EXHIBIT 10.29
Contract No. FY05-LI-133
This contract is between the State of North Dakota acting by and through its
Industrial Commission, hereafter called Commission and Red Trail Energy, LLC.,
hereafter called Contractor.
1. Independent Contractor
The Contractor, its employees, agents and representatives are not
employees of the Commission. Nothing in this Agreement shall be deemed to
create an employer/employee relationship between the Commission and the
Contractor.
2. Statement of Work
a. Contractor agrees to perform the work described in Exhibit A,
entitled "Demonstrating North Dakota Lignite's Profitability in
Energy Production and Agricultural Processing," which is attached to
this Agreement and is made a part of it.
b. Contractor agrees to provide reports for the work mentioned in
Paragraph 2a as follows
Status Report: Six months after construction of ICM fluidbed
boiler
Final Report: Six months after ethanol production has
commenced.
The reports shall comply with 43-03-05-08 of the North Dakota
Administrative Code. Specifically, the Final Report must include a
single page project summary describing the purpose of the project,
the work accomplished, the project's results, and the potential
applications of the project. Each Report must provide documentation
verifying the receipt of the private matching funds. The Final
Report and the Project Summary must be submitted in hard copy and
either Word 6.0/95 electronic format or Adobe portable document
format.
3. Consideration
a. For performing the work the Commission agrees to grant to Contractor
an amount not to exceed $350,000 according to the following
schedule:
Upon execution of the contract and receipt of the information required in Exhibit B $100,000
Upon receipt and consideration of status report $175,000
Upon receipt and consideration of final report $ 75,000
b. If after reviewing a report the Commission believes that the report
is inadequate or that the Contractor is not complying with the scope
of work or satisfactorily carrying out the work, the Commission may
withhold all or part of a scheduled payment until the Contractor, in
the opinion of the Commission, has remedied the deficiency(ies).
4. Authority to Contract and Subcontract
The Contractor shall not have the authority to contract for or on behalf
of or incur obligations on behalf of the Commission.
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The Commission acknowledges that the Contractor will be entering into
subcontracts for the work described herein and in Exhibit A. The
Contractor agrees to be solely responsible for the performance of any
Subcontractor.
5. Funds Available and Authorized
Commission certifies at the time of the execution of this Agreement
sufficient funds are available and authorized for expenditure to finance
costs of this Agreement within the Commission's current appropriation or
limitation to July 1, 2007. It is agreed that if the appropriation or
funding to the Commission is not obtained and continued at a level
sufficient to allow for payments to the Contractor, for the services
identified in Paragraph 2, the obligations of each party hereunder
terminate upon delivery of written notice to the Contractor.
6. Termination
This Agreement may be terminated by mutual consent of both parties in
writing and delivered by certified mail or in person.
Upon delivery of written notice to the Contractor, the Commission may
immediately terminate the whole or any part of this Agreement if:
a. The Contractor fails to provide services described herein and in
Exhibit A within the time specified herein or any extension thereof;
or
b. The Contractor fails to perform any of the other obligations under
this Agreement, and after receipt of written notice from the
Commission, fails to correct such failures within thirty days or
such longer period as the Commission may authorize.
The rights and remedies of the Commission provided in the above clause
related to defaults (including breach of contract) by the Contractor shall
not be exclusive and are in addition to any other rights and remedies
provided by law or under this Agreement. Any termination of this
Agreement, other than for breach of contract, shall be without prejudice
to any obligations or liabilities of either party which accrued prior to
termination.
If the Commission terminates this Agreement for default by the Contractor,
the Contractor shall immediately reimburse the Commission the amount of
all money paid by the Commission to the Contractor hereunder.
7. Contract Management
Notwithstanding the Contractor's responsibility for management of the work
described herein and in Exhibit A, the administration of this Agreement
will require maximum coordination between the Lignite Research Council,
the Commission and the Contractor.
COMMISSION'S TECHNICAL REPRESENTATIVE
The Commission's Technical Representative (TR) will be designated on
authority of the Commission to monitor all technical aspects and assist in
administration of the Agreement. The types of actions within the purview
of the TR's authority are to assure that the Contractor performs the
technical requirements of the Agreement; to perform or cause to be
performed inspections necessary in connection with the performance of the
Agreement; to maintain both written and oral communications with the
Contractor concerning written interpretations of the technical
requirements of the scope of work; to monitor the Contractor's performance
under the Agreement and notify the Commission of any deficiencies
observed.
FY05-LI-133
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COMMISSION'S AUTHORIZED OFFICER
The Commission's Authorized Officer will carry out all contractual
administration. Communications pertaining to Agreement administration
matters will be addressed to:
The Industrial Commission of North Dakota
Attention: Karlene Fine
State Capitol 14th Floor
600 E Boulevard Ave Dept 405
Bismarck, North Dakota 58505-0840
The Commission's Authorized Officer is the only person authorized to
approve changes in any of the requirements under the Agreement.
8. Access to Records
The Commission, the State Auditor of the state of North Dakota, and the
Office of the Attorney General of the State of North Dakota, and their
duly authorized representatives, shall have access to the books,
documents, papers and records of the Contractor relating to the work
performed by the Contractor hereunder for the purpose of making auditing,
examining and copying the same.
9. Repayment of Grant and North Dakota Lignite Usage Requirement
After the first year of operation, a portion of the funding should be
repaid to the Lignite Research Program in annual payments of $22,000 over
ten years. After the first year of operation, North Dakota lignite use
shall represent a minimum of 75% of the primary fuel (on a BTU basis). If
North Dakota lignite as the primary fuel is less than 75% of total fuel
usage (on a BTU basis), an additional $13,000 shall be repaid for each
year of reduced North Dakota lignite use. The Contractor shall certify
each year for ten years after the first year of operation the amount of
North Dakota lignite used in the operation of the project and what the
percentage it is of total fuel usage.
10. Compliance with Law
The Contractor shall comply with all federal, state, and local laws and
ordinances applicable to the work to be done under this Agreement.
11. Indemnity and Insurance
The Contractor shall save and hold harmless the State of North Dakota and
the Commission, its officers, agents, employees, and members, from all
claims, suits, or actions of whatsoever nature resulting from or arising
out of the activities of the Contractor or its subcontractors, agents, or
employees under this Agreement. The Contractor shall maintain liability
insurance coverage with limits of liability equal to or greater than those
damage limits prescribed in N. D. C. C. Section 32-12.2-02.
12. Ownership of Work Product
All work product of the Contractor resulting from this Agreement shall be
governed by North Dakota Administrative Code Chapter 43-03-06.
13. Nondiscrimination
Contractor agrees to comply with all applicable requirements of federal
and state civil rights and rehabilitation statutes, rules, and
regulations.
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14. Applicable Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of North Dakota.
15. Captions
The Captions or headings in this Agreement are for convenience only and in
no way define, limit, or describe the scope or intent of any provisions of
this Agreement.
16. Execution and Counterparts
This Agreement may be executed in several counterparts, each of which
shall be an original, all of which shall constitute but one and the same
instrument.
17. Amendments
The terms of this Agreement shall not be waived, altered, modified,
supplemented, or amended, in any manner whatsoever, except by written
instrument signed by the parties.
18. Notices
All notices, certificates, or other communication shall be sufficiently
given when delivered or mailed, postage prepaid, to the parties at their
respective places of business as set forth below or at a place designated
hereafter in writing by the parties.
Industrial Commission of North Dakota Red Trail Energy, L.L.C.
State Capitol, Tenth Floor Attention: Mick Miller
600 E Boulevard Ave Dept 405 3682 Highway 8 South
Bismarck, ND 58505-0840 Richardton, ND 58652
19. Successors in Interest
The provisions of this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, and their respective successors and
assigns.
20. Severability
The parties agree that if any term or provision of this Agreement is
declared by a court of competent jurisdiction to be illegal or in conflict
with any law, the validity of the remaining terms and provisions shall not
be affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the particular
term or provision held to be invalid.
21. Waiver
The failure of the state to enforce any provisions of this Agreement shall
not constitute a waiver by the state of that or any other provision.
22. Merger Clause
This Agreement constitutes the entire agreement between the parties. No
waiver, consent, modification or change of terms of this Agreement shall
bind either party unless in writing and signed by both parties. Such
waiver, consent, modification, change if made, shall be effective only in
the specific instance and for the specific purpose given. There are no
understandings, agreements, or representations, oral or written, not
specified herein regarding this Agreement. Contractor, by the signature
below of its authorized representative, hereby
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acknowledges that the Contractor has read this Agreement, understands it,
and agrees to be bound by its terms and conditions.
23. Legal Notice/Disclaimer
The following notice shall be contained in all reports intended to be
released to the public:
This report was prepared by Red Trail Energy, LLC pursuant to an agreement
with the Industrial Commission of North Dakota, which partially funded the
report. None of Red Trail Energy, LLC or any of its subcontractors, the
Industrial Commission of North Dakota, or any person acting on behalf of
any of them:
(A) Makes any warranty or representation, express or implied, with
respect to the accuracy, completeness, or usefulness of the
information contained in this report, or that the use of any
information, apparatus, method, or process disclosed in this report
may not infringe privately-owned rights; or
(B) Assumes any liabilities with respect to the use of, or for damages
resulting from the use of, any information, apparatus, method or
process disclosed in this report.
Reference herein to any specific commercial product, process, or service by
trade name, trademark, manufacturer, or otherwise, does not necessarily
constitute or imply its endorsement, recommendation, or favoring by the
Industrial Commission of North Dakota. The views and opinions of authors
expressed herein do not necessarily state or reflect those of the
Industrial Commission of North Dakota.
24 Term of Agreement. This Agreement shall be effective upon execution herein
by the required parties indicated below and shall remain in effect for 11
years following commencement of commercial operation of the Red Trail
Energy, L.L.C. Project.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed intending to be bound thereby.
RED TRAIL ENERGY, L.L.C. NORTH DAKOTA INDUSTRIAL COMMISSION
By: /s/ Ambrose Hoff By: /s/ Karlene Fine
------------------------------- ------------------------------
Name Karlene Fine
President Executive Director
Title
Date: May 12,2006 Date: April 26,2006