Exhibit 10.10

TURNKEY ENGINEERING, PROCUREMENT AND CONSTRUCTION

AGREEMENT FOR

ETHANOL PRODUCTION FACILITY

BETWEEN

PANDA HEREFORD ETHANOL, LP

A Delaware Limited Partnership

AND

LURGI PSI, INC.

A Tennessee Corporation

Dated as of October 15, 2005

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY PANDA ETHANOL, INC. FOR CERTAIN PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS AGREEMENT WITH “*****”.

TABLE OF CONTENTS

 

 

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EXHIBITS

 

 

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TURNKEY ENGINEERING, PROCUREMENT AND CONSTRUCTION

AGREEMENT FOR

ETHANOL PRODUCTION FACILITY

THIS TURNKEY ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT FOR ETHANOL PRODUCTION FACILITY (this “Agreement”), dated as of October 15, 2005 is by and between Panda Hereford Ethanol, LP, a Delaware Limited Partnership (hereinafter called “Owner”), and Lurgi PSI, Inc., a Tennessee Corporation (hereinafter called “Contractor”).

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Owner and Contractor hereby agree as follows:

ARTICLE I

GENERAL MATTERS

Section 1.01 . Defined Terms . As used in this Agreement, including the exhibits and other attachments hereto, each of the following terms shall have the meaning assigned to such term as set forth below:

“Acceptance Certificate” means a certificate relating to Final Acceptance pursuant to Section 10.06 .

“Affiliate” means, in relation to any Person, any Person: (i) which directly or indirectly controls, or is controlled by, or is under common control with, such other Person; or (ii) which directly or indirectly beneficially owns or holds fifty percent (50%) or more of any class of voting stock of such other Person; or (iii) which has fifty percent (50%) or more of any class of voting stock that is directly or indirectly beneficially owned or held by such other Person, or (iv) who either holds a general partnership interest in such other Person or such other Person holds a general partnership interest in the Person.

“Allocated Contract Price” means (a) for the time period between the Effective Date and the later of the Financial Closing Date and the date the Notice to Proceed is given to Contractor following the Financial Closing Date (the “Full Release Date”), the Ethanol Plant Price paid to Contractor; (b) for the time period after Full Release Date and until the time when *****% of the Ethanol Plant Price has been paid to Contractor, *****% of the Ethanol Plant Price plus the Ethanol Plant Price paid to Contractor to date; or (c) for the time period after *****% of the Ethanol Plant Price has been paid to Contractor, the Ethanol Plant Price paid to Contractor to date, as the case may be.

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY PANDA ETHANOL, INC. FOR CERTAIN PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS AGREEMENT WITH “*****”.

 

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“Applicable Laws” means any act, statute, law, regulation, permit, license, ordinance, rule, judgment, order, decree, directive, guideline or policy (to the extent mandatory) or any similar form of decision or determination by, or any interpretation or administration of, any of the foregoing by any Government Authority with jurisdiction over the Facility, the Job Site, the performance of the Work or other services to be performed under this Agreement.

“Applicable Permits” means any and all permits, clearances, licenses, authorizations, consents, filings, exemptions or approvals from or required by any Government Authority that are necessary for the performance of the Work.

“Builder’s Risk Policy” has the meaning set forth in Section 9.09 .

“Business Day” means any day other than a Saturday, Sunday or a legal holiday in Dallas, Texas.

“Change in Law” means any of the following events or circumstances occurring after the date of execution of this Agreement: (i) an amendment, modification, supplement or other change in or repeal of an existing Applicable Law or Applicable Permit; or (ii) an enactment or making of a new Applicable Law or Applicable Permit.

“Change Order” has the meaning set forth in Section 7.01(a) .

“Changes” has the meaning set forth in Section 7.01(a) .

“Contract Amendment” shall mean a written agreement executed by both Parties and, if required, consented to by the Financing Parties, as set forth in Section 18.09 .

“Contractor Bonus” means a Schedule Bonus or Performance Bonus.

“Contractor Equipment” means all of the equipment, materials, apparatus, structures, tools, supplies and other goods provided by Contractor and its Subcontractors and Vendors for performance of the Work other than the Equipment.

“Contractor Event of Default” was the meaning set forth in Section 15.01 .

“Contractor Insurance Policies” means the insurance policies maintained by Contractor as required pursuant to Article IX .

“Contractor Internal Costs” means the internal costs of Contractor in performing the Prefunding Work, including general and administrative costs, labor costs, overhead and out-of-pocket expenses such as travel, telephone and photocopies.

“Contractor Permits” means the Applicable Permits listed on Exhibit L .

 

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“Contractor Project Engineering Manager” means the person designated by Contractor as having the responsibility, authority and supervisory power of Contractor for the Work.

“Contractor Project Manager” means the person designated by Contractor as having the centralized responsibility, authority and supervisory power of Contractor for design, construction, testing and start-up of the Ethanol Plant and the performance of the FBG Work, as well as all matters relating to the administration of the provisions of this Agreement.

“Contractor Site Manager” means an employee of Contractor, working under the supervision of the Contractor Project Manager, located at the Job Site on a daily basis.

“Contractor Taxes” has the meaning set forth in Section 3.24 .

“Contractor’s Guarantor” has the meaning set forth in Section 11.11 .

“Corporate Guaranty” has the meaning set forth in Section 11.11 .

“Cost Plus Formula” has the meaning as set forth in Section 7.02(e) .

“Damages” has the meaning set forth in Section 16.01 .

“Defect” means, any designs, engineering, software, drawings, components, tools, Equipment, installation, construction, or workmanship furnished or performed by or on behalf of Contractor or Work, (i) that does not materially conform to the terms of this Agreement, (ii) that is not of uniform good quality, free from material defects or deficiencies in design, application, manufacture or workmanship, or that contains materially improper or inferior workmanship or (iii) that either would materially and adversely affect (A) the performance of the Ethanol Plant and FBG Work under operating conditions as stated in Exhibit A, the Scope of Work (unless, in the alternative, Performance Liquidated Damages for such defect or deficiencies has been paid) or (B) the continuous safe operation of the Facility, all as determined by reference to Good Engineering Practices. The term “Defect” shall neither be construed to include material damage caused by Owner’s acts or omissions to the extent arising out of abuse, misuse or negligence in operations, maintenance and repair (unless such act or omission was taken or made at the direction of Contractor) or failure to follow Contractor’s or manufacturers’ recommendations and directions and Good Engineering Practices, nor shall the term “Defects” be construed to include ordinary wear and tear, erosion, corrosion, and deterioration (unless as a result of a Defect) or any other defect or deficiency that has no material impact on the Facility’s appearance, operation or useful life as specified in the Scope of Work.

“Denatured Ethanol” means fuel grade ethanol in accordance with and meets the requirements of ASTM D4806-01a dated August 10, 2001.

 

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“Dispute” has the meaning set forth in Section 17.01 .

“Drawings” means (i) all specifications, designs, plans, drawings, engineering and analyses, and other documents which determine, establish, define or otherwise describe the scope, quantity, and relationship of the components of the Ethanol Plant and the FBG Work, including the structure and foundation thereof, prepared by Contractor or any of its Subcontractors or Vendors and (ii) all technical drawings, operating drawings, specifications, shop drawings, diagrams, illustrations, schedules and performance charts, samples, patterns, models, operation and maintenance manuals, piping and instrumentation diagrams, underground structure drawings, conduit and grounding drawings, lighting drawings, conduit and cable drawings, electric one-lines, electric schematics, connection diagrams and technical information of a like nature required to be submitted by Contractor, or any Subcontractor or Vendor, from time to time under this Agreement which illustrates any of the Equipment or any other portion of the Work, either in components or as completed.

“Effective Date” means the date on which all of the following have occurred: (a) this Agreement has been executed and delivered by both Owner and Contractor as set forth on Page 1 hereof, (b) Owner has paid to Contractor all amounts, if any, due under the terms of that certain Term Sheet between the Parties, and (c) Owner has issued to Contractor a Notice to Proceed under Section 5.01 and in the event any such Notice to Proceed requires the payment of any amount due pursuant to Exhibit D, such payments are made. The Parties shall confirm the Effective Date in writing.

“Electric Power Consumption” means the overall electric power consumed by the Ethanol Plant in kWh as measured at the meter for equipment specifically and directly involved in the production of ethanol and wet distiller’s grain in accordance with the Scope of Work. This does not include any CO ₂ processing, grain handling, or FBG or natural gas boiler electrical power consumption.

“Electric Power Consumption Guarantee” has the meaning set forth in Section 11.04(a) .

“Emissions Guarantee” has the meaning set forth in Section 11.04(e) .

“Equipment” means all of the equipment, materials, apparatus, structures, tools, supplies, goods and other items provided by Contractor and its Subcontractors and Vendors that are installed or incorporated into the Ethanol Plant or otherwise form or are intended to form part of the Work (other than Contractor Equipment). For avoidance of doubt, the FBG shall not constitute a part of the Equipment.

“Ethanol Plant” means the Facility, excluding both the Fluidized Bed Gasifier Equipment and the FBG Work.

 

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“Ethanol Plant Price” means the Separated Contract Price less the FBG Work Price.

“Ethanol Plant Reliability Guarantee” has the meaning set forth in Section 11.04(i) .

“Ethanol Production Rate” means the production of Denatured Ethanol measured in gallons per hour.

“Ethanol Production Rate Guarantee” means the production rate of Denatured Ethanol as guaranteed by Contractor pursuant to Section 11.04(c) .

“Ethanol Yield” means the ratio in weight (pounds) of un-denatured ethanol per weight (pounds) of starch, based on Un-denatured Ethanol density of 6.60 pounds per US gallon at 60F, containing a maximum of 0.5% water per weight. The yield is based on a feedstock specification of 56 lb per bushel test weight #2 yellow corn containing a maximum of 15.0%moisture (by weight), a maximum of 1% foreign material (by weight), a minimum of 70% of dry fermentable starch (by weight) and zero aflatoxin tolerance.

“Ethanol Yield Guarantee” has the meaning set forth in Section 11.04(d) .

“Facility” means the nominal 105 million gallon per year design capacity of Denatured Ethanol production facility consisting of all necessary and fully functional systems and equipment, apparatus, accessories, auxiliaries and controls capable of fuel grade ethanol production, and wet distillers grain production, which Facility includes the Ethanol Plant and an auxiliary natural gas boiler to be supplied by Contractor and the FBG to be supplied by the Fluidized Bed Gasifier Supplier, to be located on the Property Site as more particularly described in the Scope of Work.

“FBG Mechanical Completion” means that with respect to the FBG Work (i) the FBG and all Equipment has been installed with the required connections and controls to deliver steam to the Ethanol Plant; (ii) the FBG and all Equipment has been installed in accordance with construction drawings, the Scope of Work and manufacturers recommendations, checked for alignment, lubrication and rotation; (iii) all systems have been checked out, and are ready for safe and proper operation; (iv) all instrumentation (including Continuous Emissions Monitoring Systems) is operational and has been calibrated in accordance with manufacturers’ standards and guidelines and loop checked; and (v) all systems have been tested, flushed and cleaned out as necessary and restored in accordance with the Scope of Work.

“FBG Mechanical Completion Date” means the date when FBG Mechanical Completion is achieved.

“FBG Purchase Agreement” means that separate agreement between Owner and the Fluidized Bed Gasifier Supplier in Appendix A of Exhibit A governing the supply of

 

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the FBG for the Facility, including the design, engineering, procurement, training, commissioning, start-up and testing activities to be performed by the Fluidized Bed Gasifier Supplier directly for Owner.

“FBG Schedule Liquidated Damages” has the meaning set forth in Section 11.06 (a) .

“FBG Work” means Contractor’s design, engineering, procurement and construction for the installation of the FBG and the tie-in of the FBG to the Ethanol Plant in accordance with the Scope of Work.

“FBG Work Price” shall mean the price for the FBG Work, as stated in Exhibit J, as amended from time to time pursuant to the terms hereof.

“Field Milestone Certification” means a duly executed certificate in substantially the form of the Field Milestone Certification in Exhibit E attached hereto, which is submitted by Contractor to Owner with a Request for Payment.

“Final Acceptance” shall mean that all of the following have occurred: (i) Substantial Completion of the Ethanol Plant has been achieved; (ii) the Guaranteed Performance Tests applicable to the Ethanol Plant, mechanical calibrations, have been successfully completed and any Defects found have been corrected; (iii) either (A) the Guaranteed Performance Levels applicable to the Ethanol Plant specified in Section 11.04 have been met or exceeded as determined pursuant to Section 11.09 , or (B) the Ethanol Plant has achieved at a minimum the Minimum Performance Levels as determined pursuant to Section 11.09 and Contractor has paid all Performance Liquidated Damages applicable to the Ethanol Plant as elected or required pursuant to Section 11.05 and Section 11.06 ; (iv) the Ethanol Plant has satisfied the Emissions Guarantee and the Noise Guarantee, as more fully provided herein; (v) the Ethanol Plant has been constructed in accordance with this Agreement and the Drawings; (vi) the Final Plans accurately reflect the Ethanol Plant as constructed; (vii) the Ethanol Plant is capable of being operated in a safe manner in accordance with the terms of this Agreement; (viii) Contractor shall have delivered to Owner all operation and maintenance manuals and Final Plans relating to the Ethanol Plant in accordance with the Scope of Work; (ix) no defective or incomplete portions of the Work exist that have or could reasonably have a material negative impact on the operation or performance of the Ethanol Plant as required under this Agreement; (x) either (A) all items on the Punch List applicable to the Ethanol Plant have been completed or (B) the Parties have reached an agreement pursuant to Section 10.05(c) and Contractor has paid all amounts due to Owner pursuant thereto; (xi) all of Contractor’s cleanup and related obligations have been completed; (xii) any and all Liens in respect to this Agreement, the Equipment, the Job Site or any fixtures, personal property or Equipment included in the Work and related to the Ethanol Plant or the FBG Work created by, through or under, or as a result of any act or omission of, Contractor or any Subcontractor, Vendor or other Person providing labor or materials in connection with the Work shall have been released in accordance with Section 3.25 and in a form

 

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reasonably satisfactory to Owner in accordance with Exhibit R and Exhibit R-1 attached hereto (provided that Contractor’s Final Lien Waiver and Release related to the Ethanol Plant, in substantially the form of Exhibit R attached hereto, shall be given concurrently with Final Acceptance of the Ethanol Plant and payment of amounts due by Owner in connection therewith); (xiii) Contractor shall have paid all Schedule Liquidated Damages and Performance Liquidated Damages related to the Ethanol Plant due under this Agreement, if any; (xiv) all other outstanding obligations of Contractor relating to the Ethanol Plant hereunder that Owner has notified Contractor of shall have been satisfied; (xv) spare parts required under this Agreement with respect to the Ethanol Plant have been delivered by Contractor to the Property Site in accordance with Section 3.26(a); (xvi) Contractor has provided Owner with copies of all Contractor’s Applicable Permits relating to the Ethanol Plant; and (xvii) Owner has approved of and signed the Final Acceptance Certificate pursuant to Section 10.06 . If however, Owner has failed or refused to sign such Certificate after request by Contractor, such matter may be submitted for dispute resolution in accordance with Article XVII.

“Final Acceptance Certificate” means an Acceptance Certificate executed pursuant to Section 10.06 .

“Final Acceptance Date” means the first date on which Final Acceptance has been achieved.

“Final Plans” means final Drawings and final specifications, as revised to reflect the changes during construction, and shall include as-built drawings, piping and instrumentation diagrams, underground structure drawings (including buried piping, all utilities, and critical hidden items), electric one-lines, electric schematics and connection diagrams.

“Financial Closing” shall mean that all of the following events shall have occurred (which events may occur over a period of time) with respect to the Facility: (i) the Financing Documents have been fully executed (which documents may be executed over a period of time) which together provide for financing for the Facility in an amount and on the terms acceptable to Owner; (ii) all conditions precedent to the initial availability of funds under the Financing Documents referred to in the preceding clause (i) have been fulfilled or waived and the first draw thereunder has been made by Owner; and (iii) Owner has received commitments for such equity as is required by Owner and satisfies the requirements of the Financing Parties.

“Financial Closing Date” shall mean the actual date of Financial Closing as specified by Owner to Contractor pursuant to Section 4.08 .

“Financing Documents” means all the loan agreements, notes, indentures, securities, debt instruments, bonds, security agreements, swap agreements, letters of credit, equity purchase agreements and other documents relating to the financing (including refinancing) of the Facility or any part thereof.

 

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“Financing Parties” means the lenders, security holders, investors, export credit agencies, multilateral institutions, equity providers and others providing financing or refinancing to or on behalf of Owner, for the development, construction, ownership, operation and maintenance of the Facility or any portion thereof, or any trustee or agent acting on behalf of any of the foregoing.

“Fluidized Bed Gasifier Equipment” or “Gasifier Equipment” or “FBG” means the fluidized bed gasifier with a fired steam generation unit and all related accessory equipment, including the biomass handling equipment, supplied by the Fluidized Bed Gasifier Supplier pursuant to the terms of the FBG Purchase Agreement.

“Fluidized Bed Gasifier Supplier” means Energy Products of Idaho (EPI). For avoidance of doubt, the Fluidized Bed Gasifier Supplier shall not (in respect of its obligations relating to the design, engineering, manufacture, delivery, commissioning, start-up and testing of the FBG) constitute a Vendor or Subcontractor under this Agreement.

“Force Majeure Event” has the meaning set forth in Section 14.01 .

“Good Engineering Practices” means the practices generally recognized and accepted as guidelines defining the standard of care that documents the engineering practices with respect to design, construction, documentation, operation, and maintenance of industrial facilities (including but not limited to the engineering, operating and safety practices generally applied to ethanol facilities) such as will be constructed in accordance with the terms of this Agreement.

“Government Authority” means any and all federal, state, county, city, municipal, local or regional authorities, departments, bodies, commissions, corporations, branches, directorates, agencies, ministries, courts, tribunals, judicial authorities, legislative bodies, administrative bodies, regulatory bodies, autonomous or quasi-autonomous entities or taxing authorities of the United States of America or any department, municipality or other political subdivision thereof.

“Guaranteed Dates” means Guaranteed Interim Completion Date, Guaranteed Substantial Completion Date, Guaranteed FBG Mechanical Completion Date, and Final Acceptance Date.

“Guarantee Design Conditions” has the meaning assigned to such term in the Scope of Work.

“Guaranteed FBG Mechanical Completion Date” means the date which is 45 calendar days after the latest of the Scheduled FBG Delivery Dates set forth in Exhibit A , as such date may be adjusted by (i) the total number of days more or less, if any, before or after the Scheduled FBG Delivery Dates and the date the applicable deliverable is actually delivered to the Job Site by the Fluidized Bed Gasifier Supplier, (ii) Force Majeure Events under Article XIV, and (iii) Owner Caused Delays under Section 14.04 .

 

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“Guaranteed Interim Completion Date” means January 1, 2007, as such date may be extended under the terms of this Agreement.

“Guaranteed Performance Levels” means the performance levels of the Ethanol Plant as guaranteed by Contractor pursuant to Section 11.04 .

“Guaranteed Performance Tests” means collectively all guaranteed performance tests as described in the Scope of Work.

“Guaranteed Substantial Completion Date” means February 1, 2007, as such date may be extended under the terms of this Agreement.

“Hazardous Material” means any substance deemed as toxic, contaminated or hazardous under any Applicable Law or Applicable Permit.

“Initial Site Mobilization” means the first instance when any of Contractor or its or its Subcontractors’ or Vendors’ Labor or other representatives is present on the Property Site after Owner has granted to Contractor care, custody and control of the portion of the Property Site that is part of the Job Site.

“Interim Completion” shall mean that (i) Mechanical Completion of the Ethanol Plant has occurred; (ii) the Ethanol Plant is Ready for Start-Up; (iii) the Ethanol Plant has achieved, during a minimum continuous production period of 72 hours, on average, not less than 75 percent of the Ethanol Production Rate Guarantee, as set forth in Section 11.04, 11.09 and in the Scope of Work and (iv) the Ethanol Plant is capable to operate continuously, normally and safely, in accordance with the requirements hereunder.

“Interim Completion Date” means the actual date of achieving Interim Completion as determined pursuant to Section 10.02 .

“Interim Completion Test” means the test required to demonstrate Interim Completion, as determined in accordance with the Scope of Work and Section 11.09 .

“Job Site” means the Property Site (identified on the survey provided by Owner pursuant to Section 4.07 ) and any other areas where Contractor may temporarily obtain care, custody and control, use, easement or license for purposes directly, indirectly or incidentally related to performance of, or as an accommodation to, the Work.

“Labor” means the workforce of the relevant Person, including its staff and employee and non-employee and skilled and unskilled workers.

 

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“LC Issuing Bank” means Deutsche Bank, New York Branch, or such other financial institution reasonably acceptable to Owner and Contractor.

“Letter of Credit” has the meaning set forth in Section 11.10 .

“License Agreement” means that certain license agreement between Contractor and Owner, which agreement is an integral part of the transaction evidenced by this Agreement.

“Lien” means any lien, security interest, mortgage, hypothecation, encumbrance or other restriction on title or property interest.

“Major Equipment” means the Equipment listed on Exhibit N .

“Major Manufacturers” means the manufacturers of the Major Equipment.

“Mechanical Completion” means that (i) all Equipment has been installed with the required connections and controls to produce steam, ethanol and wet distillers’ grain; (ii) all Equipment has been installed in accordance with construction drawings, the Scope of Work and manufacturers recommendations, checked for alignment, lubrication and rotation; (iii) all systems for the Ethanol Plant have been checked out, and are ready for safe and proper operation; (iv) all instrumentation (including Continuous Emissions Monitoring Systems) for such Ethanol Plant is operational and has been calibrated in accordance with manufacturers’ standards and guidelines and loop checked; and (v) all systems for the Ethanol Plant have been tested, flushed and cleaned out as necessary and restored in accordance with the Scope of Work.

“Milestone Achievement Certificate” means a duly executed certificate in substantially the form of the Milestone Achievement Certificate in Exhibit E attached hereto, which is submitted by Contractor to Owner with a Request for Payment.

“Milestone Payment Table” means that table of Milestone Payments which is set forth in Exhibit D attached hereto.

“Milestone Payments” has the meaning set forth in Section 6.01 .

“Milestones” means the milestones set forth in Exhibit D attached hereto.

“Minimum Performance Levels” means the Ethanol Plant has achieved, during a minimum continuous production period of 72 hours, on average, not less than ***** percent of the Ethanol Production Rate Guarantee and ***** percent of the Ethanol Yield Guarantee, and no more than ***** percent of the Natural Gas Consumption Guarantee and no more than ***** percent of the Electric Power Consumption Guarantee, as set forth in Section 11.04, 11.09 and in the Scope of Work.

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY PANDA ETHANOL, INC. FOR CERTAIN PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS AGREEMENT WITH “*****”.

 

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“Natural Gas Consumption” means the overall natural gas consumed by the Ethanol Plant as measured in British Thermal Units on a higher heating value (HHV) basis at the meter in accordance with the Scope of Work when operating the Facility solely on natural gas boiler for steam production.

“Natural Gas Consumption Guarantee” has the meaning set forth in Section 11.04(b) .

“Noise Guarantee” has the meaning set forth in Section 11.04(f) .

“Notice to Proceed” means one or more notices given from Owner to Contractor from time to time directing Contractor to commence performance of the Work or a portion thereof as specified in such notice.

“O&M Contractor” means the Person selected by Owner for the operation and maintenance of the Facility.

“O&M Personnel” has the meaning set forth in Section 3.22 .

“Owner Caused Delay” has the meaning set forth in Section 14.04 .

“Owner Permits” means the Applicable Permits listed on Exhibit M .

“Owner Taxes” has the meaning set forth in Section 4.09 .

“Owner’s Engineer” shall mean an engineer appointed by Owner as may be changed from time to time, and confirmed in a notice to Contractor.

“Parties” means, collectively, Owner and Contractor.

“Performance Bonus” has the meaning set forth in Section 11.08 .

“Performance Liquidated Damages” has the meaning set forth in Section 11.05 .

“Person” means an individual, partnership, corporation, limited liability company, company, business trust, joint stock company, trust, unincorporated association, joint venture, Government Authority or other entity of whatever nature.

“Pre-Existing Hazardous Material” means Hazardous Material that existed on or in the Job Site and/or the Property Site prior to Initial Site Mobilization by Contractor.

“Prefunding Cancellation Costs” means the actual and demonstrable third party costs and Contractor Internal Costs incurred by Contractor upon termination of this Agreement in accordance with Article XV ; provided that notwithstanding anything contained herein to the contrary, “Prefunding Cancellation Costs” shall not include (A)

 

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any cancellation charges actually incurred under the Prefunding Purchase Orders except to the extent Owner authorizes Contractor to cancel any of such Prefunding Purchase Orders, and (B) any other costs expressly excluded therefrom as provided herein.

“Prefunding Purchase Orders” has the meaning set forth in Section 5.03(b) .

“Prefunding Third Party Costs” means the actual and demonstrable third party costs incurred by Contractor in performing the Prefunding Work (less all amounts refunded, whether through cancellation of Prefunding Purchase Orders or otherwise); provided that notwithstanding anything contained herein to the contrary, “Prefunding Third Party Costs” shall not include (A) any Contractor Internal Costs except as provided for in Section 5.03(a) and (B) any other costs expressly excluded therefrom as provided herein.

“Prefunding Work” has the meaning set forth in Section 5.01 .

“Procedures Manual” has the meaning set forth in Section 3.19(c) .

“Project Schedule” means the schedule for the completion of the Work attached hereto as Exhibit B, as may be amended under the terms of this Agreement.

“Property Site” means that certain piece of property located on Owner’s Property near Hereford, Texas as more particularly described in Exhibit P .

“Punch List” has the meaning set forth in Section 10.05 (b) .

“Qualified Insurer” has the meaning set forth in Section 9.03 .

“Ready for Start-up” means when the activities listed for Mechanical Completion have occurred and the Ethanol Plant has been commissioned and the Ethanol Plant is ready to mill corn at the hammer mills, produce steam, ethanol and wet distiller’s grain.

“Reference Rate” means the lesser of (i) the prime rate of interest for United States of America financial institutions as reported from time to time by The Wall Street Journal (New York Edition) plus two percent (2%) or (ii) the maximum rate permitted by Applicable Law.

“Request for Payment” means the written requests from Contractor to Owner for payment hereunder, which requests shall be in substantially the form of Exhibit F attached hereto.

“Schedule Bonus” has the meaning set forth in Section 11.08 .

“Schedule Liquidated Damages” has the meaning set forth in Section 11.02 and Section 11.03 .

 

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“Scheduled FBG Delivery Dates” mean the dates specified for the Fluidized Bed Gasifier Supplier’s delivery to the Job Site of the components of the FBG and all drawings and documentation supplied in accordance with Appendix A of Exhibit A .

“Scope of Work” means the Scope of Work attached hereto as Exhibit A , as the same may be amended from time to time in accordance with the terms hereof.

“Separated Contract Price” means the price payable by the Owner under this Agreement for the Work (including all labor, all materials, and all equipment comprising the Ethanol Plant and the FBG Work), as stated in Exhibit J, as may be amended from time to time pursuant to the terms hereof

“Steam Output” means the steam output at 125 pounds per square inch gauge saturated as measured in pounds per hour from the natural gas boiler as measured downstream of the first steam shut-off valve in accordance with the methods specified in ASME PTC 46.

“Subcontractor” means any contractor, constructor or materialman who performs any portion of the Work other than Contractor.

“Substantial Completion” shall mean that all of the following have occurred: (i) Interim Completion has been achieved; (ii) the Ethanol Plant is capable of being operated safely, normally and continuously in accordance with the requirements of this Agreement; (iii) the Ethanol Plant has achieved the Minimum Performance Levels as determined pursuant to successfully completing all the requirements of the Guaranteed Performance Tests in accordance with the Scope of Work; (iv) the Ethanol Plant has achieved the Emissions Guarantee; (v) the Ethanol Plant is capable of being operated in a safe manner in accordance with Applicable Laws and Applicable Permits; (vi) the training of O&M Personnel has been completed; and (vii) all Schedule Liquidated Damages then due, if any, under this Agreement have been paid.

“Substantial Completion Date” means the actual date the Guaranteed Performance Tests had successfully been started for achieving Substantial Completion, as determined pursuant to Section 10.04(a) or Section 10.04(b) , as applicable.

“Substantial Subcontractor” means a Subcontractor whose contract or contracts (in the aggregate) with Contractor require payments by Contractor totaling at least $500,000.

“Substantial Vendor” means a Vendor whose contract or purchase orders (in the aggregate) with Contractor require payments by Contractor of at least $250,000.

“Terms Sheet” has the meaning set forth in Section 18.13 .

 

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“Termination Payment” has the meaning set forth in Section 15.03 .

“Test Fuels” means certain fuels, as specified in Appendix H and Appendix J of the Scope of Work, used to complete certain performance testing.

“Test Notice” has the meaning set forth in Section 10.01(b) .

“Tests” means collectively, the Guaranteed Performance Tests and the Interim Completion Test.

“Total Prefunding Costs” means the aggregate of, without duplication, Contractor Internal Costs, Prefunding Third Party Costs and Prefunding Cancellation Costs.

“Un-denatured Ethanol” means anhydrous ethanol containing a maximum of 0.5% water by weight.

“Vendor” means any supplier, manufacturer or vendor of Equipment to Contractor or any Subcontractor.

“Warranty Period” has the meaning set forth in Section 12.01(d) .

“Work” has the meaning set forth in Section 3.01 . The term “Work” shall include all Work performed prior to the date hereof, including the work performed pursuant to the Terms Sheet (as described in Section 18.13 ).

Section 1.02 . Interpretation . Unless the context of this Agreement otherwise requires:

(a) the headings contained in this Agreement are used solely for convenience and do not constitute a part of this Agreement between the Parties, nor should they be used to aid in any manner to construe or interpret this Agreement;

(b) the gender of all words used herein shall include the masculine, feminine and neuter and the number of all words shall include the singular and plural words;

(c) the terms “hereof”, “herein” “hereto” and similar words refer to this entire Agreement and not to any particular Article, Section, Exhibit or any other subdivision of this Agreement;

(d) references to “Article,” “Section” or “Exhibit” are to this Agreement unless specified otherwise;

(e) reference to “this Agreement” (including any Exhibit hereto) or any other agreement, Exhibit, permit or document shall be construed as a reference to such agreement or document as the same may be amended, modified, supplemented or

 

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restated, and shall include a reference to any document which amends, modifies, supplements or restates, or is entered into, made or given pursuant to or in accordance with its terms;

(f) references to any law, statute, rule, regulation, notification or statutory provision (including Applicable Laws and Applicable Permits) shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or re-enacted;

(g) references to any Person shall be construed as a reference to such Person’s successors and permitted assigns;

(h) references to “includes,” “including” and similar phrases shall mean “including, without limitation”, and

(i) in the event of a conflict or inconsistency between this Agreement and any of the Exhibits, this Agreement shall control.

Section 1.03 . Exhibits . The following exhibits are attached to and incorporated into and made a part of this Agreement:

 

 

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ARTICLE II

RETENTION OF CONTRACTOR

Section 2.01 . Retention of Contractor . Owner hereby engages Contractor, and Contractor hereby agrees to be engaged by Owner, to perform the Work in accordance with the terms and conditions set forth herein.

Section 2.02 . Status of Contractor; No Partnership . Contractor shall be an independent contractor with respect to any and all Work performed and to be performed under this Agreement. This Agreement shall not be interpreted or construed to create an association, joint venture or partnership relationship among or between the Parties or any similar relationship, obligations or liabilities. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, act on behalf of, or to act as or be an agent or representative of, or to otherwise bind or obligate the other Party.

Section 2.03 . Subcontractors and Vendors .

(a) Subject to the terms hereof, Contractor shall have the right to have any of the Work performed by a Subcontractor or Vendor, including, as applicable, any Substantial Subcontractors and/or Substantial Vendors, subject to paragraph (b) below, qualified to perform such Work pursuant to written subcontracts or written purchase orders; provided that Contractor shall not be relieved from any liability or obligation under this Agreement. Except as otherwise indicated in this Agreement, Contractor shall be solely responsible for engaging, managing, supervising and paying all such Subcontractors and Vendors. Contractor shall require that all Work performed, and all Equipment provided by Subcontractors and Vendors are received, inspected and otherwise furnished in accordance with this Agreement, and Contractor shall be solely liable for all acts, omissions, liabilities and Work (including Defects therein) of such Subcontractors and Vendors. Owner shall not have any obligation or liability to any Subcontractor or Vendor. Nothing in any contracts, subcontracts and purchase orders with Subcontractors and Vendors shall in any way diminish or relieve Contractor from any duties and obligations under this Agreement; and all such contracts, subcontracts and purchase orders must provide that the rights thereunder are assignable to Owner and the Financing Parties or their designees. Except as otherwise specified herein, no Subcontractor or Vendor is intended to be or shall be deemed a third-party beneficiary of this Agreement.

(b) A list of approved Substantial Subcontractors and Substantial Vendors as of the date hereof, including a brief description of the Work to be performed by such Persons, is attached hereto as Exhibit Q . Contractor may retain those Substantial Subcontractors or Substantial Vendors which are set forth on Exhibit Q without further notice to or approval of Owner. In the event no Substantial Subcontractor or no Substantial Vendor listed on Exhibit Q is available to perform the requested duties, Contractor shall be entitled to request that Owner approve additional Substantial

 

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Subcontractors or Substantial Vendors to be included on a revised Exhibit Q. Upon such request, Contractor shall notify Owner and provide it with such information as necessary to enable Owner to evaluate each such proposed Substantial Subcontractor or Substantial Vendor for the portion of the Work proposed to be performed by it together with all cost information on a comparative basis required for Owner to fully evaluate the proposed additional Substantial Subcontractor or Substantial Vendor. Within five (5) Business Days after receipt of such information, Owner shall advise Contractor if any proposed Substantial Subcontractor and Substantial Vendor is unacceptable. If Owner fails to object to any proposed Substantial Subcontractor or Substantial Vendor within such five (5) Business Day period, Contractor may retain such Substantial Subcontractor or Substantial Vendor for the portion of the Work proposed. If Owner timely objects to such proposed Substantial Subcontractor or Substantial Vendor and states the basis for its objection, Contractor shall not retain such proposed Substantial Subcontractor or Substantial Vendor. Approval of any such additional Substantial Subcontractor or Substantial Vendor under this paragraph shall only be for the portion of the Work so approved and shall not be deemed an amendment or modification to Exhibit Q .

(c) The Contractor shall submit to Owner a copy of each unpriced purchase order or agreement entered into with a Substantial Subcontractor or Substantial Vendor for Equipment. Each purchase order or agreement shall show, where applicable, the Vendor’s or Subcontractor’s name, manufacturer’s name, materials type, model number, size, quantity and lists of the Equipment ordered, and shall be submitted to Owner when issued for purchase.

ARTICLE III

CERTAIN OBLIGATIONS AND RESPONSIBILITIES OF CONTRACTOR

Section 3.01 . Scope of Work; Applicable Standards .

(a) Contractor shall, at its own expense, directly or through its Subcontractors and Vendors, (i) design, engineer, procure, construct, start up, and carry out Tests on the Ethanol Plant, and perform its other obligations hereunder, (ii) perform and provide the FBG Work, and (iii) manage, supervise, inspect and furnish all Labor, Equipment, Contractor Equipment, temporary structures, temporary utilities, products and services for the foregoing, all on a turnkey basis, in accordance with this Agreement, including, without limitation, the Project Schedule and the Scope of Work, as the same may be modified from time to time in accordance with the terms hereof by a Change Order or Contract Amendment (all of the foregoing obligations of Contractor being collectively referred to in this Agreement as the “Work”). Subject to the remedies provided for herein, Contractor shall perform the Work and turn the Ethanol Plant and the FBG Work over to Owner in a manner that is (i) sufficient, complete and adequate in all material respects necessary to successfully achieve Substantial Completion by the applicable Guaranteed Substantial Completion Date, as more fully provided in this Agreement; (ii) in conformance with Good Engineering Practices; and (iii) in compliance with the terms of this Agreement and all Applicable Laws and Applicable Permits.

 

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(b) As more fully provided in Article XII, (i) the Ethanol Plant and the Work shall, at a minimum, comply with Good Engineering Practices (ii) the Ethanol Plant shall be designed, constructed and manufactured to operate, and shall be capable of being operated at all levels and operating modes in accordance with all Applicable Laws and Applicable Permits, and (iii) the Ethanol Plant and all items of Equipment and improvements comprising the Ethanol Plant shall be designed, manufactured, installed, calibrated and tested where applicable in accordance with the published standards of the organizations listed in the Scope of Work.

Section 3.02 . Control and Method of the Work .

(a) Subject to the terms hereof, Contractor shall be solely responsible for performing or causing to be performed the Work in accordance with the terms of this Agreement, and for all means, methods, techniques, sequences, procedures, and safety and security programs in connection with such performance. Contractor shall inform Owner in advance concerning its plans for carrying out the Work.

(b) Whenever the words “as ordered,” “as directed,” “as required,” “as permitted,” “as allowed,” “approved,” “reasonable,” “suitable,” “acceptable,” “properly,” “satisfactory,” or words or phrases of similar effect and import are used, it shall be understood that none of such terms shall imply that Owner has any authority over, right to control or responsibility for supervision of Contractor or its Subcontractors or Vendors, such supervision (including sole control over and responsibility therefor) being strictly reserved for Contractor. Any method of Work suggested by Owner that is used by Contractor will be used at the risk and responsibility of Contractor, and Owner will assume no responsibility therefor. Contractor shall have no obligation to use any method of Work suggested by Owner.

Section 3.03 . Compliance with Law . Contractor shall, and shall cause all of its Subcontractors, Vendors and Persons that it has a right to direct who are engaged in the performance of any of the Work to comply with all Applicable Laws and Applicable Permits. Using commercially reasonable efforts, Contractor shall perform the Work in a manner designed to avoid damage or nuisance to Persons and property of the public or others, including causes arising as a consequence of methods of construction of the Ethanol Plant and FBG Work or operation of the Ethanol Plant. The foregoing shall not be construed as to limit Contractor’s obligations and liabilities under Section 3.15 . Notwithstanding anything stated or implied herein to the contrary, if a Change in Law has a material effect on the cost of the Work or time or performance hereunder, such Change in Law shall entitle Contractor or Owner, as the case may be, to a Change Order to address such effect(s). For the avoidance of doubt, a Change in Law that does not have a material effect on the cost of the Work or time or performance hereunder shall not entitle either Party to a Change Order.

 

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Section 3.04 . Certain Matters Pertaining to Job Site . Contractor shall inspect the Job Site, verify the working conditions and undertake investigations as Contractor deems reasonably necessary before commencing any Work. Except for below ground conditions not reflected in a geotechnical report furnished by Owner to Contractor as Exhibit S, Contractor shall be solely responsible for performing any preliminary Work on the Job Site necessary for the commencement of construction to occur, including removal of all physical impediments to performing Work on the Job Site, above and below ground. Contractor shall cause its, and its Subcontractors’ and Vendors’ vehicles and self-propelled equipment entering on the Job Site to be clearly marked to identify the Contractor, Subcontractor or Vendor which owns the same. Contractor is entitled to rely on the accuracy of Exhibit S.

Section 3.05 . Access to Job Site . Owner shall have the right to have representatives on the Job Site full time. In addition, Contractor shall provide reasonable access at all times, upon request by Owner, to the Job Site and the Work to Owner, Owner’s other contractors, Owner’s Engineer, Financing Parties’ engineer and the Financing Parties and their respective employees, representatives, agents and consultants; provided, however, that in the absence of an emergency or a default by Contractor hereunder, (i) Owner shall give reasonable prior notice to Contractor, and (ii) Contractor may provide, and each such person shall accept, an escort or any safety equipment or measures that Contractor, in its reasonable discretion, deems necessary or advisable.

Section 3.06 . Inspection and Testing of Work in Progress .

(a) Each item of Major Equipment to be supplied by Contractor shall be subject to inspection and testing during and upon completion of its fabrication and installation in accordance with the provisions of the Scope of Work. Without limiting the foregoing, Contractor shall be responsible for inspection and testing of the Equipment in accordance with standard inspection practices and as required by applicable specifications before their shipment.

(b) Prior to any shipment or at the time of fabrication and assembly of the Equipment, Owner may (or require Contractor to) arrange for inspection of such Equipment at the manufacturer’s premises by Owner, and/or its designated agent. Contractor shall give notice of readiness to Owner, Financing Parties’ engineer and the Owner’s Engineer at least seven (7) days prior to the date when the Equipment will be available for inspection. Contractor shall arrange for access to the manufacturer’s facilities to permit any such inspection to be conducted smoothly.

(c) Contractor shall permit Owner and, as authorized by Owner, any party designated by Owner and the Financing Parties to inspect, test and observe the Work from time to time; provided, however, that none of such Person’s shall have any authority or responsibility for such Work. Contractor shall provide Owner each month during performance of the Work with a schedule of all testing proposed for the following three (3) month period in compliance with the requirements of the Scope of Work.

 

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Section 3.07 . No Waiver of Responsibility . No inspection made, acceptance of Work, payment of money or approval given by Owner, the Financing Parties, Financing Parties’ engineer or the Owner’s Engineer shall relieve Contractor of its obligations for the proper performance of the Work in accordance with the terms hereof. Owner may, upon notice to Contractor, reject any Work with Defects, regardless of whether Owner previously accepted any or all of such Work through oversight or otherwise. No approval given by Owner, in and of itself, shall be considered as an assumption of risk or liability by any such Person. Any such approval shall mean that the Person giving the approval has no objection to the adoption or use by Contractor of the matter approved at Contractor’s own risk and responsibility. Contractor shall have no claim relating to any such matter approved, including any claims relating to the failure or inefficiency of any method approved.

Section 3.08 . Intentionally left blank .

Section 3.09 . Clean-Up .

(a) Without limiting the provisions of Section 3.16 , Contractor shall at all times keep the Job Site reasonably free from waste, rubbish and Hazardous Material, other than Pre-Existing Hazardous Material, relating to its Work. Contractor shall maintain the Job Site in a neat and orderly condition throughout the performance of the Work. Contractor shall employ sufficient personnel to clean its site office and work areas each working day and shall cooperate with the other Persons working at the Job Site to keep the Job Site clean.

(b) Prior to the Final Acceptance Date, or as soon as practicable after the termination of this Agreement by Owner in accordance with the provisions of Article XV , Contractor shall (i) remove all Contractor Equipment from the Job Site (other than equipment, supplies and materials necessary or useful to the operation or maintenance of the Facility and Equipment and equipment, supplies and materials directed by Owner to remain at the Job Site until completion of the Ethanol Plant and FBG Work), (ii) have cleaned out all pits, pipes, chambers and conduits, (iii) tear down and remove all temporary structures on the Job Site built by it or its Subcontractors and restore such areas substantially to their original condition, and (iv) remove all waste, rubbish and Hazardous Material from and around the Job Site brought onto, caused or created by Contractor.

Section 3.10 . Obtaining, Maintaining and Identifying Permits . Contractor shall timely obtain and maintain all Contractor Permits. In addition, Contractor shall provide all assistance reasonably requested by Owner in connection with Owner’s efforts to obtain and maintain the Owner Permits, including, without limitation, witnesses testimony, depositions, preparation of exhibits, technical calculations and attending meetings. In the event that any Applicable Permit is required for the Ethanol Plant or to perform the Work that is not identified in this Agreement, at Owner’s request, Contractor

 

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shall obtain and maintain such Applicable Permit at Owner’s expense. All Applicable Permits shall be issued in the name of Owner unless otherwise required by Applicable Law or such Applicable Permit. If any Contractor Permit (or application therefor) is in the name of Owner or otherwise requires action by Owner, Owner shall upon the request of Contractor sign such application or take such action as reasonably appropriate. Owner reserves the right to review any such application of Contractor; provided; however, that Owner’s exercise of such right shall not under any circumstances, be considered an approval of the necessity, effect or contents of such application or related permit. Contractor shall deliver to Owner true and complete copies of all Applicable Permits obtained by Contractor upon its receipt thereof. Contractor shall use best efforts to identify in writing to Owner all requirements for performance of the Work of any Government Authority not identified in this Agreement, or shall confirm in writing prior to Financial Closing that, to the best of Contractor’s knowledge, there are no such requirements of any Government Authority other than as identified in this Agreement.

Section 3.11 . Labor . Contractor shall be responsible for retaining all Labor necessary for it to perform its obligations hereunder and comply with the provisions hereof, all in accordance with Applicable Laws. Contractor shall be responsible for all costs incurred in complying with this Section 3.11 or otherwise associated with its Labor, including, without limitation, costs incurred by any member of its Labor, whether by direct contract or subcontract, for medical treatment, transport and accommodation as a result of injuries or illness arising from engagement or employment in the execution of the Work.

(a) Engagement of Labor. Contractor shall make its own arrangements for the engagement of all Labor in connection with this Agreement and the performance of the Work. Contractor shall employ in the performance of the Work only Labor, whether supervisors, skilled workers or laborers, who are competent to perform their assigned duties and shall cause its Subcontractors and Vendors to adhere to the same standard with respect to their Labor. Contractor agrees, where required by Applicable Law, to employ only licensed personnel in good standing with their respective trades and licensing authorities to perform engineering, design, architectural and other professional services in the performance of the Work. All such professional services shall be performed with the degree of care, skill and responsibility customary among such licensed personnel.

(b) Identification . Contractor shall identify each member of its and its Subcontractor’s and Vendor’s Labor in accordance with the standards and procedures that are mutually acceptable to the Parties.

(c) Supply of Services for Labor . Contractor shall provide and maintain at the Job Site, in accordance with Applicable Laws and Applicable Permits, such accommodations, services and amenities as necessary for all Labor employed for the purpose of or in connection with this Agreement, including all water supply (both for drinking and other purposes), electricity supply, sanitation, fire prevention and fire-fighting equipment, refuse disposal systems and other requirements in connection with such accommodations or amenities.

 

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(d) Alcohol and Drugs . Contractor shall not possess, consume, import, sell, give, barter or otherwise dispose of any alcoholic beverages or drugs (excluding drugs for proper medical purposes and then only in accordance with Applicable Law) at the Job Site, or permit or suffer any such possession, consumption, importation, sale, gift, barter or disposal by its Subcontractors, agents or Labor and shall at all times assure that the Job Site is kept free of all such substances. Contractor shall immediately identify and remove from its or its Subcontractors’ employment at the Job Site any person (whether in the charge of Contractor or any Subcontractor) who is found to be in the possession of, under the influence, or who is a user of any dangerous or controlled drug, alcohol or other such substance or any other person who does or whose actions may create any unsafe condition or other situation that may cause damage or harm to any person or property.

(e) Arms and Ammunition . Except as required for Job Site security, Contractor shall not possess, give, barter or otherwise dispose of, to any person or persons, any arms or ammunition of any kind at the Job Site, or permit or suffer the same as aforesaid and shall at all times assure that the Job Site is kept free from arms and ammunition.

(f) Disorderly Conduct . Contractor shall be responsible for the conduct and deeds of its Labor and its Subcontractors’ Labor relating to this Agreement and the consequences thereof. Contractor shall at all times take all reasonable precautions to prevent any unlawful, riotous or disorderly conduct by or among such Labor and for the preservation of peace and protection of Persons and property in the area of the Job Site against the same. Contractor shall not interfere with any members of any authorized police, military or security force in the execution of their duties.

Section 3.12 . Project Management . Contractor has designated a management team as set forth on Exhibit O , and any future members of the management team must be approved by Owner in writing prior to his/her designation, such approval not to be unreasonably withheld or delayed. During the performance of the Work from the Initial Site Mobilization and thereafter, Contractor shall maintain continuously at the Job Site adequate management, supervisory, administrative, security and technical personnel, including the Contractor Site Manager, to ensure expeditious and competent handling of all matters related to the Work, according to its determination of the staffing required for this purpose. Contractor will not re-assign, remove or replace the Contractor Project Manager, Contractor Project Engineering Manager or Contractor Site Manager without Owner’s prior written consent, which consent shall not be unreasonably withheld or delayed. Contractor shall promptly replace its Contractor Project Manager, Contractor Project Engineering Manager or Contractor Site Manager, upon written request and explanation of Owner, if such individual is disorderly or if such individual is otherwise incompetent for his position and responsibilities.

 

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Section 3.13 . Temporary Office Quarters .

(a) During the performance of the Work from the Initial Site Mobilization and thereafter, Contractor shall maintain a suitable office at the Job Site at or near the site of the Work, which shall be the headquarters of Contractor’s representative designated pursuant to Section 3.34 .

(b) Contractor shall provide Owner’s representatives and the Owner’s Engineer with reasonably adequate office space, including all utilities, heating, ventilation and air conditioning, contemporaneously with the existence of Contractor’s site office specified in paragraph (a) above, which office space shall be subject to the approval of Owner. For purposes of this Section, “reasonably adequate” includes at a minimum the following facilities: (i) adequate offices to accommodate at least six (6) full time personnel and visitors; (ii) a conference room adequate to accommodate twelve (12) people; (iii) a secretary and reception area; (iv) a kitchen with hot and cold running water; (v) restroom facilities with indoor plumbing; and (vi) a minimum of six (6) telephone jacks, including one in each office, the conference room and the reception area. Contractor shall properly maintain such offices and shall employ sufficient personnel to clean such office each working day that such offices are used. Contractor shall be responsible for paying all utility deposits and charges, other than long distance telephone charges related to calls made by Owner and its representatives, related to such offices for Owner.

Section 3.14 . Cooperation with Other Contractors . Contractor shall reasonably cooperate and cause its Subcontractors and Vendors to cooperate with Owner and with other unrelated contractors (including the Fluidized Bed Gasifier Supplier) who may be working at or near the Job Site in order to assure that neither Contractor, nor any of its Subcontractors or Vendors , unreasonably hinders or increases, or makes more difficult than necessary the work being done by Owner and other unrelated contractors.

Section 3.15 . Protection and Safety .

(a) Contractor shall be responsible for the security, protection and safety of all Persons (including members of the public and the employees, agents, contractors, consultants and representatives of Owner, Financing Parties, Contractor and its Subcontractors and Vendors, and other contractors and subcontractors) and all public and private property (including structures, sewers and service facilities above and below ground, along, beneath, above, across or near the Job Site) that are at or near the Job Site or that are in any manner affected by the performance of the Work. Subject to and without limiting Contractor’s obligations with respect to security, protection and safety of the overall Job Site, as of Substantial Completion Date, Owner shall be responsible for the security, protection and safety of all Persons and all public and private property that are within Owner’s operational control; provided, however, Contractor shall remain responsible for the safety of its and its Subcontractors’ and Vendors’ Labor and agents.

 

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(b) Contractor shall initiate and maintain reasonable safety precautions and accident prevention programs for the Job Site and in the performance of the Work, which shall be in compliance with all Applicable Laws and Applicable Permits, to prevent injury to persons or damage to property on, about or adjacent to the Job Site and in the performance of the Work. Without limiting the generality of the foregoing, Contractor shall furnish and maintain all necessary safety equipment such as barriers, signs, warning lights and guards as required to provide adequate protection to persons and property. In addition, Contractor shall give reasonable notice to owners of public and private property and utilities when such property is susceptible to injury or damage through the performance of the Work and shall make all necessary arrangement with such owners relative to the removal and replacement of protection of such property or utilities.

Section 3.16 . Environmental Matters .

(a) Hazardous Material . Contractor shall, and shall cause its Subcontractors and Vendors to, comply with all Applicable Laws relating to Hazardous Material, all Applicable Permits, and all requirements of any Government Authority with respect to Hazardous Material; provided however that neither Contractor nor its Subcontractors or Vendors shall be obligated to perform any remediation measures relating to Pre-Existing Hazardous Material. Without limiting the