CHANGEORDER NUMBER 123108MV TO ENGINEERING, PROCUREMENT AND CONSTRUCTIONSERVICES FIXEDPRICE CONTRACT LOCATION:MT. VERNON, INDIANA

 

1.

Capitalized terms not defined herein shall have the meaning set forth in the Contract.

 

2.

Pursuant to Section 9.5 of the Contract, Owner directed Kiewit to suspend the Work on the Plant as of the Effective Date (the “Date of Suspension”).

 

3.

Pursuant to the terms of the Contract, Owner owes Kiewit $7,934,615 (subject to the Dispute Resolution procedures referenced below), which amount includes $6,685,431 not previously invoiced for the agreed progress of the Work completed as of November 14, 2008, $241,159 for sales and use taxes, and $1,008,025 for the agreed progress of the Work completed as of December 31, 2008.  Such amount is due and owing to Kiewit as of December 31, 2008, and may be subject to adjustment which may be mutually agreed upon by Kiewit and Owner or determined pursuant to the Dispute Resolution procedures set forth in Article 18 of the Contract.  Such amount shall be paid by Owner to Kiewit in accordance with the payment schedule set forth in Section 12 below.  Nothing contained in the Change Order shall be deemed to constitute the creation of indebtedness of Owner under any of its loan documents and the amount owing hereunder arose in the ordinary course of business of Owner.

 

4.

In addition to the amounts Owner owes Kiewit in Section 3, the parties agree that Owner shall pay Kiewit the following:  (i) Kiewit’s costs, with no profit or mark-up to be paid by Owner, associated with the directed suspension of the work in the lump sum amount of $2,936,600, and (ii) $2,000,000 as an allowance for the amounts invoiced by Kiewit’s subcontractors and material subcontractors (collectively the “Subcontractors”) for such Subcontractors’ suspension costs, plus a mark-up of twenty percent (20%) of such invoiced costs (“Subcontractors’ Suspension Costs”), which amounts, to the extent not disputed by Owner, shall be paid by Owner to Kiewit in accordance with the payment schedule set forth in Section 12 below.  Such amount includes payment for the Suspension Services defined below.  Kiewit will work with Owner, and shall allow Owner to work with Kiewit’s Subcontractors (to the extent allowed under the terms of such subcontracts), in an effort to reduce the Subcontractors’ Suspension Costs.  Disputes regarding the validity or amount of the Subcontractors’ Suspension Costs

 

5.

If the total Subcontractors’ Suspension Costs exceed the allowance provided for in Section 4 above, the additional amount of Subcontractors’ Suspension Costs in excess of the allowance shall be added to the amount owed by Owner to Kiewit pursuant to this Change Order and shall be paid as an additional payment on June 30, 2009 in accordance with the provisions of Section 12 below.  If the total Subcontractors’ Suspension Costs do not exceed the allowance provided for in Section 4 above, Kiewit will credit the difference between the allowance and the actual Subcontractors’ Suspension Costs to the last amounts payable to Kiewit in accordance with Section 12 of this Change Order.

 

6.

Owner and Kiewit agree that the Work may be suspended for up to 180 days from the Date of Suspension (the “Suspension Period”).  If Owner is not in default of the payment obligations specified in this Change Order, Owner may terminate the Suspension Period and direct Kiewit to resume construction of the Work following the delivery to Kiewit of (i) 10 days advance written notice to resume the Work and (ii) reasonable evidence reasonably satisfactory to Kiewit that Owner can satisfy the remaining financial obligations of this Change Order and the Contract and (iii) payment in full of all remaining amounts payable under this Change Order (without consideration of the schedule in Section 12 below); provided, however, that nothing in this Change Order shall be construed to limit or restrict Kiewit’s entitlement to an equitable adjustment to the Contract Sum arising from the suspension (including costs associated with re-mobilization and rescheduling of the Work) and the Schedule in connection with such suspension in accordance with Article 6 of the Contract.

 

7.

If the Suspension Period expires without the Owner’s termination of the Suspension Period in accordance with the terms of the Contract and this Change Order, the Contract shall be deemed to have been terminated for the Owner’s convenience under Section 9.4 of the Contract, and Owner shall pay Kiewit any amounts due Kiewit under Section 9.4 of the Contract and all remaining payments due under this Change Order (without consideration of the schedule in Section 12 below);  provided there shall be no duplication of payments under Section 9.4 of the Contract and this Change Order.  Notwithstanding the provision contained in the first sentence of Section 9.4, Owner may enter into a contract with another entity to complete construction of the Plant, if Owner has made all payments due Kiewit under Section 9.4 of the Contract and all remaining payments due under this Change Order; provided there shall be no duplication of payments under Section 9.4 of the Contract and this Change Order.

 

8.

During the Suspension Period, all Contract milestone dates and Schedule deadlines are tolled and, in the event of re-mobilization, shall be reestablished by change order pursuant to Article 6 of the Contract; provided, however, that in the event of such remobilization, Kiewit shall be excused from the notice requirements contained in Sections 6.2 and 6.3 of the Contract.  The amounts set out in Sections 3, 4 and 5 above and the rental payments or demobilization costs for the Cranes as set forth in Section 15 below shall be the only amounts due to Kiewit for costs associated with the Suspension Period; provided that nothing in this sentence shall preclude Kiewit from entitlement to a change order as set forth in Section 6 above in the event the Suspension Period is terminated.

 

9.

For so long as Owner complies with the payment provisions of this Change Order, Kiewit will

 

a.

Three Million Five Hundred Thousand Dollars ($3,500,000) on or before December 31, 2008;

 

b.

One Million Eighty Thousand Dollars ($1,080,000) on or before January 31, 2009;

 

c.

One Million Eight Hundred Thousand Dollars ($1,800,000) on or before February 27, 2009;

 

d.

One Million Eight Hundred Thousand Dollars ($1,800,000) on or before March 31, 2009;

 

e.

One Million Eight Hundred Thousand Dollars ($1,800,000) on or before April 30, 2009;

 

f.

One Million Eight Hundred Thousand Dollars ($1,800,000) on or before May 29, 2009; and

 

g.

Remaining balance on June 30, 2009.

 

 

Such payments shall be first credited against the amounts due and owing for Kiewit’s suspension costs and the Subcontractors’ Suspension Costs, and thereafter to amounts due to Subcontractors under the terms of such subcontract, and thereafter to the amounts described in Sections 3 and 5 of this Change Order.  In addition to the provisions of Section 9.3 of the Contract, in the event Owner fails to make a payment described in this Section 12 when due, Kiewit may terminate the Contract three (3) business days after providing written notice of such failure to Owner, unless cured within that period.  Such termination shall be considered a termination for Owner’s convenience under Section 9.4 of the Contract, Kiewit shall have no obligation to exercise forbearance under this Change Order, and all remaining amounts due under Section 9.4 of the Contract and under this Change Order shall be immediately due and payable to Kiewit (without consideration of the schedule in Section 12 below);  provided there shall be no duplication of payments under Section 9.4 of the Contract and this Change Order.  Notwithstanding the provision contained in the first sentence of Section 9.4, Owner may enter into a contract with another entity to complete construction of the Plant, if Owner has made all payments due Kiewit under Section 9.4 of the Contract and all remaining payments due under this Change Order (without consideration of the schedule in Section 12 below); provided there shall be no duplication of payments under Section 9.4 of the Contract and this Change Order.  Time is of the essence of this Change Order.

13.

Nothing in this Change Order shall preclude Kiewit from filing a mechanic’s and materialman’s lien against the Plant Site for the amounts unpaid, whether or not due under the Contract as modified by this Change Order. In the event any payment under the Contract or this Change Order is determined to be a preferential transfer and is required to be disgorged by Kiewit, the parties agree that any waiver of mechanic’s lien rights provided by Kiewit shall be rescinded, invalid, and of no further force and effect.

14.

(a)           In the event Owner terminates the Suspension Period as provided above, Owner and Kiewit will negotiate a change order pursuant to Article 6 of the Contract; provided, however, that Kiewit shall have no obligation to so remobilize or recommence the Work unless and until Owner has paid in full all amounts due to Kiewit under this Change Order (without consideration of the schedule in Section 12 below).  In such event, Kiewit will provide to Owner both a cost plus and a fixed price option at a negotiated profit margin for the remaining work to be performed in sufficient detail to allow a meaningful analysis of the options.

15.

Owner will retain the Tower Crane and Crawler Crane (the “Cranes”) on site and pay rental at a total amount of $260,000 for the 180 day Suspension Period (for both Cranes, which total amount is included in the calculation of Kiewit’s suspension costs in Section 4 of this Change Order.  After the initial 26 weeks the rental for the Cranes shall be as negotiated between Owner and Kiewit.  Owner will have the option, upon written notice to Kiewit, to pay an agreed demobilization fee in lieu of continuing to pay rent of $5,000 per Crane per week for said Cranes, in which event the amount of rent paid by Owner through the date of demobilization shall be credited against the demobilization fee.  However, in the event of demobilization of the Cranes, Owner will continue to pay the rental costs set out in this Section 15 for a period not to exceed six (6) weeks, or until Kiewit has otherwise rented the Cranes, if earlier.

16.

Notwithstanding its obligation to provide and maintain Builder’s Risk insurance under Section 14.3(c) of the Contract, in the even the Builder’s Risk insurance policy in effect for the Plant Site is canceled by Owner, and Owner includes the Plant Site and Work situated thereupon in its permanent property insurance program, Owner shall be deemed to be in compliance with its obligations under Section 14.3(c) of the Contract during the Suspension Period, provided that (i) Kiewit and its Subcontractors are named as additional insured under Owner’s permanent property insurance program with waiver of subrogation in their favor, and (ii) such permanent property insurance program is reasonably acceptable to Kiewit and (iii) such permanent property insurance is maintained during the Suspension Period.  Prior to and as an additional condition to any Kiewit remobilization to the Plant Site and recommencement of Work at the Plant Site following the Suspension Period, Owner shall provide and maintain the Builder’s Risk policy as required by Section 14.3(c).

17.

In the event Owner cancels the existing Builder’s Risk insurance policy in effect for the Plant Site and otwithstanding any contrary provision in the Contract, care, on the effective date of such cancelation of Builder’s Risk policy, the care, custody and control of, and risk of loss to the Work located at the Plant Site, or any part thereof, including the Equipment shall be with Owner as of and during the Suspension Period, and Owner shall be responsible for and shall pay any and all related insurance deductibles with respect to same.  Notwithstanding the foregoing sentence, Kiewit will be held responsible for any damage (i) to such Work, whether completed or ongoing, occurring during the provision of the Suspension Services or (ii) to the Owner’s existing structures, materials, or equipment adjacent to or on the Plant Site, in the case of (i) and (ii) to the extent arising from any gross negligence or willful misconduct of Kiewit,

18.

Effective December 31, 2008, Owner will assume all responsibility and cost associated with the requirements of the Mt. Vernon Stormwater Pollution and Prevention Plan (SWPPP).  All available inspection and corrective action reports developed by Kiewit dated November 2007 through December 2008 shall be provided to Owner per the requirements of the SWPPP.  Upon the effective date of the notice to proceed with remobilization of the Work, Kiewit will resume responsibility for the requirements of the SWPPP.

19.

Within ten (10) days of the Effective Date, Owner shall cause its parent guarantor, Aventine Renewable Energy Holdings, Inc., to provide a written consent to this Change Order, and Kiewit shall cause its parent guarantor, Kiewit Energy Group Inc. (formerly known as Kiewit Energy Ltd.) to provide a written consent to this Change Order.

20.

This Change Order may be executed by Kiewit and Owner in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute one and the same instrument.  Execution can be evidenced by fax signatures with original signature pages to follow in due course.