Engineering, Procurement & Construction Agreement

EXHIBIT 10.58


ENGINEERING, PROCUREMENT, AND CONSTRUCTION AGREEMENT


This ENGINEERING, PROCUREMENT, AND CONSTRUCTION AGREEMENT ("Agreement") is dated on or as of the 26th day of November, 2002 by and between the following parties:


THE OWNER: Embrex, Inc.
1040 Swabia Court
P.O. Box 13989
Research Triangle Park, North Carolina
27709-3989


THE CONTRACTOR: Lockwood Greene E & C, L.L.C.
5520 Dillard Road
Suite 260
Cary, North Carolina 27511


FOR THE FOLLOWING PROJECT: Approximately 25,000 square foot facility
for production of poultry vaccine in
Laurinburg, North Carolina


TABLE OF CONTENTS TABLE OF CONTENTS.............................................................................................2 - 6


ARTICLE 1: DEFINITION........................................................................................ 7
1.1 OWNER AND CONTRACTOR........................................................................ 7
1.2 PROJECT..................................................................................... 7
1.3 WORK........................................................................................ 7
1.4 SUBCONTRACTOR............................................................................... 7
1.5 SUB-SUBCONTRACTOR........................................................................... 7
1.6 DAY......................................................................................... 7
1.7 SITE........................................................................................ 7
1.8 CONTRACT TIMES.............................................................................. 7
1.9 MILESTONE................................................................................... 7
1.10 SUBSTANTIAL COMPLETION...................................................................... 7
1.11 CONSTRUCTION................................................................................ 8
1.12 DESIGN SERVICES............................................................................. 8
1.13 CHANGE ORDER................................................................................ 8
1.14 START-UP AND COMMISSIONING.................................................................. 8 ARTICLE 2: THE CONTRACT DOCUMENTS............................................................................ 8
2.1 CONTRACT DOCUMENTS.......................................................................... 8
2.1.1 AGREEMENT.......................................................................... 8
2.1.2 DOCUMENTS RELATING TO THE CONTRACTOR'S SCOPE OF WORK............................... 8
2.1.3 DRAWINGS AND SPECIFICATIONS........................................................ 8
2.1.4 MODIFICATIONS...................................................................... 9
2.2 INTENT OF CONTRACT DOCUMENTS................................................................ 9
2.3 CONTRACT DOCUMENTS ARE COMPLEMENTARY........................................................ 9
2.4 PRECEDENCE OF CONTRACT DOCUMENTS............................................................ 9
2.5 MODIFICATION OF CONTRACT DOCUMENTS.......................................................... 9 ARTICLE 3: CONTRACTOR'S RESPONSIBILITIES..................................................................... 9
3.1 GENERAL SERVICES OF CONTRACTOR.............................................................. 9
3.1.1 CONTRACTOR SHALL COMPLETE THE WORK................................................. 9
3.1.2 PERSONNEL AND MATERIALS............................................................ 10
3.1.3 SUBCONTRACTS....................................................................... 10
3.1.4 CONTRACTOR'S REPRESENTATIVE........................................................ 11
3.1.5 COMPLIANCE......................................................................... 11
3.1.6 PERMITS............................................................................ 11
3.1.7 LAWS AND REGULATIONS............................................................... 11
3.1.8 TAXES.............................................................................. 11
3.1.9 SAFETY............................................................................. 11
3.1.10 MAINTENANCE OF BOOKS AND RECORDS................................................... 12
3.2 RESPONSIBILITIES WITH RESPECT TO DESIGN..................................................... 12
3.2.1 DRAWINGS AND SPECIFICATIONS........................................................ 12
3.2.2 STANDARD OF CARE................................................................... 12
3.2.3 NO WARRANTY FOR PERFORMANCE BY OTHERS.............................................. 12
3.2.4 BREACH OF DUTY OF CARE............................................................. 12
3.3 RESPONSIBILITIES WITH RESPECT TO CONSTRUCTION............................................... 12
3.3.1 CONTRACTOR'S RESPONSIBILITIES...................................................... 12
3.3.2 MAINTENANCE OF THE SITE............................................................ 12
3.3.3 CONSTRUCTION WARRANTY.............................................................. 13
3.3.4 CERTIFICATES....................................................................... 13
3.3.5 DELIVERY OF WARRANTIES............................................................. 13
3.3.6 INITIAL START-UP................................................................... 13
3.4 RESPONSIBILITY WITH RESPECT TO MANUFACTURING EQUIPMENT...................................... 13


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3.4.1 PROCUREMENT........................................................................ 13
3.4.2 ORDERING OF MANUFACTURING EQUIPMENT................................................ 13
3.4.3 CERTIFICATES....................................................................... 14
3.4.4 DELIVERY OF WARRANTIES............................................................. 14
3.4.5 MANUFACTURING EQUIPMENT WARRANTY................................................... 14 ARTICLE 4. OWNER'S RESPONSIBILITIES.......................................................................... 14
4.1 PROJECT INFORMATION......................................................................... 14
4.1.1 ENVIRONMENTAL ASSESSMENT........................................................... 14
4.1.2 SURVEYS............................................................................ 14
4.1.3 DESCRIPTIONS....................................................................... 14
4.1.4 LAND USE RESTRICTIONS.............................................................. 14
4.1.5 SUBSURFACE INVESTIGATIONS.......................................................... 14
4.1.6 ENGINEERING SURVEYS................................................................ 14
4.1.7 ASSISTANCE WITH APPROVALS.......................................................... 14
4.1.8 INFORMATION CONCERNING HAZARDS..................................................... 14
4.1.9 AVAILABILITY OF LANDS.............................................................. 15
4.2 OWNER REVIEW................................................................................ 15
4.3 PROFESSIONAL SERVICES....................................................................... 15
4.4 OWNER'S REPRESENTATIVE...................................................................... 15
4.5 SUFFICIENCY OF FUNDS........................................................................ 15
4.6 PAYMENTS TO CONTRACTOR...................................................................... 15
4.7 NOTICE OF FAULTS OR DEFECTS................................................................. 15
4.8 OWNER-FURNISHED EQUIPMENT AND MATERIALS..................................................... 15
4.9 PROMPTNESS; RELIANCE........................................................................ 15
4.10 CAPABILITY TO PRODUCE FINISHED PRODUCT...................................................... 15
4.11 REVIEW OF DRAWINGS AND SPECIFICATIONS....................................................... 16
4.12 NON-WAIVER.................................................................................. 16 ARTICLE 5. SUBCONTRACTS...................................................................................... 16
5.1 SUBCONTRACTED WORK.......................................................................... 16
5.2 RESPONSIBILITY FOR SUBCONTRACTORS........................................................... 16 ARTICLE 6. TIMING OF WORK.................................................................................... 16
6.1 CONTRACT TIME SCHEDULE...................................................................... 16
6.2 DATE OF SUBSTANTIAL COMPLETION.............................................................. 17
6.3 DELAYS...................................................................................... 17
6.4 EARLY OCCUPANCY............................................................................. 17
6.5 ACCEPTANCE OF WORK.......................................................................... 17
6.6 INSTALLED EQUIPMENT......................................................................... 18
6.6.1 EQUIPMENT PRIOR TO START-UP........................................................ 18
6.6.2 JOINT INSPECTION................................................................... 18
6.6.3 RESPONSIBILITY FOR EQUIPMENT....................................................... 18 ARTICLE 7. CONTRACT PRICE.................................................................................... 18
7.1 LUMP SUM PRICE.............................................................................. 18
7.2 ALLOWANCES.................................................................................. 18
7.3 [RESERVED].................................................................................. 18
7.4 COST OF THE WORK............................................................................ 18 ARTICLE 8. CHANGES IN THE WORK............................................................................... 18
8.1 OWNER MAY REQUEST CHANGES................................................................... 18
8.2 REQUEST FOR ADDITIONAL COST OR TIME......................................................... 18
8.3 CHANGE ORDER................................................................................ 19
8.4 CHANGES TO THE CONTRACT PRICE............................................................... 19
8.4.1 LUMP SUM........................................................................... 19
8.4.2 UNIT PRICES........................................................................ 19
8.4.3 COST PLUS A FEE.................................................................... 19
8.4.4 COST OF THE WORK................................................................... 19
8.4.5 FEE................................................................................ 21


Page 3 of 41


8.4.6 DOCUMENTATION...................................................................... 21
8.4.7 UNKNOWN OR CONCEALED CONDITIONS.................................................... 21
8.5 NOTICE OF INTENT TO MAKE CLAIM.............................................................. 22
8.5.1 CLAIM.............................................................................. 22
8.5.2 CLAIM DOCUMENTATION................................................................ 22
8.5.3 DECISION........................................................................... 22
8.5.4 TIME LIMIT EXTENSION............................................................... 22
8.6 EMERGENCIES................................................................................. 22 ARTICLE 9: UNCOVERING AND CORRECTION OF WORK................................................................. 22
9.1 ACCESS TO CONSTRUCTION...................................................................... 22
9.2 UNCOVERING OF WORK.......................................................................... 22
9.3 CORRECTION OF WORK.......................................................................... 23
9.3.1 WORK REJECTED BY OWNER............................................................. 23
9.3.2 AFTER FINAL COMPLETION............................................................. 23
9.3.3 REMOVAL OF WORK.................................................................... 23
9.3.4 FAILURE TO CORRECT NON-CONFORMING WORK............................................. 23
9.4 ACCEPTANCE OF NONCONFORMING WORK............................................................ 23 ARTICLE 10. PAYMENTS TO CONTRACTOR............................................................................ 23
10.1 APPLICATION FOR PAYMENT..................................................................... 23
10.2 PAYMENT PROCEDURE........................................................................... 24
10.2.1 SUBMITTAL BY CONTRACTOR............................................................ 24
10.2.2 PAYMENT BY OWNER................................................................... 25
10.2.3 FAILURE TO MAKE PAYMENT............................................................ 25
10.2.4 INTEREST........................................................................... 25
10.3 TITLE TO WORK............................................................................... 25
10.4 NOT ACCEPTANCE OF WORK...................................................................... 25
10.5 FINAL PAYMENT............................................................................... 25
10.6 EVIDENCE OF PAYMENT......................................................................... 26
10.7 WAIVER UPON MAKING FINAL PAYMENT............................................................ 26
10.7.1 LIENS.............................................................................. 26
10.7.2 IMPROPER WORKMANSHIP............................................................... 26
10.7.3 LATENT FAILURE TO COMPLY........................................................... 26
10.7.4 SPECIAL GUARANTEES................................................................. 26
10.8 WAIVER UPON ACCEPTING FINAL PAYMENT......................................................... 26 ARTICLE 11: INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION.................................................... 26
11.1 INDEMNITY................................................................................... 26
11.1.1 INDEMNITY BY PARTIES............................................................... 26
11.1.2 INDEMNITY BY OTHERS................................................................ 27
11.1.3 APPLICATION OF INDEMNITIES......................................................... 27
11.2 CONTRACTOR'S LIABILITY INSURANCE............................................................ 27
11.2.1 WORKMEN'S COMPENSATION............................................................. 27
11.2.2 CLAIMS FOR EMPLOYEE INJURY......................................................... 27
11.2.3 CLAIMS FOR INJURY TO OTHERS........................................................ 27
11.2.4 OTHER CLAIMS....................................................................... 27
11.2.5 DAMAGE TO PROPERTY................................................................. 27
11.2.6 OPERATION OF MOTOR VEHICLE......................................................... 28
11.2.7 CONTRACTUAL LIABILITY.............................................................. 28
11.2.8 PROFESSIONAL LIABILITY............................................................. 28
11.3 INSURANCE LIMITS............................................................................ 28
11.4 CANCELLATION OF INSURANCE................................................................... 28
11.5 OWNER'S LIABILITY INSURANCE................................................................. 28
11.6 INSURANCE TO PROTECT THE PROJECT............................................................ 28
11.6.1 PROPERTY INSURANCE................................................................. 28
11.6.2 OFF-SITE MATERIALS OR EQUIPMENT.................................................... 28
11.6.3 OTHER PROPERTY INSURANCE........................................................... 28


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11.6.4 INSURANCE UPON OCCUPANCY........................................................... 29
11.6.5 BOILER AND MACHINERY INSURANCE..................................................... 29
11.6.6 LOSS OF USE OF PROPERTY............................................................ 29
11.6.7 ADDITIONAL INSUREDS................................................................ 29
11.7 OWNER'S POLICIES - CERTIFICATE OF INSURANCE................................................. 29
11.8 PROPERTY INSURANCE LOSS ADJUSTMENT.......................................................... 30
11.8.1 PAYMENT OF AN INSURED LOSS......................................................... 30
11.8.2 DISTRIBUTION OF MONIES............................................................. 30
11.9 WAIVER OF RIGHTS............................................................................ 30
11.9.1 WAIVER FOR PERILS COVERED BY INSURANCE............................................. 30
11.9.2 WAIVER FOR DAMAGE TO EQUIPMENT..................................................... 30
11.9.3 WAIVER OF SUBROGATION BY CONTRACTOR'S INSURERS..................................... 30
11.9.4 WAIVER OF SUBROGATION BY OWNER'S INSURERS.......................................... 30
11.9.5 EFFECT OF ENDORSEMENTS............................................................. 30
11.10 HAZARDOUS MATERIALS......................................................................... 31
11.10.1 PRESENCE OF HAZARDOUS MATERIALS.................................................... 31
11.10.2 HAZARDOUS/TOXIC/RADIOLOGIC WASTE INDEMNIFICATION................................... 31
11.10.3 HAZARDOUS MATERIALS DEFINITION..................................................... 32 ARTICLE 12: SUSPENSION OR TERMINATION OF THE AGREEMENT........................................................ 32
12.1 TERMINATION BY CONTRACTOR................................................................... 32
12.2 OWNER'S RIGHT TO PERFORM CONTRACTOR'S OBLIGATIONS AND TERMINATION BY OWNER FOR CAUSE........ 32
12.2.1 CONTRACTOR'S FAILURE TO PERFORM.................................................... 32
12.2.2 INSOLVENCY OF CONTRACTOR........................................................... 32
12.3 TERMINATION BY OWNER FOR CONVENIENCE........................................................ 33
12.3.1 COMPLETED AND ACCEPTED WORK........................................................ 33
12.3.2 EXPENSES........................................................................... 33
12.3.3 SETTLEMENTS........................................................................ 33
12.3.4 EXPENSES........................................................................... 33
12.4 SUSPENSION OF THE WORK...................................................................... 33 ARTICLE 13: DISPUTE RESOLUTION................................................................................ 33
13.1 DISPUTE RESOLUTION.......................................................................... 33
13.1.1 DIRECT NEGOTIATION................................................................. 33
13.1.2 MEDIATION.......................................................................... 34
13.1.3 JUDICIAL REMEDIES.................................................................. 34 ARTICLE 14: ASSIGNMENT AND GOVERNING LAW...................................................................... 34
14.1 ASSIGNMENT OF AGREEMENT..................................................................... 34
14.2 CHOICE OF LAW AND FORUM..................................................................... 34 ARTICLE 15: MISCELLANEOUS PROVISIONS.......................................................................... 34
15.1 EXTENT OF AGREEMENT......................................................................... 34
15.2 INFORMATION AND DOCUMENTS................................................................... 34
15.2.1 PROPRIETARY INFORMATION............................................................ 34
15.2.2 OWNERSHIP OF DOCUMENTS............................................................. 34
15.2.3 DOCUMENTS UPON TERMINATION......................................................... 35
15.2.4 PATENT RIGHTS...................................................................... 35
15.3 ELECTRONIC MEDIA............................................................................ 35
15.3.1 FORMAT............................................................................. 35
15.3.2 ACKNOWLEDGEMENT.................................................................... 35
15.3.3 RESPONSIBILITY FOR ACCURACY........................................................ 35
15.3.4 OWNER SPECIFICATION................................................................ 35
15.3.5 COMPUTER VIRUSES................................................................... 36
15.4 ENVIRONMENTAL MATTERS....................................................................... 36
15.4.1 ENVIRONMENTAL SERVICES............................................................. 36
15.4.2 ASBESTOS OR PCB.................................................................... 36


Page 5 of 41


15.4.3 WORK WITH HAZARDOUS, TOXIC, AND RADIOLOGIC WASTE AND SUBSTANCES.................... 36
15.4.4 CESSATION OF WORK.................................................................. 36
15.4.5 SITE RESPONSIBILITY................................................................ 37
15.4.6 UNKNOWN CONDITIONS................................................................. 37
15.4.7 SUBSURFACE CONSTRUCTION ACTIVITIES................................................. 37
15.4.8 HEALTH & SAFETY PRECAUTIONS........................................................ 37
15.4.9 LABORATORY VERIFICATION............................................................ 38
15.5 EXCLUSION OF WARRANTIES AND DAMAGES......................................................... 38
15.6 WAIVER...................................................................................... 38
15.7 EFFECT OF AGREEMENT......................................................................... 38
15.8 NOTICES..................................................................................... 38
15.9 ADDITIONAL CONTRACTOR'S REPRESENTATIONS AND WARRANTIES...................................... 39


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In consideration of the mutual covenants and agreements contained herein, Embrex, Inc. (hereinafter "OWNER") and Lockwood Greene E & C, L.L.C. (hereinafter "CONTRACTOR") agree as follows:


ARTICLE 1: DEFINITION


1.1 OWNER AND CONTRACTOR.


Contractor is an independent contractor and is not an agent of Owner. This Agreement shall not be construed as establishing an employment agreement, a partnership, a general agency, or a joint venture, and neither party shall have any authority to incur or commit for expenditures on behalf of the other party or to obligate that party except as expressly authorized by that party in writing.


1.2 PROJECT.


The term "Project" is (a) the total design, engineering, and construction of which the Work performed under the Contract Documents (as hereinafter defined) may be a whole or a part ...