Design, Procurement and Construction Management Services Agreement - EarthShell Corp., Sweetheart Cup Co. Inc., CH2M Hill Industrial Design Corp. and IDC Construction Management Inc.
DESIGN, PROCUREMENT AND CONSTRUCTION MANAGEMENT
SERVICES AGREEMENT
THIS DESIGN, PROCUREMENT AND CONSTRUCTION MANAGEMENT SERVICES AGREEMENT (this
"Agreement") is made effective May 13, 1998 (the "Effective Date") by and among
EARTHSHELL CORPORATION, formerly known as EarthShell Container Corporation, a
Delaware corporation ("EARTHSHELL"), SWEETHEART CUP COMPANY INC., a Delaware
corporation ("SWEETHEART" and, together with EARTHSHELL, the "PROJECT OWNERS"),
CH2M HILL INDUSTRIAL DESIGN CORPORATION, an Oregon corporation ("CH2M"), and IDC
CONSTRUCTION MANAGEMENT, INC., an Oregon corporation ("IDC" and, together with
CH2M, the "IDC PARTIES").
RECITALS
A. IDC, a wholly-owned subsidiary of CH2M, provides design, procurement,
construction management, design/build, system integration, industrial
engineering, consulting and other services. IDC, through its business unit known
as THE FOOD GROUP ("TFG"), has substantial experience and expertise in the
design and installation of food processing facilities and in providing related
services to the food products industry.
B. EARTHSHELL is engaged in the business of developing and sublicensing
the production of packaging material with product applications for food service
disposables.
C. SWEETHEART manufactures and supplies foodservice disposables and owns
a manufacturing facility located at 9830 Reistertown Road in Owings Mills,
Maryland (the "Sweetheart Facility"). Pursuant to the Operating Agreement
entered into by EARTHSHELL and SWEETHEART on October 16, 1997 (the "Operating
Agreement"), SWEETHEART has agreed that a portion of the Sweetheart Facility
will serve as a production facility for hinged sandwich containers for
McDonald's Corporation that utilize packaging material sublicensed from
EARTHSHELL ("Products"). The Operating Agreement contemplates that EARTHSHELL
will install certain operating lines of equipment for manufacturing Products
("Process Equipment Lines") at the Sweetheart Facility and in connection
therewith that various modifications will be required to be made to the
Sweetheart Facility and related infrastructure (the "Project").
D. EARTHSHELL and SWEETHEART wish to engage TFG, and TFG wishes to be
engaged, (i) to provide design and construction management services relating to
the renovations to be made to the Sweetheart Facility, (ii) to assist with the
procurement and installation of the Process Equipment Lines and (iii) to provide
consulting and other services relating to the Project, all on the terms and
conditions set forth below.
NOW, THEREFORE, for good and sufficient consideration, EARTHSHELL, SWEETHEART,
IDC and CH2M (each a "PARTY" and collectively, the "PARTIES") agree as follows:
ARTICLE 1
SCOPE OF WORK
1.1 TFG agrees to furnish to EARTHSHELL and SWEETHEART on a timely basis the
design, procurement, construction management, design/build, system integration,
industrial engineering, consulting and other services required for the Project,
as more specifically set out in
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the Scope of Work attached hereto as Exhibit A and incorporated into this
Agreement (the "Scope of Work").
ARTICLE 2
TFG'S RESPONSIBILITIES
2.1 TFG shall perform and complete in accordance with the Target Contract
Schedule (as defined in Article 5.1) the services and other work contemplated by
the Scope of Work ("Work") in a professional and competent manner, with the
skill and diligence that would be expected of a world-class engineering services
firm. All employees of TFG who render services in connection with the Project
shall have appropriate training and experience for the particular Work that they
perform.
2.2 All design documents (the "Facility Design Documents") relevant to the
renovation of the Sweetheart Facility and the related infrastructure
modifications (the "Facilities Modifications") pursuant to the Scope of Work
shall be subject to review by each PROJECT OWNER. All design documents (the
"Process Equipment Design Documents") relevant to installation of Process
Equipment Lines (the "Equipment Installation") pursuant to the Scope of Work
shall be subject to review by each PROJECT OWNER. EARTHSHELL shall review and
approve or otherwise comment on the Facility Design Documents and the Process
Equipment Design Documents in accordance with the provisions of Article 3.2.
SWEETHEART hereby authorizes TFG to perform the Facilities Modifications
pursuant to the Scope of Work. Notwithstanding this authorization, TFG shall at
all times be responsible for the design of the Facilities Modifications in order
to permit the installation and operation of the Process Equipment in the manner
contemplated by this Agreement. The Parties agree and acknowledge that this
Article 2.2 does not create any warranty by TFG with respect to the Process
Equipment.
2.3 TFG shall be responsible for all construction activities, inspection,
labor, materials, tools, construction equipment and its subcontracted items for
the execution and completion of Work, and for security for on-site materials.
2.3.1 TFG shall keep the area of the Project where Work is performed
free from the accumulation of waste materials and rubbish caused by its
operations, consistent with its needs in performing Work. At the completion of
all Work, TFG shall remove its waste materials and rubbish from and around the
Project as well as its tools, construction equipment, machinery and surplus
materials.
2.3.2 TFG shall take necessary precautions for the safety of its
employees, the employees of each PROJECT OWNER and others located at or around
the Project and shall comply with all applicable provisions of federal, state
and local safety laws and regulations to prevent accidents or injury to persons
on, about or adjacent to the Project site.
2.3.3 Except to the extent otherwise provided in the Scope of Work, TFG
shall directly or through one or more subcontractors obtain and pay for all
necessary construction and construction-related permits and licenses. TFG shall
pay all governmental charges and inspection fees payable in connection with the
construction relating to Project ("Project Construction"). TFG shall pay all
temporary utility charges attributable to Project Construction. SWEETHEART
shall provide for all other utilities, and pay for all charges attributable to
such other utilities, including all extension and hook-up charges for the
Process Equipment Lines.
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2.3.4 TFG shall be directly responsible for originating and executing
all purchase orders relating to Facilities Modifications, including all
equipment being acquired as part of the Facilities Modifications. All purchase
orders for process equipment being utilized in Process Equipment Lines that is
hereafter acquired by EARTHSHELL shall be originated by TFG, but shall be
approved and executed by EARTHSHELL through its Chief Executive Officer or his
designee.
2.4 All materials and equipment provided by TFG or its subcontractors under
this Agreement will be new, unless otherwise specified in the plans and
specifications approved by the PROJECT OWNERS pursuant to the Scope of Work (the
"Approved Plans and Specifications"). TFG warrants to each PROJECT OWNER that
all TFG Work (including without limitation all equipment and materials provided
by TFG or its subcontractors) will be free from defects in design, material and
workmanship, and title; shall conform in all respects with the Scope of Work and
the Approved Plans and Specifications; shall be fit and suitable for the
purposes and under the conditions made know to TFG, and shall be of good
quality.
2.4.1 During the two (2) year period commencing on the Final Completion
of Facilities Modifications, in the case of Facilities Modifications, or the
Start of Full Commercial Production, in the case of each Process Equipment Line,
TFG, at its sole cost and expense, shall correct all Work performed by it under
this Agreement which fails to conform with the requirements of this Agreement or
which otherwise proves to be defective in any respect. TFG shall use all
reasonable efforts to correct any defective Work as soon as reasonably
practicable after either PROJECT OWNER provides TFG with notice thereof or after
TFG otherwise discovers the existence of the defect in question. TFG's
obligations under this Article 2.4.1 extend solely to the Work.
2.4.2 TFG shall obtain for the benefit of the PROJECT OWNERS all
warranties and guarantees from equipment vendors and subcontractors that are
required by the Contract Documents (as defined in Article 14.1), which
warranties shall extend for at least the period specified in Article 2.4.1
except to the extent EARTHSHELL and SWEETHEART (in the case of warranties
relating to Facilities Modifications) shall have otherwise agreed to a longer
period. Except as otherwise provided in the Scope of Work, hardware or other
equipment furnished by TFG hereunder but manufactured by others will be subject
to the manufacturer's warranty provided therewith. Extended warranties with
respect to such equipment may be purchased from manufacturers and extended to
EARTHSHELL or, in the case of equipment forming a part of the Facilities
Modifications, SWEETHEART. TFG shall be primarily responsible for handling, and
shall otherwise assist EARTHSHELL or SWEETHEART, as the case may be, with, any
equipment or facility warranty issues that arise during the life of any
equipment or facility warranty, and with equipment, facility or system
acceptance procedures, as more specifically provided in the Scope in Work.
2.5 TFG shall perform and cause its subcontractors to perform all Work in
accordance with all federal, state and local laws, codes, regulations and other
applicable standards in effect at the time of performance of the Work. TFG
represents and warrants to each PROJECT OWNER that it is authorized to do
business in the State of Maryland and is properly licensed and registered by or
with all appropriate authorities.
2.6 All designs, drawings, specifications, documents, and other work products
delivered by TFG hereunder are "Instruments of Service" for the Project, whether
or not the Project is
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completed. Instruments of Service, and all intellectual property rights
therein or related thereto, to the extent they relate primarily to Facilities
Modifications, shall become the property of SWEETHEART and, to the extent
they do not relate primarily to Facilities Modifications, shall become the
property of EARTHSHELL, in each case upon full payment for services rendered
in accordance herewith. Each PROJECT OWNER hereby releases and agrees to
indemnify, defend and hold harmless TFG and its, agents, consultants and
subconsultants from any and all claims, demands, costs, suits or actions that
result from or arise out of such PROJECT OWNER or a third party authorized by
such PROJECT OWNER using in any manner such Instruments of Service on other
projects without the prior written consent of TFG (it being agreed that such
consent shall be deemed to be given automatically in the case of any other
project on which TFG is engaged by EARTHSHELL for compensation). Except as
may be provided in any applicable agreement into which TFG hereafter may
enter with one or both of the PROJECT OWNERS, and except for Facilities
Modifications intended to accommodate up to four (4) additional Process
Equipment Lines, use by either PROJECT OWNER of any of the Instruments of
Service on any other project without the written permission of TFG shall be
at such PROJECT OWNER'S sole risk and without liability or legal expense to
TFG. If TFG and EARTHSHELL jointly participate in additional projects of the
same nature TFG's written permission will not be unreasonably withheld or
delayed.
2.7 TFG shall maintain complete Project records for a period of three (3) years
after final payment hereunder, and shall provide copies of such records to
EARTHSHELL and/or SWEETHEART upon reasonable request. If TFG intends to destroy
any such records, it shall provide reasonable advance notice to each PROJECT
OWNER so that each will have the opportunity to retain an original or copy of
such records at their own respective cost. EARTHSHELL or SWEETHEART may audit
such documents as are related to their portions of the Project at any reasonable
time up to three (3) years after final payment hereunder.
2.8 TFG shall maintain in a safe place at the Project site one record copy of
all drawings, specifications, addenda, written amendments, Change Orders, and
field orders, in good order and annotated to show changes made during
construction. These record documents together with all approved submittals will
be available at all times to each PROJECT OWNER for reference. Upon completion
of all Work, these record documents and submittals, including a reproducible set
of record drawings, will be delivered to each PROJECT OWNER.
2.9 TFG shall designate a Project Manager (the "TFG Project Manager") who shall
have decision-making authority (including authority to approve Change Orders)
and who shall be responsible for coordinating the performance of the Work with
the Owner Project Managers.
ARTICLE 3
RESPONSIBILITIES OF PROJECT OWNERS
3.1 EARTHSHELL shall pay TFG in current funds the Compensation as set out in
Article 6, when and as provided in Article 8. EARTHSHELL represents that it has
readily available sufficient and unencumbered U.S. funds for payment of its
obligations under this Agreement.
3.2 Each PROJECT OWNER shall use reasonable efforts to timely conduct all
required reviews and approvals of design, Change Orders and other documents
relating to the performance of Work; provided that SWEETHEART'S review and
approval shall be limited to layout design, composition and location of Process
Equipment and any structural alterations to the Facility. TFG shall use its
best efforts to provide each PROJECT OWNER with reasonable
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advance notice of the date on which TFG expects to deliver to such PROJECT
OWNER any designs, Change Orders or other documents relating to the
performance of Work as to which TFG will be requesting the review or approval
of such PROJECT OWNER. To that end TFG will furnish to each PROJECT OWNER on
a weekly basis, a schedule reflecting TFG's good faith best estimate, based
on all information known or reasonably available to it, of each design,
Change Order and other document relating to the performance of Work that TFG
will be requesting a review or approval of by such PROJECT OWNER. The
parties agree that, subject to TFG providing reasonable advance notice to
each PROJECT OWNER of the required review or approval in question and subject
to extraordinary circumstances such as the travel schedules of the relevant
PROJECT OWNER representatives, three business days after receipt of the
relevant document generally will be deemed to be the reasonable time period
within which each PROJECT OWNER will be expected to provide any required
review and approval pursuant to this Article 3.2. Each PROJECT OWNER agrees
and acknowledges that any failure by such PROJECT OWNER to provide any such
required review or approval within such reasonable time after receipt by such
PROJECT OWNER of the design, Change Order or other document in question may
result in delays in the progress of Work. Any such delays, to the extent
caused by any such failure by a PROJECT OWNER, shall not subject TFG to
penalties under Article 6.5.
3.3 On the Effective Date or within 30 days thereof, each PROJECT OWNER
shall designate in writing a representative (each, an "Owner Project
Manager") who shall have decision-making authority and shall be fully
acquainted with the Work. Each Owner Project Manager shall have full
authority to approve Change Orders and shall use reasonable efforts to render
decisions promptly and provide information expeditiously. Owner Project
Managers shall also coordinate decisions regarding the Work with each other.
Each PROJECT OWNER shall give directions for TFG's consultants,
subcontractors and suppliers only through TFG.
3.4 SWEETHEART shall cooperate with TFG in securing building and other
permits, licenses, inspections and approvals. SWEETHEART shall ensure that
TFG has all reasonably required access to the Sweetheart Facility to perform
the Work and meet schedules set out in this Agreement.
3.5 Each PROJECT OWNER shall provide to TFG all technical data in its
possession, including reports, maps, surveys, borings, process descriptions,
material balance sheets, P&IDs, and other information reasonably required by
TFG and relating to Work. Such information shall include EARTHSHELL's
requirements for the Project, design criteria or constraints, and copies of
design and construction details or standards that EARTHSHELL requires to be
included. SWEETHEART shall provide all necessary surveys in its possession
describing the physical characteristics, soil reports and subsurface
investigations, legal limitations, and utility locations and a legal
description for the Project site. TFG shall be responsible to make such
additional investigations as it deems necessary to perform the Scope of Work.
Unless TFG has knowledge to the contrary, TFG is entitled to rely on all of
the information provided by EARTHSHELL and/or SWEETHEART in performing Work.
SWEETHEART acknowledges that in the remodeling of existing structures,
certain decisions are made based on available documents and observations of
existing conditions. Unless specifically directed in writing by SWEETHEART,
TFG shall not perform or have performed any destructive testing or open any
concealed portions of the building to ascertain its actual condition. If
TFG's reasonable assumptions regarding such conditions are incorrect,
EARTHSHELL and SWEETHEART agree that TFG will not be held
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responsible for any additional work or costs, or schedule changes required to
correct any ensuing problems, or for any injury to persons or damage to
property based upon such assumptions.
3.6 Each of EARTHSHELL, SWEETHEART and TFG (each a "PROJECT PARTY") shall
give prompt written notice to each other PROJECT PARTY whenever such PROJECT
PARTY observes or otherwise becomes aware of any development that materially
affects the Work, or its schedule or any defect in the Work of TFG or its
subcontractors.
3.7 SWEETHEART shall provide TFG, its employees, and subcontractors present on
any job site, available safety information and requirements, including but not
limited to, material safety data sheets ("MSDS") for all known hazardous
substances not introduced by TFG, to which TFG's employees or subcontractors
might potentially become exposed.
3.7.1 Except as specifically described in the Scope of Work, TFG has
not agreed to perform any Work related to asbestos, polychlorinated biphenyl
(PCB) or other hazardous substances. SWEETHEART will be responsible for any
hazardous condition encountered at the Sweetheart Facility which was not
identified in the Contract Documents. EARTHSHELL and SWEETHEART shall not be
responsible for materials creating a hazardous condition brought to the Project
site by TFG, its subcontractors, suppliers or anyone else for whom TFG is
responsible. TFG shall not bring hazardous substances to the Project site,
unless required for purposes of carrying out the Work, with EARTHSHELL's and
SWEETHEART's permission, and in compliance with federal, state and local laws
and regulations.
3.7.2 In the event TFG encounters materials on the Project site
reasonably believed to be a hazardous substance, which has not been rendered
harmless and was not anticipated in the Scope of Work, TFG and any affected
subcontractor shall immediately (i) stop all construction in connection with
such hazardous condition and in any area affected thereby (except in an
emergency), and (ii) notify SWEETHEART (and thereafter confirm such notice in
writing). SWEETHEART shall promptly take corrective action, if any. TFG shall
not be required to resume construction in connection with such hazardous
condition or in any such affected area until after SWEETHEART has obtained any
required permits and delivered to TFG special written notice either (x)
specifying that such hazardous condition and any affected area is or has been
rendered safe for the resumption of construction, or (y) specifying any special
conditions under which such construction may be resumed safely. EARTHSHELL and
SWEETHEART shall agree to any necessary schedule changes caused by any
corrective action required by this Article 3.7.2 without penalty to TFG under
Article 6.5.
3.7.3 To the fullest extent permitted by law, SWEETHEART shall
indemnify and hold harmless TFG, its subcontractors, suppliers and the officers,
directors, employees, agents, other consultants and subcontractors of each, from
and against all claims, costs, losses and damages (including but not limited to
reasonable fees and expenses charged by engineers, architects, attorneys and
other professionals and court or arbitration or other dispute resolution costs),
arising out of or in any way connected with the presence, discharge, release, or
escape of hazardous substances of any kind by SWEETHEART at the Sweetheart
Facility, including, but not limited to asbestos, PCBs, or any solid, liquid,
gaseous, or thermal irritant or contaminant, including smoke, vapor, fumes,
chemicals, acids or alkalis, and waste; provided that (i) any such claim, cost,
loss or damage is attributable to bodily injury, sickness, disease or death, or
to damage to or destruction of tangible property (other than completed
construction services), including the loss of use resulting therefrom, and (ii)
nothing in this paragraph shall obligate
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SWEETHEART to indemnify any individual or entity from and against the
consequences of that individual's or entity's own negligence or willful
misconduct.
3.8 If TFG provides services related to life safety monitoring systems, it
is agreed that a functional acceptance test at which representatives of each
PROJECT PARTY are present shall be performed on the completed life safety
monitoring system. The objective of the functional acceptance test will be
to document the system operation and compliance with specified performance
requirements agreed to by the PROJECT PARTIES. Upon satisfactory completion
of the functional acceptance test, SWEETHEART shall accept, in writing,
responsibility for the operations and maintenance of the system. SWEETHEART
shall properly maintain the system and train its employees or contractors to
operate the system. TFG shall have no further liability or responsibility
for the system, its operation, its maintenance or the results of said
operation and maintenance.
3.9 Each PROJECT PARTY shall provide TFG with all readily available information
and assistance TFG reasonably needs to obtain necessary permits and licenses for
the Work.
3.10 Each PROJECT PARTY acknowledges that timely and complete execution of the
Work will require the full and joint cooperation of all parties, and they agree
to use reasonable efforts to expedite decisions and communications affecting the
Work.
ARTICLE 4
SUBCONTRACTS
4.1 All portions of Work which TFG does not perform with its own forces shall
be performed under written subcontracts with appropriately qualified
subcontractors.
4.2 TFG shall be responsible for the management of its subcontractors in the
performance of their portion of the Work. TFG, at a minimum, shall cause all
applicable provisions of this Agreement to be included in all subcontracts and
purchase orders with its subcontractors and suppliers at all tiers to impose on
them similar obligations and requirements as in this Agreement. TFG shall not be
responsible for any work or services provided by others not engaged by TFG or
any of its subcontractors or otherwise under the direct control of TFG.
ARTICLE 5
CONTRACT SCHEDULE
5.1 Work to be performed under this Agreement shall be managed in accordance
with the contract schedule attached as Exhibit B hereto (the "Target Contract
Schedule"), subject to any Change Orders issued in accordance with Article 7
and subject to the provisions of this Article 5. The Target Contract
Schedule will be updated from time to time as the Work progresses, with the
first updated Target Contract Schedule being contemplated to be provided by
June 26, 1998. The Work will be managed using a target date of September 26,
1998 as the Start of Full Line Debug for the first Process Equipment Line.
TFG agrees to provide its best efforts to manage its resources and activities
under its direct control, including activities of its subcontractors, (i) to
achieve this date and (ii) otherwise to commence and complete Work in
accordance with the Target Contract Schedule. EARTHSHELL agrees to support
this target date by authorizing, where appropriate, overtime and other
schedule acceleration techniques with TFG (it being agreed that members of
TFG's architects and engineers, irrespective of the total number of hours
worked in any given week, will not be billed at premium overtime rates or
otherwise at rates not expressly set out in the Proposal submitted by TFG to
EARTHSHELL on April 24, 1998) and its
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subcontractors and suppliers, and with the PROJECT OWNERS and its equipment
suppliers, recognizing that such efforts will have a material effect on the
cost of Work.
5.1.1 The term "day" shall mean calendar day, unless otherwise
specifically designated. Definitions for the stages of completion of the
Facilities Modification, namely "Substantial Completion" and "Final
Completion"; and the stages of completion for each Process Equipment Line,
namely, "Start of Full Line Debug" and "Start of Full Commercial Production"
are more specifically set out in Exhibit B hereto and are incorporated by
reference herein.
5.2 The date on which all Facilities Modifications are substantially
completed subject only to punchlist items, as more specifically defined in
Exhibit B, shall constitute "Substantial Completion of Facilities
Modifications" for purposes hereof.
5.3 Final completion of all Work relating to the Process Equipment Lines
will be achieved upon final acceptance by EARTHSHELL of each Process
Equipment Line at the Start of Full Commercial Production, as more
specifically defined in Exhibit B. Final completion of all Facilities
Modifications ("Final Completion of Facilities Modifications") shall be
achieved upon final acceptance of the Facilities Modifications by EARTHSHELL
and SWEETHEART, as more specifically defined in Exhibit B.
5.4 Warranties of TFG set forth in this Agreement (including the Scope of
Work) shall continue in effect during the following periods: (i) during the
two (2) year period commencing on the Final Completion of Facilities
Modifications, in the case of Facilities Modifications, or (ii) during the
two (2) year period commencing on the relevant Start of Full Commercial
Production, in the case of each Process Equipment Line (it being agreed and
understood that warranties passed through by TFG pursuant to Article 2.4.2
may extend for longer periods). The Final Completion of Facilities
Modification and the Start of Full Commercial Production of each Process
Equipment Line shall be established by certificates issued by TFG and
approved by EARTHSHELL and SWEETHEART.
5.5 Time is of the essence in the performance of Work. If TFG is delayed at
any time in the progress of Work by any act or neglect of either PROJECT
OWNER or any consultant, contractor or vendor separately employed or engaged
by either PROJECT OWNER, by changes ordered in the Work pursuant to Article
7, delay in delivery or nonperformance of equipment vendors, by adverse
weather conditions; by site conditions that could not reasonably have been
anticipated by TFG, permit delays, circumstances described in Articles 3.2,
3.5 and 3.7 of this Agreement; or by any other force majuere causes beyond
TFG's control, then the dates of each Start of Full Line Debug shall be
extended by Change Order for the period of time caused by such delay.
ARTICLE 6
COMPENSATION
6.1 EARTHSHELL shall pay TFG compensation for all Work on the following basis,
and as more specifically defined in Exhibit C hereto ("Compensation"):
a. For design and construction management fees, on a time and
materials basis, as set out in Exhibit C hereto; and
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b. For the cost of the Work defined in the Scope of Work as "Construction
Work", on a time and materials basis which shall be determined
according to the rates and other information contained or
referred to in Exhibit C hereto.
No Compensation or other consideration shall be payable by SWEETHEART in respect
of the Work (the full consideration for all Work being the Compensation payable
by EARTHSHELL as provided above in this Article 6.1).
6.2 TFG has provided EARTHSHELL, as of April 24, 1998, TFG's good faith best
estimate, based on all information known or reasonably available to it, of the
total cost of all design, procurement and construction management fees that TFG
will incur in performing and completing all Work hereunder (the "EPCM Fee
Estimate"). TFG has provided EARTHSHELL, as of about May 1, 1998, its good
faith best estimate, based on all information known or reasonably available to
it, of the construction costs of the Work (the "Construction Cost Estimate").
On or before the fifteenth day of each month during the performance of Work
hereunder, TFG shall provide a report to EARTHSHELL which shall set forth a
revised and updated EPCM Fee Estimate, and the Construction Cost Estimate, as
appropriate, that reflects TFG's then current good faith best estimates, based
on all information then known or reasonably available to it. In addition, TFG
shall promptly notify the PROJECT OWNERS in writing if for any reason TFG
determines that the most recent EPCM Fee Estimate and Construction Cost Estimate
are at material variance with TFG's then current good faith best estimates of
the relevant total costs.
6.3 The Compensation is based upon the Scope of Work, and applicable laws,
ordinances, codes, rules and regulations in effect on the Effective Date.
6.4 EARTHSHELL and TFG may enter into separate compensation arrangements for
the Work or portions of it. Nothing herein shall affect any separate
arrangements into which EARTHSHELL and SWEETHEART may enter with respect to
Compensation or other matters involving the Project and EARTHSHELL's and
SWEETHEART's respective rights and obligations hereunder; provided, however,
that any such arrangements shall not create any third party beneficiary rights
in favor of TFG.
6.5 If the Start of Full Line Debug with respect to the first Process Equipment
Line (the "First Start of Full Line Debug") has not occurred by January 21, 1999
(subject to any extension implemented through a Change Order) other than by
reason of Changes in Work or Schedule, or circumstances beyond the control of
TFG that are described in Article 5.5, then, for each day on and after
January 21, 1999 that the First Start of Full Line Debug is so delayed, TFG
shall pay (as liquidated damages) to EARTHSHELL (or, if amounts are then owing
to TFG hereunder, credit against such amounts) the sum of $20,000 per day until
the First Start of Full Line Debug has occurred; and, during the period the
foregoing $20,000 amount is payable by TFG, TFG shall not be entitled to receive
any design, procurement and construction management fees in respect of any Work
relating to the first Process Equipment Line. Notwithstanding the foregoing,
the aggregate amount payable by TFG pursuant to this Article 6.5 shall in no
event exceed thirty per cent (30%) of the total design, procurement and
construction management fees paid or to be paid to TFG for services by its staff
(excluding design subconsultants) under this Agreement in respect of the first
Process Equipment Line. No penalty will be payable hereunder to the extent any
delay is caused by any event or circumstance described in Article 5.5 or by
reason of a failure of a PROJECT OWNER to timely review or approve documents
pursuant to Article 3.2.
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ARTICLE 7
CHANGES IN WORK
7.1 EARTHSHELL and/or SWEETHEART, without invalidating this Agreement, may
order changes to the Scope of Work consisting of additions, deletions or other
revisions ("Changes in Work"); provided that (i) Changes in Work involving the
Facility Design Documents or otherwise relating primarily to the Facilities
Modifications shall be ordered by EARTHSHELL and SWEETHEART and (ii) Changes in
Work involving the Equipment Design Documents or otherwise relating primarily to
the Equipment Installation shall be ordered solely by EARTHSHELL. All Changes in
Work shall be made pursuant to written Change Orders. In the event that TFG
determines a Change in Work requires an adjustment to the Compensation and/or
the Target Contract Schedule, the Change in Work shall not be effective unless
any such adjustment shall have been agreed to in writing by each Owner Project
Manager pursuant to Change Order.
7.1.1 A "Change Order" is a written order to TFG signed by EARTHSHELL
and/or SWEETHEART or their authorized agent, issued after the execution of this
Agreement, directing a Change in Work and/or an adjustment in the Compensation
and/or an adjustment in the Target Contract Schedule.
7.2 If TFG believes that Changes in Work or other changed circumstances
warrant an extension to the Target Contract Schedule, it shall give
EARTHSHELL and SWEETHEART written notice thereof. Within a reasonable time
after EARTHSHELL and SWEETHEART receives any such notice, the PROJECT PARTIES
shall meet and discuss any extension to the Target Contract Schedule that may
be appropriate as a result of any such Changes in Work or other changed
circumstance. Under no circumstances shall TFG delay the performance of any
previously contracted Work on account of any such Changes in Work or changed
circumstances.
7.3 SWEETHEART, in the case of the Facilities Modifications, and EARTHSHELL, in
the case of the Process Equipment Installation, may order minor Changes in the
Work not involving a material amount of additional fees or expenses or an
adjustment of the Target Contract Schedule, and not inconsistent with the Scope
of Work. Such Changes in the Work shall be effected by written order.
ARTICLE 8
PAYMENTS TO AND BY TFG
8.1 TFG shall invoice EARTHSHELL and, to the extent the Facilities
Modifications are involved, shall provide copies of the invoices to SWEETHEART.
EARTHSHELL shall make payments to TFG monthly as follows:
8.1.1 At least fifteen (15) days prior to the first invoice given by
TFG hereunder, the PROJECT PARTIES shall agree to the forms and what data will
be needed to substantiate all Applications for Payment by TFG and will agree on
the form of Applications for Payment that will be utilized. TFG's Applications
for Payment shall be based on the schedule and any requirements set out in
Exhibit C.
8.1.2 On or before the fifteenth day of each month after Work has
commenced, TFG shall submit to EARTHSHELL and to SWEETHEART an Application for
Payment, in the form agreed to pursuant to Article 8.1.1, together with such
detail as EARTHSHELL may require,
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based on Work completed and materials ordered for the period ending on the
twenty-fifth (25th) day of the preceding month, less the aggregate of amounts
previously paid by EARTHSHELL.
8.1.3 Within twenty (20) days after receipt of a monthly Application
for Payment, EARTHSHELL shall pay directly to TFG a payment in respect of Work
completed (a "Progress Payment") equal to ninety per cent (90%) of the amount
shown as due in the Application for Payment, less any amount as to which
EARTHSHELL requires further substantiation or a bona fide dispute exists. Each
Application for Payment will include a retention equal to ten per cent (10%) of
the amount shown as due, which retention shall not be due and payable until the
time specified in Article 8.4. The amount of the retention that relates to
Facilities Modifications (the "Facilities Retention") and the amount of the
retention relating to all other Work (the "Equipment Retention") will be
separately accounted for. Within fifteen (15) days after its receipt of each
monthly Application for Payment, EARTHSHELL shall notify TFG in writing if all
or any part of such Application for Payment has been disapproved, with a copy to
SWEETHEART with respect to any Facilities Modifications as to which any such
disapproval relates.
8.1.4 If EARTHSHELL fails to pay any Compensation payable to TFG
hereunder, when due, TFG may, at any time, serve written notice to EARTHSHELL
and SWEETHEART, that it will stop Work within fifteen (15) days after such
notice, and after such fifteen (15) day period, stop Work until it receives
payment of the amount due. In addition, commencing at the conclusion of such
fifteen (15) day period, TFG may charge EARTHSHELL interest on any outstanding
amounts at two (2%) over prime per annum.
8.2 TFG warrants and guarantees that title to all Work, materials and equipment
to be incorporated in the Project covered by an Application for Payment, whether
then incorporated in the Project or not, will pass to EARTHSHELL, in the case of
equipment and related materials, or to SWEETHEART, in the case of fixtures and
improvements that are integrated into and form a part of the Sweetheart
Facility, free and clear of all liens, claims, security interests or
encumbrances, in each case subject to EARTHSHELL having paid to TFG the full
amount due in respect of the Work, materials and equipment in question.
8.3 No Progress Payment or any partial or entire use or occupancy of the
Project by EARTHSHELL and/or SWEETHEART shall constitute an acceptance of any
Work not in accordance with the Scope of Work and Approved Plans and
Specifications.
8.4 Final Payments of the unpaid balances of the Compensation shall be due
and payable as follows: (i), in the case of the Facilities Retention and all
other unpaid Compensation relating to Facilities Modifications, (30) thirty
days after Final Completion of Facilities Modifications; and (ii), in the
case of the Equipment Retention and all other Compensation relating to a
particular Process Equipment Line, (A) one-half of such Equipment Retention
shall be paid thirty (30) days after the Start of Full Commercial
Production-Phase 1 of such Process Equipment Line and (B) the remaining
amount of Equipment Retention and all such other Compensation shall be paid
within thirty (30) days of the earlier to occur of (I) the Start of Full
Commercial Production-Phase 2 of such Process Equipment Line or (II) the date
on which TFG shall have demonstrated to the satisfaction of EARTHSHELL that
the Start of Full Commercial Production-Phase 2 has not occurred within one
hundred and twenty (120) days after the Start of Full Commercial
Production-Phase 1 solely by reason of delays caused by any event or
circumstance described in Article 5.5; provided that in each case EARTHSHELL
shall have the right to retain the
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reasonable cost to perform and finally complete any agreed to punch list Work
items that remain to be completed on Final Payment. EARTHSHELL shall pay
such amount retained for punch list Work within fifteen (15) days after the
punch list Work items are completed or at the time of Final Payment,
whichever occurs last.
8.5 Before each Progress Payment and each Final Payment, TFG shall provide
EARTHSHELL, with a copy to SWEETHEART to the extent any Facilities
Modifications are relevant thereto, partial and final construction lien, stop
notice, and bond claim waivers and releases, from TFG and all its
subcontractors. The waivers and releases shall apply to all Work performed
through the date for which payment is to be made and may be conditioned upon
payment of the pay estimate. If EARTHSHELL makes all required payments and a
lien or stop notice is filed on the Project or Project proceeds related to
the Work, TFG at its expense shall remove the lien or stop notice from the
Project or Project proceeds, by payment or release bond, within twenty (20)
days after written demand from EARTHSHELL, and TFG shall defend and indemnify
each PROJECT PARTY, its officers, directors, agents and employees, and such
PROJECT PARTY'S lenders and other secured parties, if any, from such liens
and stop notices.
8.6 TFG shall pay its first-tier subcontractor and its other first-tier
payees performing Work, after receipt of payment from EARTHSHELL, an amount
equal to the percentage of completion allowed to TFG on account of their
Work. TFG shall require each first-tier subcontractor and other first-tier
payees to make similar payments to lower tier subcontractors and payees. If
TFG withholds such payment due to a bona fide dispute, TFG may notify
EARTHSHELL, with a copy to SWEETHEART, and EARTHSHELL shall withhold such
funds from TFG until the dispute is resolved.
ARTICLE 9
INDEMNITY, INSURANCE, WAIVER OF
SUBROGATION AND LIABILITY
9.1 TFG shall defend, indemnify and hold harmless each PROJECT OWNER from
and against all claims, damages, injuries, costs, penalties, actions, suits
and liabilities of all kinds, including without limitation attorneys' fees,
for personal injury, illness or death of any person, including TFG's
employees, and damage to or destruction of property, arising out of or
related to Work, to the extent caused by the negligent or intentional acts or
omissions of TFG, or anyone for whom TFG is legally responsible (including
without limitation any subcontractors engaged by TFG), or by breach of this
Agreement, except that in no instance shall TFG be required to indemnify
either PROJECT OWNER against such liabilities or damages caused primarily by
the negligence of such PROJECT OWNER.
9.2 Each PROJECT OWNER shall defend, indemnify and hold harmless TFG from
and against all claims, damages, injuries, costs, penalties, actions, suits
and liabilities of all kinds, including without limitation attorneys' fees,
for personal injury, illness or death of any person, including such PROJECT
OWNER's employees, and damage to property, arising out of or related to Work,
to the extent caused by the negligent or intentional acts or omissions of
such PROJECT OWNER, or anyone for whom such PROJECT OWNER is legally
responsible, or by breach of this Agreement, except that in no instance shall
such PROJECT OWNER be required to indemnify TFG against such liabilities or
damages caused primarily by the negligence of TFG or the other Project Owner.
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9.3 TFG shall purchase and maintain insurance as described below for TFG's
operations under this Agreement:
a. Umbrella coverage $10,000,000
b. Workers' Compensation Statutory Limits
c. Employer's liability $1,000,000
d. Commercial general liability $1,000,000 (per occurrence and aggregate)
e. Automobile liability $1,000,000 (combined single limit)
f. Professional liability $2,000,000 (per claims and aggregate)
9.3.1 The insurance required by Article 9.3 shall be maintained without
interruption from date of commencement of Work until completion, except that the
Professional Liability insurance shall be maintained for at least two (2) years
following the later of the date of Final Completion of Facilities Modifications
or Start of Full Commercial Production.
9.3.2 All coverage provided by the insurance required by Article 9.3
shall be on an occurrence basis. TFG shall provide to each PROJECT OWNER
promptly after the Effective Date a certificate evidencing the coverage required
by Article 9.3 and, except in the case of professional liability insurance,
naming each PROJECT OWNER and their employees, officers, directors and agents as
an additional insured.
9.3.3 TFG shall ensure that all subcontractors engaged by it shall
purchase and maintain insurance comparable to that required by Article 9.3
above; provided that such subcontractors shall not be required to obtain
umbrella coverage in excess of $5,000,000.
9.4 TFG shall place and maintain Builder's Risk property insurance in the
amount of the cost of replacement for the entire Work, excluding tools and
equipment of TFG and subcontractors and any other property not a permanent part
of or intended to become a permanent part of the Project at the site. Such
property insurance shall be maintained, unless otherwise agreed in writing by
all persons and entities who are beneficiaries of such insurance, until no
person or entity other than EARTHSHELL or SWEETHEART, as appropriate, has an
insurable interest in the property required to be covered. This insurance shall
include the interests of EARTHSHELL or SWEETHEART, as appropriate, TFG and
subcontractors in the Work.
9.4.1 Builder's risk property insurance shall be on an "All-Risk"
policy form and shall insure against the perils of fire, and extended coverage
and physical loss or damage including, without duplication of coverage, theft,
vandalism, malicious mischief, collapse, falsework, errors and omissions,
temporary buildings and debris removal including demolition occasioned by
enforcement of any applicable legal requirements and all other risks of property
damage as to which coverage is reasonably available, with any exclusions clearly
defined in the Certificate of Insurance, and shall cover reasonable compensation
for EARTHSHELL's architect's or engineer's services and expenses required as a
result of such insured loss.
9.4.2 EARTHSHELL shall pay all costs not covered because of any
deductible under the property insurance described in Article 9.4, provided that
the amount of such deductible shall be approved by EARTHSHELL in advance.
9.4.3 Each PROJECT PARTY waives all rights against each other PROJECT
PARTY and any of their subcontractors, at any tier, and their employees and
agents, each of the other, for
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damages caused by fire or other perils to the extent covered by property
insurance obtained by TFG or other property insurance applicable to Work,
except such rights as they have to proceeds of such insurance. A waiver of
subrogation shall be effective as to a person or entity even though that
person or entity would otherwise have a duty of indemnification, contractual
or otherwise, did not pay the insurance premium directly or indirectly, and
whether or not the person or entity had an insurable interest in the property
damaged.
9.4.4 A loss insured under such property insurance shall be adjusted
with EARTHSHELL and SWEETHEART and made payable to EARTHSHELL and SWEETHEART as
trustees for the insureds, as their interests may appear. TFG shall pay
subcontractors their just shares of insurance proceeds received by TFG, and by
appropriate written agreements shall require subcontractors to make payments to
their lower-tier subcontractors in similar manner.
9.5 As to TFG's liability, if any, arising out of this Agreement for
professional negligence, EARTHSHELL, SWEETHEART, and TFG agree that, to the
extent permitted by law, the entire joint, several and individual liability of
TFG, its officers, agents, subcontractors, representatives and employees,
irrespective of the number of claims, shall in no event exceed the total amount
of engineering, procurement, construction management or other fees paid or to be
paid to TFG hereunder; provided that the foregoing limitation shall not be
applicable to any gross negligence or reckless or willful misconduct. Subject
to TFG's express obligations under Article 6.5, neither TFG nor its officers,
agents, representatives or employees shall be liable to EARTHSHELL, SWEETHEART,
their officers, representatives, subcontractors, affiliates or agents for any
indirect, special, reliance, incidental, consequential or exemplary damages
arising out of or in connection with this Agreement.
9.5.1 These limitations of liability shall apply regardless of whether
a claim is based on contract (including breach of representation or warranty),
delay, negligence (active or passive), strict tort liability or other theory of
law, but shall not apply to any claim based on gross negligence or reckless or
willful misconduct.
9.6 TFG has authority and control over its and its subcontractors' employees at
the plant site and is best able to provide for their safety. Accordingly, to
the maximum extent allowed by law, TFG will defend and indemnify EARTHSHELL and
SWEETHEART against any claims arising from injury, illness or death, including
all costs of defense of such claims, to TFG or any subcontractor employees
(current and former), their spouses (current and former), their children, or
anyone else whose claim is based upon injury, illness or death to said employees
of TFG or any of its subcontractors.
9.6.1 EARTHSHELL and SWEETHEART have authority over their respective
employees at the plant site and are best able to provide for their safety.
Accordingly, to the maximum extent allowed by law, EARTHSHELL and SWEETHEART
shall defend and indemnify TFG from claims by EARTHSHELL's and SWEETHEART's
respective employees (current and former), their spouses (current and former),
and their children, and anyone else whose claim is based on injury, illness or
death of said employees of EARTHSHELL and SWEETHEART.
9.6.2 Except as otherwise expressly provided herein, the indemnities
herein shall apply regardless of the fault or negligence of the party to be
indemnified, but shall not apply to injury, illness or death caused by the
willful misconduct or sole or gross negligence of the party to be indemnified.
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9.7 The parties waive any right that limits, voids or makes unenforceable their
respective indemnification obligations as set forth herein. If any such right
is deemed or ruled not to be subject to a waiver, the parties agree that an
amount equal to the amount which would have been needed to fully satisfy the
obligations of such other party to defend and indemnify the other party or its
partners, agents and employees, as set forth herein, will be promptly paid as
additional compensation.
9.8 The provisions in Article 9 of this Agreement shall survive the completion
or termination of this Agreement.
ARTICLE 10
TERMINATION OF THE AGREEMENT
10.1 EARTHSHELL and SWEETHEART may terminate this Agreement for any reason
effective upon thirty (30) days written notice to TFG. If the PROJECT OWNERS
so terminate, TFG shall be entitled to compensation only for Work relating to
the Equipment Installation or Facilities Modification, as the case may be,
actually performed on the Project through the fifteenth day after the notice
is delivered less all such payments already made to TFG. Termination
expenses shall include reasonable demobilization and cancellation costs
arising from such termination. Such payments by EARTHSHELL shall be TFG's
sole and exclusive remedy for EARTHSHELL's or SWEETHEART's termination for
convenience and EARTHSHELL and SWEETHEART shall have no further obligation to
TFG.
10.2 EARTHSHELL and SWEETHEART may terminate this Agreement upon written
notice to TFG, if TFG is in default of this Agreement with respect to the
Facilities Modification and TFG fails to commence to cure such default within
fifteen (15) days from delivery of the notice. In all other circumstances
any PROJECT PARTY may terminate this Agreement upon written notice to the
other two PROJECT PARTIES, if either PROJECT OWNER or TFG is in default of
any material term of this Agreement and fails to commence to cure such
default within fifteen (15) days from delivery of the notice and thereafter
diligently and continuously to proceed to cure such default.
10.2.1 If either PROJECT OWNER cancels because of TFG's default, no
further fees or expenses shall be payable to TFG hereunder after the notice of
default. Such cancellation shall not prejudice such PROJECT OWNER's right to
claim damages or to pursue any appropriate legal or equitable remedy otherwise
provided for in this Agreement or by applicable law. If TFG cancels because of
a PROJECT OWNER'S default, EARTHSHELL (on behalf of itself or SWEETHEART) shall
be obliged to pay TFG only for Work relating to the Equipment Installation or
Facilities Modification, as the case may be, actually performed on the Project
through the fifteenth day after the notice is delivered less all such payments
already made to TFG. Such payments by EARTHSHELL to TFG shall not prejudice
TFG's right to claim damages or to pursue any other appropriate remedy provided
for under this Agreement.
ARTICLE 11
CONFIDENTIALITY
11.1 EARTHSHELL, SWEETHEART and TFG will receive information from each other
in connection with this Agreement. All such information shall be treated as
confidential information unless designated otherwise. TFG shall not, without
the prior written consent of EARTHSHELL or SWEETHEART, as applicable, use
confidential information for any purposes other than the performance of Work,
nor disclose such information to any other entity except as
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required for the performance of Work and only if such third party has agreed
in writing to hold such information confidential. All EARTHSHELL or
SWEETHEART-supplied documents shall be returned by TFG at the completion of
Work or upon termination of this Agreement.
11.2 Nothing furnished to TFG which is already known to TFG at the time of
disclosure and that is not required to be treated as confidential
information, or is, or becomes generally known to the related industry and
public through no fault of TFG, shall be deemed confidential.
11.3 TFG shall have the right to take photographs of the project site during
construction and at completion of the Project, upon reasonable notice to and
prior written approval of EARTHSHELL and SWEETHEART.
11.4 Any confidential know how or other trade secrets (and any patentable or
copyrightable subject matter included therein or forming a part thereof) that
is first created or developed by TFG in the performance of Work shall be
deemed to be owned by EARTHSHELL and shall not be disclosed to any third
party or used for any purpose other than in connection with the performance
of Work hereunder.
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ARTICLE 12
NOTICES
12.1 All notices or other official correspondence relating to contractual
matters among the PROJECT PARTIES shall be made by fax transmission or U.S.
Postal Service, first-class, postage-paid mail addressed to the parties at
their respective street addresses as follows:
To: EARTHSHELL: EarthShell Corporation
800 Miramonte Drive
Santa Barbara, California 93109-1419
Attention: Simon Hodson
Facsimile: (805) 899-3517
with a copy to:
EarthShell Corporation
800 Miramonte Drive
Santa Barbara, California 93109-1419
Attention: General Counsel
Facsimile: (805) 899-3517
To: SWEETHEART Sweetheart Cup Company Inc.
10100 Reistertown Road
Owings Mills, Maryland 21117
Attention: D.E. Boyles
Facsimile: (410) 998-2718
with a copy to:
Sweetheart Cup Company Inc.
10100 Reistertown Road
Owings Mills, Maryland 21117
Attention: Vice President and General
Counsel
Facsimile: (410) 998-1313
To: IDC PARTIES: IDC
2020 S.W. Fourth Avenue
Portland, Oregon 97201
Attention: Vern Jackson
David Etchart
Facsimile: 503-423-3963
ARTICLE 13
DISPUTE RESOLUTION
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13.1 All claims, disputes and other matters in question relating to this
Agreement shall be resolved pursuant to this Article 13. Any dispute among or
between any PARTY shall be resolved, first by mediation by referring the matter
to the respective PROJECT OWNER Representative(s) and the TFG Representative;
and failing resolution, to a third party mediator, agreed to by the PROJECT
PARTIES. If the dispute cannot be resolved by mediation or the parties fail to
agree upon a mediator within thirty (30) days, then the dispute will be referred
to arbitration under the construction rules of the American Arbitration
Association, pursuant to the following procedures:
(a) Notice of the demand for arbitration shall be filed in writing with
the other party to this Agreement and with the American Arbitration
Association.
(b) Such arbitration shall be conducted by a panel of three arbitrators
appointed as follows. If the dispute involves the three PROJECT PARTIES,
then one (1) arbitrator (the "Project Party Appointee") shall be appointed by
the PROJECT OWNER(S) that are involved in the dispute, one (1) arbitrator
(the "TFG Appointee") shall be appointed by TFG and one (1) arbitrator (the
"Independent Arbitrator") shall be selected by Project Party Appointee and
the TFG Appointee. The PROJECT OWNER(S) and TFG shall each appoint their
respective Appointee within ten (10) business days after a disputed matter is
submitted to arbitration. If the Project Party Appointee and the TFG
Appointee are unable to agree upon an Independent Arbitrator within ten (10)
business days after the latter of such Appointees is appointed, then such
Independent Arbitrator shall be appointed by the American Arbitration
Association. If the dispute involves just the PROJECT OWNERS, then one (1)
arbitrator shall be appointed by EARTHSHELL (the "EARTHSHELL Appointee"), one
(1) arbitrator shall be appointed by SWEETHEART (the "SWEETHEART Appointee"),
and one (1) arbitrator shall be appointed by the PROJECT OWNERS' Appointees.
The PROJECT OWNERS shall each appoint their respective Appointee within ten
(10) business days after a disputed matter is submitted to arbitration. If
the PROJECT OWNERS' Appointees are unable to agree on an Independent
Arbitrator within ten (10) business days of their appointments, then the
Independent Arbitrator shall by appointed by the American Arbitration
Association.
(c) A determination by a majority of the panel of three arbitrators
shall be binding.
(d) Reasonable discovery shall be allowed in arbitration.
(e) The parties to the dispute shall be entitled to be represented at
the arbitration by legal counsel and shall be entitled to adduce evidence.
(f) Unless otherwise agreed by the parties to the dispute, all
arbitration proceedings shall be held in Baltimore, Maryland.
(g) Each party agrees to comply with any award made in such proceeding
that has become final and to the entry of a judgment in accordance with
applicable law in any court having jurisdiction thereof upon any award
rendered in such proceeding that has become final.
(h) The decision of the arbitrator shall be tendered within sixty (60)
days of the final submissions of the parties to the dispute in writing or in a
hearing before the arbitrators.
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(i) Each such arbitration award that has become final shall be conclusive
and binding upon the parties to the dispute and shall not be appealable.
(j) Attorneys' fees, costs and other out-of-pocket expenses may be
awarded by the arbitrators in their discretion to the Party that prevails in
any such arbitration, provided that each party to the dispute shall pay its
own expenses pending the awarding thereof to the party that prevails in any
such arbitration. The costs of the arbitration shall be allocated evenly
between or among the parties that are involved.
The foregoing agreement to arbitrate shall be specifically enforceable and
the award rendered by the arbitrators shall be final and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction thereof. Nothing in this Article 13.1 shall limit the rights of
any of the parties to seek in any court of competent jurisdiction such
interim equitable relief as may be needed to maintain the status quo, to
prevent irreversible harm or otherwise protect the subject matter of the
arbitration until the matter shall have been finally resolved. Any such
interim relief ordered by a court shall not determine or prejudge the
substantive issues to be decided by such arbitration. In addition, if a
disputed matter is submitted to arbitration, and the arbitrators deem
themselves to be incompetent to hear any matter brought before them pursuant
to this Article 13.1, then the parties may seek relief in any court of
competent jurisdiction.
13.2 For an arbitration between the parties pursuant to the terms of this
Agreement, EARTHSHELL, SWEETHEART and TFG agree that, at TFG's option, the
parties will consolidate such arbitration with arbitration between TFG and
any of its consultants, subcontractors, suppliers, or any other party with
whom TFG may have an agreement in connection with the Project.
13.3 Unless otherwise ordered by EARTHSHELL and SWEETHEART, TFG shall continue
to proceed with Work under this Agreement, pending any dispute resolution
procedures, and EARTHSHELL shall continue to make all payments which are not in
dispute in accordance with this Agreement.
13.4 Any disputes between EARTHSHELL and SWEETHEART on any issues or between
EARTHSHELL and TFG related to separate compensation agreements shall be resolved
independently from this Agreement.
ARTICLE 14
CONTRACT DOCUMENTS
14.1 The following agreements and documents (the "Contract Documents")
comprise the entire agreement between EARTHSHELL and SWEETHEART, on the one
hand, and TFG, on the other, with respect to the Work (except as may be
otherwise specifically agreed in writing, in the event of a conflict between
two or more Contract Documents, the following order of precedence shall
govern):
A. This Agreement;
B. All Exhibits to this Agreement (Exhibits A, B and C),
C. All Change Orders authorizing Changes in Work (Scope, Schedule,
Compensation); and,
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D. Any notice to proceed, purchase order or other authorization
from EARTHSHELL or SWEETHEART.
ARTICLE 15
LIABILITY OF CH2M FOR TFG PERFORMANCE
15.1 CH2M (together with IDC) shall be jointly and severally liable for all
of the obligations of TFG under this Agreement, as they may be increased,
extended or otherwise modified from time to time after the Effective Date.
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 Each party is an independent contractor, and no party shall be deemed
to be the agent of any other party.
16.1.1 The parties shall not subcontract nor assign this Agreement in
whole or part, for any purpose, without the written consent of the other.
16.1.2 This Agreement shall be binding upon and inure to the benefit
of EARTHSHELL, SWEETHEART, and the IDC PARTIES and their respective
successors in interest and permitted assigns. No assignment of this
Agreement shall be effective until the assignee assumes in writing the
obligations of the assigning party, and delivers such written assumption to
the other original party to this Agreement. Any attempt at assignment of
this Agreement without such written consent shall be null and void.
16.1.3 EARTHSHELL, SWEETHEART and the IDC PARTIES acknowledge that
nothing in the Agreement implies any undertaking by TFG for the benefit of,
or which may be enforced by, any third party and that TFG's obligations are
solely intended for the benefit of EARTHSHELL and SWEETHEART.
16.2 This Agreement shall be governed by the laws of the state of Maryland,
excluding conflict of law provisions. Subject to Article 13, each party shall
bear the cost of its own defense in such legal actions, including attorneys'
fees.
16.3 If at any time any provision of this Agreement is in conflict with any
law, ruling, order, rule or regulation, or is unenforceable for any reason,
then such provision shall continue in effect only to the extent that it
remains valid. If any provision of this Agreement becomes less than fully
operative, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
16.4 This Agreement represents the entire agreement between EARTHSHELL and/or
SWEETHEART, on the one hand, and the IDC PARTIES, on the other hand, and
supersedes all prior and contemporaneous negotiations, representations and
agreements. This Agreement may be amended only by written instrument signed by
EARTHSHELL, SWEETHEART [to extent of any change which affects SWEETHEART's
rights or obligations] and TFG. Nothing herein shall affect any agreement
between SWEETHEART and EARTHSHELL.
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the Effective Date.
EARTHSHELL CORPORATION IDC CONSTRUCTION MANAGEMENT, INC.
By:______________________________ By:______________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
SWEETHEART CUP COMPANY INC. CH2M HILL INDUSTRIAL DESIGN
CORPORATION
By:______________________________ By:______________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
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EXHIBIT A
TO
DESIGN, PROCUREMENT AND CONSTRUCTION MANAGEMENT
SERVICES AGREEMENT AMONG EARTHSHELL, SWEETHEART AND TFG
SCOPE OF WORK
THE PROJECT
TFG WILL PROVIDE ENGINEERING, DESIGN AND CONSTRUCTION MANAGEMENT SERVICES FOR
FACILITY MODIFICATIONS AND THREE PROCESS EQUIPMENT LINES AT THE SWEETHEART CUP
ST. THOMAS PLANT WHICH WILL MANUFACTURE 720 MILLION SANDWICH CONTAINERS
ANNUALLY, USING THE PATENTED EARTHSHELL CONTAINER TECHNOLOGY AND IN ACCORDANCE
WITH THE APPROVED MCDONALD'S SPECIFICATION.
TFG'S SERVICES ARE MORE FULLY DESCRIBED IN THE FOLLOWING SCOPE OF SERVICES.
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<PAGE>
EXHIBIT B
TO
DESIGN, PROCUREMENT AND CONSTRUCTION MANAGEMENT
SERVICES AGREEMENT AMONG EARTHSHELL, SWEETHEART, CH2M AND IDC
TARGET CONTRACT SCHEDULE
THIS EXHIBIT CONSISTS OF TWO PARTS:
B-1 DEFINITIONS OF PROJECT MILESTONES INCORPORATED INTO THE AGREEMENT
B-2 PROJECT SCHEDULE
THIS SCHEDULE ALSO IDENTIFIES THE ORDER DATES, DELIVERY AND ASSEMBLY DATES FOR
THE PROCESS EQUIPMENT PURCHASED BY EARTHSHELL. ANY DELAYS IN MEETING SUCH
DATES WILL IMPACT OVERALL PROJECT SCHEDULE.
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<PAGE>
EXHIBIT C
TO
DESIGN, PROCUREMENT AND CONSTRUCTION MANAGEMENT
SERVICES AGREEMENT AMONG EARTHSHELL, SWEETHEART, CH2M AND IDC
COMPENSATION
DESIGN AND CONSTRUCTION MANAGEMENT FEES
A) TFG Engineering Per Rate Table in
Proposal
B) TFG Construction Management Per Rate Table in
Proposal
C) TFG Subconsultants Cost plus 4%
D) TFG Direct Expenses Per Rate Table in
Proposal
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TOTAL EPCM SERVICES: Sum of A+B+C+D
COST OF CONSTRUCTION WORK
F) CM Field Costs (trailers; permits & licenses; Actual Cost
equipment leases; builder's risk premiums; temporary
utilities; state and local taxes related to construction
equipment; storage and delivery costs, CM travel and per
diem; etc.)
G) Subcontractor Costs Actual Cost
H) Equipment Purchases (excluding production equipment) Actual Cost
I) Subtotal Sum of G+H
J) TFG Contractor Fee 5% of I
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TOTAL CONSTRUCTION COST (COST PLUS FEE): SUM OF I+J
Note: The Fee Rate Tables and Reimbursable Expense Tables referred to above are
the Preferred Rates which TFG agreed to use to provide services to EARTHSHELL in
a previous Memorandum of Understanding agreement between the two parties.
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