AMENDMENT TO
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND DESIGN/BUILDER
DESIGN AND CONSTRUCTION AGREEMENT
This agreement amends (the "Amendment") the DESIGN AND CONSTRUCTION AGREEMENT
entitled "LG01" entered into between Covol Technologies, Inc. (the "Owner') and
Lockwood Greene Engineers, Inc., (the "Design/Builder") on December 28, 1995.
1. All references within the Agreement to the Work, Scope of Work, Project
or services to be provided by the Design/Builder (including but not
limited to all references to "construction") are amended so as to be
consistent with the amended Scope of Work described in Paragraph 19 of
this Amendment. The Design/Builder shall not be responsible for and
shall not provide, warrant, or indemnify the Owner for any materials,
equipment or services which are part of the Owner's responsibilities
defined in Paragraph 19 of this Amendment, except to the extent that
Design/Builder has specific responsibilities for such items in
Paragraph 19 of this Amendment.
2. Article 1.1.2 is amended to read as follows: "The Project is the total
design and construction for which the Design/Builder is responsible
under the Agreement, including all professional design services and
site management. All labor, materials and equipment used or
incorporated in such design and construction shall be the
responsibility of the Owner."
3. The following is inserted as Article 1.1.5: "The Design/Builder shall
act as Agent for the Owner in all dealings with the Vendor(s),
Supplier(s) and Contract(s) under this agreement with respect to the
Work. All contracts with the Vendor(s), Supplier(s) and Contractor(s)
shall be with the Owner and not the Design/Builder. Prior to making any
financial commitments, the Design/Builder shall obtain the Owner's
written approval except within the scope of the Project where time
constraints make advance approval impractical or in cases of extreme
emergencies which might involve life or property damage. The Design/
Builder will immediately notify the Owner of such orders or commitments
(within five days). Owner and Design/Builder shall execute a separate
Limited Agency Agreement to define the terms and conditions of this
agency relationship. This Limited Agency Agreement is attached as
Exhibit D."
4. Article 2.1.1 is amended to read as follows: "Design services shall he
performed by qualified architects, engineers and other professionals
selected and paid by the Design/Builder. The professional obligations
of such persons shall be undertaken and performed in the interest of
the Design/Builder. The Design/Builder shall negotiate and prepare the
contract documents between the Owner and such contractors and
suppliers. The Design/Builder shall retain control and management of
the contractors and suppliers. Payments to construction contractors and
suppliers shall be made by the Owner upon Design/Builder's approval.
5. Article 2.2.4 is amended to read as follows: "Unless otherwise provided
in the Contract Documents, the Design/Builder shall provide or cause to
be provided and shall pay for design services and construction
management. All 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 will be paid for by
the Owner."
6. Article 2.2.8 is amended to state that the Design/Builder shall advise
the Owner as to work which does not conform to the Construction
Documents.
7. Articles 2.2.9, 2.2.10, 2.2.12, 2.2.14, 2.2.16, 4.5, 5.1.7, 5.1.8 and
5.1.9 are deleted.
8. Article 3.3 is amended to state that Owner will pay all the listed
fees.
9. Article 4.1 is amended to replace "construction" with "construction
management."
10. Article 4.3 is replaced in its entirety with the following:
"Design/Builder will perform its services in a timely and efficient
manner."
11. Article 5.1.4 is amended to provide that Owner shall pay each
contractor and supplier directly.
12. Article 5.2.1 is amended to specify that Design/Builder's final payment
shall not be delayed due to causes within Owner's responsibilities.
13. Article 6 is amended to make Owner responsible for all safety issues
relating to the aspects of the Project which are under the control of
Owner. All subcontractors will be required to name Owner and
Design/Builder as additional insureds. Substitute "Owner" for
Design/Builder in all Article 6.4.
14. Article 7.5.1 is amended to read as follows: "The Design/Builder shall
require a surety bond from each of the subcontractors for the full
amount of the respective subcontract covering the faithful performance
of such subcontractor and the payment of all obligations arising
thereunder."
15. Article 7.6.1 is amended to read as follows: "The Design Builder shall
provide a Professional Liability Insurance Policy for a maximum amount
of $10,000,000 aggregate.
16. Article 13.2.5 is amended to specify a fixed fee of $500,000,
consisting of a cash payment of $100,000 and an equity position of
$400,000 in one of Owners other projects.
17. Articles 13.3.1 and 13.3.2 are deleted.
18. Article 9.1 is amended to replace "correct Work rejected by the Owner
or" with "immediately advise Owner (within five days) of Work."
19. The Basic Services and Scope of Work as described in Articles 14.1 and
14.2 of the Agreement are amended to change some responsibilities from
the Design/Builder to the Owner, and Article 14 is amended to read as
follows:
14.1 Scope of Work
14.1.1 The Design/Builder shall provide all professional engineering
services, materials, labor, and equipment associated with the design
and construction at a Coal Fine Agglomeration Facility to be
constructed at a site to be designated by the Owner.
14.1.2 The Facility will be rated at an average capacity of 50 tons per
hour of finished product at a moisture content of no more than 10 per
cent (10%). The Facility will have an annual rated capacity to allow it
to produce 360,000 tons annually at 7,200 hours per year of operation.
14.1.3 The Facility will utilize the approximately 5,000,000 tons
currently located in Carbon County, Utah. The coal fines are generally
at 15% moisture, 14% ash, 0.5% sulphur, 30% volatile matter, and 12,500
Btu's per pound. All percentages are based on dry ash free basis.
14.1.4 The Facility process flow diagram is attached and consists of
the following key equipment components:
1 ea Rubber Tire Wheel Loaders;
1 ea Coal Feed Bins;
1 ea Portable Power Screen;
1 ea Metal Detection and Removal System
1 ea Continuous Mixing System capable of mixing the dry coal
fines with 4 to 6 per cent binder;
1 ea Binder/Water/Acid Distribution System including moisture
detections, piping, values, pumps, and automated controls;
1 ea Binder Production & Storage Facility with freeze
protection system (off-site);
1 ea Coal Extruding System with vacuum system and support
equipment;
1 ea Material Handling System with belt conveyors and bulk
recovery equipment to Radial Stacker capable of storing
15,000 tons of finished product;
1 ea Finish Drying Ovens capable of removing 10% moisture;
1 ea Dust Collection System;
1 ea Facility Electrical Controls including motor control
center, Facility automation controls, instrumentation, and
control room;
1 ea Truck Weigh Station;
1 ea Fire Protection System;
1 ea Metal building to cover the extrusion equipment and
dryers;
1 ea Portable Trailer for plant office and laboratory;
1 ea. Office and laboratory equipment.
The other major equipment package would be provided from companies that
specialize in the manufacture of clay extruding equipment and large material
drying systems. J.C. Steel and Sons, Statesville, North Carolina has assisted
Owner in the development of the technology.
The Owner will be responsible for the site survey, soils investigation,
utilities to project site and process design.
14.1.5 The site location will be at RailCo Coal terminal, Carbon County, Utah.
Any site demolition work, construction of utility above normal service
extensions and connections, and major earthwork required will be added through
Change Orders.
14.1.6 All utilities, including fuel, electricity and water, will be the
responsibility of the Owner.
14.1.7 The Owner will obtain all environmental permitting such as air/water
quality permits and coal-related permitting. The Design/Builder will assist in
the coordination of engineering and construction-related permitting with local
governmental entities.
14.1.S The Design/Builder will assist Owner in developing Operation and
Maintenance Manuals, Spare Part Lists and other plant-related documents. The
Design/Builder shall also provide start-up assistance and operational training
for the first month of plant operation.
14.2 Performance Demonstration and Training
14.2.1 The Design/Builder shall design the Facility to allow for production of
finished product at a rate of 50 tons per hour at ten per cent (10%) moisture.
The Design/Builder will secure guarantees from the extruder manufacturer at 50
tons per hour at 10% moisture to protect the interests of the Owner. The Owner
is responsible for commissioning, operating, and maintaining the Facility. The
Design/Builder will furnish start-up assistance and operational assistance. The
Owner and Design/Builder will mutually develop an acceptable performance
demonstration and training program within ninety (90) days of mechanical
completion.
14.2.2 Owner will be responsible for guarantees to the performance of the
finished product such as durability, Btu value, ash content and grindability.
14.2.3 (Deleted)
14.3 Project Meetings
14.3.1 Owner will hold frequent Project Meetings on a regularly scheduled basis
for the purpose of ensuring orderly and expeditious completion of the Work. Such
meetings will include Design/Builder's Project Manager and responsible
representatives or Subcontractors, and when desirable, Vendors or Suppliers.
14.3.2 At these meetings, schedule and progress shall be reviewed, work
activities and administrative procedures coordinated, problem areas identified
and corrective actions initiated, pending changes discussed, and safety
activities reported. Any other pertinent or timely subjects should be included
on the meeting agenda.
14.3.3 Minutes of each meeting shall be promptly issued by Design/Builder to all
attendees and/or designated persons.
14.4 Design/Builder shall, in addition to other information required by the
Contract Documents, provide, in a format acceptable to Owner, the following
reports, compiled separately for each facility, and cumulatively: Project
Procedures Manual; Monthly Progress Report (will include procurement status
report and schedule updates).
20. If there are any conflicts between the Agreement and this Amendment,
the provisions of this Amendment shall control.
This Amendment entered into this 16 day of Sept., 1996.
OWNER DESIGN/BUILDER
By: /s/ Michael Midgley By: /s/ H. David Rosamond
Its: President Its: Sr. Vice President