Work.

 

5.1.6        Neither progress payment nor partial or entire use or

occupancy of the Project by the Owner shall constitute acceptance of Work not

in accordance with the Contract Documents.

 

9

 

5.1.7        The Design Builder warrants that title to all construction

covered by an Application for Payment will pass to the Owner no later than the

time of payment.  The Design Builder

further warrants that upon submittal of an Application for Payment all

construction for which payments have been received from the Owner shall be free

and clear of liens, claims, security interests or encumbrances in favor of the

Design Builder or any other person or entity performing construction at the

site or furnishing materials or equipment relating to the construction.

 

5.1.8        Upon compliance with the Process Guarantee, the Owner shall

pay the Design Builder the retainage, if any, less the reasonable cost to

correct or complete incorrect or incomplete Work.  Final payment of such withheld sum shall be made upon correction

or completion of such Work.

 

5.2.         FINAL PAYMENT

 

5.2.1 When the Work has been

completed and the contract fully performed, the Design Builder shall submit a

final application for payment to the Owner, who shall make final payment within

ten (10) days of receipt.

 

5.2.2        The making of final payment shall constitute a waiver of

claims by the Owner except those arising from:

 

5.2.2.1              liens, claims, security interests

or encumbrances arising out of the Contract and unsettled;

 

5.2.2.2              failure of the Work to comply with

the requirements of the Contract Documents; or

 

5.2.2.3              terms of special warranties

required by the Contract Documents.

 

5.2.3        Acceptance of final payment shall constitute a waiver of all

claims by the Design Builder except those previously made in writing and

identified by the Design Builder as unsettled at the time of final Application

for Payment.

 

5.3          INTEREST PAYMENTS

 

5.3.1        Payments due to the Design Builder under this Agreement which

are not paid when due shall bear interest from the date due at the rate

specified in Article 13, or in the absence of a specified rate, at the legal

rate prevailing where the Project is located.

 

ARTICLE 6 –

PROTECTION OF PERSONS AND PROPERTY

 

6.1                               The

Design Builder shall be responsible for initiating, maintaining and providing

supervision of safety precautions and programs in connection with the

performance of this Agreement.

 

6.2                               The

Design Builder shall take reasonable precautions for the safety of, and shall

provide reasonable protection to prevent damage, injury or loss to: (1)

employees on the Work and other persons who may be affected thereby; (2) the Work

and materials and equipment to be incorporate therein, whether in storage on or

off the site, under care, custody, or control 

 

10

 

of the Design Builder or the

Design Builder’s contractors; and (3) other property at or adjacent thereto,

such as trees, shrubs, lawns, walks, pavements, roadways, structures and

utilities not designated for removal relocation, or replacement in the course

of construction.

 

6.3                               The

Design Builder shall give notices and comply with applicable laws, ordinances,

rules, regulations and lawful orders of public authorities bearing on the

safety of persons or property or their protection from damage, injury or loss.

 

6.4                               The

Design Builder shall promptly remedy damage and loss (other than damage or loss

insured under property insurance provided or required by the Contract

Documents) to property at the site caused in whole or in part by the Design

Builder, a contractor of the Design Builder or anyone directly or indirectly

employed by any of them, or by anyone for whose acts they may be liable.

 

ARTICLE 7 –

INSURANCE AND BONDS

 

7.1          PERFORMANCE, PAYMENT AND OTHER BONDS

 

                                                7.1.1        If it is required by the Primary Lender,

Design Builder shall furnish performance and payment Bonds, each in an amount

at least equal to the Contract Price as security for the faithful performance

and payment of all Design Builder’s obligations to furnish, provide and pay for

Construction and related materials under the Contract Documents.  These Bonds shall remain in effect at least

until one year after the date when final payment becomes due, except as

provided otherwise by Laws or Regulations or by the Contract Documents.  Design Builder shall also furnish such other

Bonds as are required by Article 14. All Bonds shall be in the form prescribed

by the Contract Documents except as provided otherwise by Laws or Regulations,

and shall be executed by such sureties as are named in the current list of

“Companies Holding Certificates of Authority as Acceptable Surety Companies” as

published in Circular 570 (amended) by the Audit Staff, Bureau of Government

Financial Operations, U.S. Treasury Department.  All Bonds signed by an agent must be accompanied by a certified

copy of such agent’s authority to act. 

The cost of the performance and payment bonds shall be paid by the

Owner.

 

7.1.2        If the surety on any Bond furnished by Design Builder is

declared bankrupt or becomes insolvent or its right to do business is

terminated in any state where any part of the Project is located or it ceases

to meet the requirements of paragraph 7.1.1, Design Builder shall within thirty

days thereafter substitute another Bond and surety meeting the requirements of

paragraphs 7.1.1 and 7.9.

 

7.2          DESIGN/BUILDER’S LIABILITY INSURANCE

 

7.2.1        The Design Builder shall purchase from and maintain, in a

company or companies lawfully authorized to do business in the jurisdiction in

which the Project is located, such insurance as will protect the Owner and

Design Builder from claims set forth below which may arise out of or result

from operations under this Agreement by the Design Builder.

 

7.2.1.1

             Claims under workers’

compensation, disability benefits and other similar employee benefit acts;

 

11

 

7.2.1.2

             Claims for damages because of

bodily injury, occupational sickness or disease, or death of Design Builder’s

employees;

 

7.2.1.3

             Claims for damages because of

bodily injury, sickness or disease, or death of any person other than Design

Builder’s employees;

 

7.2.1.4

             Claims for damages insured by

customary personal injury liability coverage which are sustained (i) by any

person as a result of an offense directly or indirectly related to the

employment of such person by Design Builder, or (ii) by any other person for

any other reason;

 

7.2.1.5

             Claims for damages, other

than to the Work itself, because of injury to or destruction of tangible

property wherever located, including loss of use resulting therefrom; and

 

7.2.1.6

             Claims for damages because of

bodily injury or death of any person or property damage arising out of the

ownership, maintenance or use of any motor vehicle.

 

7.2.2        The policies of insurance required by paragraph 7.2.1 shall:

 

7.2.2.1

             With respect to insurance

required by paragraphs 7.2.1.3 through 7.2.1.6 inclusive, include as additional

insureds Owner and any other persons or entities indicated in Article 14, all

of whom shall be listed as additional insureds, and include coverage for the

respective officers and employees of all such additional insureds;

 

7.2.2.2

             Include at least the specific

coverages and be written for not less than the limits of liability provided in

7.2.2.2.a through 7.2.2.2.c or required by Laws or Regulations, whichever is

greater;

 

	

  a.

  	

   

  	

  Worker’s Compensation under

  Paragraph 7.2.1.1 of the General Conditions:

  

 

	

  1.

  	

   

  	

  State:     Statutory

  	

   

  	

   

  
	

  2.

  	

   

  	

  Applicable Federal:

  	

  Statutory

  	

   

  
	

  3.

  	

   

  	

  Employer’s Liability:

  	

  $500,000

  	

   

  

 

 

	

  b.  

  	

  Design Builder’s General

  Liability (under paragraphs 7.2.1.2 through 7.2.1.6) which shall include

  completed operations and product liability coverages

  

 

	

  1.

  	

   

  	

  General Aggregate:  
(Except Products – Completed Operations)

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  $2,000,000

  	

   

  
	

  2.

  	

   

  	

  Products - Completed

  Operations Aggregate

  	

   

  	

  $2,000,000

  	

   

  
	

  3.

  	

   

  	

  Personal and Advertising

  Injury

  
(Per Person/Organization)

  	

   

  	

  $1,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  4.

  	

   

  	

  Each Occurrence  
(Bodily Injury and Property Damages)

  	

   

  	

  $1,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  5.

  	

   

  	

  Property Damage liability

  insurance will

  
provide Explosion, Collapse and Underground  
coverages where applicable.

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  6.

  	

   

  	

  Excess Liability

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  General Aggregate

  	

   

  	

  $5,000,000

  	

   

  
	

   

  	

   

  	

  Each Occurrence

  	

   

  	

  $5,000,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  c.

  	

   

  	

  Automobile Liability:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Combine Single

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Limit (Bodily Injury and

  Property Damage)

  	

   

  	

  $1,000,000

  	

   

  

 

12

 

7.2.2.3

             Include completed operations

insurance;

 

7.2.2.4

             Include contractual liability

insurance covering Design Builder’s indemnity obligations under paragraphs

3.2.11, 3.2.12 and 11.4;

 

7.2.2.5

             Contain a provision or

endorsement that the coverage afforded will not be cancelled, materially

changed or renewal refused until at least 30 days prior written notice has been

given to Owner and each other additional insured indicated in Article 14 to

whom a certificate of insurance has been issued (and the certificates of

insurance furnished by the Design Builder pursuant to paragraph 7.9.2 will so

provide);

 

7.2.2.6.

            Remain in effect at least

until final payment and at all times thereafter when Design Builder may be

correcting, removing or replacing defective Construction in accordance with

Article 9; and

 

7.2.2.7

             With respect to completed

operations insurance, and any other insurance coverage written on a claims-made

basis, this insurance shall remain in effect for at least one year after final

payment.

 

7.3          OWNER’S LIABILITY INSURANCE

 

7.3.1        The Owner shall be responsible for purchasing and maintaining

the Owner’s General, Auto and Workmen’s Compensation liability insurance.  Optionally, the Owner may purchase and

maintain other insurance for self-protection against claims which may arise

from operations under this Agreement. 

The Design Builder shall not be responsible for purchasing and

maintaining this optional Owner’s liability insurance unless specifically

required by the Contract Documents.

 

7.4          PROPERTY INSURANCE

 

7.4.1        Unless otherwise provided in Article 14, Owner shall purchase

and maintain property insurance upon the Construction at the Site in the amount

of the full replacement cost thereof (subject to deductible amounts not

exceeding $5000 per occurrence). This insurance will:

 

7.4.1.1     Include the interests of Owner, Design/Builder, Subcontractors,

and any other persons or entities indicated in the Supplementary Conditions,

each of whom 

13

is deemed to have an insurable

interest and shall be listed as an insured or additional insured;

 

 

7.4.1.2     Be written on a Builder’s Risk “all-risk” or open peril or

special causes of loss policy form that shall at least include insurance for

physical loss and damage to the Construction, temporary buildings, falsework

and all materials and equipment in transit, and shall insure against at least

the following perils or causes of loss: fire, lightning, extended coverage,

theft, vandalism and malicious mischief, collapse, debris removal, demolition

occasioned by enforcement of Laws and Regulations, and such other perils or

causes of loss as may be specifically required by the Supplementary Conditions;

 

7.4.1.3     Include expenses incurred in the repair or replacement of any

insured property (including but not limited to fees and charges of engineers

and design professionals);

 

7.4.1.4     Be maintained in effect until final payment is made unless

otherwise agreed to in writing by Owner and Design/Builder with thirty days

written notice to each other additional insured to whom a certificate of

insurance has been issued; and

 

7.4.1.5     Allow partial utilization in accordance

with paragraph 7.8.

 

7.4.2        BOILER AND PRESSURE VESSEL INSURANCE

 

7.4.2.1     At the appropriate time during the construction period, the

Owner shall purchase and maintain Broad Coverage Insurance for equipment such

as boilers, other pressure vessels, hot water boilers, fired storage water

heaters, fired coil water heaters, unfired pressure vessels, machinery, and

similar equipment or objects, which are provided under the Contract for this

Work and which may not be covered under other insurances.  The insurance shall be in accordance with

State Laws.  Such coverage shall, as a

minimum, insure against loss or damages, including death or bodily injury, from

explosion, rupture, or bursting of the equipment piping and normally covered

appurtenances or other similar hazards peculiar to the particular equipment or

object.

 

7.4.2.2     The policy shall name the Owner, the Design/Builder, all

Subcontractors and lower tier Sub-subcontractors as joint insured.

 

7.4.2.3     The insurance shall be placed into effect prior to the testing,

use or start up of any equipment of object provided under the Contract.  The Design/Builder shall notify the Owner or

insurance agent in ample time prior to testing or startup of the object to

permit any required inspections.

 

7.4.2.4     The policy, shall cover, as a minimum, (1) loss to property of

the insured, including extra costs of temporary repair (2) death or bodily

injury liability, including defense, settlement and supplementary payments, and

(3) property damage liability including defense, settlement and supplementary

payments.  The minimum limits shall be

$1,000,000 per occurrence.

 

14

 

7.4.2.5     After acceptance of the Work, or upon occupancy by the Owner,

the Owner will provide pressure vessel insurance.  Owner will purchase and maintain boiler, machinery and other

property insurance as indicated in paragraph 7.4.

 

7.4.2.6     Entities deemed to have an insurable interest shall be listed as

an insured or additional insured.

 

7.4.3        All the policies of insurance (and the certificates or other

evidence thereof) required to be purchased and maintained by Owner in accordance

with paragraph 7.4 will contain a provision or endorsement that the coverage

afforded will not be cancelled or materially changed or renewal refused until

at least 30 days’ prior written notice has been given to Design Builder and to

each other additional insured to whom a certificate of insurance has been

issued and will contain waiver provisions in accordance with paragraph 7.5.1.

 

7.4.4.       Owner shall not be responsible for purchasing and maintaining

any property insurance to protect the interests of Design Builder,

Subcontractors, Supplies, Engineers or others in the Work to the extent of any

deductible amounts.  The risk of loss

within such identified deductible amount, will be borne by Design Builder,

Subcontractor or others suffering any such loss and if any of them wishes

property insurance coverage within the limits of such amounts, each may

purchase and maintain it at the purchaser’s own expense.

 

7.5          WAIVER OF RIGHTS

 

7.5.1        Owner and Design Builder intend that all policies purchased

in accordance with paragraph 7.4 will protect Owner, Design Builder, Engineers,

Subcontractors, and all other individuals or entities indicated in Article 14

to be listed as insured or additional insureds in such policies and will

provide primary coverage for all losses and damages caused by the perils or

causes of loss covered thereby.  All

such policies shall contain provisions to the effect that in the event of

payment of any loss or damage the insurers will have no rights of recovery

against any of the insureds or additional insureds thereunder.  Owner and Design Builder waive all rights

against each other and their respective officers, directors, employees and

agents for all losses and damages caused by, arising out of or resulting from

any of the perils or causes of loss covered by such policies and any other

property insurance applicable to the Work; and, in addition, waive all such

rights against Subcontractors, Suppliers, Engineers and all other individuals

or entities indicated in the Supplementary Conditions to be listed as insureds

or additional insureds under such policies for losses and damages so

caused.  None of the above waivers   shall extend to the rights that any party

making such waiver may have to the proceeds of insurance held by Owner as

trustee or otherwise payable under any policy so issued.  In addition, Owner waives all rights against

Design Builder, Subcontractors, Engineers and Suppliers and the officers,

directors, employees and agents of any of them for business interruption, loss

of use of Owner’s property and any other consequential damages caused by,

arising out of or resulting from any of such insured perils or causes of loss

or any other peril or cause of loss whether or not insured.

 

7.6          RECEIPT AND APPLICATION OF PROCEEDS

 

7.6.1        Any insured loss under the policies of insurance required by

paragraph 7.4 will be adjusted with Owner and made payable to Owner as

fiduciary for the insureds, as their  

 

15

interests may appear, subject to

the requirements of any applicable mortgage clause and of paragraph 7.6.3.

 

 

7.6.2.       Owner shall deposit in a separate account any money so

received, and shall distribute it in accordance with such agreement as the

parties in interest may reach.  If no

other special agreement is reached the damaged Work shall be repaired or

replaced, the moneys so received applied on account thereof and the Work and

the cost thereof covered by an appropriate Change Order or Written Amendment.

 

7.6.3.       Owner as fiduciary shall have power to adjust and settle any

loss with the insurers unless one of the parties in interest shall object in

writing within fifteen days after the occurrence of loss to Owner’s exercise of

this power.  If such objection be made,

Owner as fiduciary shall make settlement with the insurers in accordance with

such agreement as the parties in interest may reach.  If no such agreement among the parties in interest is reached,

Owner as fiduciary shall adjust and settle the loss with the insurers and, if

required in writing by any party in interest, Owner as fiduciary shall give

bond for the proper performance of such duties.

 

7.7          ACCEPTANCE OF BONDS AND INSURANCE;

OPTION TO REPLACE

 

7.7.1        If either party has any objection to the coverage afforded by

or other provisions of the Bonds or insurance required to be purchased and

maintained by the other party in accordance with Article 7 on the basis of

their not complying with the Contract Documents, the objecting party shall so

notify the other party in writing within ten days after receipt of the

certificates.  Owner and Design Builder

shall each provide to the other such additional information in respect of

insurance provided as the other may reasonably request.  If either party does not purchase or

maintain all of the Bonds and insurance required of such party by the Contract

Documents, such party shall notify the other party in writing of such failure

to purchase prior to the start of the Work, or of such failure to maintain

prior to any change in the required coverage. 

Without prejudice to any other right or remedy, the other party may

elect to obtain equivalent Bonds or insurance to protect such other party’s

interests at the expense of the party who was supposed to provide such

coverage, and a Change Order or Written Amendment shall be issued to adjust the

Contract Price accordingly.

 

7.8          PARTIAL UTILIZATION - PROPERTY

INSURANCE

 

7.8.1        If Owner finds it necessary to occupy or use a portion or

portions of the Work prior to Substantial Completion of all the construction,

such use or occupancy may be accomplished; provided that no such use or

occupancy shall commence before the insurers providing the property insurance

have acknowledged notice thereof and in writing effected any changes in

coverage necessitated thereby.  The

insurers providing the property insurance shall consent by endorsement on the

policy or policies, but the property insurance shall not be cancelled or

permitted to lapse on account of any such partial use or occupancy.

 

7.9          LICENSED SURETIES AND INSURERS;

CERTIFICATES OF INSURANCE

 

7.9.1        All Bonds and insurance required by the Contract Documents to

be purchased and maintained by Owner or Design Builder shall be obtained from

surety or insurance companies that are duly licensed or authorized in the jurisdiction

in which the Project is 

 

16

 

located to issue Bonds or

insurance policies for the limits and coverage’s so required.  Such surety and insurance companies shall

also meet such additional requirements and qualifications as may be provided in

Article 14.

 

7.9.2        Design Builder shall deliver to Owner, with copies to each

additional insured indicated in Article 14, certificates of insurance (and

other evidence of insurance requested by Owner or any other additional insured)

which Design/Builder is required to purchase and maintain in accordance with

paragraph 7.2.1. Owner shall deliver to Design Builder, with copies to each

additional insured indicated in Article 14, certificates of insurance (and

other evidence of insurance requested by Design Builder or any other additional

insured) which Owner is required to purchase and maintain in accordance with

paragraphs 7.4.1 and 7.4.2.

 

ARTICLE 8 –

CHANGES IN THE WORK

 

8.1          CHANGES

 

8.1.1        Changes in the Work may be accomplished after execution of

this Agreement, without invalidating this Agreement, by Change Order,

Construction Change Directive, or order for a minor change in the Work, subject

to the limitations stated in the Contract Documents.

 

8.1.2        A Change Order shall be based upon agreement between the

Owner and the Design Builder; a Construction Change Directive may be issued by

the Owner without the agreement of the Design Builder; an order for a minor

change in the Work may be issued by the Design Builder alone.

 

8.1.3        Changes in the Work shall be performed under applicable

provisions of the Contract Documents, and the Design Builder shall proceed

promptly, unless otherwise provided in the Change Order, Construction Change

Directive, or order for a minor change in the Work.

 

8.1.4        If unit prices are stated in the Contract Documents or

subsequently agreed upon, and if quantities originally contemplated are so

changed in a proposed Change Order or Construction Change Directive that

application of such unit prices to quantities of Work proposed will cause

substantial inequity to the Owner or the Design Builder, the applicable unit

prices shall be equitably adjusted.

 

8.2          CHANGE ORDERS

 

8.2.1        A Change Order is a written instrument prepared by the Design

Builder and signed by the Owner and the Design Builder, stating their agreement

upon all of the following:

 

1.             a change in the Work’

2.             the amount of the adjustment, if

any, in the Contract Sum; and

3.             the extent of the adjustment, if

any, in the Contract Time.

 

8.2.2        If the Owner requests a proposal for a change in the Work

from the Design Builder and subsequently elects not to proceed with the change,

a Change Order shall be issued 

 

17

 

to reimburse the Design Builder

for any costs incurred for estimating services, design services or preparation

of proposed revisions to the Contract Documents.

 

8.3          CONSTRUCTION CHANGE DIRECTIVES

 

8.3.1        A Construction Change Directive is a written order prepared

and signed by the Owner, directing a change in the Work prior to agreement on

adjustment, if any, in the Contract Sum or Contract Time, or both.

 

8.3.2        Except as otherwise agreed by the Owner and the Design

Builder, the adjustment to the Contract Sum shall be determined on the basis of

reasonable expenditures and savings of those performing the Work attributable

to the change, including the expenditures for design services and revisions to

the Contract Documents.  In such case,

the Design Builder shall keep and present an itemized accounting together with

appropriate supporting data for inclusion in a Change Order.  Unless otherwise provided in the Contract

Documents, costs for these purposes shall be limited to the following:

 

1.             costs of labor, including social security, old age and

unemployment insurance, fringe benefits required by agreement or custom, and

workers’ compensation insurance;

 

2.             costs of materials, supplies and equipment, including

cost of transportation, whether incorporated or consumed;

 

3.             rental costs of machinery and equipment exclusive of

hand tools, whether rented from the Design Builder or others;

 

4.             costs of premiums for all bonds and insurance permit

fees, and sales, use or similar taxes;

 

5.             additional costs of supervision and field office

personnel directly attributable to the change; and fees paid to other design

professionals.

 

8.3.3        Pending final determination of cost to the Owner, amounts not

in dispute may be included in Applications for Payment.  The amount of credit to be allowed by the

Design Builder to the Owner for deletion or change which results in a net

decrease in the Contract Sum and Contract Time, such agreement shall be

effective immediately and shall be recorded by preparation and execution of an

appropriate Change Order.

 

8.4          MINOR CHANGES IN THE WORK

 

8.4.1        The Design Builder shall have authority to make minor changes

in the Construction Documents and construction consistent with the intent of

the Contract Documents when such minor changes do not involve adjustment in the

Contract Sum or extension of the Contract Time.  The Design Builder shall promptly inform the Owner, in writing,

of minor changes in the Construction Documents and construction.

 

18

 

8.5          CONCEALED CONDITIONS

 

8.5.1        If conditions are encountered at the site which are (1)

subsurface or otherwise concealed physical conditions which differ materially

from those indicated in the Contract Documents, or (2) unknown physical

conditions of an unusual nature which differ materially from those ordinarily

found to exist and generally recognized as inherent in construction activities

of the character provided for in the Contract Documents, then notice by the

observing party shall be given to the other party promptly before conditions

are disturbed and in no event later than 21 days after first observance of the

conditions.  The Contract Sum shall be

equitably adjusted for such concealed or unknown conditions by Change Order

upon claim by either party made within 21 days after the claimant becomes aware

of the conditions.

 

8.6          REGULATORY CHANGES

 

8.6.1        The Design Builder shall be compensated for changes in the

construction necessitated by the enactment or revisions of codes, laws or

regulations subsequent to the submission of the Design Builder’s Proposal.

 

ARTICLE 9 –

CORRECTION OF WORK

 

9.1           The Design Builder shall promptly correct Work rejected by

the Owner or known by the Design Builder to be defective or failing to conform

to the requirements of the Contract Documents, whether observed before or after

Substantial Completion and whether or not fabricated, installed or

completed.  The Design Builder shall

bear costs of correcting such rejected Work, including additional testing and

inspections.

 

9.2           If, within one (1) year after the date of Substantial

Completion of the Work or, after the date for commencement of warranties

established in a written agreement between the Owner and the Design Builder, or

by terms of an applicable special warranty required by the Contract Documents,

any of the Work is found to be not in accordance with the requirements of the

Contract Documents, the Design Builder shall correct it promptly after receipt

of a written notice from the Owner to do so unless the Owner has previously

given the Design Builder a written acceptance of such condition.

 

9.3           Nothing contained in this Article 9 shall be construed to

establish a period of limitation with respect to other obligations which the

Design/Builder might have under the Contract Documents.  Establishment of the time period of one (1)

year as described in Subparagraph 9.2 relates only to the specific obligation

of the Design Builder to correct the Work, and has no relationship to the time

within which proceedings may be commenced to establish the Design Builder’s liability

with respect to the Design Builder’s obligations other than specifically to

correct the Work.

 

9.4           If the Design Builder fails to correct nonconforming Work

as required or fails to carry out Work in accordance with the Contract

Documents, the Owner, by written order signed personally or by an Agent

specifically so empowered by the Owner in writing, may order the Design Builder

to stop the Work, or any portion thereof, until the cause for such order has

been eliminated; however, the Owner’s right to stop the Work shall not give

rise to a duty on the part of the Owner to exercise the right for benefit of

the Design Builder or other persons or entities.

 

19

 

9.5           If the Design Builder defaults or neglects to carry out

the Work in accordance with the Contract Documents and fails within fourteen

(14) days after receipt of written notice from the Owner to commence and

continue correction of such default or neglect with diligence and promptness,

the Owner may give a second written notice to the Design Builder and, fourteen

(14) days following receipt by the Design Builder of that second written notice

and without prejudice to other remedies the Owner may have, correct such

deficiencies.  In such case an appropriate

Change Order shall be issued deducting from payments then or thereafter due the

Design Builder, the costs of correcting such deficiencies.  If the payments then or thereafter due the

Design Builder are not sufficient to cover the amount of the deduction, the

Design Builder shall pay the difference to the Owner.  Such action by the Owner shall be subject to dispute resolution

procedures as provided in Article 10.

 

ARTICLE 10 –

DISPUTE RESOLUTION - MEDIATION AND ARBITRATION

 

10.1         Claims, disputes or other matters in question between the

parties to this Agreement arising out of or relating to this Agreement or

breach thereof shall be subject to and decided by mediation or

arbitration.  Such mediation or

arbitration shall be conducted in accordance with the Construction Industry

Mediation or Arbitration Rules of the American Arbitration Association

currently in effect.

 

10.2         In addition to and prior to arbitration, the parties shall

endeavor to settle disputes by mediation. 

Demand for mediation shall be filed in writing with the other party to

this Agreement and with the American Arbitration Association.  A demand for mediation shall be made within

a reasonable time after the claim, dispute, or other matter in question has

arisen.  In no event shall the demand

for mediation be made after the date when institution of legal or equitable

proceedings based on such claim, dispute or other matter in question would be

barred by the applicable statutes or repose or limitations.

 

10.3         Demand for arbitration shall be filed in writing with the

other party to this Agreement and with the American Arbitration

Association.  A demand for arbitration

shall be made within a reasonable time after the claim, dispute or other matter

in question has arisen.  In no event

shall the demand for arbitration be made after the date when institution of

legal or equitable proceedings based on such claim, dispute or other matter in

question would be barred by the applicable statutes of repose or limitations.

 

10.4         An arbitration pursuant to this Article may be joined with

an arbitration involving common issues of law or fact between the Design

Builder and any person or entity with whom the Design Builder has a contractual

obligation to arbitrate disputes.  No

other arbitration arising out of or relating to this Agreement shall include,

by consolidation, joinder or in any other matter, an additional person or

entity not a party to this Agreement or not a party to an agreement with the

Design Builder, except by written consent containing a specific reference to

this Agreement signed by the Owner, the Design Builder and any other person or

entities sought to be joined.  Consent

to arbitration involving an additional person or entity shall not constitute

consent to arbitration of any claim, dispute or other matter in question not

described in the written consent or with a person or entity not named or

described therein.  The foregoing

agreement to arbitrate and other agreements to arbitrate with and additional person

or entity duly consented to by the parties to this Agreement shall be

specifically enforceable in accordance with applicable law in any court having

jurisdiction thereof.

 

20

 

10.5         The award rendered by the arbitrator or arbitrators shall be

final, and judgment may be entered upon it in accordance with applicable law in

any court having jurisdiction thereof. 

Any and all arbitration or mediation hearings shall be held in Sioux

Falls, SD.

 

ARTICLE 11 –

MISCELLANEOUS PROVISIONS

 

11.1                        Unless

otherwise provided, this Agreement shall be governed by the law of the place

where the Project is located.

 

11.2        RELATED CONSTRUCTION OF SITE

 

11.2.1      Owner may perform other Work related to the Project at the Site

by Owner’s own forces, or let other direct contracts therefore or have other

work performed by utility owners.  If

the fact that such other work is to be performed was not noted in the

Conceptual Documents then (i) written notice thereof will be given to Design

Builder prior to starting any such other work and (ii) Design Builder may make

a claim therefore as provided in Article 8 if Design Builder believes that such

performance will involve additional expense to Design Builder or requires

additional time and the parties are unable to agree as to the amount or extent

thereof.

 

11.2.2      Design Builder shall afford each other contractor who is a party

to such a direct contract and each utility owner (and Owner, if Owner is

performing the additional work with Owner’s employees) proper and safe access

to the Site and a reasonable opportunity for the introduction and storage of

materials and equipment and the execution of such other work and shall properly

connect and coordinate the Construction with theirs.  Unless otherwise provided in the Contract Documents, Design

Builder shall do all cutting, fitting and patching of the Work that may be

required to make its several parts come together properly and integrate with

such other work.  Design Builder shall

not endanger any work of others by cutting, excavating or otherwise altering

their work with the written consent of Owner and the others whose work will be

affected.  The duties and

responsibilities of Design Builder under this paragraph are for the benefit of

such utility owners and other contractors to the extent that there are

comparable provisions for the benefit of Design Builder in said direct

contracts between Owner and such utility owners and other contractors.

 

11.2.3      If the proper execution or results of any part of Design

Builder’s Work depends upon work performed or services provided by others under

this paragraph 11.2, Design Builder shall inspect such other work and

appropriate instruments of service and promptly report to Owner in writing any

delays, defects of deficiencies in such other work or services that render it

unavailable or unsuitable for the proper execution and results of Design

Builder’s Work.  Design Builder’s

failure so to report will constitute an acceptance of such other work as fit

and proper for integration with Design Builder’s Work except for latent or

nonapparent defects and deficiencies in such other work.

 

11.2.4      Coordination

 

11.2.4.1           If Owner contracts with others for

the performance of other work on the Project at the Site, the following will be

set forth in Article 14:

 

21

 

a.        The individual or entity who will have

authority and responsibility for coordination of the activities among the

various prime contractors will be identified;

 

b.        The specific matters to be covered by

such authority and responsibility will be itemized; and

 

c.        The extent of such authority and

responsibilities will be provided.

 

11.2.4.2           Unless otherwise provided in Article

14, Owner shall have sole authority and responsibility in respect of such coordination.

 

11.3        CLAIMS FOR DAMAGES

 

11.3.1      If either party to this Agreement suffers injury or damage to

person or property because of an act or omission of the other party, of any of

the other party’s employees or agents, or of others for whose acts such party

is legally liable, written notice of such injury or damage, whether or not

insured, shall be given to the other party within a reasonable time not

exceeding 21 days after first observance. 

The notice shall provide sufficient detail to enable the other party to

investigate the matter.  If a claim of

additional cost or time related to this claim is to be asserted, it shall be

filed in writing.

 

11.4        INDEMNIFICATION

 

11.4.1      To the fullest extent permitted by law, the Design Builder shall

indemnify and hold harmless the Owner’s, the Board of Managers, Officers,

Owner’s consultants, and agents and employees of any of them from and against

claims, damages, losses and expenses, including but not limited to attorney’s

fees, arising out of or resulting from performance of the Work, provided that

such claim, damage, loss or expense is attributable to bodily injury, sickness,

disease or death, or to injury to or destruction of tangible property (other

than the Work itself) including loss of use resulting therefrom, but only to

the extent caused in whole or in part by negligent acts or omissions of the

Design Builder, anyone directly or indirectly employed by the Design Builder or

anyone for whose acts the Design Builder may be liable.  Such obligation shall not be construed to

negate, abridge, or reduce other rights or obligations of indemnity which would

otherwise exist as to a party or person described in this Paragraph 11.4.

 

11.4.2      To the fullest extent permitted by law, the Owner shall

indemnify and hold harmless the Design Builder, Broin’s Board of Directors and

Officers, Design Builder’s consultants, and agents and employees of any of them

from and against claims, damages, losses and expenses, including but not

limited to attorney’s fees, arising out of or resulting from performance of the

Work, provided that such claim, damage, loss or expense is attributable to

bodily injury, sickness, disease or death, or to injury to or destruction of

tangible property (other than the Work itself) including loss of use resulting

therefrom, but only to the extent caused in whole or in part by negligent acts

or omissions of the Owner, anyone directly or indirectly employed by the Owner

or anyone for whose acts the Owner may be liable.  Such obligation shall not be construed to negate, abridge, or

reduce other rights or obligations of indemnity which would otherwise exist as

to a party or person described in this Paragraph 11.4.

 

22

 

11.4.3      In claims against any person or entity indemnified under this

Paragraph 11.4 by an employee of the Design Builder, anyone directly or

indirectly employed by the Design Builder or anyone for whose acts the Design

Builder may be liable, the indemnification obligation under this Paragraph 11.4

shall not be limited by a limitation on amount or type of damages, compensation

or benefits payable by or for the Design Builder under worker’s compensation

acts, disability benefit acts or other employee benefit acts.

 

11.5        SUCCESSORS AND ASSIGNS

 

11.5.1      The Owner and Design Builder, respectively, bind themselves,

their partners, successors, assigns and legal representatives to the other

party to this Agreement and to the partners, successors and assigns of such

other party with respect to all covenants of this Agreement.  Neither the Owner nor the Design Builder

shall assign this Agreement without the written consent of the other.  The Owner may assign this Agreement to any institutional

lender providing construction financing, and the Design Builder agrees to

execute all consents reasonably required to facilitate such an assignment.  If either party makes such an assignment,

that party shall nevertheless remain legally responsible for all obligations

under this Agreement, unless otherwise agreed by the other party.

 

11.6        EXTENT OF AGREEMENT

 

11.6.1      This Agreement represents the entire agreement between the Owner

and the Design Builder and supersedes prior negotiations, representations or

agreements, either written or oral. 

This Agreement may be amended only by written instrument and signed by

both the Owner and the Design Builder.

 

ARTICLE 12 –

TERMINATION OF THE AGREEMENT

 

12.1        TERMINATION BY THE OWNER

 

12.1.1      This Agreement may be terminated by the Owner upon 14 days’

written notice to the Design Builder in the event that the Project is

abandoned.  If such termination occurs,

the Owner shall pay the Design Builder for Work completed and for proven loss

sustained upon materials, equipment, tools, and construction equipment

machinery, including reasonable profit and applicable damages.

 

12.1.2      If the Design Builder defaults or persistently fails or neglects

to carry out the Work in accordance with the Contract Documents or fails to

perform the provisions of this Agreement, the Owner may give written notice

that the Owner intends to terminate this Agreement.  If the Design Builder fails to correct the defaults, failure or

neglect within fourteen (14) days after being given notice, the Owner may then

give a second written notice and, after an additional fourteen (14) days the

Owner may without prejudice to any other remedy terminate the employment of the

Design Builder and take possession of the site and of all materials, equipment

and finish the Work by whatever method the Owner may deem expedient.  If the unpaid balance of the Contract Sum

exceeds the expense of finishing the Work and all damages incurred by the

Owner, such excess shall be paid to the Design Builder.  If the expense of completing the Work and

all damages incurred by the Owner exceeds the unpaid balance, the Design

Builder shall pay the difference to the Owner. 

This obligation for payment shall survive termination of this Agreement.

 

23

 

12.2        TERMINATION BY THE DESIGN/BUILDER

 

12.2.1      If the Owner fails to make payment when due, the Design Builder

may give written notice of the Design Builder’s intention to terminate this

Agreement.  If the Design Builder fails

to receive payment within fourteen (14) days after receipt of such notice by

the Owner, the Design Builder may give a second written notice and, fourteen

(14) days after receipt of such second written notice by the Owner, may

terminate this Agreement and recover from the Owner payment for Work executed

and for proven losses sustained upon materials, equipment, tools, and

construction equipment and machinery, including reasonable profit and

applicable damages.

 

ARTICLE 13 –

BASIS OF COMPENSATION

 

The Owner shall compensate the Design Builder

in accordance with Article 5, Payments, and the other provisions of this

Agreement as described below.

 

13.1        COMPENSATION

 

13.1.1      For the Design Builder’s performance of the Work, as described

in Paragraph 3.2 and including any other services listed in Article 14 as part

of Basic Services, the Owner shall pay the Design Builder in current funds the

Contract Sum as follows:

 

Forty Seven Million Five Hundred Thirty Three

Thousand Four Hundred and Forty One Dollars ($47,533,441.00). This

price includes sales and excise tax and will remain valid as long as construction

is started by June 15, 2002. A Start date after that time will cause the price

to be reviewed and adjusted accordingly.

 

13.1.2      For Additional Services, as described in Paragraph 3.3 and

including any other services listed in Article 14 as Additional Services,

compensation shall be at a negotiated price.

 

13.2        REIMBURSABLE EXPENSES

 

13.2.1      Reimbursable Expenses are in addition to the compensation for

Basic and Additional Services, and include actual expenditures made by the

Design Builder and the Design/Builder’s employees and contractors in the

interest of the Project.

 

13.2.2      FOR REIMBURSABLE EXPENSES, compensation shall be a multiple of

(1 .1) times the amounts expended.

 

13.3        INTEREST PAYMENTS

 

13.3.1      The rate of interest for past due payments shall be as follows.-

 

(1.5%)

one and one half percent per month.

 

ARTICLE 14 –

OTHER CONDITIONS AND SERVICES

 

14.1                           The

Basic Services to be performed shall be commenced on issuance of Notice to

Proceed and, subject to authorized adjustments and to delays not caused by the

Design Builder,

 

24

 

Substantial Completion shall be

achieved in fourteen (14) months following the start of concrete work.

 

14.2         The

Basic Services beyond those described in Article 3 are as follows:

 

None

 

14.3         Additional

Services beyond those described in Article 3 are as follows:

 

None

 

14.4                           The

Design Builder shall submit an Application for Payment on or about the Twelfth

(12) day of each month.

 

14.5         The

Design Builders Exhibits include the following documents:

 

	

  Title

  	

   

  	

  Date

  
	

  Exhibit 1 –

  	

   

  	

  Schedule of Contract Values

  consisting of 2 pages

  	

   

  	

  9/7/2001

  
	

  Exhibit 2 –

  	

   

  	

  Licensing Agreement for

  Ethanol Production Process

  	

   

  	

   

  
	

  Exhibit 2A–

  	

   

  	

  Licensor’s Technology

  	

   

  	

   

  
	

  Exhibit 213–

  	

   

  	

  Confidentiality and

  Nondisclosure Agreement

  	

   

  	

   

  
	

  Exhibit 3 –

  	

   

  	

  Process Guarantee consisting

  of 1 page

  	

   

  	

   

  
	

  Exhibit 4 –

  	

   

  	

  Notice to Proceed consisting

  of 1 page

  	

   

  	

   

  
	

  Exhibit 5 –

  	

   

  	

  Detailed Cost Breakout

  	

   

  	

   

  

 

14.6        OTHER CONDITIONS

 

14.6.1      A payment of three hundred thousand dollars ($300,000.00) will

be due and payable for Preliminary Engineering for the Project within 15 days

upon signing of this document.

 

14.6.2      A payment of seventy five thousand dollars ($75,000.00) for

permitting and initial design will be due and payable for the Project within 15

days upon signing of this document.

 

14.6.3      Owner will apply for and receive any applicable state sales or

excise tax refunds.  Design Builder will

assist the Owner in compiling necessary documentation.

 

14.6.4      The Process guarantee attached as Exhibit 3, shall be met

within 90 days following the date of substantial completion.

 

NO OTHER

CONDITIONS ARE NEITHER EXPRESSED NOR IMPLIED OTHER THAN THOSE STATED ABOVE.

 

25

 

IN WITNESS WHEREOF, OWNER and DESIGN BUILDER

have signed this Agreement in duplicate. 

One counterpart each has been delivered to OWNER and DESIGN

BUILDER.  All portions of the Contract

Documents have been signed, initialed or identified by OWNER and DESIGN

BUILDER.

 

This Owner - Design Builder Agreement will be

effective on the day and year first written above.

 

	

  OWNER:

  	

   Great Plains Ethanol, LLC

  	

   

  	

  DESIGN BUILDER:

  	

  BROIN AND ASSOCIATES,INC. 

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/

  Darrin Ihnen

  	

   

  	

  By:

  	

  /s/

  Robert Broin 

  	

   

  
	

  Name: 

  	

  Darrin Ihnen

  	

   

  	

  Name:

  	

  Rob Broin

  	

   

  
	

  Title: 

  	

  Chairman of the Board

  	

   

  	

  Title:

  	

  President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  [CORPORATE

  SEAL]

  	

   

  	

  [CORPORATE

  SEAL]

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Attest:

  	

   

  	

   

  	

  Attest:

  	

  /s/ Wendy S. John

  	

   

  
	

   

  	

   

  	

   

  
	

  Address for giving notices:

  	

   

  	

  Address for giving notices:

  
	

   

  	

   

  	

   

  
	

  Great Plains Ethanol. LLC 

  	

   

  	

  Broin and Associates Inc

  
	

  P.O. Box 172

  	

   

  	

  2209 East 57 Street North

  
	

  Lennox, SD  57039

  	

  Sioux Falls, SD  57104

  
												

 

26Exhibit 10

Exhibit

10.10

 

LICENSING

AGREEMENT

For

Ethanol Production Process

 

THIS

LICENSING AGREEMENT is made and entered into this 20th day of November, 2001 by and

between Broin and Associates, Inc., a South Dakota corporation located at 2209

East 57th Street North, Sioux Falls, SD 57104, (hereinafter referred to as

“Licensor”) and Great Plains Ethanol, LLC, located at P.O. Box 172, Lennox, SD

57039 (hereinafter referred to as “Licensee”).

 

WHEREAS, the Licensor is in the business

of designing and building dry mill ethanol plants; and

 

WHEREAS, Licensor and Licensee have

entered into a Construction Contract dated as of even date herewith

(“Construction Contract”) to construct the dry mill ethanol plant near

Chancellor, SD (“Facility”).

 

WHEREAS, Licensee has chosen Licensor as

Design/Builder to construct the Facility because that Licensor has expertise in

the design and construction of ethanol plants; and

 

WHEREAS, the Licensor possesses certain

proprietary technology, design information and operational information (hereinafter

referred to as the “Technology”, as set forth in Exhibit 2A); and

 

WHEREAS, the Licensee wishes to license a

plant design and its associated proprietary design and operational information

from the Licensor; and

 

WHEREAS, the parties hereto are entering

into a Confidentiality and Nondisclosure agreement which is attached hereto as

Exhibit 2B.

 

NOW,

THEREFORE,

in consideration of the foregoing mutual covenants and agreements set forth

herein, the parties agree as follows:

 

Agreement

 

1.0          THE TECHNOLOGY

The “Licensor’s

Technology” refers to all proprietary rights, including patents, copyrights,

trade secrets, formulas, research data, processes, know-how and specifications

related to the Licensor’s design and construction of the Facility identified in

Exhibit 2A.

 

 

2.0          THE GRANT

 

2.1          License

Licensor grants to

Licensee a nonexclusive license to utilize Licensor’s Technology to make, use

and sell Ethanol and related co-products produced using the Licensor’s

Technology only at the facility located near Chancellor, South Dakota.

 

2.2          Restrictions

The Licensee agrees that

it will use the items listed in Exhibit 2A only in relation to the operation

and maintenance of the Facility.

 

3.0          COMPENSATION

For and in consideration

of the Licensee’s execution of the Construction Contract and for the payment of

$100,000, which is included in the Design/Build Contract Price Licensor

executed this License Agreement with Licensee.

 

4.0          TERM OF AGREEMENT

 

4.1          Term

This Agreement shall

commence on the date that the Facility operates for seven days as provided in

the Process Guarantee attached to the Construction Contract and continue for so

long as the plant shall exist to use the Licensor’s Technology.

 

4.2          Breach

Any party shall be in

default under this Agreement if said party otherwise fails to perform any of

its obligations under this Agreement. 

In the event a party is in default under this Agreement, the

nondefaulting party shall have such rights and remedies as may be available at

law or in equity, including the right of specific performance and injunctive

relief.

 

5.0          LIMITATION OF LIABILITY

In no event shall Licensor

be liable to Licensee (or any other party) for loss of profits or indirect,

incidental, special, consequential, or other similar damages arising out of any

breach of this Agreement or obligations under this Agreement.

 

6.0          INDEPENDENT CONTRACTOR

For the purpose of this

Agreement and all services to be provided hereunder, both parties shall be, and

shall be deemed to be, independent contractors and not agents or employees of

the other.  Neither party shall have

authority to make any statements, representations or commitments of any kind,

or to take any action, that will be binding on the other party.

 

7.0          SEVERABILITY

If any one or more of the

provisions of this Agreement shall be held to be invalid, illegal or

unenforceable, such provision shall be enforced to the maximum extent possible

consistent with applicable law and the remaining provisions of this Agreement

shall remain in full force and effect.

 

2

 

8.0          ASSIGNABILITY

This Agreement shall be

assignable by either party upon mutual written consent of the parties

hereto.  It is understood and agreed by

Licensee that the Licensing Agreement will need to be Assigned to a new owner

prior to the operation of the Facility by a new owner.  Neither party shall unreasonably withhold

consent to said transfer.

 

9.0          ENTIRE AGREEMENT

This instrument contains

the entire agreement between the parties hereto with respect to the subject

matter hereof and supersedes any prior or contemporaneous agreement.

 

10.0        MODIFICATIONS IN WRITING

No change, modification,

extension, termination or waiver of this Agreement, or any of the provisions

herein contained, shall be valid unless made in writing and signed by a duly

authorized representative of each party.

 

11.0        GOVERNING LAW

The validity and

interpretation of this Agreement and the legal relations of the parties to it

shall be governed by the laws of the State of South Dakota, excepting that body

of law related to conflict of laws.

 

12.0.       CAPTIONS

The captions are provided

for convenience and are not to be used in construing this Agreement.

 

13.0        CONSTRUCTION

The parties agree that

they have participated equally in the formation of this Agreement and that the

language herein should not be presumptively construed against either of them.

 

14.0        CONFIDENTIALITY

The parties acknowledge

that Licensor will likely be providing confidential information to Licensee

during the term of this Agreement.  In

contemplation thereof, the parties have signed Exhibit 213-Confidentiality and

Non-disclosure Agreement which is hereby incorporated by reference into this

agreement.

 

15.0        DEFENSE OF THE TECHNOLOGY

The Licensor, in granting

the Licensee a license to said Licensor’s Technology as noted in this

Agreement, will defend the Licensee in matters pertaining to infringement of

Licensor’s Technology including patents, trademarks, copyrights, trade secrets,

or any other proprietary rights owned or controlled by third parties by reason

of Licensee’s manufacture, use, or sale of Ethanol or ethanol cogenerated

products through Licensor’s Technology. 

Licensee shall inform Licensor immediately upon receipt of notice of any

suit, actions, claim or claims relating to patents, trademarks, copyrights,

trade secrets, or other proprietary rights having any bearing on said

Licensor’s Technology.  Should it so

elect, Licensee, may, at its own expense, assume the control of and join the

Licensor in the defense of any such suit, actions, claim, or claims.  In the event that Licensor’s Technology is

found to infringe in any of the aforementioned instances, Licensor will pay any

costs to change the Technology or to bring the Licensee into compliance with

the holders of any proprietary rights.

 

3

 

16.0        NOTICES

All notices hereunder

shall be effective if sent by first class mail, postage prepaid, and shall be

deemed given and received one business day after deposit with the post

office.  Supplemental to the delivery

methods described above, the parties may also fax and E-mail said notices.  Notice sent by recognized express courier,

certified or registered mail shall be considered the official and binding

notice.  Notice shall be to:

 

	

  IF TO LICENSOR:

  	

   

  	

  BY:

  	

   

  	

  ROBERT BROIN

  
	

   

  	

   

  	

  ITS:

  	

   

  	

  PRESIDENT

  
	

   

  	

   

  	

  ADDRESS:

  	

   

  	

  2209 EAST 57TH STREET NORTH

  
	

   

  	

   

  	

   

  	

   

  	

  SIOUX FALLS, SD 57104

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  PHONE:

  	

   

  	

  (605) 965-2200

  
	

   

  	

   

  	

  FAX:

  	

   

  	

  (605) 965-2203

  
	

   

  	

   

  	

  E-MAIL:

  	

   

  	

  robbroin@broin.com

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  IF TO LICENSEE:

  	

   

  	

  BY:

  	

   

  	

  DARRIN IHNEN

  
	

   

  	

   

  	

  ITS:

  	

   

  	

  CHAIRMAN OF THE BOARD

  
	

   

  	

   

  	

  ADDRESS:

  	

   

  	

  28065 459TH AVE.

  
	

   

  	

   

  	

   

  	

   

  	

  HURLEY, SD 57036

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  EMAIL:

  

 

IN WITNESS WHEREOF, THE

PARTIES HERETO HAVE EXECUTED THIS AGREEMENT ON THE DATE AND YEAR FIRST ABOVE

WRITTEN.

 

	

  LICENSOR:

  	

   

  	

  LICENSEE:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  BROIN AND ASSOCIATES, INC.

  	

  GREAT PLAINS ETHANOL, LLC

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  BY:

  	

  /s/ Robert Broin

  	

   

  	

  BY:

  	

  /s/ Darrin Ihnen

  	

   

  
	

   

  	

  Its President - Robert

  Broin

  	

   

  	

  Its Chairman of the Board - Darrin Ihnen

  	

   

  
								

 

4

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