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DESIGN/BUILD AGREEMENT
THIS DESIGN/BUILD AGREEMENT (this "Agreement") is entered into as of
the 14th day of May, 1999 by and between AmerAlia, Inc., a Utah Corporation,
with its principal place of business at 311 Raleigh Road, Kenilworth, Illinois
60043 (hereinafter referred to as "AMERALIA"), and U.S. Filter Wastewater Group,
Inc., a Delaware corporation, d/b/a U.S. Filter Corporation, HPD Products, with
its principal place of business at 55 Shuman Boulevard, Naperville, IL 60563
(hereinafter referred to as "HPD"), the two of which shall hereinafter be
referred to as "Party" or the "Parties". The Parties amended this Agreement in a
first amendment dated August 1999 and in a second amendment dated August 24,
1999. When used herein, the term "the Agreement" includes this Agreement as
amended.
WITNESSETH THAT:
WHEREAS, AMERALIA desires to have HPD provide those design, project
management, supervision, procurement, construction, testing, and startup
assistance services specifically described in this Agreement (the "Work") in
relation to AMERALIA's proposed sodium bicarbonate solution mining and
production plant at AMERALIA's 1320 acre leasehold estate in the Piceance Creek
Basin near Rifle, Colorado (which plant is hereinafter referred to as the "Rock
School Project"); and
WHEREAS, HPD represents that it has an adequate staff of properly
trained and qualified personnel, and proper facilities, tools, equipment, and
financial and other resources, to undertake and complete all of its obligations
and duties described in this Agreement; and
WHEREAS, AMERALIA and HPD wish to enter into this Agreement, under
which HPD shall, for valuable consideration to be paid by AMERALIA, complete the
Rock School Project.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein expressed, the Parties hereto agree as follows:
1. DEFINITIONS
Capitalized terms which are used in this Agreement shall have the
meanings set forth below:
"Agreement" shall have the meaning set forth in the Preamble.
"AMERALIA" shall have the meaning set forth in the Preamble.
"Certificate of Commercial Operation" shall have the meaning set forth
in Section 16.2.4.
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"Certificate of Final Completion" shall have the meaning set forth in
Section 16.3.1.
"Certificate of Mechanical Completion" shall have the meaning set forth
in Section 16.1.3.
"Change Expenses" shall mean the Cost of the Work and that portion of
the Engineering Fee which are associated with changes in the Work which cause
the Guaranteed Maximum Price to exceed or remain above $32,000,000.
"Change Order" shall mean and refer to a written instrument signed by
HPD and AMERALIA stating their agreement upon all of the following: a change in
the Work; the amount of the adjustment in the Guaranteed Maximum Price, if any;
the extent of the adjustment in the Scheduled Dates, if any; the extent of the
adjustment in the Performance Guarantees, if any; and the adjustment in the
Milestone Payment Schedule, if any.
"Commercial Operation" shall be deemed to have occurred when (i)
Mechanical Completion has occurred, and (ii) either all Performance Tests have
been conducted and the Performance Guarantees have been achieved, or all
Performance Tests have been conducted, the Production Rate and Product Quality
Performance Guarantees have been achieved, and liquidated damages related to the
Utility Consumption Performance Guarantees have been paid by HPD to AMERALIA.
"Commercial Operation Date" shall mean and refer to the date on which
HPD has successfully achieved Commercial Operation.
"Commitment Date" shall have the meaning set forth in Section 9.4.
"Confidential Information" shall have the meaning set forth in Section
10.
"Contract Sum" shall have the meaning set forth in Section 8.1(a).
"Cost of the Work" shall have the meaning set forth in Section 8.1(b).
"Day" or "day" shall mean and refer to a calendar day.
"Default" shall have the meaning set forth in Section 17.1.
"Depletion Date" shall have the meaning set forth in Section 8.4(a).
"Dispute" shall have the meaning set forth in Section 12.1.
"Effective Date" shall have the meaning set forth in Section 2(a).
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"Engineering Fee" shall have the meaning set forth in Section 8.1(c).
"Environmental Law" shall mean and refer to any Law which relates to
environmental quality, health, safety, pollution, contamination, cleanup, or the
protection of human health, ambient air, waters (including ground waters) or
land; including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et seq.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et
seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et
seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Clean
Water Act, as amended, 33 U.S.C. Section 1251 et seq.; and the Occupational
Safety and Health Act, as amended, 29 U.S.C. Section 651 et seq.
"Equity Amount" shall have the meaning set forth in Section 8.2.
"Equity Payment Period" shall have the meaning set forth in Section
8.3(a).
"Escrow Account" shall have the meaning set forth in Section 8.2.
"Escrow Deposits" shall have the meaning set forth in Section 8.2.
"Excusable Event" shall have the meaning set forth in Section 15.
"Existing Hazardous Substance" shall mean and refer to a Hazardous
Substance existing at the Project Site as of the Effective Date or a Hazardous
Substance which is introduced to the Project Site by an individual or entity
other than HPD or one of its subcontractors.
"Final Completion" shall be deemed to have occurred when (i) Mechanical
Completion has occurred, (ii) Commercial Operation has occurred, and (iii) all
items identified on the Punch List have been completed.
"Final Completion Date" shall mean and refer to the date on which HPD
has successfully achieved Final Completion.
"Governmental Authority" shall mean and refer to any national, federal,
state, county, municipal or local government, agency, authority or court, or any
department, board, bureau or instrumentality thereof.
"Guaranteed Maximum Price" shall have the meaning set forth in Section
8.1(a).
"Hazardous Substance" shall mean and refer to (A) any substance which
is listed, defined, designated or classified under any Environmental Law as a
(i) hazardous material, substance, constituent or waste, (ii) toxic material,
substance, constituent or waste, (iii) radioactive material, substance,
constituent or waste, (iv) dangerous material, substance, constituent or waste,
(v) pollutant, (vi) contaminant, or (vii) special waste; (B)
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any material, substance, constituent or waste regulated under any Environmental
Laws; or (C) petroleum, petroleum products, polychlorinated biphenyl,
pesticides, asbestos, or asbestos-containing materials.
"HPD" shall have the meaning set forth in the Preamble.
"HPD Loan" shall have the meaning set forth in Section 8.4(b).
"Invoices" shall have the meaning set forth in Section 8.3.
"Law" shall mean and refer to any constitution, charter, statute, act,
law, ordinance, regulation, code, rule, order, decree, permit, judgment,
directive, ruling, decision, guideline, resolution or declaration of any
Governmental Authority, or any interpretation or application thereof by any such
Governmental Authority.
"Mechanical Completion" shall be deemed to have occurred when (i) the
Rock School Project has been designed, engineered and constructed in accordance
with this Agreement (excluding Punch List items), (ii) the Rock School Project
is mechanically and structurally sound and free from detectable and patent
defects and deficiencies, (iii) HPD has successfully completed all
pre-commissioning procedures and tests as set forth in Exhibit C attached
hereto, and (iv) the Rock School Project is ready for commissioning.
"Mechanical Completion Date" shall mean and refer to the date on which
HPD has successfully achieved Mechanical Completion.
"Milestone" shall have the meaning set forth in Section 8.3(a).
"Milestone Payments" shall have the meaning set forth in Section
8.3(a).
"Milestone Payment Schedule" shall have the meaning set forth in
8.3(a).
"Party" or "Parties" shall have the meanings set forth in the Preamble.
"Performance Guarantees" shall mean and refer to those levels of
performance which the Rock School Project should achieve upon its full and
complete operation, which guarantees are identified on Exhibit F attached
hereto.
"Performance Tests" shall mean and refer to those tests specified in
Exhibit G attached hereto which shall be used to determine whether the Rock
School Project has satisfied the Performance Guarantees.
"Project Site" means the 1320 acre parcel of real property in the
Piceance Creek Basin near Rifle, Colorado, which parcel is more specifically
described in Exhibit A attached hereto.
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"Punch List" shall mean and refer to a comprehensive list prepared upon
Mechanical Completion of the Rock School Project identifying those insubstantial
details of construction and mechanical adjustment which require repair,
completion, correction or re-execution, the noncompletion of which does not
interfere with AMERALIA's occupancy and use of the Rock School Project.
"Rock School Project" shall have the meaning set forth in the recitals
hereof.
"Savings" shall have the meaning set forth in Section 8.1(d).
"Scheduled Commercial Operation Date" shall mean and refer to the date
which is three hundred fifty (350) days after the Mechanical Completion Date, as
such date may be adjusted pursuant to the terms and provisions of this
Agreement.
"Scheduled Dates" shall mean and refer to the Scheduled Mechanical
Completion Date and the Scheduled Commercial Operation Date.
"Scheduled Mechanical Completion Date" shall mean and refer to August
18, 2000, as such date may be adjusted pursuant to the terms and provisions of
this Agreement.
"Senior Officer" shall have the meaning set forth in Section 12.1.
"subcontractor" shall mean and refer to any person or entity who has a
direct contract or agreement with HPD to perform a portion of the Work.
"Technical Specifications" shall mean and refer to those documents
identified or contained within Exhibit C attached hereto, which documents define
the program requirements and scope of Work for the Rock School Project.
"Unforeseeable Conditions" shall mean and refer to physical conditions
at the Project Site (i) which differ materially from those indicated in this
Agreement, or (ii) which differ materially from those ordinarily found to exist
and generally recognized as inherent in construction activities of the character
provided for in this Agreement.
"Work" shall have the meaning set forth in the recitals hereof.
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2. DURATION
(a) This Agreement is effective as of the date first shown above (the
"Effective Date") and shall continue in force until Final Completion of the Rock
School Project, subject to termination of this Agreement as otherwise provided
herein. HPD agrees that it shall achieve Mechanical Completion of the Rock
School Project on or before the Scheduled Mechanical Completion Date, and
Commercial Operation of the Rock School Project on or before the Scheduled
Commercial Operation Date. A detailed description of Rock School Project
Progress Schedule is attached as Exhibit B to this Agreement.
(b) The Parties agree that it would be extremely difficult and
impracticable under the presently known and anticipated facts and circumstances
to ascertain and fix the actual damages AMERALIA would incur should HPD delay in
achieving Mechanical Completion by the Scheduled Mechanical Completion Date, and
accordingly the Parties hereby agree that if HPD fails to so achieve Mechanical
Completion within such time, then AMERALIA's sole and exclusive remedy for such
delay shall be to recover from HPD as liquidated damages, and not as a penalty,
the sum of Five Thousand and No/100 Dollars ($5,000.00) for each day Mechanical
Completion is so delayed by HPD; it being acknowledged and agreed by the Parties
hereto that HPD's maximum liability for such delay liquidated damages shall be
limited to five percent (5%) of the Guaranteed Maximum Price.
(c) Conversely, AMERALIA shall pay HPD an incentive fee of Five
Thousand and No/100 Dollars ($5,000.00) for each day the Mechanical Completion
Date precedes the Scheduled Mechanical Completion Date; provided, however, such
incentive fee shall be limited to an amount equal to five percent (5%) of the
Guaranteed Maximum Price.
(d) The Parties agree that it would be extremely difficult and
impracticable under the presently known and anticipated facts and circumstances
to ascertain and fix the actual damages AMERALIA would incur should HPD fail to
achieve the Utility Consumption Performance Guarantee by the Scheduled
Commercial Operation Date, and accordingly the Parties hereby agree that if HPD
fails to achieve the Utility Consumption Performance Guarantee by the Scheduled
Commercial Operation Date, then AMERALIA's sole and exclusive remedy for such
failure shall be to recover from HPD as liquidated damages, and not as a
penalty, those amounts identified as liquidated damages in Exhibit F attached
hereto; it being acknowledged and agreed by the Parties hereto that the HPD's
maximum liability for such liquidated damages shall be limited to Five percent
(5%) of the Guaranteed Maximum Price. Such liquidated damages shall be
calculated on the basis of the last Performance Test performed before the
Scheduled Commercial Operation Date.
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3. REPRESENTATIONS AND WARRANTIES
3.1 AMERALIA's Representations and Warranties: AMERALIA represents and
warrants to HPD that it retains a leasehold interest in and to the Project Site,
that its leasehold interest includes the right to develop, design and construct
the Rock School Project, that such leasehold interest permits HPD to access the
Project Site for the purposes contemplated in this Agreement, and that it has
obtained (or will obtain) all governmental (including environmental) permits,
licenses, variances and authorizations necessary to proceed with the Rock School
Project.
AMERALIA represents and warrants that it has, or will have, the
financial capacity to meet each and every financial obligation imposed by this
Agreement at the time required.
AMERALIA represents and warrants that it has obtained any necessary
permission(s) from its corporate officers and/or board of directors, that it is
legally authorized to enter into this Agreement and to fulfill any and all
obligations imposed hereby, and that this Agreement constitutes the legal, valid
and binding Agreement of AMERALIA; AMERALIA represents and warrants that the
individual signing this Agreement for AMERALIA is fully authorized to enter into
this Agreement in the name of AMERALIA, and that s/he suffers no incapacity or
infirmity which would invalidate the commitments herein undertaken.
3.2 HPD's Representations and Warranties: HPD represents that it has an
understanding of the nature and scope of the project identified herein, that it
is generally familiar with projects of the nature described herein, and that it
is experienced in performing work similar in nature to the Work provided herein.
HPD represents and warrants that it is legally authorized to enter into
this Agreement and to fulfill any and all obligations imposed hereby and that
this Agreement constitutes the legal, valid and binding agreement of HPD; HPD
represents and warrants that the individual signing this Agreement for HPD is
fully authorized to enter into this Agreement in the name of HPD, and that s/he
suffers no incapacity or infirmity which would invalidate the commitments herein
undertaken. HPD acknowledges that AMERALIA is relying on HPD's expertise in
relation to the design, engineering and construction of the Rock School Project.
3.3 Warranty as to the Work. (a) HPD warrants to AMERALIA that the
materials and equipment incorporated into the Work will be free from defects in
workmanship. The preceding warranty shall remain in full force and effect for a
period of one (1) year after the Mechanical Completion Date, at which time, such
warranty shall terminate and be of no further force or effect.
(b) If, at any time prior to the expiration of the preceding one (1)
year warranty period, AMERALIA discovers any breach of HPD's warranty contained
in Section 3.3(a) and notifies HPD in writing of such breach, then HPD shall, at
its sole
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option, either repair or replace the defective portion of the Work; provided,
however, AMERALIA shall (prior to HPD performing any corrective work or
services) disconnect the portion of the Work to be corrected by HPD from all
piping, clean such Work, free such Work of all liquids, solids, explosives, and
combustible, toxic and asphyxiate gases, and otherwise make such Work safe for
the corrective work and services to be performed by HPD. The foregoing remedy
shall be AMERALIA's sole and exclusive remedy for breach of warranty by HPD, and
shall be in lieu of all other remedies (whether available at law or in equity).
(c) The warranties provided in this Section 3.3 exclude remedy for (a)
damages, defects, deficiencies or failures due to: negligence, abuse, willful
misconduct or neglect by AMERALIA or a third party; accidents; following the
Mechanical Completion Date, failure to store, operate and maintain in accordance
with HPD's written instructions; modifications, repairs or alterations not
executed by HPD; normal wear and tear under normal usage; corrosion, erosion or
abrasion; abnormal conditions of temperature, moisture or dirt; or deterioration
or wear occasioned by chemicals; and (b) damages, defects, deficiencies or
failures not reported within the one (1) year warranty period.
(d) All limitations in this Agreement as to HPD's liability (including,
without limitation, those limitations set forth in Section 26) shall apply even
if the remedies for breach of warranty are deemed to "fail of their essential
purpose" or are otherwise held to be invalid or unenforceable.
(e) THE WARRANTY SET FORTH IN THIS SECTION 3 IS HPD'S SOLE AND
EXCLUSIVE WARRANTY. HPD MAKES NO OTHER WARRANTIES OF ANY KIND WHATSOEVER,
EXPRESS, IMPLIED, ORAL, WRITTEN OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF NON-INFRINGEMENT, TITLE, PATENT, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR WARRANTIES ARISING BY CUSTOM, TRADE USAGE, PROMISE,
EXAMPLE OR DESCRIPTION, ALL OF WHICH WARRANTIES ARE EXPRESSLY DISCLAIMED BY HPD
AND WAIVED BY AMERALIA.
4. RELATIONSHIP OF THE PARTIES
HPD agrees that it is and shall conduct itself for all purposes as an
independent contractor in its completion of the Rock School Project. HPD further
agrees that none of the employees, agents or subcontractors of HPD shall be
considered for any purpose whatsoever, or hold themselves out to be, or act as,
employees of AMERALIA. HPD agrees that neither HPD nor any of its employees,
agents or subcontractors shall, except as specifically authorized in writing by
AMERALIA, act as an agent for AMERALIA.
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5. CHANGE ORDERS
AMERALIA may, at any time during the term of this Agreement, request
changes in the Work within the general scope of this Agreement (consisting of
additions, deletions or other revisions) by written communication to HPD. HPD
shall, within five (5) business days thereafter, provide AMERALIA with a written
acknowledgment of such request. Thereafter, HPD shall with reasonable promptness
provide AMERALIA with a written proposal for incorporating the requested change
into the Rock School Project. HPD's proposal shall include, if appropriate, an
equitable adjustment in the Guaranteed Maximum Price, the Performance
Guarantees, the Milestone Payment Schedule and the Scheduled Dates. Such
proposal shall be the basis for the negotiation of the corresponding Change
Order. If AMERALIA and HPD have previously agreed on unit prices for any aspects
of changed Work, then the unit prices shall be utilized for the pricing of the
applicable portion of the proposed change. If AMERALIA agrees with HPD's
proposal, the Parties shall execute a Change Order reflecting the requested
change in the Work and the proposed adjustments, if any, in the Guaranteed
Maximum Price, the Performance Guarantees, the Milestone Payment Schedule and
the Scheduled Dates. In the event AMERALIA disagrees with HPD's proposal,
AMERALIA may submit such disagreement to the dispute resolution process set
forth in Section 12; provided, however, (i) the Parties agree that any
adjustment in the Guaranteed Maximum Price which is determined pursuant to a
dispute resolution process shall be made on the basis of the associated Cost of
the Work and Engineering Fee calculated in accordance with Sections 8.1(b) and
(c), and (ii) under no circumstances (even pursuant to the dispute resolution
process) shall HPD be obligated to accept any change in the Work proposed by
AMERALIA if HPD believes that such change will impact HPD's ability to achieve
the Performance Guarantees. Under no circumstances shall HPD be obligated to
proceed with a requested change in the Work unless and until the Parties execute
a mutually acceptable Change Order.
Should HPD believe that any instructions, interpretations or
communications of any kind from AMERALIA constitute a change to the Rock School
Project, then HPD shall notify AMERALIA of said belief within five (5) business
days after HPD becomes aware of such instruction, communication or
interpretation. AMERALIA and HPD shall thereafter attempt to arrive at an
agreement on whether a change has occurred, and the impact of such change, if
any, on the Guaranteed Maximum Price, the Performance Guarantees, the Milestone
Payment Schedule and the Scheduled Dates. Should the Parties fail to arrive at
an agreement on the matter, then either Party may, by written notice to the
other, invoke the dispute resolution provisions in Section 12.
6. CONFLICTS
If there is any conflict between any provisions in the body of this
Agreement and any provisions in the attached Exhibits, then the provisions in
the body of this Agreement shall prevail over the provisions in the attached
Exhibits.
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7. HPD'S WORK
(a) HPD covenants and agrees that it shall perform and complete the
Work in accordance with this Agreement (including, without limitation, in
accordance with the Technical Specifications). Except as otherwise provided in
this Agreement, HPD shall supply and pay for all services, materials (which,
unless otherwise agreed in writing by AMERALIA, shall be new), and other items
identified in this Agreement as being necessary to perform the Work. The entire
scope of the Work is specifically set forth in this Agreement; and any items or
services not specifically enumerated herein are not included as part of the Work
and are considered to be the responsibility of AMERALIA.
(b) HPD's design, engineering and construction services shall be
performed in accordance with generally accepted design, engineering and
construction standards recognized in the United States for projects similar in
nature to the Rock School Project.
(c) HPD shall not permit the employment of personnel at the Project
Site who are unfit or incompetent or otherwise not skilled in the tasks assigned
to them, and shall supply security for the Project Site as it deems necessary in
its sole discretion.
8. COMPENSATION
8.1 Contract Sum. (a) AMERALIA shall pay HPD for the performance of the
Work the "Contract Sum" consisting of the Cost of the Work, the Engineering Fee,
and the Deposit Relief Fee. HPD covenants and agrees that the sum of the Cost of
the Work, the Engineering Fee and the Deposit Relief Fee shall not exceed Thirty
Three Million Two Hundred Thousand and No/100 Dollars ($33,200,000), subject to
additions to, and deductions from, such amount by Change Order as provided in
this Agreement. Such maximum sum is referred to in this Agreement as the
"Guaranteed Maximum Price". Costs which would cause the Guaranteed Maximum Price
to be exceeded shall be paid by HPD without reimbursement from AMERALIA; it
being acknowledged and agreed by the Parties, however, that interest payable to
HPD by AMERALIA as provided in this Section 8 is not included within the
Guaranteed Maximum Price. HPD acknowledges that AMERALIA has, prior to the
Effective Date, already paid $875,000 of the Contract Sum.
(b) For purposes of this Agreement, "Cost of the Work" shall mean and
refer to any and all costs and expenses incurred by HPD in the performance of
the Work and/or completion of the Rock School Project and paid or payable to
subcontractors, vendors, suppliers or other third parties, and shall include,
without limitation, any of the following costs and expenses payable to third
parties: costs for materials, supplies, machinery, equipment and facilities,
labor costs, amounts paid or owing to subcontractors, rental charges, testing
fees, insurance premiums, and costs related to HPD's field office; provided,
however, Cost of the Work shall not include those items reflected in the
Engineering Fee as expressed in the following Section 8.1(c) or interest payable
to HPD as provided in this Section 8. In calculating the Cost of the Work, HPD
will add a multiplier of 0.30 to any of the preceding costs and expenses paid or
payable to
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subcontractors, vendors, suppliers or other third parties. The Parties
understand and agree that the Deposit Relief Fee is not a part of the Cost of
Work.
(c) The "Engineering Fee", except as limited by the Guaranteed Maximum
Price, shall be an amount equal to Two Million Eight Hundred Forty Four Thousand
Five Hundred Five and No/100 Dollars ($2,844,505). The Engineering Fee shall
not, under any circumstances, be reduced. However, should a change in the Work
be implemented by a Change Order, the Engineering Fee shall be increased to
reflect the additional engineering services performed by HPD's personnel in
relation to such change, which increase shall be equivalent to the product of
(i) the "man hours" expended by the personnel specified in Exhibit D attached
hereto in relation to the change, multiplied by (ii) the corresponding rate(s)
provided in such Exhibit. The Engineering Fee is intended to compensate HPD for
the following overhead and personnel costs associated with the Rock School
Project: wages and salaries for HPD's project management, project engineering,
field supervision, field service, research and development, purchasing and
process design personnel; travel and subsistence expenses for the preceding
personnel; and costs and expenses associated with HPD's quality assurance
services; it being agreed by the Parties that no such costs or expenses shall be
charged to AMERALIA as a Cost of the Work.
(d) If, as of the Final Completion Date, (i) the total aggregate sum of
the Cost of the Work plus the Engineering Fee plus the Deposit Relief Fee is
less than (ii) the Guaranteed Maximum Price, then the difference (hereinafter
referred to as "Savings") shall accrue and inure to the benefit of AMERALIA and
HPD as follows: The Savings shall be split 50% to AMERALIA and 50% to HPD;
provided, however, HPD's share of the Savings shall not exceed One Million and
No/100 Dollars ($1,000,000).
8.2 Security. (a) Upon execution of this Agreement, HPD and AMERALIA
shall establish an escrow account (the "Escrow Account") for the mutual benefit
of HPD and AMERALIA at Chicago Title and Trust Company or at a federally insured
commercial bank acceptable to both Parties. AMERALIA shall wire transfer into
the Escrow Account such amounts at such times as provided for in the Deposit
Schedule attached hereto as Exhibit E (the "Escrow Deposits"). The aggregate
amount of the Escrow Deposits shall be $6,400,000, less the $875,000 of the
Contract Sum previously paid by AMERALIA (the "Equity Amount"). HPD shall have
the right to withdraw funds from the Escrow Account in the manner provided in
Section 8.4. AMERALIA shall not be permitted to withdraw any funds from the
Escrow Account without the prior written consent of HPD. All escrow fees and
charges incurred for the establishment and maintenance of the Escrow Account
shall be paid by AMERALIA. All interest earned on monies deposited into the
Escrow Account shall be credited to AMERALIA and shall remain in the Escrow
Amount.
(b) For and in consideration of the additional payment of $1,200,000 by
AMERALIA to HPD (the "Deposit Relief Fee"), HPD and AMERALIA hereby
agree to amend the Deposit Schedule as follows:
(i) An Escrow Deposit of $3,600,000 shall be deposited by
AMERALIA into the Escrow Account on or before September 15,
1999; and
(ii) A final Escrow Deposit of $600,000 shall be deposited by
AMERALIA into the Escrow Account on or before October 1, 1999.
The Deposit Relief Fee shall be deemed earned upon the date of
execution of the Second Amendment (August 25, 1999) and shall be paid
by AMERALIA to HPD within ten (10) days after the Mechanical Completion
Date.
(c) (i) In order to secure the full and prompt payment of any and all
monies which AMERALIA is obligated to pay under Section 8.2(b),
AMERALIA does hereb6y collaterally assign, transfer, and convey, grant
a mortgage and security interest in, and pledge to, HPD all of
AMERALIA's right, title and interest in and to all of AMERALIA's
current and future assets, including, without limitation, all of
AMERALIA's real property, personal property, and AMERALIA's interest in
that certain Sodium Lease Renewal (#C-011905) related to the Project
Site (collectively "AMERALIA's Assets"). AMERALIA covenants and agrees
that upon written notice from HPD, AMERALIA shall promptly execute and
deliver any and all documents which HPD deems necessary (in HPD's sole
and absolute discretion) to fully evidence and perfect the preceding
assignment, transfer, conveyance, mortgage, security interest, and
pledge in and to AMERALIA's Assets, including, without limitation, any
deed of trust, leasehold assignment, security agreement, pledge
agreement, and UCC financing statements.
(ii) AMERALIA represents and warrants to HPD (i) that AMERALIA
has good and merchantable title to the AMERALIA Assets, (ii) that the
AMERALIA Assets are free and clear of any and all liens, claims,
security interests, mortgages, charges or encumbrances. AMERALIA
further covenants and agrees that AMERALIA shall not, until the
Contract Sum is paid in full to HPD, grant, permit, or suffer any lien,
claim, security interest, mortgage, charge or encumbrance upon or
against the AMERALIA Assets except the existing Marvin L. Hudson
("Hudson") and Raytheon Engineers + Constructors, Inc. ("Raytheon")
claims being contested by AMERALIA. The Hudson claim is being brouth in
the U.S. District Court for the District of Colorado, case no.
99-M-1203. The Raytheon claim is in the total amount of $303,800 and
brought pursuant to a General Services Agreement dated October 7, 1993.
8.3 Invoices. During the term of this Agreement, HPD shall submit to
AMERALIA monthly invoices ("Invoices") as follows:
(a) During the period of time from the Effective Date through the
Depletion Date (such period to be referred to as the "Equity Payment Period"),
HPD will be compensated on a milestone payment basis. During the Equity Payment
Period, HPD's Invoices shall be submitted to AMERALIA on the last business day
of each month and shall (i) state AMERALIA's project number, (ii) set forth the
Milestone(s) which HPD
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has successfully achieved during such month, and (iii) set forth the Milestone
Payment(s) which correspond to such Milestone(s). In connection therewith,
attached to this Agreement as Exhibit H is a "Milestone Payment Schedule" which
identifies significant "Milestones" to be achieved by HPD during the Equity
Payment Period and that portion of the Contract Sum which is payable to HPD once
HPD successfully achieves the corresponding Milestone (a "Milestone Payment").
HPD shall be paid the Milestone Payments for all Milestones completed during the
month covered by the applicable Invoice. Within five (5) days of its receipt of
an Invoice, AMERALIA must provide written notice to HPD as to any reasonable
objections it may have as to Milestones which HPD claims to have achieved. If
AMERALIA fails to provide written notice of any objections within such five (5)
day period, AMERALIA shall be deemed to have accepted the corresponding Invoice.
If AMERALIA provides a reasonable objection (within the foregoing five (5) day
period) as to HPD's claim of completion as to any Milestone, HPD shall not be
paid for such Milestone until it is in fact achieved; however, the remaining
portion of the Invoice shall be deemed accepted by AMERALIA. On the fifteenth
(15th) day of the following month, HPD may submit an Invoice for Milestones
previously objected to by AMERALIA, but which have since been achieved by HPD;
in which event, the preceding provisions regarding AMERALIA's ability to object
in writing shall apply once again. In the event any Milestone previously
objected to by AMERALIA is not achieved by such fifteenth (15th) day of the
month, HPD may nevertheless include such Milestone in the Invoice immediately
following the date the Milestone is finally achieved.
(b) During the period of time from and after the Depletion Date until
the Final Completion Date, HPD shall submit Invoices to AMERALIA within five (5)
business days after the last day of a month. Each such Invoice shall list as
separate line items the following: AMERALIA's project number; the Cost of the
Work due from AMERALIA, which shall represent the aggregate amount of all bills
and invoices received by HPD from all its subcontractors, vendors, suppliers or
other third parties during the immediately preceding month; a summary of the
composition of the Cost of the Work; that portion of the Engineering Fee which
is due to HPD for the immediately preceding month as provided in Exhibit I
attached hereto; that portion of the Cost of the Work and the Engineering Fee
which are Change Expenses; accrued interest as to the HPD Loan; the Deposit
Relief Fee when such fee is payable; and any other information reasonably
requested by AMERALIA. HPD shall be paid the amounts referenced on any such
Invoice in the manner provided in Sections 8.4(b) and (c). Within five (5) days
of its receipt of an Invoice, AMERALIA must provide written notice to HPD as to
any reasonable objections it may have as to the amounts requested in such
Invoice. If AMERALIA fails to provide written notice of any objections within
such five (5) day period, AMERALIA shall be deemed to have accepted the
corresponding Invoice. If AMERALIA provides a reasonable objection (within the
foregoing five (5) day period) as to any amount(s) identified in an Invoice, HPD
shall not be paid for such amount(s) until the cause for such reasonable
objection is removed; however, the remaining portion of the Invoice shall be
deemed accepted by AMERALIA. Once the cause for any reasonable objection by
AMERALIA is removed, the corresponding amount(s) shall be paid to HPD as
provided in Section 8.4(b).
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(c) If AMERALIA objects to any amount(s) expressed in any Invoice,
either Party may refer such objection to the dispute resolution procedures set
forth in Section 12.
8.4 Payment. (a) Until such time as HPD's Invoices aggregate an amount
equivalent to the Equity Amount, AMERALIA shall satisfy its payment obligations
to HPD by permitting HPD to withdraw funds due to HPD from the Escrow Account.
Specifically, on the date AMERALIA has accepted an Invoice (or portion thereof)
as provided in Section 8.3(a), HPD may withdraw funds from the Escrow Account
equal to the amount in the Invoice (or portion thereof) which has been accepted
by AMERALIA; which payment procedure shall continue until the date the monies in
the Escrow Account are depleted (the "Depletion Date").
(b) From and after the Depletion Date until the Final Completion Date,
HPD shall submit Invoices to AMERALIA in the manner provided in Section 8.3(b).
However, amounts due to HPD as expressed in such Invoices (which shall be the
Cost of the Work, the Engineering Fee and the Deposit Relief Fee identified
therein, excluding (if applicable) Change Expenses) shall be paid by AMERALIA as
follows:
(i) AMERALIA may, at its election, pay amounts due to HPD as expressed
in an Invoice by paying all such amounts in cash to HPD; provided,
however, if AMERALIA elects to pay such amounts in cash, it must do so
on or before the fifteenth (15th) day of the month in which it receives
the corresponding Invoice. If AMERALIA makes the foregoing election, it
must pay all amounts expressed in the corresponding Invoice; it being
agreed that no partial payments shall be permitted. Notwithstanding the
foregoing, if AMERALIA reasonably objects to any amount in an Invoice
as provided in Section 8.3(b), it may nevertheless select the option
expressed in this Section 8.4(b) and pay the amounts to which it does
not object as provided in this Section 8.4(b), but the amounts which
were objected to by AMERALIA must be paid in cash within five (5) days
after the cause for AMERALIA's objection is removed.
(ii) If AMERALIA fails to pay in cash all amounts expressed in an
Invoice which have been accepted by AMERALIA as provided in Section
8.3(b) on or before the fifteenth (15th) day of the month in which it
receives such Invoice, the entire amount expressed in such Invoice
shall be loaned by HPD to AMERALIA. All amounts expressed in any such
Invoice shall bear interest at an annual rate of ten percent (10%),
compounded monthly, accruing from the fifteenth (15th) day of the month
in which AMERALIA receives the corresponding Invoice until all such
amounts are paid by AMERALIA to HPD (all such amounts loaned by HPD, as
well as all accrued interest, being hereinafter referred to as the "HPD
Loan"). Notwithstanding the foregoing, amounts which have been objected
to by AMERALIA as provided in Section 8.3(b) shall not bear interest
until the cause for any such objection is removed. Interest which
accrues during the first fifteen (15) days as to an Invoice, or portion
thereof, which is accepted by AMERALIA
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as provided in Section 8.3(b) may be paid in cash to HPD, but only if
such accrued interest is paid in cash on the date such fifteen (15) day
period expires; otherwise such interest shall be compounded monthly
along with any interest which accrues after the expiration of such
fifteen (15) day period. If the HPD Loan is not paid in full by the
date which is nine (9) months after the Mechanical Completion Date, the
preceding ten percent (10%) interest rate will change to a variable
rate which is equal to the sum of (i) the prime rate of interest
published from time to time in the Money Rate Section of the Wall
Street Journal, plus (ii) seven percent (7%), which new rate shall
apply retroactively commencing on the Mechanical Completion Date. The
HPD Loan, representing the aforementioned amounts identified in the
Invoices submitted between the Depletion Date and the Final Completion
Date and interest thereon, if not sooner paid, shall be due and payable
by AMERALIA to HPD on the Final Completion Date.
(c) Notwithstanding anything to the contrary contained in this
Agreement, Change Expenses shall not be paid from the Escrow Account or by means
of the HPD Loan. Change Expenses, if any, shall be identified in the Invoice(s)
corresponding to the month in which any such expenses apply, and shall be paid
by AMERALIA to HPD in cash within thirty (30) days after the submittal of the
corresponding Invoice.
8.5 HPD Loan. AMERALIA understands and accepts the terms of the HPD
Loan as set forth in Section 8.4 and AMERALIA covenants and agrees that it will
pay all amounts due under the HPD Loan, including, without limitation, all
accrued interest, no later than the Final Completion Date. Although the interest
which accrues under the HPD Loan is due and payable to HPD as provided in this
Agreement, no such interest shall constitute a part of the Cost of the Work or a
portion of the Engineering Fee or the Deposit Relief Fee or otherwise accrue
against the Guaranteed Maximum Price. AMERALIA further covenants and agrees that
any amounts due to HPD under the HPD Loan shall always be considered amounts due
to HPD as a contractor pursuant to any mechanics', materialmen's or construction
lien laws of the State of Colorado.
8.6 Records. If requested by AMERALIA, HPD will submit to AMERALIA,
within a reasonable period of time, any of the following information or
documentation in relation to any Invoice:
(i) Reasonable back-up documentation sufficient for audit of all Cost
of the Work expenses, costs related to Change Orders, and interest
expenses related to the HPD Loan;
(ii) Lien waivers from subcontractors; and
(iii) Reasonable evidence as to all payrolls, bills for materials and
equipment, invoices and indebtedness related to the Cost of the Work.
The submission of any of the preceding information or documentation shall not be
a condition precedent to the payment of any Invoice. However, if HPD cannot
substantiate
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any amount previously invoiced, AMERALIA may thereafter withhold an amount
equivalent to such unsubstantiated amount until HPD is able to substantiate the
same.
8.7 Offset. HPD authorizes AMERALIA to offset from any amount payable
to HPD, all amounts that are rightly payable by HPD to AMERALIA under the terms
of this Agreement. AMERALIA's exercise or failure to exercise such right to
offset shall not affect the validity of the underlying obligation.
8.8 Employment Taxes. HPD accepts exclusive liability for payment of
federal and state payroll taxes for its employees who are assigned to the Rock
School Project, and for the associated contributions for unemployment insurance,
old age pensions, annuities, retirement, and related benefits, imposed under any
provision of any applicable Law. HPD will ensure that each subcontractor who
performs any part of the Rock School Project accepts the same responsibility and
liability with respect to its employees. HPD agrees to indemnify and save
AMERALIA harmless against all claims, taxes, penalties, interest or costs which
may be made or assessed under any applicable Laws with respect to the payment of
federal and state payroll taxes, and contributions for unemployment insurance,
old age pensions, annuities, retirement and related benefits, payable to or on
behalf of the employees of HPD or any of its subcontractor's employees.
8.9 Title and License. (a) Title to each portion of the Work shall pass
to AMERALIA at the time AMERALIA pays cash to HPD for such portion of the Work.
HPD represents that the Work for which HPD has been paid by AMERALIA will be
free and clear of liens, claims and security interests in favor of HPD and its
subcontractors. If such is not the case, HPD shall either (i) cause such lien,
claim or security interest to be discharged, or (ii) provide AMERALIA a bond or
other security in relation to such lien, claim or security interest in the event
HPD wishes to contest the same.
(b) Upon payment in full by AMERALIA of all amounts due to HPD under
this Agreement (including, without limitation, the HPD Loan), HPD shall convey
title to the Work to AMERALIA by bill of sale, deed or other appropriate
instrument, and shall deliver all subcontractor warranties to AMERALIA.
9. AMERALIA'S DUTIES & OBLIGATIONS
9.1 Taxes and Permits. (a) AMERALIA shall pay all sales, consumer, use,
excise and other taxes, levies, duties and tariffs (whether direct or indirect)
relating to or incurred in connection with the performance of the Work and/or
completion of the Rock School Project, including without limitation all duties,
levies, tariffs and taxes (whether foreign or otherwise) related to the import
or export of machinery, equipment, materials, parts and supplies utilized in
performing the Work. AMERALIA shall also secure and pay for any and all permits
and licenses necessary for the performance of the Work and/or completion of the
Rock School Project. AMERALIA shall promptly reimburse HPD in the event HPD is
required to pay any such duty, levy, tariff or tax, or to secure or pay for any
such permit or license.
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(b) AMERALIA will, promptly after the Effective Date, provide HPD with
a copy of any applicable state sales tax exemption certificate. The certificate
number will be included by HPD on any purchase orders issued during the course
of the Rock School Project. Should any state sales or use taxes be required to
be paid by HPD on the equipment or other materials incorporated into the Rock
School Project, AMERALIA shall reimburse HPD as provided in the preceding
Section 9.1(a).
9.2 Leasehold Agreement. AMERALIA represents and warrants to HPD that
it retains a leasehold interest in and to the Project Site, that its leasehold
interest includes the right to develop, design and construct the Rock School
Project, and that such leasehold interest permits HPD to access the Project Site
for the purposes contemplated in this Agreement. AMERALIA shall, upon the
request of HPD, provide such documentation and other evidence as HPD may
reasonably request to substantiate the preceding representation and warranty.
9.3 Access. HPD and its subcontractors, and their respective employees,
agents, representatives and designees, shall be granted access to the Project
Site at all times so as to enable HPD to perform its duties and obligations
under this Agreement.
9.4 Long-Term Financing. On or before the date which is the earlier of
(i) the Depletion Date, and (ii) August 15, 1999 (the "Commitment Date"),
AMERALIA shall deliver to HPD a commitment letter from a financial institution
committing to provide long-term financing to AMERALIA for the Rock School
Project, which commitment letter and financial institution must both be
acceptable to HPD in HPD's sole and absolute discretion. At a minimum, the
commitment letter must provide for the guaranteed payment of the HPD Loan in
full on or before the date specified in this Agreement. If for any reason
AMERALIA fails to provide to HPD the aforementioned commitment letter from a
financial institution by the Commitment Date (which commitment letter and
financial institution must both be acceptable to HPD in HPD's sole and absolute
discretion), HPD may terminate this Agreement upon written notice to AMERALIA.
If this Agreement is so terminated, HPD shall be entitled to receive the
following from AMERALIA: payment for the Cost of the Work incurred and the
Engineering Fee earned to the date of termination, the Deposit Relief Fee,
reimbursement for all cancellation charges incurred by HPD in relation to its
subcontractors, and a demobilization fee in an amount equal to $500,000.
9.5 Utilities and Consumables. AMERALIA shall, at all times during the
term of this Agreement and at its sole cost and expense, provide the following
items as required by HPD including, without limitation, during the construction
and commissioning of the Rock School Project and the performance of the
Performance Tests: all electricity, all water and all other utilities, all
chemicals, all lubricants, all feed stock and all consumables.
9.6 AMERALIA's Obligations. AMERALIA must provide the following
services in relation to the Rock School Project:
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(i) Provide full access to the Project Site to HPD by August 1, 1999;
(ii) Secure all permits and licenses necessary for performance of the
Work and/or completion of the Rock School Project by September 1,
1999;
(iii) Provide a natural gas "tie-in" to a location within the Project
Site designated by HPD by January 1, 2000;
(iv) Provide construction power (i.e., single phase power) to a
location within the Project Site designated by HPD by October 1,
1999, and permanent power to a location within the Project Site
designated by HPD by April 1, 2000; and
(v) Provide ground water at a location within the Project Site
designated by HPD at a rate of 200 gallons per minute (along with
the legal rights to such water) by November 1, 1999.
9.7 Mutual Cooperation. Whenever AMERALIA's cooperation is required by
HPD in order to carry out HPD's obligations hereunder, AMERALIA agrees that it
shall act in good faith in so cooperating with HPD at the reasonable expense of
AMERALIA. Similarly, whenever HPD's cooperation is required by AMERALIA in order
to carry out AMERALIA'S obligations hereunder, HPD agrees that it shall act in
good faith in so cooperating with AMERALIA at the reasonable expense of HPD.
9.8 Not Exclusive. The foregoing are in addition to the other duties
and obligations of AMERALIA and HPD enumerated elsewhere in this Agreement.
10. CONFIDENTIALITY
In the course of negotiations and performance of this Agreement and the
related interaction between the Parties, it may be necessary for either HPD or
AMERALIA, or both of them, to divulge to the other certain confidential or
proprietary technical, financial, statistical or business information. This
confidentiality provision shall only apply to such information which is clearly
labeled "confidential," "secret," or "proprietary" by the providing Party, or
information which the providing Party advises the other Party in writing is
confidential in nature. The Party providing such information may advise the
other Party in writing as to the confidential nature of such information before
the information is given to the other Party, at the time such information is
given to the other Party, or within one day after such information is given to
the other Party (provided, however, disclosure of any such information within
such one day period shall not be deemed a violation of this Section 10). The
preceding information is hereinafter referred to as "Confidential Information".
The receiving Party hereby agrees to treat all Confidential Information
in the same manner as it would its own confidential information. During the term
of this Agreement,
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and for five (5) years thereafter, the recipient shall use the Confidential
Information solely for the purposes of performing the Work or operating and
maintaining the Rock School Project, as the case may be. The recipient may
disclose Confidential Information only to those individuals and entities who are
reasonably required to know the Confidential Information in order to fulfill
their obligations in relation to the Rock School Project.
The obligations imposed by this Section 10 shall not apply to any
Confidential Information that: (1) was already in the possession of the
recipient prior to the Effective Date (unless the recipient received such
information from the other Party pursuant to the development and negotiation of
this Agreement), or (2) is or becomes publicly available through no fault of the
recipient, or (3) is obtained by the recipient from a third party who is under
no obligation of confidence to the Party source, or (4) is disclosed to third
parties without restriction by the Party source, or (5) for which disclosure is
required by any Law, but only after first notifying the Party source of such
required disclosure.
11. INDEMNITY
Each Party, to the maximum extent permitted by law, shall defend,
protect, indemnify and hold harmless the other, its respective officers,
directors, employees and agents against all claims, demands, causes of action,
suits, damages, liabilities, judgments, losses and expenses (including, without
limitation, court costs and reasonable attorneys' fees) which may be incurred by
any indemnified Party on account of any third party bodily injury or property
damage, but only to the extent such injury or damage is caused by the willful
misconduct or negligence of the indemnifying Party. This indemnification,
defense and hold harmless obligation shall survive the termination or expiration
of this Agreement.
This indemnification shall not be effective if the Party seeking
indemnification (1) fails to give the other Party notice of the claim within
thirty (30) days after the Party seeking indemnification becomes aware of the
claim, or (2) fails to provide reasonable cooperation and assistance in the
defense thereof. The indemnifying Party shall have the authority for the
direction of the defense and shall have the sole authority to negotiate and
agree to any compromise or settlement of any indemnified matter hereunder. The
indemnified Party hereby reserves the right to participate in its defense, at
its own cost, with counsel of its own choosing.
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12. DISPUTE RESOLUTION
12.1 Senior Officers to Resolve. All claims, disputes or other
controversies arising out of, or relating to, this Agreement (hereinafter
collectively referred to as a "Dispute") shall initially be submitted to a
Senior Officer from each Party for resolution by mutual agreement between said
officers. Any mutual determination by the Senior Officers shall be final and
binding upon the Parties. However, should such Senior Officers fail to arrive at
a mutual decision as to the Dispute within twenty (20) days after notice to both
individuals of the Dispute, the Parties shall then attempt to resolve such
Dispute by mediation in accordance with the terms and provisions set forth in
Section 12.2 hereof. For purposes of this Agreement, the term "Senior Officer"
of HPD shall mean and refer to any vice president of HPD, and "Senior Officer"
of AMERALIA shall mean and refer to either Bill Gunn or John Woolard.
12.2 Mediation. Notice of the demand for mediation for any Dispute
which has not been resolved in accordance with Section 12.1 shall be filed with
the other Party to this Agreement, and shall be made within a reasonable time
after such Party is permitted to mediate the Dispute as provided herein. All
mediation proceedings shall take place in Chicago, Illinois, and shall be
conducted in accordance with rules mutually determined by the Parties. The
mediator shall be an individual mutually selected by AMERALIA and HPD, which
individual shall (i) have at least 10 years experience in the discipline which
is the subject of the Dispute, and (ii) be an attorney whose 10 years of
experience has been in the realm of litigating issues which are the subject of
the Dispute. Any mutual determination by the Parties pursuant to any such
mediation shall be final and binding upon the Parties. However, should the
Parties fail to arrive at a mutual decision as to the Dispute within thirty (30)
days after commencement of the mediation proceedings, the Parties shall then be
entitled to refer such Dispute to arbitration as provided in Section 12.3.
12.3 Additional Proceedings. To the extent that any Dispute continues
to exist after the mediation provided for in Section 12.2, the Parties agree to
resolve the dispute by binding arbitration, unless the remedy sought is
injunctive relief. Respecting any Disputes which ultimately become the subject
of court proceedings wherein the remedy sought is injunctive relief, the Parties
irrevocably agree that (i) the venue and jurisdiction for such proceedings shall
be in any court of competent jurisdiction within the County of Cook, State of
Illinois and (ii) trial by jury is waived by AMERALIA and HPD. Arbitration of
disputes shall be conducted in the County of Cook, State of Illinois, at a
location determined by the arbitrator(s) and shall apply the substantive law
governing this Agreement. The arbitration proceedings will be conducted by a
panel of three arbitrators in accordance with the Rules of Commercial
Arbitration of the American Arbitration Association ("AAA") and under the
professional administration of the AAA, except that the Parties shall have the
rights of discovery as to one another such as are provided by Federal Rules of
Civil Procedure 26 through 37 in effect at the time of the arbitration and
rights of discovery as to third-parties in effect at the time of the arbitration
as are provided by law. The arbitration award shall be binding upon the Parties,
but shall be subject to the Parties' right to appeal an award.
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12.4 Costs and Expenses. The prevailing Party in any dispute resolution
proceedings shall be reimbursed by the other Party for all costs, expenses and
charges, including, without limitation, reasonable attorneys' fees, incurred by
said prevailing Party.
13. INSURANCE
13.1 AMERALIA'S Insurance. AMERALIA shall, commencing on the Mechanical
Completion Date, procure and maintain an "All Risk" Property Insurance Policy in
relation to the Rock School Project. Such policy shall (i) be written on a full
replacement cost, "all risk" form, (ii) include a waiver of any coinsurance
penalty, (iii) cover the entire Rock School Project, including all equipment,
materials, machinery, supplies, structures and other items incorporated in the
Rock School Project, (iv) contain no deductibles which exceed $10,000 per
occurrence, and (v) be maintained until the Final Completion Date. The preceding
insurance shall include the interests of AMERALIA, HPD, subcontractors,
sub-subcontractors, vendors and suppliers in the Work, naming each as insureds.
Such insurance shall be placed with an insurer with a rating of "A" "X" or
better by A.M. Best Company, and shall contain an endorsement which requires the
insurer to provide the insureds with at least thirty (30) days' prior written
notice before canceling, terminating or materially altering the terms of such
policy. AMERALIA shall, on the Mechanical Completion Date, furnish HPD with a
certificate of insurance, evidencing the foregoing coverage.
13.2 HPD's Insurance. HPD shall maintain at its sole cost the insurance
coverages set forth below with companies reasonably satisfactory to AMERALIA,
and with policy limits not less than as stated:
(i) Workers' Compensation Insurance as required by laws and
regulations applicable to and covering employees of HPD engaged in the
performance of the Rock School Project;
(ii) Employers' Liability Insurance protecting HPD against
common law liability in the absence of statutory liability, for
employee bodily injury arising out of the master servant relationship
with a limit of not less than $1,000,000 per occurrence;
(iii) Commercial General Liability Insurance, including
products and completed operations, with limits of not less than
$1,000,000 per occurrence and in the aggregate;
(iv) Automobile Liability Insurance, including nonowned and
hired vehicle coverage, with limits of liability of not less than
$1,000,000 per occurrence and in the aggregate;
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(v) Excess Liability Insurance over Automobile Liability,
Commercial General Liability, and Employers' Liability coverages
afforded by the primary policies described above with minimum limits of
$4,000,000 per occurrence and in the aggregate;
(vi) Builder's Risk Property Insurance as to the Work, which
insurance shall cover materials in-transit or stored off-site and which
otherwise is substantially similar to the property insurance policy
described in Section 13.1; and
Prior to commencement of the Rock School Project, certificates
evidencing the required coverages shall be delivered to AMERALIA, and shall name
AMERALIA as an additional insured under the Commercial General Liability, Excess
Liability Insurance and Builder's Risk Policies. These certificates shall
provide that any change restricting or reducing coverage or the cancellation of
any policies under which such certificates are issued shall not be valid as
respects AMERALIA until AMERALIA has received thirty (30) days written notice of
such change or cancellation.
14. ASSIGNMENT
(a) Neither Party may assign, convey or transfer this Agreement or any
part thereof, or delegate its duties hereunder, without the prior written
consent of the other Party, which consent shall not be unreasonably withheld or
delayed. This Agreement shall be binding upon, and inure to the benefit of, the
successors and permitted assigns of the Parties hereto. Regardless of the
consent of the other Party, no such assignment, conveyance, transfer or
subcontract shall relieve the Party from any of its responsibilities under this
Agreement.
(b) As soon as practicable after execution of this Agreement, HPD shall
furnish in writing to AMERALIA the names of those subcontractors proposed for
each portion of the Work. AMERALIA shall, within five (5) days thereafter, reply
to HPD in writing stating whether or not AMERALIA, after due investigation, has
reasonable objection to any such proposed subcontractor. Failure of AMERALIA to
reply within said five (5) day period shall constitute notice of no reasonable
objection. If AMERALIA has reasonable objection to a subcontractor proposed by
HPD, HPD shall propose another to whom AMERALIA has no reasonable objection. The
Guaranteed Maximum Price and the Scheduled Dates shall be adjusted in order to
reflect the cost and schedule impact to HPD as a result of the selection of
another subcontractor to whom AMERALIA has no reasonable objection, which
adjustments shall be made by Change Order.
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15. EXCUSABLE EVENTS
HPD shall be entitled to an equitable adjustment in the Guaranteed
Maximum Price and in the Scheduled Dates upon the occurrence of an Excusable
Event. For purposes of this Agreement, an "Excusable Event" shall mean and refer
to: (a) delays resulting from the acts or omissions of AMERALIA, or of its
separate contractors, representatives and agents performing work or services at
the Project Site (including, without limitation, any delays caused by AMERALIA's
failure to perform its duties and obligations set forth in Sections 9 or 16, or
any work stoppages which occur pursuant to the terms and provisions of Section
19); (b) acts of God, fires, explosions, casualties, floods, earthquakes,
tornados, severe weather, natural disasters, epidemics, civil disturbances, war,
riots, sabotage, accidents, restraints or injunctions issued by a court or other
Governmental Authority or other governmental acts or omissions, strikes or labor
disputes, or non-delivery of acceptable materials or unusual delays in the
delivery of materials by suppliers; (c) the discovery of any Unforeseeable
Conditions at the Project Site; (d) the discovery of any Existing Hazardous
Substances at the Project Site; (e) the occurrence of an amendment,
modification, adoption, repeal or enactment after the Effective Date of any Law
which is applicable to the performance of the Work; or (f) the occurrence of any
other events or matters which are beyond the control of HPD. Any adjustment in
the Guaranteed Maximum Price and Scheduled Dates shall be reflected in a Change
Order executed by the Parties hereto.
16. MECHANICAL COMPLETION, COMMERCIAL OPERATION AND FINAL COMPLETION
16.1 Mechanical Completion
16.1.1 Training. On or before the date which is thirty (30) days prior
to the date HPD reasonably believes Mechanical Completion of the Rock School
Project will be achieved, HPD shall schedule a training program for AMERALIA's
personnel in relation to the operation and maintenance of the Rock School
Project from and after the Mechanical Completion Date. Such program shall
commence no earlier than ten (10) days prior to HPD's estimated date of
Mechanical Completion, and shall consist of the provision of training manuals
and technical assistance, and the conducting of classroom and hands-on
instruction. HPD shall complete all such training on or before the Mechanical
Completion Date, and shall provide AMERALIA with all operation and maintenance
manuals at such time.
16.1.2 Spare Parts. HPD shall provide AMERALIA with a list of spare
parts necessary to operate and maintain the Rock School Project for a period of
one (1) year after the Mechanical Completion Date. AMERALIA shall procure and
deliver to the Project Site by the Mechanical Completion Date, at its sole cost
and expense, such spare parts as the Parties mutually determine are reasonably
necessary for the performance of the Performance Tests. Such spare parts shall
be made available to HPD for use during the performance of the Performance
Tests; provided, however, if HPD so utilizes any
23
such spare parts, it shall either replace the same or reimburse AMERALIA in cash
for such parts at AMERALIA's cost plus a 30% mark-up.
16.1.3 Establishing Mechanical Completion. When HPD has completed the
Mechanical Completion procedures outlined in the Technical Specifications and
believes that it has achieved Mechanical Completion, HPD shall so notify
AMERALIA (which notice shall be accompanied by HPD's proposed Punch List).
Thereafter, AMERALIA shall conduct those investigations and inspections as it
deems necessary or appropriate to determine if Mechanical Completion has in fact
been achieved. Within five business (5) days after the receipt of HPD's notice
by AMERALIA, AMERALIA shall either (i) notify HPD that Mechanical Completion has
been achieved, or (ii) notify HPD that Mechanical Completion has not been
achieved and stating the reasons therefor. In the event AMERALIA provides
written notice that Mechanical Completion has been achieved, HPD and AMERALIA
shall, within ten (10) days thereafter, mutually prepare an updated Punch List,
and shall execute a "Certificate of Mechanical Completion" establishing and
identifying the Mechanical Completion Date (which date shall be the date of
HPD's original notice). In the event AMERALIA provides written notice that
Mechanical Completion has not been achieved, HPD shall, at its sole cost and
expense, immediately correct and/or remedy the defects, deficiencies and other
conditions which so prevent Mechanical Completion. Upon completion of such
corrective and/or remedial actions, HPD shall resubmit its notice stating that
it believes Mechanical Completion has been achieved and the foregoing procedures
shall be repeated until Mechanical Completion has in fact been achieved. In the
event AMERALIA fails to provide written notice to HPD within the foregoing five
(5) business day period, then Mechanical Completion shall be deemed to have been
achieved on the date of HPD's original notice.
16.1.4 Possession. Upon the Mechanical Completion Date, AMERALIA shall
take possession of, and shall assume care, custody and control over, the Rock
School Project.
16.2 Performance Testing and Commercial Operation
16.2.1 Commissioning. After the Mechanical Completion Date, AMERALIA's
personnel shall, under HPD's direction and supervision, commence the initial
operation of the Rock School Project (i.e., the commissioning of the Rock School
Project), and shall, under HPD's direction and supervision, continue with such
operation during HPD's performance of the Performance Tests.
16.2.2 AMERALIA's Obligations After Mechanical Completion. After the
Mechanical Completion Date, but prior to the date which is two hundred days
(200) after the Mechanical Completion Date, AMERALIA shall, at its sole cost and
expense, perform the following: provide for the solution mine cavern
development, which shall include, without limitation, the provision of any and
all feed required for the performance of the Performance Tests by HPD, as
described in Exhibit G.
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16.2.3 Performance Testing. Once AMERALIA has completed its duties and
responsibilities as set forth in Section 16.2.2 hereof, and at such time as HPD
believes that the Rock School Project will be ready for the performance of the
Performance Tests, HPD shall so notify AMERALIA of the specific date of the
proposed Performance Tests in writing, provided that notice will be given not
less than ten (10) business days prior to the performance of the Performance
Tests. AMERALIA shall conduct the Performance Tests on the date(s) specified in
the preceding notice in order to determine if the Rock School Project meets the
Performance Guarantees. All such tests shall be conducted utilizing AMERALIA's
personnel, who shall act under the supervision and direction of HPD. The Rock
School Project will be operated in its normal mode of operation while
Performance Tests are being conducted, which shall consist of (i) the operation
of the Rock School Project as a whole, (ii) the concurrent operation of Rock
School Project systems, and (iii) the operation of all Rock School Project
systems within the manufacturers' specifications and without over-stressing or
over-pressurizing any such systems. All fuel, all consumables, all water, all
utilities, all operating supplies, all operating personnel and all related
resources necessary to perform the Performance Tests shall be provided by
AMERALIA at AMERALIA's sole cost and expense.
16.2.4 Establishing Commercial Operation. When HPD believes that it has
achieved Commercial Operation, HPD shall so notify AMERALIA (which notice shall
be accompanied by the results of the last Performance Tests and any other
information deemed reasonably necessary by HPD). Thereafter, AMERALIA shall
conduct those investigations and inspections it deems necessary or appropriate
to determine if Commercial Operation has in fact been achieved. Within five (5)
business days after the receipt of HPD's notice by AMERALIA, AMERALIA shall
either (i) notify HPD that Commercial Operation has been achieved, or (ii)
notify HPD that Commercial Operation has not been achieved and stating the
reasons therefor. In the event AMERALIA provides written notice that Commercial
Operation has been achieved, HPD and AMERALIA shall execute a "Certificate of
Commercial Operation" establishing and identifying the Commercial Operation Date
(which date shall be the date of HPD's original notice). In the event AMERALIA
provides written notice that Commercial Operation has not been achieved, HPD
shall, at its sole cost and expense, immediately correct and/or remedy the
defects, deficiencies and other conditions which so prevent Commercial
Operation, and to the extent necessary, it shall re-perform the Performance
Tests in the manner provided in Section 16.2.3 (but HPD need only give AMERALIA
five (5) business days advance written notice for any such subsequent tests).
The foregoing procedures shall be repeated until the earlier of (i) the date
Commercial Operation has in fact been achieved, or (ii) the occurrence of the
Scheduled Commercial Operation Date. In the event AMERALIA fails to provide
written notice to HPD within the foregoing five (5) business day period, then
Commercial Operation shall be deemed to have been achieved on the date of HPD's
original notice.
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16.3 Final Completion
16.3.1 Establishing Final Completion. When HPD believes that it has
achieved Final Completion, HPD shall so notify AMERALIA. Immediately thereafter,
AMERALIA shall conduct those investigations and inspections it deems necessary
or appropriate to determine if Final Completion has in fact been achieved.
Within five (5) business days after the receipt of HPD's notice by AMERALIA,
AMERALIA shall either (i) notify HPD that Final Completion has been achieved, or
(ii) notify HPD that Final Completion has not been achieved and stating the
reasons therefor. In the event AMERALIA provides written notice that Final
Completion has been achieved, HPD and AMERALIA shall execute a "Certificate of
Final Completion" establishing and identifying the Final Completion Date (which
date shall be the date of HPD's original notice). In the event AMERALIA provides
written notice that Final Completion has not been achieved, HPD shall, at its
sole cost and expense, immediately correct and/or remedy the defects,
deficiencies and other conditions which so prevent Final Completion. Upon
completion of such corrective and/or remedial actions, HPD shall resubmit its
notice stating that it believes Final Completion has been achieved and the
foregoing procedures shall be repeated until Final Completion has in fact been
achieved. In the event AMERALIA fails to provide written notice to HPD within
the foregoing five (5) business day period, then Final Completion shall be
deemed to have been achieved on the date of HPD's original notice.
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17. TERMINATION OF THE AGREEMENT
17.1 Default and Remedies. The occurrence of any one or more of the
following matters shall constitute a default under this Agreement (a "Default"):
(a) failure by either Party to observe and perform any covenant, condition or
agreement on its part to be observed or performed hereunder and the continuation
of the same for seven (7) days after the defaulting Party's receipt of written
notice thereof from the non-defaulting Party; provided, however, if such matter
cannot with due diligence be remedied by the defaulting Party within such seven
(7) day period, and the defaulting Party shall have diligently prosecuted the
remedying of such failure within such seven (7) days, such period shall be
extended by such additional time period as may be reasonably required by the
defaulting Party to cure or correct such matter (it being agreed, however, that
nonpayment of monies by either Party shall not, under any circumstances, give
rise to an extension in the preceding seven (7) day period); (b) the insolvency,
dissolution or liquidation of either Party, or the filing of a petition in
bankruptcy by or against either Party, or the adjudication of either Party as
bankrupt, or any general assignment by either Party for the benefit of its
creditors, or the application for, or consent to, the appointment of any
receiver, trustee, custodian, or similar officer by either Party; or (c) failure
(or admission in writing of inability or unwillingness) by one Party hereunder
to pay amounts due and payable to the other Party hereunder. Should HPD be in
Default, AMERALIA may terminate this Agreement and avail itself of any and all
rights or remedies available at law or in equity. Should AMERALIA be in Default,
HPD may terminate this Agreement and avail itself of any and all rights or
remedies available at law or in equity. Upon the occurrence of a Default by
AMERALIA or HPD, the HPD Loan shall be accelerated and shall be due and payable
to HPD immediately after any such Default.
17.2 Termination for Convenience. AMERALIA may terminate this Agreement
without cause upon not less than thirty (30) days' prior written notice to HPD.
If this Agreement is so terminated, HPD, as its sole and exclusive remedy
hereunder, shall be entitled to receive the following: payment for the Cost of
the Work incurred and the Engineering Fee earned to the date of termination
(which shall include acceleration of the HPD Loan (i.e., all outstanding
principal and accrued interest) and payment of the same in full); reimbursement
for all cancellation charges incurred by HPD in relation to its subcontractors,
the Deposit Relief Fee, and a demobilization fee in an amount equal to $500,000.
17.3 Termination by Reason of Excusable Events. If the cumulative
number of days by which the School Rock Project is delayed by reason of
Excusable Events exceeds 90 days (excluding those "Excusable Event days" which
were caused by HPD's gross negligence or wrongful acts), then HPD shall have the
right to terminate this Agreement upon not less than 30 days' prior written
notice to AMERALIA. If this Agreement is so terminated, HPD, as its sole and
exclusive remedy hereunder, shall be entitled to receive the following: payment
for the Cost of the Work incurred and the Engineering Fee earned to the date of
termination (which shall include acceleration of the HPD Loan (i.e., all
outstanding principal and accrued interest) and the Deposit Relief Fee and
payment of
27
the same in full); reimbursement for all cancellation charges incurred by HPD in
relation to its subcontractors, and a demobilization fee in an amount equal to
$500,000.
18. SITE CONDITIONS & HAZARDOUS SUBSTANCES
18.1 Unforeseeable Conditions. Notwithstanding anything to the contrary
contained in this Agreement, if HPD encounters conditions at the Project Site
which HPD reasonably believes are Unforeseeable Conditions, then notice by HPD
as to the same shall be given to AMERALIA. If it is thereafter determined that
such condition is in fact an Unforeseeable Condition, then HPD shall be entitled
to an equitable adjustment in the Guaranteed Maximum Price or the Scheduled
Dates, or both, as provided in Section 15. If AMERALIA disagrees with HPD's
assessment that Unforeseeable Conditions exist, it may refer such disagreement
to the dispute resolution procedures set forth in Section 12.
18.2 Hazardous Substances. (a) If, in the course of performance of the
Work, HPD encounters on the Project Site any matter which it reasonably believes
is a Hazardous Substance that may require response, removal, cleanup or other
remedial action under applicable Environmental Laws, then HPD shall immediately
suspend the Work in the area affected and report the condition to AMERALIA by
telephone and in writing. In any such event, the obligations and duties of the
Parties hereto shall be as follows:
(i) If it is determined that such condition involves an
Existing Hazardous Substance, then HPD shall have no obligation with
respect to such condition, and AMERALIA shall, at its sole cost and
expense, perform any response, removal, cleanup or other remedial
action required by applicable Environmental Laws;
(ii) If it is determined that such condition involves a
Hazardous Substance introduced to the Project Site by HPD or its
subcontractors, then any response, removal, cleanup or other remedial
action required by applicable Environmental Laws shall be performed by
HPD at its sole cost and expense; or
(iii) If it is determined that the condition does not involve
a Hazardous Substance that requires response, removal, cleanup or other
remedial action under applicable Environmental Laws, HPD shall resume
the portion of the Work that had been suspended. Such time period
involved in determining that the condition did not involve a Hazardous
Substance that required response, removal, cleanup or other remedial
action shall not constitute an Excusable Event, unless HPD reasonably
believed that such condition was a Hazardous Substance requiring
remediation when it initially notified AMERALIA.
The Parties acknowledge and agree that HPD shall not commence or
continue any construction activities on any portion of the Project Site on, in
or under which remedial actions are to be (or are being) performed until such
remedial actions are to the point where construction activities will not
interfere with such remedial actions, as evidenced
28
by appropriate certifications from the applicable environmental engineer and/or
remediation contractor and any required approvals of any applicable Governmental
Authorities. If AMERALIA disagrees with HPD's belief that a Hazardous Substance
requiring remediation exists, it may refer such disagreement to the dispute
resolution procedures set forth in Section 12.
(b) AMERALIA shall indemnify, defend and hold harmless HPD from and
against any and all claims, demands, suits, liabilities, causes of action,
losses, costs, expenses, damages, fines and penalties, including, without
limitation, court costs and reasonable attorneys' fees, arising or resulting
from the existence of Existing Hazardous Substances at the Project Site. HPD
shall indemnify, defend and hold harmless AMERALIA from and against any and all
claims, demands, suits, liabilities, causes of action, losses, costs, expenses,
damages, fines and penalties, including, without limitation, court costs and
reasonable attorneys' fees, arising or resulting from any Hazardous Substances
which were introduced to the Project Site by HPD or any of its subcontractors.
The preceding indemnification, defense and hold harmless obligations shall
survive the termination or expiration of this Agreement.
19. WORK STOPPAGE
HPD may stop the Work if any Escrow Deposits are not made when due
pursuant to Section 8.2, or if any Invoices are not paid when due, and may do so
without prejudice to any other rights or remedies that HPD may have under this
Agreement or at law or in equity.
20. NOTICES
All notices necessary to be given under the terms of this Agreement,
except as herein otherwise provided, shall be in writing and shall be
communicated by overnight courier or facsimile transmission addressed to the
other Party at the following addresses:
If to AMERALIA: John F. Woolard
Executive Vice President
311 Raleigh Road
Kenilworth, IL 60043
Fax: 847-251-7916
with a copy to: Roger L. Day
818 Taughenbaugh Blvd.
Rifle, CO 81650
Fax: 970-625-9137
If to HPD: Mark Boone
U.S. Filter Corporation/HPD Products
55 Shuman Blvd.
Naperville, IL 60563
Fax: 630-717-4562
29
Notices shall be deemed given on the actual date of receipt at the offices of
the receiving Party.
21. COMPLIANCE WITH APPLICABLE LAWS
HPD agrees to keep conspicuously posted all notices required under
workers' compensation Laws and other applicable Laws. HPD shall obtain and
maintain any contractor's or other licenses necessary for the pursuit of its
business and conducting the activities envisioned by this Agreement. HPD agrees
to comply, and shall ensure that its employees, agents and subcontractors
comply, with all Laws applicable to the performance of the Work.
22. ANNOUNCEMENTS AND PRESS RELEASES
HPD agrees that during and after the term of this Agreement, it will
make no announcements, press releases or other publications concerning the Rock
School Project without the prior written consent of AMERALIA, which consent
shall not be unreasonably withheld or delayed.
23. OWNERSHIP OF DATA; TECHNOLOGY
(a) All drawings, specifications, designs and plans related to the Rock
School Project and generated by HPD during the performance of the Rock School
Project, and all intellectual property rights in and to such documents, shall be
and remain the sole property of HPD. AMERALIA is granted a limited,
non-exclusive, nontransferable (except to a purchaser of the Rock School
Project) license to reproduce all such documents for use in the operation,
maintenance, repair and expansion of the Rock School Project; provided, however,
only the civil, structural, building and electrical drawings may be used in
relation to an expansion of the Rock School Project; provided, further however,
AMERALIA may transfer the preceding license only to an entity which purchases
the Rock School Project and only if such purchaser provides legally binding
documentation to HPD stating that it shall adhere to the limitations of such
license which are expressed in this Section 23(a). Such documents are for use
solely with respect to the Rock School Project as provided above, and shall not,
without HPD's prior written consent, be used by AMERALIA, or its employees,
representatives or agents, on any other project, for completion of the Work
hereunder by others, or for any other work or services. Upon Final Completion,
HPD shall deliver to AMERALIA up-to-date copies of the preceding documents in
both hard copy and in electronic format.
(b) The solution mining process technology to be utilized in the Rock
School Project has been required by AMERALIA. Therefore, AMERALIA hereby agrees
that it shall indemnify, defend and hold harmless HPD from and against any and
all losses, damages, costs, expenses and liabilities, including, without
limitation, reasonable attorneys' fees, arising or resulting from any claim or
legal action that the use of such
30
solution mining process technology in relation to the Rock School Project
constitutes an infringement and/or violation of any patent, trademark,
copyright, trade secret, intellectual property right or other proprietary right.
(c) HPD shall indemnify, defend and hold harmless AMERALIA from and
against any and all losses, damages, costs, expenses and liabilities, including,
without limitation, reasonable attorneys' fees, arising or resulting from any
claim or legal action that the crystallization design provided by HPD under this
Agreement constitutes an infringement and/or violation of any patent, trademark,
copyright, trade secret, intellectual property right or other proprietary right.
24. SAFETY PROGRAM
HPD shall be responsible for initiating, maintaining and supervising
safety precautions and programs in connection with the performance of this
Agreement, including, without limitation, appropriate precautions and programs
for areas in and around the Project Site. HPD shall give notices and comply with
all applicable Laws bearing on the safety of persons or property or their
protection from damage, injury or loss, including, without limitation, the
Federal Occupational Safety and Health Act.
25. APPLICABLE LAW
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Colorado, without regard to conflicts of law
principles.
26. LIMITATION ON LIABILITY
26.1 Waiver of Claims. Notwithstanding anything to the contrary
contained in this Agreement, HPD and AMERALIA waive all claims against each
other (and against each other's parent company, affiliates, contractors,
subcontractors, consultants, agents, suppliers and vendors) for loss or damage
to any of their respective property; which waiver shall apply without regard to
which Party's fault or negligence caused the loss or damage.
26.2 Consequential Damages. Notwithstanding anything to the contrary
contained in this Agreement, HPD and AMERALIA waive all claims against each
other (and against each other's parent company, affiliates, contractors,
subcontractors, consultants, agents, suppliers and vendors) for any
consequential, incidental, indirect, special, exemplary or punitive damages
(including, but not limited to, loss of actual or anticipated profits, revenues
or product; loss by reason of shutdown or non-operation; increased expense of
manufacturing, operation, borrowing or financing; loss of use, productivity or
shop space; or increased cost of capital), and regardless of whether any such
claim arises out of breach of contract, guarantee or warranty, tort, product
liability, indemnity, contribution, strict liability or any other legal theory.
Any consequential, incidental, indirect, special, exemplary or punitive damages
incurred by AMERALIA or HPD in relation to a third party shall, for all purposes
of this Agreement, be deemed
31
consequential, incidental, indirect, special, exemplary or punitive damages in
relation to any claim brought by AMERALIA or HPD against the other Party to this
Agreement.
26.3 Overall Limitation. (a) Notwithstanding anything to the contrary
contained in this Agreement, in no event shall HPD, and its parent company,
affiliates, contractors, subcontractors, consultants, vendors, suppliers and
agents be liable, alone or in the aggregate, to AMERALIA for any damages,
claims, demands, suits, causes of action, losses, costs, expenses and/or
liabilities in excess of an amount equal to 100% of the Guaranteed Maximum
Price, regardless of whether such liability arises out of breach of contract,
guarantee or warranty, tort, product liability, indemnity, contribution, strict
liability or any other legal theory.
(b) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall AMERALIA, and its parent company, affiliates,
contractors, subcontractors, consultants, vendors, suppliers and agents be
liable, alone or in the aggregate, to HPD for any damages, claims, demands,
suits, causes of action, losses, costs, expenses and/or liabilities in excess of
an amount equal to 100% of the Guaranteed Maximum Price, regardless of whether
such liability arises out of breach of contract, guarantee or warranty, tort,
product liability, indemnity, contribution, strict liability or any other legal
theory.
27. SEVERABILITY
If any part, term or provision of this Agreement is held by a court of
competent jurisdiction to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining parts, terms or provisions shall
not be affected, and the rights and obligations of the Parties shall be
construed and enforced as if this Agreement did not contain the particular part,
term or provision held to be illegal, invalid or unenforceable. As soon as
possible after said court determination, the Parties shall meet to negotiate a
replacement provision, as closely approximating the void provision as possible,
without the same infirmity.
28. WAIVER
The failure of either Party at any time to require performance by the
other Party of any provision of this Agreement shall in no way affect the right
of such Party thereafter to enforce the same, nor shall any waiver of any breach
of any provision hereof by either Party be taken or held to be a waiver by such
Party of any succeeding breach of such provision.
29. SECTION HEADINGS
The section headings appearing in this Agreement have been inserted for
the purpose of convenience and ready reference. They do not purport to, and
shall not be deemed to define, limit or extend the scope or intent of the
sections to which they appertain.
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30. EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE
The following Exhibits are attached hereto and made a part of this
Agreement:
EXHIBIT A - Project Site
EXHIBIT B - Progress Schedule
EXHIBIT C - Technical Specifications
EXHIBIT D - Engineering Service Rates for Change Orders
EXHIBIT E - Deposit Schedule
EXHIBIT F - Performance Guarantees
EXHIBIT G - Performance Tests
EXHIBIT H - Milestone Payment Schedule
EXHIBIT I - Payment of Engineering Fee
The recitals and the preceding Exhibits are hereby incorporated by this
reference into this Agreement.
31. LATE PAYMENTS
Payments properly due to any Party, but which remain unpaid by the
other Party after the occurrence of a Default, shall bear interest at an annual
rate of twelve percent (12%) or at the maximum rate permitted by law, whichever
is less.
32. ENTIRE AGREEMENT
(a) This Agreement supersedes all prior oral or written proposals,
communications or other agreements related to the subject matter of this
Agreement (including, without limitation, that certain Memorandum of
Understanding between HPD and AMERALIA). This Agreement sets forth the entire
agreement between the Parties with regard to the subject matter of this
Agreement and no amendment shall be binding upon the Parties unless in writing
and signed by both Parties.
(b) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall be deemed to
be one and the same instrument.
(c) This Agreement has been approved by the Board of Directors of
AMERALIA (the "Board") by a statement of consent of the Board dated as of May
14, 1999.
33
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
signed by their respective authorized representatives, effective as of the date
first set forth above.
AMERALIA, INC. U.S. FILTER WASTEWATER
GROUP, INC., d/b/a U.S. Filter
Corporation, HPD Products
By: By:
--------------------------------- -------------------------------
Name: Bill H. Gunn Name: Ron P. Davis
Title:Chairman & CEO, Title: Executive Vice President,
AmerAlia, Inc. Industrial Equipment Group,
U.S. Filter Corporation,
HPD Products