Exhibit 10

LUMP SUM DESIGN-BUILD AGREEMENT

BETWEEN

ABE NORTHFIELD, LLC (“OWNER”)

AND

FAGEN, INC. (“DESIGN-BUILDER”)

February 7, 2007

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* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

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TABLE OF CONTENTS

 

Page

Article 1 Definitions; Rules of Interpretation

 

1

 

 

 

1.1

Rules of Construction

 

1

1.2

Defined Terms

 

2

 

 

 

 

Article 2 The Project

 

6

 

 

 

2.1

Services to be Performed

 

6

2.2

Extent of Agreement

 

6

2.3

Conflicting Provisions

 

7

 

 

 

 

Article 3 Design-Builder Responsibilities

 

7

 

 

 

3.1

Design-Builder’s Services in General

 

7

3.2

Design Development and Services

 

8

3.3

Standard of Care

 

9

3.4

Government Approvals and Permits

 

9

3.5

Subcontractors

 

9

3.6

Maintenance of Site

 

10

3.7

Project Safety

 

10

3.8

Submission of Reports

 

11

3.9

Training

 

11

 

 

 

 

Article 4 Owner’s Responsibilities

 

11

 

 

 

4.1

Duty to Cooperate

 

11

4.2

Furnishing of Services and Information

 

11

4.3

Financial Information; Cooperation with Lenders; Failure to Obtain Financial
Closing

 

12

4.4

Owner’s Representative

 

13

4.5

Government Approvals and Permits

 

13

4.6

Owner’s Separate Contractors

 

13

4.7

Security

 

13

 

 

 

 

Article 5 Ownership of Work Product; Risk of Loss

 

13

 

 

 

5.1

Work Product

 

13

5.2

Owner’s Limited License Upon Payment in Full

 

14

5.3

Owner’s Limited License Upon Owner’s Termination for Convenience or
Design-Builder’s Election to Terminate

 

14

5.4

Owner’s Limited License Upon Design-Builder’s Default

 

15

5.5

Owner’s Indemnification for Use of Work Product

 

15

5.6

Risk of Loss

 

15

 

 

 

 

Article 6 Commencement and Completion of the Project

 

15

 

 

 

6.1

Phase I and Phase II Engineering

 

15

 

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Page

6.2

Notice to Proceed; Commencement

 

16

6.3

Project Start-Up and Testing

 

16

6.4

Substantial Completion

 

17

6.5

Final Completion

 

18

6.6

Post Completion Support

 

19

 

 

 

 

Article 7 Performance Testing and Liquidated Damages

 

20

 

 

 

7.1

Performance Guarantee

 

20

7.2

Performance Testing

 

20

7.3

Liquidated Damages

 

21

7.4

Bonds and Other Performance Security

 

22

 

 

 

 

Article 8 Warranties

 

23

 

 

 

8.1

Design-Builder Warranty

 

23

8.2

Correction of Defective Work

 

23

8.3

Warranty Period Not Limitation to Owner’s Rights

 

24

 

 

 

 

Article 9 Contract Price

 

24

 

 

 

9.1

Contract Price

 

24

9.2

Effect of Construction Cost Index Increase on Contract Price

 

25

 

 

 

 

Article 10 Payment Procedures

 

25

 

 

 

10.1

Payment at Financial Closing Prior to Notice to Proceed

 

25

10.2

Progress Payments

 

26

10.3

Final Payment

 

27

10.4

Failure to Pay Amounts Due

 

27

10.5

Design-Builder’s Payment Obligations

 

27

10.6

Record Keeping and Finance Controls

 

28

 

 

 

 

Article 11 Hazardous Conditions and Differing Site Conditions

 

28

 

 

 

11.1

Hazardous Conditions

 

28

11.2

Differing Site Conditions; Inspection

 

29

 

 

 

 

Article 12 Force Majeure; Change in Legal Requirements

 

29

 

 

 

12.1

Force Majeure Event

 

29

12.2

Effect of Force Majeure Event

 

30

12.3

Change in Legal Requirements

 

31

12.4

Time Impact And Availability

 

31

12.5

Effect of Industry-Wide Disruption on Contract Price

 

31

 

 

 

 

Article 13 Changes to the Contract Price and Scheduled Completion Dates

 

32

 

 

 

13.1

Change Orders

 

32

13.2

Contract Price Adjustments

 

32

13.3

Emergencies

 

33

13.4

Failure to Complete Owner’s Milestones

 

33

 

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Page

Article 14 Indemnity

 

33

 

 

 

14.1

Tax Claim Indemnification

 

33

14.2

Payment Claim Indemnification

 

33

14.3

Design-Builder’s General Indemnification

 

34

14.4

Owner’s General Indemnification

 

35

14.5

Patent and Copyright Infringement

 

35

 

 

 

 

Article 15 Stop Work; Termination for Cause

 

36

 

 

 

15.1

Owner’s Right to Stop Work

 

36

15.2

Owner’s Right to Perform and Terminate for Cause

 

36

15.3

Owner’s Right to Terminate for Convenience

 

37

15.4

Design-Builder’s Right to Stop Work

 

38

15.5

Design-Builder’s Right to Terminate for Cause

 

38

15.6

Bankruptcy of Owner or Design-Builder

 

39

15.7

Lenders’ Right to Cure

 

40

 

 

 

 

Article 16 Representatives of the Parties

 

40

 

 

 

16.1

Designation of Owner’s Representatives

 

40

16.2

Designation of Design-Builder’s Representatives

 

40

 

 

 

 

Article 17 Insurance

 

41

 

 

 

17.1

Insurance

 

41

17.2

Design-Builder’s Insurance Requirements

 

42

17.3

Owner’s Liability Insurance

 

43

17.4

Owner’s Property Insurance

 

43

17.5

Coordination with Loan Documents

 

45

 

 

 

 

Article 18 Representations and Warranties

 

45

 

 

 

18.1

Design-Builder and Owner Representations and Warranties

 

45

18.2

Design-Builder Representations and Warranties

 

46

 

 

 

 

Article 19 Dispute Resolution

 

46

 

 

 

19.1

Dispute Avoidance and Mediation

 

46

19.2

Arbitration

 

46

19.3

Duty to Continue Performance

 

47

19.4

No Consequential Damages

 

47

19.5

Limitation of Liability

 

47

 

 

 

 

Article 20 Confidentiality of Shared Information

 

48

 

 

 

20.1

Non-Disclosure Obligation

 

48

20.2

Publicity and Advertising

 

49

20.3

Term of Obligation

 

49

 

 

 

 

Article 21 Miscellaneous

 

49

 

 

 

21.1

Assignment

 

49

21.2

Successors

 

50

21.3

Governing Law

 

50

 

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Page

21.4

Severability

 

50

21.5

No Waiver

 

50

21.6

Headings

 

50

21.7

Notice

 

50

21.8

No Privity with Design Consultant/Subcontractors

 

51

21.9

Amendments

 

51

21.10

Entire Agreement

 

52

21.11

Third-Party Beneficiaries

 

52

21.12

Counterparts

 

52

21.13

Survival

 

52

 

 

 

 

EXHIBIT A Performance Guarantee Criteria

 

A-1

 

 

 

EXHIBIT B General Project Scope

 

B-1

 

 

 

EXHIBIT C Owner’s Responsibilities

 

C-1

 

 

 

EXHIBIT D ICM License Agreement

 

D-1

 

 

 

EXHIBIT E Schedule of Values

 

E-1

 

 

 

EXHIBIT F Form of Informational Report

 

F-1

 

 

 

EXHIBIT G Required Permits

 

G-1

 

 

 

EXHIBIT H Form of Performance Bond

 

H-1

 

 

 

EXHIBIT I Form of Payment Bond

 

I-1

 

 

 

EXHIBIT J Draw (Payment) Schedule

 

J-1

 

 

 

EXHIBIT K Air Emissions Application or Permit

 

K-1

 

 

 

EXHIBIT L Phase I and Phase II Engineering Services Agreement

 

L-1

 

 

 

EXHIBIT M Form of Application for Payment

 

M-1

 

 

 

EXHIBIT N Form of Lien Waiver

 

N-1

 

 

 

EXHIBIT O Form of Consent to Assignment

 

O-1

 

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LUMP SUM DESIGN-BUILD CONTRACT

This LUMP SUM DESIGN-BUILD CONTRACT (the “Agreement”) is made as of February 7,
2007, (the “Effective Date”) by and between ABE Northfield, LLC, a Delaware
limited liability company (the “Owner”) and Fagen, Inc., a Minnesota corporation
(the “Design-Builder”) (each a “Party” and collectively, the “Parties”).

RECITALS

A.    The Owner desires to develop, construct, own and operate a one hundred
(100)  million gallons per year (“MGY”) dry grind denatured ethanol production
facility located near Northfield, Minnesota (the “Plant”); and

B.    Design-Builder desires to provide design, engineering, procurement and
construction services for the Plant.

NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein and for other good and valuable consideration, Owner and
Design-Builder agree as follows.

AGREEMENT

ARTICLE 1

DEFINITIONS; RULES OF INTERPRETATION

1.1          Rules of Construction.  The capitalized terms listed in this
Article shall have the meanings set forth herein whenever the terms appear in
this Agreement, whether in the singular or the plural or in the present or past
tense.  Other terms used in this Agreement but not listed in this Article shall
have meanings as commonly used in the English language and, where applicable, in
generally accepted construction and design-build standards of the fuel ethanol
industry in the Midwest United States.  Words not otherwise defined herein that
have well known and generally accepted technical or trade meanings are used
herein in accordance with such recognized meanings.  In addition, the following
rules of interpretation shall apply:

(a)                                  The masculine shall include the feminine
and neuter.

(b)                                 References to “Articles,” “Sections,”
“Schedules,” or “Exhibits” shall be to Articles, Sections, Schedules or Exhibits
of this Agreement.

(c)                                  This Agreement was negotiated and prepared
by each of the Parties with the advice and participation of counsel.  The
Parties have agreed to the wording of this Agreement and none of the provisions
hereof shall be construed against one Party on the ground that such Party is the
author of this Agreement or any part hereof.

 

 

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1.2          Defined Terms.  In addition to definitions appearing elsewhere in
this Agreement, the following terms have the following meanings: 

AAA is defined in Section 19.1.

Agreement is defined in the Preamble.

Air Emissions Tester means a third party entity engaged by Owner meeting all
required state and federal requirements for such testing entities, to conduct
air emissions testing of the Plant in accordance with Exhibit A.

Applicable Law means

(a)                                  any and all laws, legislation, statutes,
codes, acts, rules, regulations, ordinances, treaties or other similar legal
requirements enacted, issued or promulgated by a Governmental Authority;

(b)                                 any and all orders, judgments, writs,
decrees, injunctions, Governmental Approvals or other decisions of a
Governmental Authority; and

(c)                                  any and all legally binding announcements,
directives or published practices or interpretations, regarding any of the
foregoing in (a) or (b) of this definition, enacted, issued or promulgated by a
Governmental Authority;

to the extent, for each of the foregoing in (a), (b) and (c) of this definition,
applicable to or binding upon (i) a Party, its affiliates, its shareholders, its
members, its partners or their respective representatives, to the extent any
such person is engaged in activities related to the Project; or (ii) the
property of a Party, its affiliates, its shareholders, its members, its partners
or their respective representatives, to the extent such property is used in
connection with the Project or an activity related to the Project.

Application for Payment is defined in Section 10.2.1.

As Built Plans is defined in Section 5.2.

Bankrupt Party is defined in Section 15.6.1.

Baseline Index is defined in Section 9.2.1.

Change Order is defined in Section 13.1.1.

CCI is defined in Section 9.2.

Certificate of Substantial Completion is defined in Section 6.4.3.

Commitment Fee is defined in Section 10.1.1.

Confidential Information is defined in Section 20.1.

Construction Documents is defined in Section 3.2.1.

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Contract Documents is defined in Section 2.2.

Contract Price is defined in Section 9.1.

Contract Time(s) means scheduled dates provided for in the Contract Documents
including Scheduled Substantial Completion Date and Final Completion Date.

Damages is defined in Section 14.3.1.

Day or Days shall mean calendar days unless otherwise specifically noted in the
Contract Documents.

Design-Builder is defined in the Preamble.

Design-Builder’s Representative is defined in Section 16.2.

Design-Builder’s Senior Representative is defined in Section 16.2.

Design Consultant is a qualified, licensed design professional that is not an
employee of Design-Builder, but is retained by Design-Builder, or employed or
retained by anyone under contract with Design-Builder or Subcontractor, to
furnish design services required under the Contract Documents.

Differing Site Conditions is defined in Section 11.2.1.

Early Completion Bonus is defined in Section 6.4.4.

Effective Date is defined in the Preamble.

Fagen Engineering is defined in Section 6.1.

Final Application for Payment is defined in Section 10.3.

Final Completion is defined in Section 6.5.2.

Final Completion Date is defined in Section 6.5.1.

Final Payment is defined in Section 10.3.

Financial Closing means the execution of the Financing Documents by all the
parties thereto, and the fulfillment of all conditions precedent thereunder
necessary to permit the advance of funds to pay amounts due under this
Agreement.

Financing Documents means the final loan documents with the Lender or Lenders
providing financing for the construction or term financing of the Plant and any
and all agreements

3

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necessary to demonstrate a binding commitment of Owner or Lenders to fund the
construction of the Plant.

Force Majeure Event is defined in Section 12.1.

Governmental Approvals are any material authorizations or permissions issued or
granted by any Governmental Authority to the Project, its Owner, the
Design-Builder, Subcontractors and their affiliates in connection with any
activity related to the Project.

Governmental Authority means any federal, state, local or municipal governmental
body; any governmental, quasi-governmental, regulatory or administrative agency,
commission, body or other authority exercising or entitled to exercise any
administrative, executive, judicial, legislative, policy, regulatory or taxing
authority or power; or any court or governmental tribunal; in each case having
jurisdiction over the Owner, the Design-Builder, the Project, or the Site. 

Hazardous Conditions are any materials, wastes, substances and chemicals deemed
to be hazardous under applicable Legal Requirements, or the handling, storage,
remediation, or disposal of which are regulated by applicable Legal
Requirements.

ICM means ICM, Inc., a Kansas corporation.

ICM License Agreement means the license agreement to be executed between Owner
and ICM, Inc., substantially in the form attached hereto as Exhibit D.

Indemnified Parties is defined in Section 5.2.

Independent Engineer means Owner’s and Lenders’ independent engineer.

Industry-Wide Disruption is defined in Section 12.4.

Informational Report is defined in Section 3.8.

Legal Requirements or Laws are all applicable federal, state and local statutes,
laws, codes, ordinances, rules, regulations, judicial decisions, orders,
decrees, plans, injunctions, permits, tariffs, governmental agreements and
governmental restrictions, whether now or hereafter in effect, of any
Governmental Authority, the practices involved in the Project or Site, or any
Work, including any consensus standards for materials, products, systems, and
services established by ASTM International, any successor organization thereto,
or any Governmental Authority.

Lenders means the lenders that are party to the Financing Documents.

Lenders’ Agent means an agent or agents acting on behalf of the Lenders.

Manufacturer’s Warranty shall mean a warranty provided by the original
manufacturer or vendor of equipment used by Design-Builder in the Plant.

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MGY is defined in the Recitals.

Notice to Proceed is defined in Section 6.2.

Operating Procedures means, without limitation, the process equipment and
specifications manuals, standards of quality, service protocols, data collection
methods, construction specifications, training methods, engineering standards
and any other information prescribed by Design-Builder and ICM from time to time
concerning the ownership, operation, maintenance and repair of the Plant,
subject to the limitations provided in the Agreement and in the ICM License
Agreement.

Owner is defined in the Preamble.

Owner Indemnified Parties is defined in Section 14.3.1.

Owner’s Milestones is defined in Section 13.4.

Owner’s Operator means the entity that Owner identifies, upon written notice to
Design-Builder, as operator of the Project or any other entity that Owner
chooses, upon notice to Design-Builder, to replace such entity as operator of
the Project.

Owner’s Representative is defined in Section 16.1.

Owner’s Senior Representative is defined in Section 16.1.

Party or Parties is defined in the Preamble.

Pass Through Warranties mean any warranties provided to Design-Builder by a
Subcontractor which are assigned to Owner.

Pay Period means, with respect to a given Application for Payment, the one (1)
month period following the last day of the previous Pay Period to which the
immediately prior Application for Payment is applied; provided that the initial
Pay Period shall commence on the date of delivery of the Notice to Proceed and
end on the twenty-fourth (24th) day of the calendar month during which the
Notice to Proceed is issued.

Payment Bond is defined in Section 7.4.2.

Performance Bond is defined in Section 7.4.1.

Performance Guarantee Criteria means the criteria listed in Exhibit A.

Performance Tests is defined in Section 7.2.1.

Phase I is defined in Exhibit L.

Phase I and Phase II Engineering Services Agreement is defined in Section 6.1.

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Phase II is defined in Exhibit L.

Plant is defined in the Recitals.

Project is defined in Section 2.1.

Project Scope is defined in Exhibit B.

Punch List is defined in Section 6.4.3.

Qualified Independent Expert means an expert retained by Owner and approved by
Design-Builder pursuant to Section 11.1.2.

Safety Representative is defined in Section 3.7.1.

Schedule of Values is defined in Section 10.2.5.

Scheduled Substantial Completion Date is defined in Section 6.4.1.

Site is the land or premises on which the Project is located.

Subcontractor is any person or entity retained by Design-Builder, or by any
person or entity retained directly or indirectly by Design-Builder, in each case
as an independent contractor to perform a portion of the Work, and shall include
materialmen and suppliers.

Substantial Completion is defined in Section 6.4.2.

Work is defined in Section 3.1.

Work Product is defined in Section 5.1.

ARTICLE 2

THE PROJECT

2.1          SERVICES TO BE PERFORMED.

  Pursuant to this Agreement, Design-Builder shall perform all work and services
in connection with the engineering, design, procurement, construction startup,
testing and training for the operation and maintenance of the Plant, and provide
all material, equipment, tools and labor necessary to complete the Plant in
accordance with the terms of this Agreement.   The Plant, together with all
equipment, labor, services and materials furnished hereunder is defined as the
“Project.”

2.2          Extent of Agreement.  This Agreement consists of the following
documents, and all exhibits, schedules, appendices and attachments hereto and
thereto (collectively, the “Contract Documents”):

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2.2.1       ALL WRITTEN MODIFICATIONS, AMENDMENTS AND CHANGE ORDERS TO THIS
AGREEMENT.

2.2.2       THIS AGREEMENT, INCLUDING ALL EXHIBITS AND ATTACHMENTS, EXECUTED BY
OWNER AND DESIGN-BUILDER, INCLUDING THOSE BELOW:

List of Exhibits

 

Exhibit A

 

Performance Guarantee Criteria

Exhibit B

 

General Project Scope

Exhibit C

 

Owner’s Responsibilities

Exhibit D

 

ICM License Agreement

Exhibit E

 

Schedule of Values

Exhibit F

 

Form of Informational Report

Exhibit G

 

Required Permits

Exhibit H

 

Form of Performance Bond

Exhibit I

 

Form of Payment Bond

Exhibit J

 

Draw (Payment) Schedule

Exhibit K

 

Air Emissions Application or Permit

Exhibit L

 

Phase I and Phase II Engineering Services Agreement

Exhibit M

 

Form of Application for Payment

Exhibit N

 

Form of Lien Waiver

Exhibit O

 

Form of Consent to Assignment

 

2.2.3       CONSTRUCTION DOCUMENTS TO BE PREPARED BY DESIGN-BUILDER PURSUANT TO
SECTION 3.2.1 SHALL BE INCORPORATED IN THIS AGREEMENT.

2.3          Conflicting Provisions.  In the event of any conflict or
inconsistency between the body of this Agreement and any Exhibit or Schedule
hereto, the terms and provisions of this Agreement, as amended from time to
time, shall prevail and be given priority.  Subject to the foregoing, the
several documents and instruments forming part of this Agreement are to be taken
as mutually explanatory of one another and in the case of ambiguities or
discrepancies within or between such parts the same shall be explained and
interpreted, if possible, in a manner which gives effect to each part and which
avoids or minimizes conflicts among such parts.  No oral representations or
other agreements have been made by the Parties except as specifically stated in
the Contract Documents.

ARTICLE 3

DESIGN-BUILDER RESPONSIBILITIES

3.1          Design-Builder’s Services in General.  Except for services and
information to be provided by Owner and specifically set forth in Article 4 and
Exhibit C, Design-Builder shall perform or cause to be performed all design,
engineering, procurement, construction services, supervision, labor, inspection,
testing, start-up, material, equipment, machinery, temporary utilities and other
temporary facilities to complete construction of the Project consistent with the
Contract Documents (the “Work”).  All design and engineering and construction
services and

7

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other Work of the Design-Builder shall be performed in accordance with (i) the
Project Scope set forth in Exhibit B, (ii) the Construction Documents, (iii) all
Legal Requirements, and (iv) generally accepted construction and design-build
standards of the fuel ethanol industry in the United States during the relevant
time period.  Any design and engineering or other professional service to be
performed pursuant to this Agreement, which under Applicable Law must be
performed by licensed personnel, shall be performed by licensed personnel as
required by Law.  The enumeration of specific duties and obligations to be
performed by the Design-Builder under the Contract Documents shall not be
construed to limit in any way the general undertakings of the Design-Builder as
set forth herein.  Design-Builder’s Representative shall be reasonably available
to Owner and shall have the necessary expertise and experience required to
supervise the Work.  Design-Builder’s Representative shall communicate regularly
with Owner and shall be vested with the authority to act on behalf of
Design-Builder.

3.2          DESIGN DEVELOPMENT AND SERVICES.

3.2.1       WHERE REQUIRED BY LAW, DESIGN-BUILDER SHALL PROVIDE THROUGH
QUALIFIED, LICENSED DESIGN PROFESSIONALS EMPLOYED BY DESIGN-BUILDER, OR PROCURED
FROM QUALIFIED, INDEPENDENT LICENSED DESIGN CONSULTANTS, THE NECESSARY DESIGN
SERVICES, INCLUDING ARCHITECTURAL, ENGINEERING AND OTHER DESIGN PROFESSIONAL
SERVICES, FOR THE PREPARATION OF THE REQUIRED DRAWINGS, SPECIFICATIONS AND OTHER
DESIGN SUBMITTALS REQUIRED TO PERMIT CONSTRUCTION OF THE WORK IN ACCORDANCE WITH
THIS AGREEMENT (SUCH DRAWINGS, SPECIFICATIONS AND DESIGN SUBMITTALS
COLLECTIVELY, THE “CONSTRUCTION DOCUMENTS”). TO THE EXTENT NOT PROHIBITED BY
LEGAL REQUIREMENTS, DESIGN-BUILDER MAY PREPARE CONSTRUCTION DOCUMENTS FOR A
PORTION OF THE WORK TO PERMIT CONSTRUCTION TO PROCEED ON THAT PORTION OF THE
WORK PRIOR TO COMPLETION OF THE CONSTRUCTION DOCUMENTS FOR THE ENTIRE WORK.

3.2.2       CONSTRUCTION OF THE PLANT SHALL BE CONSISTENT WITH THE CONSTRUCTION
DOCUMENTS.

3.2.3       DESIGN-BUILDER SHALL MAINTAIN A CURRENT, COMPLETE SET OF DRAWINGS
AND SPECIFICATIONS AT THE SITE.  OWNER SHALL HAVE THE RIGHT TO REVIEW SUCH
DRAWINGS AND SPECIFICATIONS.  OWNER AND INDEPENDENT ENGINEER MAY NOT MAKE COPIES
OF THE AVAILABLE DRAWINGS AND SPECIFICATIONS WITHOUT DESIGN-BUILDER’S WRITTEN
PERMISSION, AND, GRANTED SUCH PERMISSION, MAY ONLY DO SO TO THE EXTENT SUCH
DRAWINGS AND SPECIFICATIONS DIRECTLY PERTAIN TO THE PLANT; PROVIDED HOWEVER
THAT, PURSUANT TO SECTION 5.1 OF THIS AGREEMENT, DESIGN-BUILDER RETAINS
OWNERSHIP OF AND PROPERTY INTERESTS IN ANY DRAWING OR SPECIFICATIONS MADE
AVAILABLE AND/OR COPIED.

3.2.4       EXCEPT AS PROVIDED ELSEWHERE IN THIS AGREEMENT, IT IS UNDERSTOOD AND
AGREED THAT REVIEW, COMMENT AND/OR APPROVAL BY OWNER (OR ITS DESIGNEES) OR
INDEPENDENT ENGINEER OF ANY DOCUMENTS OR SUBMITTALS THAT DESIGN-BUILDER IS
REQUIRED TO SUBMIT TO OWNER (OR ITS DESIGNEES) OR INDEPENDENT ENGINEER HEREUNDER
FOR THEIR REVIEW, COMMENT AND/OR APPROVAL (INCLUDING WITHOUT LIMITATION THE
CONSTRUCTION DOCUMENTS PURSUANT TO SECTIONS 3.2.1 AND 3.2.3 HEREOF) SHALL NOT
RELIEVE OR RELEASE DESIGN-BUILDER FROM ANY OF ITS DUTIES, OBLIGATIONS OR
LIABILITIES

8

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PROVIDED FOR UNDER THE TERMS OF THIS AGREEMENT OR TRANSFER ANY DESIGN LIABILITY
FROM DESIGN-BUILDER TO OWNER.

3.3          Standard of Care.  All services performed by the Design-Builder and
its Subcontractors pursuant to the Construction Documents shall be performed in
accordance with the  standard of care and skill generally accepted in the fuel
ethanol industry in the Midwest United States during the relevant time period or
in accordance with any of the practices, methods and acts that in the exercise
of reasonable judgment in light of the facts known at the time the decision was
made, could have been expected to accomplish the desired result at a reasonable
cost consistent with good business practices, safety and expedition.  This
standard of care is not intended to be limited to the optimum practice, method
or act to the exclusion of all others, but rather to be acceptable practices,
methods or acts generally accepted in the construction and design-build
standards of the fuel ethanol industry in the Midwest United States. 
Design-Builder and its Subcontractors shall perform all construction activities
efficiently and with the requisite expertise, skill, competence, resources and
care to satisfy the requirements of the Contract Documents and all applicable
Legal Requirements.  Design-Builder shall at all times exercise complete and
exclusive control over the means, methods, sequences and techniques of
construction.

3.4          Government Approvals and Permits.  Except as identified in Exhibit
C and, with respect to items identified as Owner’s responsibility, in Exhibit G
(which items shall be obtained by Owner pursuant to Section 4.5), Design-Builder
shall obtain and pay for all necessary permits, approvals, licenses, government
charges and inspection fees required for the prosecution of the Work by any
government or quasi-government entity having jurisdiction over the Project.
Design-Builder shall provide reasonable assistance to Owner in obtaining those
permits, approvals and licenses that are Owner’s responsibility.

3.5          SUBCONTRACTORS.

3.5.1       DESIGN-BUILDER MAY SUBCONTRACT PORTIONS OF THE WORK IN ACCORDANCE
WITH THE TERMS HEREOF.

3.5.2       DESIGN-BUILDER ASSUMES RESPONSIBILITY TO OWNER FOR THE PROPER
PERFORMANCE OF THE WORK OF SUBCONTRACTORS AND ANY ACTS AND OMISSIONS IN
CONNECTION WITH SUCH PERFORMANCE.  NOTHING IN THE CONTRACT DOCUMENTS IS INTENDED
OR DEEMED TO CREATE ANY LEGAL OR CONTRACTUAL RELATIONSHIP BETWEEN OWNER AND ANY
SUBCONTRACTOR, INCLUDING BUT NOT LIMITED TO ANY THIRD-PARTY BENEFICIARY RIGHTS.

3.5.3       DESIGN-BUILDER SHALL COORDINATE THE ACTIVITIES OF ALL OF
DESIGN-BUILDER’S SUBCONTRACTORS.  IF OWNER PERFORMS OTHER WORK ON THE PROJECT OR
AT THE SITE WITH SEPARATE CONTRACTORS UNDER OWNER’S CONTROL, DESIGN-BUILDER
AGREES TO REASONABLY COOPERATE AND COORDINATE ITS ACTIVITIES WITH THOSE SEPARATE
CONTRACTORS SO THAT THE PROJECT CAN BE COMPLETED IN AN ORDERLY AND COORDINATED
MANNER WITHOUT UNREASONABLE DISRUPTION.

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3.5.4       DESIGN-BUILDER SHALL ENSURE THAT EACH SUBCONTRACT WITH A
SUBCONTRACTOR IS ASSIGNABLE TO OWNER WITHOUT CONSENT OF THE SUBCONTRACTOR OR ANY
OTHER PERSON OR ENTITY IN THE EVENT THAT DESIGN-BUILDER SHALL BE IN AN UNCURED
DEFAULT OR TERMINATED WITH CAUSE UNDER THE TERMS OF THIS AGREEMENT.

3.6          Maintenance of Site.  Design-Builder shall keep the Site reasonably
free from debris, trash and construction wastes to permit Design-Builder to
perform its construction services efficiently, safely and without interfering
with the use of adjacent land areas.  Upon Substantial Completion of the Work
Design-Builder shall remove all debris, trash, construction wastes, materials,
equipment, machinery and tools arising from the Work to permit Owner to occupy
the Project for its intended use.

3.7          PROJECT SAFETY.

3.7.1       DESIGN-BUILDER RECOGNIZES THE IMPORTANCE OF PERFORMING THE WORK IN A
SAFE MANNER SO AS TO PREVENT DAMAGE, INJURY OR LOSS TO (I) ANY INDIVIDUALS AT
THE SITE, WHETHER WORKING OR VISITING, (II) THE WORK, INCLUDING MATERIALS AND
EQUIPMENT INCORPORATED INTO THE WORK OR STORED ON-SITE OR OFF-SITE, AND (III)
ANY OTHER PROPERTY AT THE SITE OR ADJACENT THERETO.  DESIGN-BUILDER ASSUMES
RESPONSIBILITY FOR IMPLEMENTING AND MONITORING ALL SAFETY PRECAUTIONS AND
PROGRAMS RELATED TO THE PERFORMANCE OF THE WORK.  DESIGN-BUILDER SHALL, PRIOR TO
COMMENCING CONSTRUCTION, DESIGNATE A REPRESENTATIVE (THE “SAFETY
REPRESENTATIVE”) WITH THE NECESSARY QUALIFICATIONS AND EXPERIENCE TO SUPERVISE
THE IMPLEMENTATION AND MONITORING OF ALL SAFETY PRECAUTIONS AND PROGRAMS RELATED
TO THE WORK. UNLESS OTHERWISE REQUIRED BY THE CONTRACT DOCUMENTS,
DESIGN-BUILDER’S SAFETY REPRESENTATIVE SHALL BE AN INDIVIDUAL STATIONED AT THE
SITE WHO MAY HAVE RESPONSIBILITIES ON THE PROJECT IN ADDITION TO SAFETY.  THE
SAFETY REPRESENTATIVE SHALL MAKE ROUTINE DAILY INSPECTIONS OF THE SITE AND SHALL
HOLD WEEKLY SAFETY MEETINGS WITH DESIGN-BUILDER’S PERSONNEL, SUBCONTRACTORS AND
OTHERS AS APPLICABLE.

3.7.2       DESIGN-BUILDER AND SUBCONTRACTORS SHALL COMPLY WITH ALL LEGAL
REQUIREMENTS RELATING TO SAFETY, AS WELL AS ANY OWNER-SPECIFIC SAFETY
REQUIREMENTS SET FORTH IN THE CONTRACT DOCUMENTS; PROVIDED, THAT SUCH
OWNER-SPECIFIC REQUIREMENTS DO NOT VIOLATE ANY APPLICABLE LEGAL REQUIREMENT.  AS
PROMPTLY AS PRACTICABLE, DESIGN-BUILDER WILL REPORT IN WRITING ANY
SAFETY-RELATED INJURY, LOSS, DAMAGE OR ACCIDENT ARISING FROM THE WORK TO OWNER’S
REPRESENTATIVE AND, TO THE EXTENT MANDATED BY LEGAL REQUIREMENTS, TO ALL
GOVERNMENT OR QUASI-GOVERNMENT AUTHORITIES HAVING JURISDICTION OVER
SAFETY-RELATED MATTERS INVOLVING THE PROJECT OR THE WORK.

3.7.3       DESIGN-BUILDER’S RESPONSIBILITY FOR SAFETY UNDER THIS SECTION 3.7IS
NOT INTENDED IN ANY WAY TO RELIEVE SUBCONTRACTORS OF THEIR OWN CONTRACTUAL AND
LEGAL OBLIGATIONS AND RESPONSIBILITY FOR (I) COMPLYING WITH ALL LEGAL
REQUIREMENTS, INCLUDING THOSE RELATED TO HEALTH AND SAFETY MATTERS, AND (II)
TAKING ALL NECESSARY MEASURES TO IMPLEMENT AND MONITOR ALL SAFETY PRECAUTIONS
AND PROGRAMS TO GUARD AGAINST INJURY, LOSSES, DAMAGES OR ACCIDENTS RESULTING
FROM THEIR PERFORMANCE OF THE WORK.

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3.8          Submission of Reports. Design-Builder shall provide Owner with a
monthly informational report substantially in the form of Exhibit F attached
hereto (“Informational Report”).

3.9          Training.  At a mutually agreed time prior to start-up,
Design-Builder shall provide up to two (2) weeks of training at a facility
designated by ICM for all of Owner’s employees and Owner Operator’s employees
required for the operation and maintenance of the Plant in accordance with all
design specifications therefor contained in the Contract Documents and necessary
in order to maintain the Performance Guarantee Criteria, including operators,
laboratory personnel, general, plant and maintenance managers. Other personnel
of Owner and Owner Operator may receive such training by separate arrangement
between Owner and Design-Builder and as time is available.  All training
personnel and costs associated with such training personnel, including labor and
all training materials will be provided to Owner and Owner Operator within the
Contract Price at no additional cost. Owner and Owner Operator will be
responsible for all travel and expenses of their employees and the Owner and
Owner Operator will pay all wages and all other expenses for their personnel
during the training. The training services will include training on computers,
laboratory procedures, field operating procedures, and overall plant section
performance expectations.  Prior to the start-up training, Design-Builder shall
provide Owner training manuals and operating manuals and other documents
reasonably necessary for the start-up process.

ARTICLE 4

OWNER’S RESPONSIBILITIES

4.1          DUTY TO COOPERATE.

4.1.1       OWNER SHALL, THROUGHOUT THE PERFORMANCE OF THE WORK, COOPERATE WITH
DESIGN-BUILDER AND PERFORM ITS RESPONSIBILITIES, OBLIGATIONS AND SERVICES IN A
TIMELY MANNER TO FACILITATE DESIGN-BUILDER’S TIMELY AND EFFICIENT PERFORMANCE OF
THE WORK AND SO AS NOT TO DELAY OR INTERFERE WITH DESIGN-BUILDER’S PERFORMANCE
OF ITS OBLIGATIONS UNDER THE CONTRACT DOCUMENTS.

4.1.2       OWNER SHALL PAY ALL REASONABLE COSTS INCURRED BY DESIGN-BUILDER FOR
FROST REMOVAL SO THAT WINTER CONSTRUCTION CAN PROCEED.  SUCH COSTS MAY INCLUDE,
BUT ARE NOT LIMITED TO, EQUIPMENT COSTS, EQUIPMENT RENTAL COSTS, SHELTERING
COSTS, SPECIAL MATERIAL COSTS, FUEL COSTS AND ASSOCIATED LABOR COSTS.  OWNER
ACKNOWLEDGES AND AGREES THAT SUCH COSTS ARE IN ADDITION TO, AND NOT INCLUDED IN,
THE CONTRACT PRICE, AND THAT THE PAYMENT OF SUCH COSTS, WHICH SHALL BE BILLED ON
A WEEKLY BASIS, SHALL NOT REQUIRE THE ISSUANCE OF A CHANGE ORDER OR THE
OBTAINING OF ANY OWNER APPROVAL PRIOR TO THE ISSUANCE OF INVOICES FOR SUCH
COSTS.

4.2          FURNISHING OF SERVICES AND INFORMATION.

4.2.1       PRIOR TO THE ISSUANCE OF THE NOTICE TO PROCEED, AT ITS OWN COST AND
EXPENSE, OWNER SHALL PROVIDE THE FOLLOWING ITEMS TO DESIGN-BUILDER FOR
DESIGN-BUILDER’S INFORMATION AND USE AND ALL OF WHICH DESIGN-BUILDER IS ENTITLED
TO RELY UPON IN PERFORMING THE WORK:

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(a)                                  surveys describing the property,
boundaries, topography and reference points for use during construction,
including existing service and utility lines;

(b)                                 geotechnical studies describing subsurface
conditions including soil borings, and other surveys describing other latent or
concealed physical conditions at the Site;

(c)                                  temporary and permanent easements, zoning
and other requirements and encumbrances affecting land use, or necessary to
permit the proper design and construction of the Project and enable
Design-Builder to perform the Work;

(d)                                 A legal description of the Site;

(e)                                  to the extent available, as-built and
record drawings of any existing structures at the Site; and

(f)                                    all environmental studies, reports and
impact statements describing the environmental conditions, including Hazardous
Conditions, in existence at the Site that have been conducted or performed.

4.2.2       OWNER SHALL PROVIDE TO DESIGN-BUILDER ALL OWNER’S DELIVERABLES UNDER
EXHIBIT C PURSUANT TO OWNER’S MILESTONES.  SUCH DELIVERABLES SHALL BE PROVIDED,
AT OWNER’S OWN COST AND EXPENSE, FOR DESIGN-BUILDER’S INFORMATION AND USE.
DESIGN-BUILDER IS ENTITLED TO RELY UPON SUCH DELIVERABLES IN PERFORMING THE
WORK.

4.2.3       OWNER IS RESPONSIBLE FOR SECURING AND EXECUTING ALL NECESSARY
AGREEMENTS WITH ADJACENT LAND OR PROPERTY OWNERS THAT ARE NECESSARY TO ENABLE
DESIGN-BUILDER TO PERFORM THE WORK AND THAT HAVE BEEN IDENTIFIED AND NOTIFIED IN
WRITING BY DESIGN-BUILDER TO OWNER PRIOR TO THE EFFECTIVE DATE.  OWNER IS
FURTHER RESPONSIBLE FOR ALL COSTS, INCLUDING ATTORNEYS’ FEES, INCURRED IN
SECURING THESE NECESSARY AGREEMENTS.

4.3          Financial Information; Cooperation with Lenders; Failure to Obtain
Financial Closing.  Design-Builder acknowledges that Owner is seeking financing
for the Project.  Design-Builder agrees to cooperate with Owner in good faith in
order to satisfy the reasonable requirements of Owners’ financing arrangements,
including, where appropriate and reasonable, the execution and delivery of
documents or instruments necessary to accommodate the Financial Closing.  Owner
agrees to pay all documented costs incurred by Design-Builder incurred prior to
and at Financial Closing, and thereafter during the term of this Agreement, in
connection with satisfying the requirements of Owners’ financing arrangements
including all documented attorney’s fees.  Design-Builder and Owner also
acknowledge that the Lenders, as a condition to providing financing for the
Plant, shall require Owner to provide the Independent Engineer with certain
reasonable participation and review rights with respect to Design-Builder’s
performance of the Work.  Design-Builder acknowledges and agrees that such
reasonable participation and review rights shall consist of the right to (i)
enter the Site and inspect the Work upon reasonable notice to Design-Builder;
(ii) attend all start-up and testing procedures; and (iii) review and approve
such other items for which Owner is required by Lenders to obtain the
concurrence, opinion or a certificate of the Independent Engineer or the Lenders
pursuant to the Financing Documents which items do not alter the rights or
impose additional obligations on Design-

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Builder.  Nothing in this Section 4.3 shall be deemed to require Design-Builder
to agree to any amendments to this Agreement that would adversely affect
Design-Builder’s risks, rights or obligations under this Agreement.  Upon
Financial Closing, Owner shall promptly provide to Design-Builder an officer’s
certificate certifying that Financial Closing has occurred and such Owner’s
officer’s certificate shall constitute evidence satisfactory to Design-Builder
that Owner has adequate funds available and committed to fulfill its obligations
under the Contract Documents for all purposes hereunder.  Owner must provide
such officer’s certificate prior to issuing the Notice to Proceed.

4.4          Owner’s Representative.  Owner’s Representative, as set forth in
Section 16.1 hereof, shall be responsible for providing Owner-supplied
information and approvals in a timely manner to permit Design-Builder to fulfill
its obligations under the Contract Documents.  Owner’s Representative shall also
provide Design-Builder with prompt notice if it observes any failure on the part
of Design-Builder to fulfill its contractual obligations, including any errors,
omissions or defects in the performance of the Work.  Owner’s Representative
shall be vested with the authority to act on behalf of Owner and Design-Builder
shall be entitled to rely on written communication from Owner’s Representative
with respect to a Project matter.

4.5          Government Approvals and Permits.  Owner shall obtain and pay for
all necessary Governmental Approvals required by Law, including permits,
approvals, licenses, government charges and inspection fees set forth in Exhibit
C and, to the extent identified as Owner’s responsibility, Exhibit G.  Owner
shall provide reasonable assistance to Design-Builder in obtaining those
permits, approvals and licenses that are Design-Builder’s responsibility
pursuant to Exhibit G and Section 3.4.

4.6          Owner’s Separate Contractors.  Owner is responsible for all work,
including such work listed on Exhibit C, performed on the Project or at the Site
by separate contractors under Owner’s control.  Owner shall contractually
require its separate contractors to cooperate with, and coordinate their
activities so as not to interfere with, Design-Builder in order to enable
Design-Builder to timely complete the Work consistent with the Contract
Documents.

4.7          Security.  Owner shall be responsible for Site security (including
fencing, alarm systems, security guarding services and the like) at all times
during the term of this Agreement to prevent vandalism, theft and danger to the
Project, the Site, and personnel.  Owner shall coordinate and supervise ingress
and egress from the Site so as to minimize disruption to the Work.

ARTICLE 5

OWNERSHIP OF WORK PRODUCT; RISK OF LOSS

5.1          Work Product.  All drawings, specifications, calculations, data,
notes and other materials and documents, including electronic data furnished by
Design-Builder to Owner under this Agreement (“Work Product”) shall be
instruments of service and Design-Builder shall retain the ownership and
property interests therein, including the copyrights thereto.

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5.2          Owner’s Limited License Upon Payment in Full.  Upon Owner’s payment
in full for all Work performed under the Contract Documents, Design-Builder
shall grant Owner a limited license to use the Work Product in connection with
Owner’s occupancy and repair of the Plant.  Design-Builder acknowledges and
agrees that the limited license to use the Work Product granted hereby shall
provide Owner sufficient rights in and to the Work Product as shall be necessary
for Owner to operate and maintain the Plant and shall include any Pass Through
Warranties in connection therewith.  Design-Builder shall provide Owner with a
copy of the plans of the Plant, as built, (the “As Built Plans”) conditioned on
Owner’s express understanding that its use of the Work Product and its
acceptance of the As Built Plans is at Owner’s sole risk and without liability
or legal exposure to Design-Builder or anyone working by or through
Design-Builder, including Design Consultants of any tier (collectively the
“Indemnified Parties”); provided, however, that any performance guarantees and
warranties (of equipment or otherwise) shall remain in effect according to the
terms of this Agreement.

5.2.1       DESIGN-BUILDER IS UTILIZING CERTAIN PROPRIETARY PROPERTY AND
INFORMATION OF ICM IN THE DESIGN AND CONSTRUCTION OF THE PROJECT AND
DESIGN-BUILDER MAY INCORPORATE PROPRIETARY PROPERTY AND INFORMATION OF ICM INTO
THE WORK PRODUCT.  OWNER’S USE OF THE PROPRIETARY PROPERTY AND INFORMATION OF
ICM SHALL BE GOVERNED BY THE TERMS AND PROVISIONS OF THE ICM LICENSE AGREEMENT,
TO BE EXECUTED BY OWNER AND ICM IN CONNECTION WITH THE EXECUTION OF THIS
AGREEMENT.  OWNER SHALL BE ENTITLED TO USE THE WORK PRODUCT SOLELY FOR PURPOSES
RELATING TO THE PLANT, BUT SHALL NOT BE ENTITLED TO USE THE WORK PRODUCT FOR ANY
OTHER PURPOSES WHATSOEVER, INCLUDING WITHOUT LIMITATION, EXPANSION OF THE
PLANT.  NOTWITHSTANDING THE FOREGOING SENTENCE, OWNER SHALL BE ENTITLED TO USE
THE WORK PRODUCT FOR THE OPERATION, MAINTENANCE AND REPAIR OF THE PLANT
INCLUDING THE INTERCONNECTION OF, BUT NOT THE DESIGN OF, ANY FUTURE EXPANSIONS
TO THE PLANT.  THE LIMITED LICENSE GRANTED TO OWNER UNDER SECTIONS 5.2, 5.3 OR
5.4 TO USE THE WORK PRODUCT SHALL BE LIMITED BY AND CONSTRUED ACCORDING TO THE
SAME TERMS CONTAINED IN THE ICM LICENSE AGREEMENT, ATTACHED HERETO AS EXHIBIT D
AND INCORPORATED HEREIN BY REFERENCE THERETO, EXCEPT (I) REFERENCES IN SUCH ICM
LICENSE AGREEMENT TO ICM AND PROPRIETARY PROPERTY SHALL REFER TO DESIGN-BUILDER
AND WORK PRODUCT, RESPECTIVELY, (II) THE LAWS OF THE STATE OF MINNESOTA SHALL
GOVERN SUCH LIMITED LICENSE, AND (III) THE DISPUTE RESOLUTION PROVISIONS
CONTAINED IN ARTICLE 19 HEREOF SHALL APPLY TO ANY BREACH OR THREATENED BREACH OF
OWNER’S DUTIES OR OBLIGATIONS UNDER SUCH LIMITED LICENSE, EXCEPT THAT
DESIGN-BUILDER SHALL HAVE THE RIGHT TO SEEK INJUNCTIVE RELIEF IN A COURT OF
COMPETENT JURISDICTION AGAINST OWNER OR ITS REPRESENTATIVES FOR ANY SUCH BREACH
OR THREATENED BREACH.  THIS PARAGRAPH ALSO APPLIES TO SECTIONS 5.3 AND 5.4
BELOW.

5.3          Owner’s Limited License Upon Owner’s Termination for Convenience or
Design-Builder’s Election to Terminate.  If Owner terminates the Project for its
convenience as set forth in Section 15.3 hereof, or if Design-Builder elects to
terminate this Agreement in accordance with Section 15.5, Design-Builder shall,
upon Owner’s payment in full of the amounts due Design-Builder under this
Agreement, grant Owner a limited license to use the Work Product to complete the
Plant and subsequently occupy and repair the Plant, subject to the following:

(a)                                  Use of the Work Product is at Owner’s sole
risk without liability or legal exposure to any Indemnified Party; provided,
however, that any Pass Through Warranties regarding equipment or express
warranties regarding equipment provided by this Agreement shall remain in effect
according to their terms; and

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(b)                                 If the termination for convenience is by
Owner in accordance with Section 15.3 hereof, or if Design-Builder elects to
terminate this Agreement in accordance with Section 15.5, then Owner agrees to
pay Design-Builder the additional sum of Two Million Five Hundred Thousand
Dollars ($2,500,000.00) as compensation for the limited right to use the Work
Product completed “as is” on the date of termination in accordance with this
Article 5.

5.4          Owner’s Limited License Upon Design-Builder’s Default.  If this
Agreement is terminated due to Design-Builder’s default pursuant to Section 15.2
and (i) it is adjudged that Design-Builder was in default, and (ii) Owner has
fully satisfied all of its obligations under the Contract Documents through the
time of Design-Builder’s default, then Design-Builder shall grant Owner a
limited license to use the Work Product in connection with Owner’s completion
and occupancy and repair of the Plant.  This limited license is conditioned on
Owner’s express agreement that its use of the Work Product is at Owner’s sole
risk without liability or legal exposure to any Indemnified Party; provided,
however, that any Pass Through Warranties regarding equipment or express
warranties regarding equipment provided by this Agreement shall remain in effect
according to their terms.  This limited license grants Owner the ability to
repair the Plant at Owner’s discretion.

5.5          Owner’s Indemnification for Use of Work Product.  If Owner uses the
Work Product or Plant under any of the circumstances identified in this Article
5, to the fullest extent allowed by Law, Owner shall defend, indemnify and hold
harmless the Indemnified Parties from and against any and all claims, damages,
liabilities, losses and expenses, including attorneys’ fees, arising out of or
resulting from the use of the Work Product and Plant; provided, however, that
any Pass Through Warranties regarding equipment or express warranties regarding
equipment provided by this Agreement shall remain in effect according to their
terms.

5.6          Risk of Loss.  Design-Builder shall have no liability for a
physical loss of or damage to the Work unless such loss or damage is caused by
the negligence of Design-Builder or someone acting under its direction or
control. Design-Builder shall not be liable for physical loss of or damage to
the Work where such loss or damage is caused by the negligence of Owner’s
employees or third parties who are not Subcontractors.  Design-Builder shall
have no liability for a physical loss of or damage to the Work occurring after
Final Completion.  Design-Builder shall have no liability for losses or damages
for which insurance coverage under this Agreement is available to Owner; in such
circumstances, any liability for losses and damages as described in this Section
5.6 shall be limited to losses or damages which exceed insurance coverage
available to the Owner.

Article 6

Commencement and Completion of the Project

6.1          Phase I and Phase II Engineering.  Owner shall have entered into
that certain Phase I and Phase II Engineering Services Agreement dated January
9, 2007 between Owner and Fagen Engineering, LLC (“Fagen Engineering”) and
attached hereto as Exhibit L (“Phase I and Phase II Engineering Services
Agreement”). The Phase I and Phase II Engineering Services Agreement provides
for Fagen Engineering to commence work on the Phase I and Phase II

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engineering for the Project as set forth therein.  Owner has agreed to pay Fagen
Engineering Ninety-two Thousand Five Hundred Dollars ($92,500.00) for such
engineering services pursuant to the terms of that agreement, the full amount of
which shall be included in and credited to the Contract Price.  Notwithstanding
the foregoing sentence, if a Notice to Proceed is not issued pursuant to Section
6.2, or Financial Closing is not obtained pursuant to Section 4.3, then no
amount paid under the Phase I and Phase II Engineering Services Agreement shall
be refunded to Owner.

6.2          Notice to Proceed; Commencement.  The Work shall commence within
five (5) Days of Design-Builder’s receipt of Owner’s written valid notice to
proceed (“Notice to Proceed”) unless the Parties mutually agree otherwise in
writing.  The Parties agree that a valid Owner’s Notice to Proceed cannot be
given until:  (1) Owner has title to the real estate on which the Project will
be constructed; (2) the Phase I and Phase II Site work required of Owner, as
described in Exhibit L is completed along with redline drawings and such Phase I
and Phase II Site work and redline drawings have been reviewed and deemed
adequate by Design-Builder;(3) the air permit(s) and/or other applicable local,
state or federal permits necessary so that construction can begin, as listed on
Exhibit G, have been obtained; (4) Owner has obtained Financial Closing pursuant
to Section 4.3; (5) if applicable, Owner has executed a sales tax exemption
certificate and provided the same to Design-Builder; (6) Owner has provided the
name of its property/all-risk insurance carrier and the specific requirements
for fire protection; (7) Owner has provided an insurance certificate or copy of
insurance policy demonstrating that Owner has obtained builder’s risk insurance
pursuant to Section 17.4.3 hereof, and (8) Design-Builder provides Owner written
notification of its acceptance of the Notice to Proceed, provided that
Design-Builder shall not be required to accept the Notice to Proceed prior to
October 8, 2007. Owner and Design-Builder mutually agree that time is of the
essence with respect to the dates and times set forth in the Contract Documents.
Owner must complete the prerequisites to the issuance of a valid Notice to
Proceed, as listed in items number (1) through (7) of this Section 6.2 and
submit a Notice to Proceed to Design-Builder for Design-Builder’s acceptance by
October 15, 2007; otherwise, this Agreement may be terminated, at
Design-Builder’s sole option.  If Design-Builder chooses to terminate this
Agreement pursuant to its right under the immediately preceding sentence, then
Design-Builder shall have no further obligations hereunder.

6.2.1       NOTICE TO PROCEED SHALL BE DELIVERED BY OWNER TO DESIGN-BUILDER
PURSUANT TO THE NOTICE REQUIREMENTS SET FORTH IN SECTION 21.7 HEREOF, WITH A
COPY TO:

Fagen, Inc.
501 W. Highway 212
P. O. Box 159
Granite Falls, MN  56241
Attention: Becky Dahl
Fax:  (320) 564-3278

6.3          Project Start-Up and Testing.  Owner shall provide, at Owner’s
cost, equipment, tools, instruments and materials necessary for Owner to comply
with its obligations under Exhibit C, raw materials, consumables and personnel
necessary for start-up and testing of the Plant, and Design-Builder shall
provide supervision, standard and special test instruments, tools, equipment and
materials required to perform component and equipment checkout and testing,

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initial start-up, operations supervision and corrective maintenance of all
permanent Plant equipment within the scope of the Work.  Notwithstanding the
foregoing sentence, Design-Builder shall be responsible for raw materials and
consumables to the extent such amounts provided by Owner are destroyed or
damaged (as opposed to consumed in the ordinary course of start-up and testing)
by Design-Builder or its personnel during start-up and testing. Design-Builder
shall supervise and direct Owner’s employees and Owner Operator’s personnel who
shall participate in the start-up activities with Design-Builder’s personnel to
become familiar with all aspects of the Plant. Owner and the Independent
Engineer may witness start-up and testing activities.  Performance testing will
be conducted in accordance with the provisions of Section 7.2 hereof.

6.4          SUBSTANTIAL COMPLETION.

6.4.1       SUBSTANTIAL COMPLETION OF THE ENTIRE WORK SHALL BE ACHIEVED NO LATER
THAN SIX HUNDRED THIRTY-FIVE (635) DAYS AFTER THE DATE OF THE NOTICE TO PROCEED,
SUBJECT TO ADJUSTMENT IN ACCORDANCE WITH THE CONTRACT DOCUMENTS HEREOF (THE
“SCHEDULED SUBSTANTIAL COMPLETION DATE”).

6.4.2       “SUBSTANTIAL COMPLETION” SHALL BE DEEMED TO OCCUR ON THE DATE ON
WHICH THE WORK IS SUFFICIENTLY COMPLETE SO THAT OWNER CAN OCCUPY AND USE THE
PLANT FOR ITS INTENDED PURPOSES.  SUBSTANTIAL COMPLETION SHALL BE ATTAINED AT
THE POINT IN TIME WHEN THE PLANT IS READY TO GRIND THE FIRST BATCH OF CORN AND
BEGIN OPERATION FOR ITS INTENDED USE.  NO PRODUCTION IS GUARANTEED ON THE DATE
OF SUBSTANTIAL COMPLETION.

6.4.3       PROCEDURES.  DESIGN-BUILDER SHALL NOTIFY OWNER IN WRITING WHEN IT
BELIEVES SUBSTANTIAL COMPLETION HAS BEEN ACHIEVED WITH RESPECT TO THE WORK. 
WITHIN FIVE (5) DAYS OF OWNER’S RECEIPT OF DESIGN-BUILDER’S NOTICE, OWNER AND
DESIGN-BUILDER WILL JOINTLY INSPECT SUCH WORK TO VERIFY THAT IT IS SUBSTANTIALLY
COMPLETE IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACT DOCUMENTS.  IF SUCH
WORK IS DEEMED SUBSTANTIALLY COMPLETE, DESIGN-BUILDER SHALL  PREPARE AND ISSUE A
“CERTIFICATE OF SUBSTANTIAL COMPLETION” FOR THE WORK THAT WILL SET FORTH (I) THE
DATE OF SUBSTANTIAL COMPLETION, (II) THE REMAINING ITEMS OF WORK THAT HAVE TO BE
COMPLETED BEFORE FINAL PAYMENT (“PUNCH LIST”), (III) PROVISIONS (TO THE EXTENT
NOT ALREADY PROVIDED IN THIS AGREEMENT) ESTABLISHING OWNER’S AND
DESIGN-BUILDER’S RESPONSIBILITY FOR THE PROJECT’S SECURITY, MAINTENANCE,
UTILITIES AND INSURANCE PENDING FINAL PAYMENT, AND (IV) AN ACKNOWLEDGMENT THAT
WARRANTIES WITH RESPECT TO THE WORK COMMENCE ON THE DATE OF SUBSTANTIAL
COMPLETION, EXCEPT AS MAY OTHERWISE BE NOTED IN THE CERTIFICATE OF SUBSTANTIAL
COMPLETION.  UPON SUBSTANTIAL COMPLETION OF THE ENTIRE WORK AND SATISFACTION OF
THE PERFORMANCE GUARANTEE CRITERIA LISTED IN EXHIBIT A, OWNER SHALL RELEASE TO
DESIGN-BUILDER ALL RETAINED AMOUNTS, LESS AN AMOUNT EQUAL TO ONE HUNDRED FIFTY
PERCENT (150%) OF THE REASONABLE VALUE OF ALL REMAINING OR INCOMPLETE ITEMS OF
WORK AS NOTED IN THE CERTIFICATE OF SUBSTANTIAL COMPLETION, AND LESS AN AMOUNT
EQUAL TO THE VALUE OF ANY SUBCONTRACTOR LIEN WAIVERS NOT YET OBTAINED. OWNER, AT
ITS OPTION, MAY USE A PORTION OF THE WORK PRIOR TO COMPLETION OF THE ENTIRE
WORK; PROVIDED, THAT (I) A CERTIFICATE OF SUBSTANTIAL COMPLETION HAS BEEN ISSUED
FOR THE PORTION OF WORK ADDRESSING THE ITEMS SET FORTH IN SECTION 6.4.3 ABOVE,
(II) DESIGN-BUILDER AND OWNER HAVE, TO THE EXTENT REQUIRED, OBTAINED THE CONSENT
OF THEIR SURETIES AND INSURERS AND THE APPROPRIATE GOVERNMENT

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AUTHORITIES HAVING JURISDICTION OVER THE PROJECT OR SITE, AND (III) OWNER AND
DESIGN-BUILDER AGREE THAT OWNER’S USE OR OCCUPANCY WILL NOT INTERFERE WITH
DESIGN-BUILDER’S COMPLETION OF THE REMAINING WORK IN ACCORDANCE WITH THE
CONTRACT DOCUMENTS.

6.4.4       EARLY COMPLETION BONUS.  IF SUBSTANTIAL COMPLETION IS ATTAINED
WITHIN FOUR HUNDRED EIGHTY-FIVE (485) DAYS AFTER THE DATE OF THE NOTICE TO
PROCEED, OWNER SHALL PAY DESIGN-BUILDER AT THE TIME OF FINAL PAYMENT UNDER
SECTION 10.3 HEREOF AN EARLY COMPLETION BONUS (“EARLY COMPLETION BONUS”) OF
TWENTY THOUSAND DOLLARS ($20,000.00) PER DAY FOR EACH DAY THAT SUBSTANTIAL
COMPLETION OCCURRED IN ADVANCE OF FOUR HUNDRED EIGHTY-FIVE (485) DAYS UP TO A
MAXIMUM BONUS OF TWO MILLION DOLLARS ($2,000,000).  OWNER SHALL NOT BE LIABLE
FOR ANY AMOUNT IN EXCESS OF TWO MILLION DOLLARS ($2,000,000) PURSUANT TO THIS
SECTION 6.4.4.

6.4.5       IN ALL EVENTS, PAYMENT OF SAID BONUS, IF APPLICABLE, AT THE TIME OF
FINAL PAYMENT IS SUBJECT TO RELEASE OF FUNDS BY SENIOR LENDER.  IF SENIOR LENDER
DOES NOT ALLOW RELEASE OF FUNDS AT THE TIME OF FINAL PAYMENT TO PAY SAID EARLY
COMPLETION BONUS IN FULL, ANY UNPAID BALANCE SHALL BE CONVERTED TO AN UNSECURED
PROMISSORY NOTE PAYABLE BY OWNER TO DESIGN-BUILDER, ACCRUING INTEREST AT TEN
PERCENT (10%).  ON EACH ANNIVERSARY OF THE NOTE, ANY UNPAID ACCRUED INTEREST
SHALL BE CONVERTED TO PRINCIPAL AND SHALL ACCRUE INTEREST AS PRINCIPAL
THEREAFTER.  OWNER SHALL PAY SAID PROMISSORY NOTE AS SOON AS ALLOWED BY SENIOR
LENDER; IN ANY EVENT, THE NOTE, PLUS ACCRUED INTEREST, SHALL BE PAID IN FULL
BEFORE OWNER PAYS OR MAKES ANY DISTRIBUTIONS TO OR FOR THE BENEFIT OF ITS OWNERS
(SHAREHOLDERS, MEMBERS, PARTNERS, ETC.).  ALL PAYMENTS SHALL BE APPLIED FIRST TO
ACCRUED INTEREST AND THEN TO PRINCIPAL.

6.5          FINAL COMPLETION.

6.5.1       FINAL COMPLETION OF THE WORK SHALL BE ACHIEVED WITHIN NINETY (90)
DAYS AFTER THE EARLIER OF THE ACTUAL DATE OF SUBSTANTIAL COMPLETION OR THE
SCHEDULED SUBSTANTIAL COMPLETION DATE (THE “FINAL COMPLETION DATE”).

6.5.2       “FINAL COMPLETION” SHALL BE ACHIEVED WHEN THE OWNER REASONABLY
DETERMINES THAT THE FOLLOWING CONDITIONS HAVE BEEN MET:

(A)                                  SUBSTANTIAL COMPLETION HAS BEEN ACHIEVED;

(B)                                 ANY OUTSTANDING AMOUNTS OWED BY
DESIGN-BUILDER TO OWNER HAVE BEEN PAID IN FULL;

(C)                                  THE ITEMS IDENTIFIED ON THE PUNCH LIST AND
ALL OTHER WORK HAVE BEEN COMPLETED BY DESIGN-BUILDER;

(D)                                 CLEAN-UP OF THE SITE HAS BEEN COMPLETED;

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(E)                                  ALL PERMITS REQUIRED TO HAVE BEEN OBTAINED
BY DESIGN-BUILDER HAVE BEEN OBTAINED;

(F)                                    THE INFORMATION IN SECTION 6.5.4 HAS BEEN
PROVIDED TO OWNER;

(g)                                 release and waiver of all claims and liens
from Design-Builder and Subcontractors have been provided; and

(h)                                 the Performance Tests have been successfully
completed.

6.5.3       AFTER RECEIPT OF A FINAL APPLICATION FOR PAYMENT FROM
DESIGN-BUILDER, OWNER SHALL MAKE FINAL PAYMENT IN ACCORDANCE WITH SECTION 10.3,
LESS AN AMOUNT EQUAL TO THE VALUE OF ANY SUBCONTRACTOR LIEN WAIVERS NOT YET
OBTAINED.

6.5.4       AT THE TIME OF SUBMISSION OF ITS FINAL APPLICATION FOR PAYMENT,
DESIGN-BUILDER SHALL PROVIDE THE FOLLOWING INFORMATION:

(A)                                  AN AFFIDAVIT THAT THERE ARE NO CLAIMS,
OBLIGATIONS OR LIENS OUTSTANDING OR UNSATISFIED FOR LABOR, SERVICES, MATERIAL,
EQUIPMENT, TAXES OR OTHER ITEMS PERFORMED, FURNISHED OR INCURRED FOR OR IN
CONNECTION WITH THE WORK WHICH WILL IN ANY WAY AFFECT OWNER’S INTERESTS;

(B)                                 A GENERAL RELEASE EXECUTED BY DESIGN-BUILDER
WAIVING, UPON RECEIPT OF FINAL PAYMENT BY DESIGN-BUILDER, ALL CLAIMS FOR
PAYMENT, ADDITIONAL COMPENSATION, OR DAMAGES FOR DELAY, EXCEPT THOSE PREVIOUSLY
MADE TO OWNER IN WRITING AND REMAINING UNSETTLED AT THE TIME OF FINAL PAYMENT
PROVIDED SUCH GENERAL RELEASE SHALL NOT WAIVE DEFENSES TO CLAIMS THAT MAY BE
ASSERTED BY OWNER AFTER PAYMENT OR CLAIMS ARISING AFTER PAYMENT;

(C)                                  CONSENT OF DESIGN-BUILDER’S SURETY, IF ANY,
TO FINAL PAYMENT; AND

(D)                                 A HARD COPY OF THE AS BUILT PLANS; PROVIDED,
HOWEVER, THAT SUCH PLANS WILL REMAIN THE WORK PRODUCT OF THE DESIGN-BUILDER AND
SUBJECT IN ALL RESPECTS TO ARTICLE 5.

6.5.5       UPON MAKING FINAL PAYMENT, OWNER WAIVES ALL CLAIMS AGAINST
DESIGN-BUILDER EXCEPT CLAIMS RELATING TO (I) DESIGN-BUILDER’S FAILURE TO SATISFY
ITS PAYMENT OBLIGATIONS, (II) DESIGN-BUILDER’S FAILURE TO COMPLETE THE WORK
CONSISTENT WITH THE CONTRACT DOCUMENTS, INCLUDING DEFECTS APPEARING WITHIN ONE
(1) YEAR AFTER SUBSTANTIAL COMPLETION, AND (III) THE TERMS OF ANY WARRANTIES
REQUIRED BY THE CONTRACT DOCUMENTS.

6.6          Post Completion Support.  Adequate personnel to complete all Work
within the Contract Time(s) will be maintained on-Site by Design-Builder or a
Subcontractor until Final Completion has been achieved.  In addition to
prosecuting the Work until Final Completion has

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been achieved, Design-Builder or its Subcontractor will provide one (1) month of
on-Site operational support for Owner’s and Owner Operator’s personnel after
successful completion of the Performance Tests and, from the date of Substantial
Completion, will provide six (6) months of off-Site technical and operating
procedure support by telephone and other electronic data transmission and
communication.

Article 7

Performance Testing and Liquidated Damages

7.1          Performance Guarantee.  The Design-Builder guarantees that the
Plant will meet the performance criteria listed in Exhibit A (the “Performance
Guarantee Criteria”) during a performance test conducted and concluded pursuant
to the terms hereof not later than ninety (90) Days after the date of
Substantial Completion.  If there is a performance shortfall, Design-Builder
will pay all design and construction costs associated with making the necessary
corrections.  Design-Builder retains the right to use its sole discretion in
determining the method (which shall be in accordance with generally accepted
construction and design-build standards of the fuel ethanol industry in the
Midwest United States) to remedy any performance related issues.

7.2          PERFORMANCE TESTING.

7.2.1       THE DESIGN-BUILDER SHALL DIRECT AND SUPERVISE THE TESTS AND, IF
NECESSARY, THE RETESTS OF THE PLANT USING DESIGN-BUILDER’S SUPERVISORY PERSONNEL
AND THE AIR EMISSIONS TESTER SHALL CONDUCT THE AIR EMISSIONS TEST, IN EACH CASE,
IN ACCORDANCE WITH THE TESTING PROCEDURES SET FORTH IN EXHIBIT A (THE
“PERFORMANCE TESTS”), TO DEMONSTRATE, AT A MINIMUM, COMPLIANCE WITH THE
PERFORMANCE GUARANTEE CRITERIA.  OWNER IS RESPONSIBLE FOR OBTAINING AIR
EMISSIONS TESTER AND FOR ENSURING AIR EMISSIONS TESTER’S TIMELY PERFORMANCE. 
DESIGN-BUILDER SHALL COOPERATE WITH THE AIR EMISSIONS TESTER TO FACILITATE
PERFORMANCE OF ALL AIR EMISSIONS TESTS.  DESIGN-BUILDER SHALL NOT BE HELD
RESPONSIBLE FOR THE ACTIONS OF OWNER’S EMPLOYEES AND THIRD PARTIES INVOLVED IN
THE PERFORMANCE TESTING, INCLUDING BUT NOT LIMITED TO AIR EMISSIONS TESTER.

7.2.2       NO LATER THAN THIRTY (30) DAYS PRIOR TO THE EARLIER OF THE SCHEDULED
SUBSTANTIAL COMPLETION DATE OR SUBSTANTIAL COMPLETION, DESIGN-BUILDER SHALL
PROVIDE TO OWNER FOR REVIEW A DETAILED TESTING PLAN FOR THE PERFORMANCE TESTS
(OTHER THAN FOR AIR EMISSIONS).  OWNER AND DESIGN-BUILDER SHALL AGREE UPON A
TESTING PLAN THAT SHALL BE CONSISTENT WITH THE PERFORMANCE TEST PROTOCOL
CONTAINED IN EXHIBIT A HERETO.  AFTER SUCH AGREEMENT HAS BEEN REACHED,
DESIGN-BUILDER SHALL NOTIFY THE OWNER FIVE (5) BUSINESS DAYS PRIOR TO THE DATE
DESIGN-BUILDER INTENDS TO COMMENCE THE PERFORMANCE TESTS AND SHALL NOTIFY THE
OWNER UPON COMMENCEMENT OF THE PERFORMANCE TESTS. OWNER AND INDEPENDENT ENGINEER
EACH HAVE THE RIGHT TO WITNESS ALL TESTING, INCLUDING THE PERFORMANCE TESTS AND
ANY EQUIPMENT TESTING, WHETHER AT THE SITE OR AT THE SUBCONTRACTOR’S OR
EQUIPMENT SUPPLIER’S PREMISES DURING THE COURSE OF THIS AGREEMENT. 
NOTWITHSTANDING THE FOREGOING SENTENCE, OWNER SHALL BEAR THE COSTS OF PROVIDING
A WITNESS TO ANY SUCH TESTING AND ALL SUCH WITNESSES SHALL COMPLY AT ALL TIMES
WITH DESIGN-BUILDER’S, SUBCONTRACTOR’S OR EQUIPMENT SUPPLIER’S SAFETY AND
SECURITY PROCEDURES AND OTHER

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REASONABLE REQUIREMENTS, AND OTHERWISE CONDUCT THEMSELVES IN A MANNER THAT DOES
NOT INTERFERE WITH DESIGN-BUILDER’S, SUBCONTRACTOR’S OR EQUIPMENT SUPPLIER’S
ACTIVITIES OR OPERATIONS.

7.2.3       DESIGN-BUILDER SHALL PROVIDE TO OWNER A PERFORMANCE TEST REPORT
(EXCLUDING RESULTS FROM AIR EMISSIONS TESTING), INCLUDING ALL APPLICABLE TEST
DATA, CALCULATIONS AND CERTIFICATES INDICATING THE RESULTS OF THE PERFORMANCE
TESTS AND, WITHIN FIVE (5) BUSINESS DAYS OF OWNER’S RECEIPT OF SUCH RESULTS,
OWNER, INDEPENDENT ENGINEER AND DESIGN-BUILDER WILL JOINTLY INSPECT SUCH WORK
AND REVIEW THE RESULTS OF THE PERFORMANCE TESTS TO VERIFY THAT THE PERFORMANCE
GUARANTEE CRITERIA HAVE BEEN MET.   IF OWNER OR INDEPENDENT ENGINEER REASONABLY
DETERMINES THAT THE PERFORMANCE GUARANTEE CRITERIA HAVE NOT BEEN MET, OWNER
SHALL NOTIFY DESIGN-BUILDER THE REASONS WHY OWNER DETERMINED THAT THE
PERFORMANCE GUARANTEE CRITERIA HAVE NOT BEEN MET AND DESIGN-BUILDER SHALL
PROMPTLY TAKE SUCH ACTION OR PERFORM SUCH ADDITIONAL WORK AS WILL ACHIEVE THE
PERFORMANCE GUARANTEE CRITERIA AND SHALL ISSUE TO THE OWNER ANOTHER NOTICE IN
ACCORDANCE WITH SECTION 7.2.2; PROVIDED HOWEVER THAT IF THE NOTICE RELATES TO A
RETEST, THE NOTICE MAY BE PROVIDED NO LESS THAN TWO (2) BUSINESS DAYS PRIOR TO
THE PERFORMANCE TESTS.  SUCH PROCEDURE SHALL BE REPEATED AS NECESSARY UNTIL
OWNER AND INDEPENDENT ENGINEER VERIFIES THAT THE PERFORMANCE GUARANTEE CRITERIA
HAVE BEEN MET.

7.2.4       IF OWNER, FOR WHATEVER REASON, PREVENTS DESIGN-BUILDER FROM
DEMONSTRATING THE PERFORMANCE GUARANTEE CRITERIA WITHIN THIRTY (30) DAYS OF
DESIGN-BUILDER’S NOTICE THAT THE PLANT IS READY FOR PERFORMANCE TESTING, THEN
DESIGN-BUILDER SHALL BE EXCUSED FROM DEMONSTRATING COMPLIANCE WITH THE
PERFORMANCE GUARANTEE CRITERIA DURING SUCH PERIOD OF TIME THAT DESIGN-BUILDER IS
PREVENTED FROM DEMONSTRATING COMPLIANCE WITH THE PERFORMANCE GUARANTEE CRITERIA;
PROVIDED HOWEVER THAT DESIGN-BUILDER WILL BE DEEMED TO HAVE FULFILLED ALL OF ITS
OBLIGATIONS TO DEMONSTRATE THAT THE PLANT MEETS THE PERFORMANCE GUARANTEE
CRITERIA SHOULD SUCH PERIOD OF TIME DURING WHICH DESIGN-BUILDER IS PREVENTED
FROM DEMONSTRATING THE PERFORMANCE CRITERIA EXCEED THIRTY (30) DAYS OR EXTEND
BEYOND THE FINAL COMPLETION DATE.

7.3          LIQUIDATED DAMAGES.

7.3.1       DESIGN-BUILDER UNDERSTANDS THAT IF FINAL COMPLETION IS NOT ATTAINED
BY THE FINAL COMPLETION DATE, OWNER WILL SUFFER DAMAGES WHICH ARE DIFFICULT TO
DETERMINE AND ACCURATELY SPECIFY.  DESIGN-BUILDER AGREES THAT IF FINAL
COMPLETION IS NOT ATTAINED BY THE END OF THE FINAL COMPLETION DATE,
DESIGN-BUILDER SHALL PAY OWNER TWENTY THOUSAND DOLLARS ($20,000.00) AS
LIQUIDATED DAMAGES, AND NOT AS A PENALTY, FOR EACH DAY THAT FINAL COMPLETION
EXTENDS BEYOND THE FINAL COMPLETION DATE.  OWNER, AT ITS DISCRETION, MAY ELECT
TO OFFSET ANY SUCH LIQUIDATED DAMAGES FROM ANY RETAINAGE.  LIQUIDATED DAMAGES
SHALL BE PAID BY DESIGN-BUILDER BY THE FIFTEENTH (15TH) DAY OF THE MONTH
FOLLOWING THE MONTH IN WHICH THE LIQUIDATED DAMAGES WERE INCURRED.  THE
LIQUIDATED DAMAGES PROVIDED HEREIN SHALL BE IN LIEU OF ALL LIABILITY FOR ANY AND
ALL EXTRA COSTS, LOSSES, LOSS OF PROFITS, EXPENSES, CLAIMS, PENALTIES AND ANY
OTHER DAMAGES, WHETHER SPECIAL OR CONSEQUENTIAL, AND OF WHATSOEVER NATURE
INCURRED BY OWNER WHICH ARE OCCASIONED SOLELY BY ANY DELAY IN ACHIEVING FINAL
COMPLETION.

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7.3.2       MAXIMUM LIQUIDATED DAMAGES.  DESIGN-BUILDER’S LIABILITY FOR
LIQUIDATED DAMAGES UNDER SECTION 7.3.1 SHALL BE CAPPED AT AND SHALL NOT EXCEED
ONE MILLION DOLLARS ($1,000,000).

7.3.3       THE LIQUIDATED DAMAGES PROVIDED HEREIN SHALL BE IN LIEU OF ALL
LIABILITY FOR ANY AND ALL EXTRA COSTS, LOSSES, LOSS OF PROFITS, EXPENSES,
CLAIMS, PENALTIES AND ANY OTHER DAMAGES, WHETHER SPECIAL OR CONSEQUENTIAL, AND
OF WHATSOEVER NATURE INCURRED BY OWNER WHICH ARISE SOLELY DUE TO A DELAY IN
ACHIEVING FINAL COMPLETION BY THE FINAL COMPLETION DATE; PROVIDED THAT SUCH
LIQUIDATED DAMAGES SHALL NOT IN ANY WAY DETRACT FROM OR LIMIT OWNER’S REMEDIES
OR DESIGN-BUILDER’S LIABILITIES IN CONNECTION WITH ANY DEFAULT BY DESIGN-BUILDER
UNDER SECTION 15.2 HEREOF.

7.3.4       DESIGN-BUILDER SHALL NOT BE LIABLE FOR LIQUIDATED DAMAGES DURING ANY
PERIOD OF TIME FOR WHICH AN EXTENSION OF THE SCHEDULED SUBSTANTIAL COMPLETION
DATE AND/OR  FINAL COMPLETION DATE IS AVAILABLE PURSUANT TO ARTICLE 12.

7.4          BONDS AND OTHER PERFORMANCE SECURITY.

7.4.1       ON OR PRIOR TO THE DATE OF FINANCIAL CLOSING, IF REQUESTED BY OWNER,
THE DESIGN-BUILDER SHALL DELIVER TO OWNER A BOND SUBSTANTIALLY IN THE FORM
ATTACHED AS EXHIBIT H (THE “PERFORMANCE BOND”) IN AN INITIAL AMOUNT EQUIVALENT
TO THE CONTRACT PRICE.  OWNER SHALL PAY ON THE DATE OF FINANCIAL CLOSING ALL
COSTS OF OBTAINING SUCH BOND, PLUS PAY DESIGN-BUILDER A FEE OF SEVEN AND ONE
HALF PERCENT (7.5%) FOR OBTAINING SUCH BOND, SUCH FEE TO BE CALCULATED BY
MULTIPLYING SEVEN AND ONE HALF PERCENT (7.5%) TIMES THE COST OF THE PERFORMANCE
BOND.  ANY AMOUNTS PAYABLE TO THE SURETY DUE TO DESIGN-BUILDER’S DEFAULT UNDER
THIS AGREEMENT OR THE PERFORMANCE BOND SHALL BE FOR THE ACCOUNT OF
DESIGN-BUILDER.

(A)                                  DESIGN-BUILDER SHALL POST ADDITIONAL BONDS
OR SECURITY (WHICH MUST BE IN FORM AND SUBSTANCE SATISFACTORY TO OWNER AND THE
LENDERS) OR SHALL INCREASE THE AMOUNT OF THE PERFORMANCE BOND BY THE AMOUNT OF
ANY INCREASES TO THE CONTRACT PRICE; PROVIDED, HOWEVER, THAT OWNER SHALL PAY ALL
COSTS OF OBTAINING SUCH BONDS OR SECURITY, PLUS PAY DESIGN-BUILDER A FEE OF
SEVEN AND ONE HALF PERCENT (7.5%) FOR OBTAINING SUCH BONDS OR SECURITY, SUCH FEE
TO BE CALCULATED BY MULTIPLYING SEVEN AND ONE HALF PERCENT (7.5%) TIMES THE COST
OF THE BONDS OR SECURITY.

(B)                                 THE PERFORMANCE BOND SHALL SECURE THE
DESIGN-BUILDER’S OBLIGATIONS TO COMPLETE THE WORK IN ACCORDANCE WITH THIS
AGREEMENT.

7.4.2       ON OR PRIOR TO THE DATE OF FINANCIAL CLOSING, IF REQUESTED BY OWNER,
THE DESIGN-BUILDER SHALL DELIVER TO OWNER A BOND SUBSTANTIALLY IN THE FORM
ATTACHED AS EXHIBIT I (THE “PAYMENT BOND”) IN AN INITIAL AMOUNT EQUIVALENT TO
THE CONTRACT PRICE.  OWNER SHALL PAY ON THE DATE OF FINANCIAL CLOSING ALL COSTS
OF OBTAINING SUCH BOND, PLUS PAY DESIGN-BUILDER A FEE OF SEVEN AND ONE HALF
PERCENT (7.5%) FOR OBTAINING SUCH BOND, SUCH FEE TO BE CALCULATED BY MULTIPLYING
SEVEN AND ONE HALF PERCENT (7.5%) TIMES THE COST OF THE PAYMENT BOND BUT ANY

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AMOUNTS PAYABLE TO THE SURETY DUE TO DESIGN-BUILDER’S DEFAULT UNDER THIS
AGREEMENT OR THE PAYMENT BOND SHALL BE FOR THE ACCOUNT OF DESIGN-BUILDER.

(A)                                  DESIGN-BUILDER SHALL POST ADDITIONAL BONDS
OR SECURITY (WHICH MUST BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
OWNER AND THE LENDERS) OR SHALL INCREASE THE AMOUNT OF THE PAYMENT BOND BY THE
AMOUNT OF ANY INCREASE TO THE CONTRACT PRICE.

(B)                                 THE PAYMENT BOND SHALL SECURE THE
DESIGN-BUILDER’S OBLIGATIONS TO PAY ITS SUBCONTRACTORS, VENDORS AND SUPPLIERS.

(C)                                  THE PAYMENT BOND SHALL PROVIDE THE
CONDITIONS UPON WHICH SUBCONTRACTORS, VENDORS AND SUPPLIERS MAY DRAW UPON SUCH
PAYMENT BOND FOLLOWING DESIGN-BUILDER’S FAILURE TO PAY AMOUNTS DUE SUCH
SUBCONTRACTORS, VENDORS AND SUPPLIERS.

Article 8

Warranties

8.1          Design-Builder Warranty.  Design-Builder warrants to Owner that the
construction, including all materials and equipment furnished as part of the
construction, shall be new, of good quality, in conformance with the Contract
Documents and all Legal Requirements, free of defects in materials and
workmanship.  Design-Builder’s warranty obligation excludes defects caused by
abuse, alterations, or failure to maintain the Work by persons other than
Design-Builder or anyone for whose acts Design-Builder may be liable. Nothing in
this warranty is intended to limit any Manufacturer’s Warranty which provides
Owner with greater warranty rights than set forth in this Section 8.1 or the
Contract Documents.  Design-Builder will provide to Owner all manufacturers’ and
Subcontractors’ warranties upon the earlier of Substantial Completion or
termination of this Agreement.   Owner’s failure to comply with all Operating
Procedures shall void those guarantees, representations and warranties, whether
expressed or implied, that were given by Design-Builder to Owner, concerning the
performance of the Plant that are reasonably determined by Design-Builder to be
affected by such failure.  If Design-Builder reasonably determines that all
damage caused by such failure can be repaired and Owner makes all repairs needed
to correct such damage, as reasonably determined by Design-Builder, all
guarantees, representations and warranties shall be reinstated for the remaining
term thereof, if any, from the date of the repair.

8.2          CORRECTION OF DEFECTIVE WORK.

8.2.1       DESIGN-BUILDER AGREES TO CORRECT ANY WORK THAT IS FOUND TO NOT BE IN
CONFORMANCE WITH THE CONTRACT DOCUMENTS, INCLUDING THAT PART OF THE WORK SUBJECT
TO SECTION 8.1, WITHIN A PERIOD OF ONE (1) YEAR FROM THE DATE OF SUBSTANTIAL
COMPLETION OF THE WORK; PROVIDED THAT OWNER MUST REPORT SUCH NON-CONFORMANCE
WITHIN TEN (10) DAYS OF THE EARLIER OF (I)  THE DATE THAT OWNER BECOMES AWARE OF
SUCH FAILURE OR NON-CONFORMANCE, OR (II) THE DATE OWNER SHOULD HAVE BECOME AWARE
OF SUCH FAILURE OR NON-CONFORMANCE HAD OWNER ACTED IN A REASONABLE MANNER AND
OPERATED PURSUANT TO APPLICABLE OPERATING MANUALS, INSPECTION REQUIREMENTS, AND

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MAINTENANCE LOGS AS PROVIDED BY DESIGN-BUILDER OR THE APPROPRIATE VENDOR; AND
THAT SUCH ONE (1)-YEAR PERIOD SHALL BE EXTENDED ONE (1) DAY FOR ANY PART OF THE
WORK THAT IS FOUND TO BE NOT IN CONFORMANCE WITH THE CONTRACT DOCUMENTS FOR EACH
DAY THAT SUCH PART OF THE WORK IS NOT OPERATING IN CONFORMITY WITH THE CONTRACT
DOCUMENTS, INCLUDING ANY  TIME DURING WHICH ANY PART OF THE WORK IS REPAIRED OR
REPLACED PURSUANT TO THIS ARTICLE 8.

8.2.2       DESIGN-BUILDER SHALL, WITHIN SEVEN (7) DAYS OF RECEIPT OF WRITTEN
NOTICE FROM OWNER THAT THE WORK IS NOT IN CONFORMANCE WITH THE CONTRACT
DOCUMENTS, TAKE MEANINGFUL STEPS TO COMMENCE CORRECTION OF SUCH NONCONFORMING
WORK, INCLUDING THE CORRECTION, REMOVAL OR REPLACEMENT OF THE NONCONFORMING WORK
AND CORRECTION OR REPLACEMENT OF ANY WORK DAMAGED BY SUCH NONCONFORMING WORK. 
IF DESIGN-BUILDER FAILS TO COMMENCE THE NECESSARY STEPS WITHIN SUCH SEVEN (7)
DAY PERIOD OR FAILS TO CONTINUE TO PERFORM SUCH STEPS THROUGH COMPLETION, OWNER,
IN ADDITION TO ANY OTHER REMEDIES PROVIDED UNDER THE CONTRACT DOCUMENTS, MAY
PROVIDE DESIGN-BUILDER WITH WRITTEN NOTICE THAT OWNER WILL COMMENCE OR ASSUME
CORRECTION OF SUCH NONCONFORMING WORK AND REPAIR OF SUCH DAMAGED WORK WITH ITS
OWN RESOURCES.  IF, FOLLOWING SUCH WRITTEN NOTICE, OWNER PERFORMS SUCH
CORRECTIVE AND REPAIR WORK, DESIGN-BUILDER SHALL BE RESPONSIBLE FOR ALL
REASONABLE COSTS INCURRED BY OWNER IN PERFORMING THE CORRECTION.  IF, FOLLOWING
SUCH WRITTEN NOTICE, OWNER PERFORMS SUCH CORRECTIVE AND REPAIR WORK,
DESIGN-BUILDER SHALL BE RESPONSIBLE FOR ALL REASONABLE COSTS INCURRED BY OWNER
IN PERFORMING THE CORRECTION. IF THE NONCONFORMING WORK CREATES AN EMERGENCY
REQUIRING AN IMMEDIATE RESPONSE, THE SEVEN (7) DAY PERIODS IDENTIFIED HEREIN
SHALL BE INAPPLICABLE AND DESIGN-BUILDER SHALL IMMEDIATELY CORRECT, REMOVE OR
REPLACE THE NONCONFORMING WORK.

8.3          Warranty Period Not Limitation to Owner’s Rights.  The one (1)-year
period referenced in Section 8.2 above applies only to Design-Builder’s
obligation to correct nonconforming Work and is not intended to constitute a
period of limitations for any other rights or remedies Owner may have regarding
Design-Builder’s other obligations under the Contract Documents.

Article 9

Contract Price

9.1          Contract Price.  As full consideration to Design-Builder for full
and complete performance of the Work and all costs incurred in connection
therewith, Owner shall pay Design-Builder in accordance with the terms of
Article 10, the sum of One Hundred Twenty-two Million Five Hundred Forty-two
Thousand Three Hundred Sixty-three Dollars ($122,542,363.00) (“Contract Price”),
subject to adjustments made in accordance with Article 13.  The Contract Price
does not include the water pre-treatment system and the fire protection system
which shall be provided by Design-Builder pursuant to a separate side-letter
agreement executed by Owner and Design-Builder at Design-Builder’s standard time
plus material rates during the relevant time period and at the relevant locale. 
Owner acknowledges that it has taken no action which would impose a union labor
or prevailing wage requirement on Design-Builder, Owner or the Project.  The
Parties acknowledge and agree that if after the date hereof, an Owner’s action,
a change in Applicable Law, or a Governmental Authority acting pursuant to a
change in Applicable Law shall require Design-Builder to employ union labor or
compensate labor at prevailing wages, the Contract Price shall be adjusted
upwards to include any increased

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costs associated with such labor or wages.  Such adjustment shall include, but
not be limited to, increased labor, subcontractor, and material and equipment
costs resulting from any union or prevailing wage requirement; provided,
however, that if an option is made available to either employ union labor, or to
compensate labor at prevailing wages, such option shall be at Design-Builder’s
sole discretion and that if such option is executed by Owner without
Design-Builder’s agreement, Design-Builder shall have the right to terminate
this agreement and shall be entitled to compensation pursuant to Section 15.3.1
hereof.

9.2          Effect of Construction Cost Index Increase on Contract Price.  The
Contract Price shall be subject to adjustment by Design-Builder as follows:

9.2.1       CONSTRUCTION COST INDEX INCREASE.  THE BASELINE INDEX FOR THIS
AGREEMENT SHALL BE 7882.53 (OCTOBER 2006) (“BASELINE INDEX”).  IF BETWEEN THE
EFFECTIVE DATE AND THE DATE ON WHICH A VALID NOTICE TO PROCEED IS GIVEN TO
DESIGN-BUILDER THE CONSTRUCTION COST INDEX PUBLISHED BY ENGINEERING NEWS-RECORD
MAGAZINE (“CCI”) INCREASES OVER THE BASELINE INDEX, DESIGN-BUILDER SHALL NOTIFY
OWNER IN WRITING THAT IT IS ADJUSTING THE CONTRACT PRICE AND THE CONTRACT PRICE
SHALL BE INCREASED BY A PERCENTAGE AMOUNT EQUAL TO THE PERCENTAGE INCREASE IN
CCI.

ARTICLE 10

PAYMENT PROCEDURES

10.1        PAYMENT AT FINANCIAL CLOSING PRIOR TO NOTICE TO PROCEED.

10.1.1     COMMITMENT FEE.  AS SOON AS POSSIBLE AFTER EXECUTION OF THIS
AGREEMENT, BUT IN ANY EVENT, NO LATER THAN APRIL 30, 2007, OWNER SHALL PAY
DESIGN-BUILDER TWO MILLION DOLLARS ($2,000,000) AS A NON-REFUNDABLE COMMITMENT
FEE (“COMMITMENT FEE”).  THE COMMITMENT FEE WILL BE CREDITED AGAINST THE
CONTRACT PRICE UPON THE ACCEPTANCE OF NOTICE TO PROCEED PURSUANT TO SECTION
6.2.  IF OWNER FAILS TO PROVIDE TIMELY NOTICE TO PROCEED PURSUANT TO SECTION
6.2, DESIGN-BUILDER, IN ADDITION TO OTHER REMEDIES AVAILABLE UNDER THE
AGREEMENT, SHALL RETAIN THE FULL AMOUNT OF THE COMMITMENT FEE AND OWNER SHALL
NOT BE ENTITLED TO ANY REFUND OR CREDIT.  SHOULD OWNER FAIL TO PAY THE
COMMITMENT FEE AS PROVIDED HEREIN, DESIGN-BUILDER SHALL HAVE THE RIGHT TO
TERMINATE THIS AGREEMENT AND SHALL BE ENTITLED TO COMPENSATION PURSUANT TO
SECTION 15.3.1 HEREOF.

10.1.2     AS PART OF THE CONTRACT PRICE, OWNER SHALL PAY DESIGN-BUILDER TWENTY
MILLION DOLLARS ($20,000,000.00), AS A MOBILIZATION FEE, AS SOON AS ALLOWED BY
ITS ORGANIZATIONAL DOCUMENTS AND ANY OTHER AGREEMENTS OR LAWS AND AT THE LATEST,
AT THE EARLIER TO OCCUR OF FINANCIAL CLOSING OR THE ISSUANCE OF A NOTICE TO
PROCEED. THE TWENTY MILLION DOLLAR ($20,000,000.00) MOBILIZATION FEE PAYMENT
SHALL BE SUBJECT TO RETAINAGE AS PROVIDED BY SECTION 10.2.7.

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10.2        Progress Payments.

 

10.2.1     APPLICATION FOR PAYMENT.  FOLLOWING THE ISSUANCE OF NOTICE TO PROCEED
PURSUANT TO SECTION 6.2, DESIGN-BUILDER SHALL SUBMIT TO OWNER, ON OR BEFORE THE
TWENTY-FIFTH (25TH) DAY OF EACH MONTH, ITS REQUEST FOR PAYMENT FOR ALL WORK
PERFORMED AND NOT PAID FOR DURING THE PREVIOUS PAY PERIOD (THE “APPLICATION FOR
PAYMENT”).  THE APPLICATION FOR PAYMENT SHALL BE SUBSTANTIALLY IN THE FORM
ATTACHED HERETO AS EXHIBIT M.  DESIGN-BUILDER SHALL SUBMIT TO OWNER, ALONG WITH
EACH APPLICATION FOR PAYMENT, SIGNED LIEN WAIVERS, SUBSTANTIALLY IN THE FORM
ATTACHED HERETO AS EXHIBIT N, RECEIVED FROM SUBCONTRACTORS AND SUPPLIERS FOR THE
WORK INCLUDED IN THE APPLICATION FOR PAYMENT SUBMITTED FOR THE IMMEDIATELY
PRECEDING PAY PERIOD AND FOR WHICH PAYMENT HAS BEEN RECEIVED..

10.2.2     THE APPLICATION FOR PAYMENT SHALL CONSTITUTE DESIGN-BUILDER’S
REPRESENTATION THAT THE WORK HAS BEEN PERFORMED CONSISTENT WITH THE CONTRACT
DOCUMENTS AND HAS PROGRESSED TO THE POINT INDICATED IN THE APPLICATION FOR
PAYMENT.  THE PARTIES AGREE THAT THE WORK COMPLETED AT THE SITE, THE COMPARISON
OF THE APPLICATION FOR PAYMENT AGAINST THE WORK SCHEDULE, AND THE SCHEDULE OF
VALUES SHALL PROVIDE SUFFICIENT SUBSTANTIATION OF THE ACCURACY OF THE
APPLICATION FOR PAYMENT AND THAT NO ADDITIONAL DOCUMENTATION WILL BE PROVIDED TO
OWNER OR INDEPENDENT ENGINEER IN SUPPORT OF AN APPLICATION FOR PAYMENT.  TITLE
TO THE WORK, INCLUDING WORK REFLECTED IN AN APPLICATION FOR PAYMENT WHICH IS IN
PROCESS, IS IN TRANSIT, IS IN STORAGE, OR HAS BEEN INCORPORATED INTO THE SITE,
SHALL PASS TO OWNER FREE AND CLEAR OF ALL CLAIMS, LIENS, ENCUMBRANCES, AND
SECURITY INTERESTS UPON DESIGN-BUILDER’S RECEIPT OF PAYMENT THEREFOR.

10.2.3     WITHIN TEN (10) DAYS AFTER OWNER’S RECEIPT OF EACH APPLICATION FOR
PAYMENT, OWNER SHALL PAY DESIGN-BUILDER ALL AMOUNTS PROPERLY DUE, BUT IN EACH
CASE LESS THE TOTAL OF PAYMENTS PREVIOUSLY MADE, AND LESS AMOUNTS PROPERLY
WITHHELD UNDER THIS AGREEMENT.

10.2.4     THE APPLICATION FOR PAYMENT MAY REQUEST PAYMENT FOR EQUIPMENT AND
MATERIALS NOT YET INCORPORATED INTO THE PROJECT; PROVIDED THAT (I) OWNER IS
SATISFIED THAT THE EQUIPMENT AND MATERIALS ARE SUITABLY STORED AT EITHER THE
SITE OR ANOTHER ACCEPTABLE LOCATION, (II) THE EQUIPMENT AND MATERIALS ARE
PROTECTED BY SUITABLE INSURANCE, AND (III) UPON PAYMENT, OWNER WILL RECEIVE THE
EQUIPMENT AND MATERIALS FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES EXCEPT FOR
LIENS OF THE LENDERS AND OTHER LIENS AND ENCUMBRANCES PERMITTED UNDER THE
FINANCING DOCUMENTS.

10.2.5     SCHEDULE OF VALUES.  THE SCHEDULE OF VALUES ATTACHED HERETO AS
EXHIBIT E (THE “SCHEDULE OF VALUES”) (I) SUBDIVIDES THE WORK INTO ITS RESPECTIVE
PARTS, (II) INCLUDES VALUES FOR ALL ITEMS COMPRISING THE WORK, AND (III) SERVES
AS THE BASIS FOR MONTHLY PROGRESS PAYMENTS MADE TO DESIGN-BUILDER THROUGHOUT THE
WORK.

10.2.6     WITHHOLDING OF PAYMENTS.  ON OR BEFORE THE DATE SET FORTH IN SECTION
10.2.3, OWNER SHALL PAY DESIGN-BUILDER ALL AMOUNTS PROPERLY DUE.  IF OWNER
DETERMINES THAT DESIGN-BUILDER IS NOT ENTITLED TO ALL OR PART OF AN APPLICATION
FOR PAYMENT, IT WILL NOTIFY DESIGN-BUILDER IN WRITING AT LEAST FIVE (5) DAYS
PRIOR TO THE DATE PAYMENT IS DUE.  THE NOTICE SHALL INDICATE THE SPECIFIC
AMOUNTS OWNER INTENDS TO WITHHOLD, THE REASONS AND CONTRACTUAL BASIS FOR THE
WITHHOLDING, AND THE SPECIFIC MEASURES DESIGN-BUILDER MUST TAKE TO RECTIFY
OWNER’S

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CONCERNS.  DESIGN-BUILDER AND OWNER WILL ATTEMPT TO RESOLVE OWNER’S CONCERNS
PRIOR TO THE DATE PAYMENT IS DUE.  IF THE PARTIES CANNOT RESOLVE SUCH CONCERNS,
DESIGN-BUILDER MAY PURSUE ITS RIGHTS UNDER THE CONTRACT DOCUMENTS, INCLUDING
THOSE UNDER ARTICLE 19.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE
CONTRACT DOCUMENTS, OWNER SHALL PAY DESIGN-BUILDER ALL UNDISPUTED AMOUNTS IN AN
APPLICATION FOR PAYMENT WITHIN THE TIMES REQUIRED BY THE AGREEMENT.

10.2.7     RETAINAGE ON PROGRESS PAYMENTS.  OWNER WILL RETAIN TEN PERCENT (10%)
OF EACH PAYMENT UP TO A MAXIMUM OF SIX MILLION ONE HUNDRED TWENTY-SEVEN THOUSAND
ONE HUNDRED EIGHTEEN DOLLARS ($6,127,118.00). ONCE SIX MILLION ONE HUNDRED
TWENTY-SEVEN THOUSAND ONE HUNDRED EIGHTEEN DOLLARS ($6,127,118.00) HAS BEEN
RETAINED, IN TOTAL, OWNER WILL NOT RETAIN ANY ADDITIONAL AMOUNTS FROM ANY
SUBSEQUENT PAYMENTS. OWNER WILL ALSO REASONABLY CONSIDER REDUCING RETAINAGE FOR
SUBCONTRACTORS COMPLETING THEIR WORK EARLY IN THE PROJECT.  UPON SUBSTANTIAL
COMPLETION OF THE WORK OWNER SHALL RELEASE TO DESIGN-BUILDER ALL RETAINED
AMOUNTS LESS AN AMOUNT EQUAL TO THE REASONABLE VALUE OF ALL REMAINING OR
INCOMPLETE ITEMS OF WORK AND LESS AN AMOUNT EQUAL TO THE VALUE OF ANY
SUBCONTRACTOR LIEN WAIVERS NOT YET OBTAINED, AS NOTED IN THE CERTIFICATE OF
SUBSTANTIAL COMPLETION, PROVIDED THAT SUCH PAYMENT SHALL ONLY BE MADE IF
DESIGN-BUILDER HAS MET THE PERFORMANCE GUARANTEE CRITERIA LISTED IN EXHIBIT A.

10.3        Final Payment.  Design-Builder shall deliver to Owner a request for
final payment (the “Final Application for Payment”) when Final Completion has
been achieved in accordance with Section 6.5. Owner shall make final payment
within thirty (30) Days after Owner’s receipt of the Final Application for
Payment (“Final Payment”).

10.4        FAILURE TO PAY AMOUNTS DUE.

10.4.1     INTEREST.  PAYMENTS WHICH ARE DUE AND UNPAID BY OWNER TO
DESIGN-BUILDER, WHETHER PROGRESS PAYMENTS OR FINAL PAYMENT, SHALL BEAR INTEREST
COMMENCING FIVE (5) DAYS AFTER PAYMENT IS DUE AT THE RATE OF EIGHTEEN PERCENT
(18%) PER ANNUM, OR  THE MAXIMUM RATE ALLOWED BY LAW.

10.4.2     RIGHT TO SUSPEND WORK.  IF OWNER FAILS TO PAY DESIGN-BUILDER ANY
UNDISPUTED AMOUNT THAT BECOMES DUE, DESIGN-BUILDER, IN ADDITION TO ALL OTHER
REMEDIES PROVIDED IN THE CONTRACT DOCUMENTS, MAY STOP WORK PURSUANT TO SECTION
15.4 HEREOF.  ALL PAYMENTS PROPERLY DUE AND UNPAID SHALL BEAR INTEREST AT THE
RATE SET FORTH IN SECTION 10.4.1.

10.4.3     FAILURE TO MAKE FINAL PAYMENT.  OWNER’S FAILURE TO MAKE FINAL PAYMENT
PURSUANT TO SECTION 10.3 HEREOF SHALL VOID ANY AND ALL WARRANTIES, WHETHER
EXPRESS OR IMPLIED, PROVIDED BY DESIGN-BUILDER PURSUANT TO THIS AGREEMENT.

10.5        Design-Builder’s Payment Obligations.  Design-Builder will pay
Design Consultants and Subcontractors, in accordance with its contractual
obligations to such parties, all the amounts Design-Builder has received from
Owner on account of their work.  Design-Builder will impose similar requirements
on Design Consultants and Subcontractors to pay those parties with whom they
have contracted.  Design-Builder will indemnify and defend Owner against any
claims for payment and mechanic’s liens as set forth in Section 14.2 hereof.

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10.6        Record Keeping and Finance Controls. With respect to changes in the
Work performed on a cost basis by Design-Builder pursuant to the Contract
Documents, Design-Builder shall keep full and detailed accounts and exercise
such controls as may be necessary for proper financial management, using
accounting and control systems in accordance with generally accepted accounting
principles and as may be provided in the Contract Documents.  During the
performance of the Work and for a period of three (3) years after Final Payment,
Owner and Owner’s accountants shall be afforded access from time to time, upon
reasonable notice, to Design-Builder’s records, books, correspondence, receipts,
subcontracts, purchase orders, vouchers, memoranda and other data relating to
changes in the Work performed on a cost basis in accordance with the Contract
Documents, all of which Design-Builder shall preserve for a period of three (3)
years after Final Payment.

ARTICLE 11

HAZARDOUS CONDITIONS AND DIFFERING SITE CONDITIONS

11.1        HAZARDOUS CONDITIONS.

11.1.1     UNLESS OTHERWISE EXPRESSLY PROVIDED IN THE CONTRACT DOCUMENTS TO BE
PART OF THE WORK, DESIGN-BUILDER IS NOT RESPONSIBLE FOR ANY HAZARDOUS CONDITIONS
ENCOUNTERED AT THE SITE.  UPON ENCOUNTERING ANY HAZARDOUS CONDITIONS,
DESIGN-BUILDER WILL STOP WORK IMMEDIATELY IN THE AFFECTED AREA AND AS PROMPTLY
AS PRACTICABLE NOTIFY OWNER AND, IF DESIGN-BUILDER IS SPECIFICALLY REQUIRED TO
DO SO BY LEGAL REQUIREMENTS, ALL GOVERNMENTAL AUTHORITIES HAVING JURISDICTION
OVER THE PROJECT OR SITE.  DESIGN-BUILDER SHALL NOT REMOVE, REMEDIATE OR HANDLE
IN ANY WAY (EXCEPT IN CASE OF EMERGENCY) ANY HAZARDOUS CONDITIONS ENCOUNTERED AT
THE SITE WITHOUT PRIOR WRITTEN APPROVAL OF OWNER.

11.1.2     UPON RECEIVING NOTICE OF THE PRESENCE OF SUSPECTED HAZARDOUS
CONDITIONS, OWNER SHALL TAKE THE NECESSARY MEASURES REQUIRED TO ENSURE THAT THE
HAZARDOUS CONDITIONS ARE REMEDIATED OR RENDERED HARMLESS.  SUCH NECESSARY
MEASURES SHALL INCLUDE OWNER RETAINING QUALIFIED INDEPENDENT EXPERTS TO (I)
ASCERTAIN WHETHER HAZARDOUS CONDITIONS HAVE ACTUALLY BEEN ENCOUNTERED, AND, IF
THEY HAVE BEEN ENCOUNTERED, (II) PRESCRIBE THE REMEDIAL MEASURES THAT OWNER IS
REQUIRED UNDER APPLICABLE LEGAL REQUIREMENTS TO TAKE WITH RESPECT TO SUCH
HAZARDOUS CONDITIONS IN ORDER FOR THE WORK TO PROCEED.  OWNER’S CHOICE OF SUCH
QUALIFIED INDEPENDENT EXPERTS SHALL BE SUBJECT TO THE PRIOR APPROVAL OF
DESIGN-BUILDER, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.

11.1.3     DESIGN-BUILDER SHALL BE OBLIGATED TO RESUME WORK AT THE AFFECTED AREA
OF THE PROJECT ONLY AFTER OWNER’S QUALIFIED INDEPENDENT EXPERT PROVIDES IT WITH
WRITTEN CERTIFICATION THAT (I) THE HAZARDOUS CONDITIONS HAVE BEEN REMOVED OR
RENDERED HARMLESS, AND (II) ALL NECESSARY APPROVALS HAVE BEEN OBTAINED FROM ALL
GOVERNMENT ENTITIES HAVING JURISDICTION OVER THE PROJECT OR SITE AND A
REMEDIATION PLAN HAS BEEN UNDERTAKEN PERMITTING THE WORK TO PROCEED.

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11.1.4     DESIGN-BUILDER WILL BE ENTITLED, IN ACCORDANCE WITH THIS ARTICLE 11,
TO AN ADJUSTMENT IN ITS CONTRACT PRICE AND/OR CONTRACT TIME(S) TO THE EXTENT
DESIGN-BUILDER’S COST AND/OR TIME OF PERFORMANCE HAVE BEEN ADVERSELY IMPACTED BY
THE PRESENCE OF HAZARDOUS CONDITIONS, PROVIDED THAT SUCH HAZARDOUS MATERIALS
WERE NOT INTRODUCED TO THE SITE BY DESIGN-BUILDER, SUBCONTRACTORS OR ANYONE FOR
WHOSE ACTS THEY MAY BE LIABLE.

11.1.5     TO THE FULLEST EXTENT PERMITTED BY LAW, OWNER SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS DESIGN-BUILDER, DESIGN CONSULTANTS, SUBCONTRACTORS, ANYONE
EMPLOYED DIRECTLY OR INDIRECTLY FOR ANY OF THEM, AND THEIR OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS, FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES,
LIABILITIES AND EXPENSES, INCLUDING ATTORNEYS’ FEES AND EXPENSES, ARISING OUT OF
OR RESULTING FROM THE PRESENCE, REMOVAL OR REMEDIATION OF HAZARDOUS CONDITIONS
AT THE SITE.

11.1.6     NOTWITHSTANDING THE PRECEDING PROVISIONS OF THIS SECTION 11.1, OWNER
IS NOT RESPONSIBLE FOR HAZARDOUS CONDITIONS INTRODUCED TO THE SITE BY
DESIGN-BUILDER, SUBCONTRACTORS OR ANYONE FOR WHOSE ACTS THEY MAY BE LIABLE. 
DESIGN-BUILDER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS OWNER AND OWNER’S
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM AND AGAINST ALL CLAIMS, LOSSES,
DAMAGES, LIABILITIES AND EXPENSES, INCLUDING ATTORNEYS’ FEES AND EXPENSES,
ARISING OUT OF OR RESULTING FROM THOSE HAZARDOUS CONDITIONS INTRODUCED TO THE
SITE BY DESIGN-BUILDER, SUBCONTRACTORS OR ANYONE FOR WHOSE ACTS THEY MAY BE
LIABLE.

11.2        DIFFERING SITE CONDITIONS; INSPECTION.

11.2.1     CONCEALED OR LATENT PHYSICAL CONDITIONS OR SUBSURFACE CONDITIONS AT
THE SITE THAT (I) DIFFER FROM THE CONDITIONS INDICATED IN THE CONTRACT
DOCUMENTS, OR (II) ARE OF AN UNUSUAL NATURE, DIFFERING FROM THE CONDITIONS
ORDINARILY ENCOUNTERED AND GENERALLY RECOGNIZED AS INHERENT IN THE WORK ARE
COLLECTIVELY REFERRED TO HEREIN AS “DIFFERING SITE CONDITIONS.”  IF
DESIGN-BUILDER ENCOUNTERS A DIFFERING SITE CONDITION, DESIGN-BUILDER WILL BE
ENTITLED TO AN ADJUSTMENT IN THE CONTRACT PRICE AND/OR CONTRACT TIME(S) TO THE
EXTENT DESIGN-BUILDER’S COST AND/OR TIME OF PERFORMANCE ARE ADVERSELY IMPACTED
BY THE DIFFERING SITE CONDITION.

11.2.2     UPON ENCOUNTERING A DIFFERING SITE CONDITION, DESIGN-BUILDER SHALL
PROVIDE PROMPT WRITTEN NOTICE TO OWNER OF SUCH CONDITION, WHICH NOTICE SHALL NOT
BE LATER THAN FOURTEEN (14) BUSINESS DAYS AFTER SUCH CONDITION HAS BEEN
ENCOUNTERED.  DESIGN-BUILDER SHALL, TO THE EXTENT REASONABLY POSSIBLE, PROVIDE
SUCH NOTICE BEFORE THE DIFFERING SITE CONDITION HAS BEEN SUBSTANTIALLY DISTURBED
OR ALTERED.

Article 12

Force Majeure; Change in Legal Requirements

12.1        Force Majeure Event.  A force Majeure event shall mean a cause or
event beyond the reasonable control of, and without the fault or negligence of a
Party claiming Force Majeure, including, without limitation, an emergency,
floods, earthquakes, hurricanes, tornadoes, adverse weather conditions not
reasonably anticipated or acts of God; sabotage; vandalism beyond that

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which could reasonably be prevented by a Party claiming Force Majeure;
terrorism; war; riots; fire; explosion; blockades; insurrection; strike; slow
down or labor disruptions (even if such difficulties could be resolved by
conceding to the demands of a labor group); delay in the delivery of materials
or equipment that is beyond the control of a Party claiming Force Majeure, and
action or failure to take action by any Governmental Authority after the
Effective Date (including the adoption or change in any rule or regulation or
environmental constraints lawfully imposed by such Governmental Authority), but
only if such requirements, actions, or failures to act prevent or delay
performance; and inability, despite due diligence, to obtain any licenses,
permits, or approvals required by any Governmental Authority (any such event, a
“Force Majeure Event”).   Economic hardship (except to the extent caused by a
Force Majeure Event) is explicitly excluded as a Force Majeure Event and is
solely the responsibility of the affected party.

12.2        Effect of Force Majeure Event.  Neither Party shall be considered in
default in the performance of any of the obligations contained in the Contract
Documents, except for the Owners or the Design-Builder’s obligations to pay
money (including but not limited to, Progress Payments and payments of
liquidated damages which become due and payable with respect to the period prior
to the occurrence of the Force Majeure Event), when and to the extent the
failure of performance shall be caused by a Force Majeure Event.  If either
Party is rendered wholly or partly unable to perform its obligations under the
Contract Documents because of a Force Majeure Event, such Party will be excused
from performance affected by the Force Majeure Event to the extent and for the
period of time so affected; provided that:

(A)           THE NONPERFORMING PARTY, WITHIN FORTY-EIGHT (48) HOURS AFTER THE
NONPERFORMING PARTY ACTUALLY BECOMES AWARE OF THE OCCURRENCE AND IMPACT OF THE
FORCE MAJEURE EVENT, GIVES THE OTHER PARTY WRITTEN NOTICE DESCRIBING THE EVENT
OR CIRCUMSTANCE IN DETAIL, INCLUDING AN ESTIMATION OF ITS EXPECTED DURATION AND
PROBABLE IMPACT ON THE PERFORMANCE OF THE AFFECTED PARTY’S OBLIGATIONS HEREUNDER
AND CONTINUES TO FURNISH TIMELY REGULAR REPORTS WITH RESPECT THERETO DURING THE
CONTINUATION OF AND UPON THE TERMINATION OF THE FORCE MAJEURE EVENT;

(B)           THE SUSPENSION OF PERFORMANCE IS OF NO GREATER SCOPE AND OF NO
LONGER DURATION THAN IS REASONABLY REQUIRED BY THE FORCE MAJEURE EVENT;

(C)           THE OBLIGATIONS OF EITHER PARTY THAT AROSE BEFORE THE OCCURRENCE
CAUSING THE SUSPENSION OF PERFORMANCE AND THE PERFORMANCE THAT IS NOT PREVENTED
BY THE OCCURRENCE, SHALL NOT BE EXCUSED AS A RESULT OF SUCH OCCURRENCE;

(D)           THE NONPERFORMING PARTY USES ITS BEST EFFORTS TO REMEDY ITS
INABILITY TO PERFORM AND MITIGATE THE EFFECT OF SUCH EVENT AND RESUMES ITS
PERFORMANCE AT THE EARLIEST PRACTICAL TIME AFTER CESSATION OF SUCH OCCURRENCE OR
UNTIL SUCH TIME THAT PERFORMANCE IS PRACTICABLE;

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(E)           WHEN THE NONPERFORMING PARTY IS ABLE TO RESUME PERFORMANCE OF ITS
OBLIGATIONS UNDER THE CONTRACT DOCUMENTS, THAT PARTY SHALL GIVE THE OTHER PARTY
WRITTEN NOTICE TO THAT EFFECT; AND

(F)            DESIGN-BUILDER SHALL BE ENTITLED TO A DAY-FOR-DAY TIME EXTENSION
FOR THOSE EVENTS SET FORTH IN SECTION 12.1 TO THE EXTENT THE OCCURRENCE OF SUCH
EVENT DELAYED DESIGN-BUILDER’S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS
AGREEMENT.

12.3        Change in Legal Requirements.  The Contract Price and/or the
Contract Time(s) shall be adjusted to compensate Design-Builder for the effects
of any changes to the Legal Requirements that occur after the date of this
Agreement and as a result of such change, the performance of the Work is
adversely affected.  Such effects may include, without limitation, revisions
Design-Builder is required to make to the Construction Documents because of
changes in Legal Requirements.

12.4        Time Impact And Availability.  If the Design-Builder is delayed at
any time in the commencement or progress of the Work due to a delay in the
delivery of, or unavailability of, essential materials or labor to the Project
as a result of a significant industry-wide economic fluctuation or disruption
beyond the control of and without the fault of the Design-Builder or its
Subcontractors which is experienced or expected to be experienced by certain
markets providing essential materials and equipment to the Project during the
performance of the Work and such economic fluctuation or disruption adversely
impacts the price, availability, and delivery timeframes of essential materials,
equipment, or labor (such event an “Industry-Wide Disruption”), the
Design-Builder shall be entitled to an equitable extension of the Contract
Time(s) on a day-for-day basis equal to such delay.  The Owner and
Design-Builder shall undertake reasonable steps to mitigate the effect of such
delays.  Notwithstanding any other provision to the contrary, the Design-Builder
shall not be liable to the Owner for any expenses, losses or damages arising
from a delay, or unavailability of, essential materials or labor to the Project
as a result of an Industry-Wide Disruption.

12.5        Effect of Industry-Wide Disruption on Contract Price.  In the event
of an Industry-Wide Disruption, the Contract Price shall be adjusted to allocate
the risk of such market conditions between the Owner and Design-Builder through
the following equitable escalation in the Contract Price:

12.5.1     IF DURING THE COURSE OF THE PROJECT THE CCI INCREASES OVER THE
BASELINE INDEX ESTABLISHED IN SECTION 9.2.1, DESIGN-BUILDER SHALL NOTIFY OWNER
IN WRITING THAT IT IS ADJUSTING THE CONTRACT PRICE.

12.5.2     IN THE EVENT THAT THE CCI INCREASES OVER THE BASELINE INDEX, THE
CONTRACT PRICE SHALL BE ADJUSTED TO REFLECT SUCH INCREASE, BUT ONLY WITH RESPECT
TO THOSE APPLICATIONS FOR PAYMENT SUBMITTED AFTER THE DATE ON WHICH WRITTEN
NOTICE OF THE ADJUSTMENT IN CONTRACT PRICE IS GIVEN.

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12.5.3     PAYMENT FOR ANY ADJUSTMENT IN THE CONTRACT PRICE AS A RESULT OF THIS
ARTICLE 12 SHALL BE MADE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

Article 13

Changes to the Contract Price and Scheduled Completion Dates

13.1        CHANGE ORDERS.

13.1.1     A CHANGE ORDER (“CHANGE ORDER”) IS A WRITTEN INSTRUMENT ISSUED AFTER
EXECUTION OF THIS AGREEMENT SIGNED BY OWNER AND DESIGN-BUILDER, STATING THEIR
AGREEMENT UPON ALL OF THE FOLLOWING:

(A)           THE SCOPE OF THE CHANGE IN THE WORK;

(B)           THE AMOUNT OF THE ADJUSTMENT TO THE CONTRACT PRICE; AND

(C)           THE EXTENT OF THE ADJUSTMENT TO THE CONTRACT TIME(S).

13.1.2     ALL CHANGES IN THE WORK AUTHORIZED BY AN APPLICABLE CHANGE ORDER
SHALL BE PERFORMED UNDER THE APPLICABLE CONDITIONS OF THE CONTRACT DOCUMENTS. 
OWNER AND DESIGN-BUILDER SHALL NEGOTIATE IN GOOD FAITH AND AS EXPEDITIOUSLY AS
POSSIBLE THE APPROPRIATE ADJUSTMENTS FOR SUCH CHANGES.  PRIOR TO INCURRING ANY
COSTS WITH RESPECT TO ESTIMATING SERVICES, DESIGN SERVICES AND ANY OTHER
SERVICES INVOLVED IN THE PREPARATION OF THE PROPOSED REVISIONS TO THE CONTRACT
DOCUMENTS, DESIGN-BUILDER MUST OBTAIN THE WRITTEN APPROVAL OF OWNER FOR SUCH
COSTS.

13.1.3     IF OWNER REQUESTS A PROPOSAL FOR A CHANGE IN THE WORK FROM
DESIGN-BUILDER AND SUBSEQUENTLY ELECTS NOT TO PROCEED WITH THE CHANGE, A CHANGE
ORDER SHALL BE ISSUED TO REIMBURSE DESIGN-BUILDER FOR REASONABLE COSTS INCURRED
FOR ESTIMATING SERVICES, DESIGN SERVICES AND ANY OTHER SERVICES INVOLVED IN THE
PREPARATION OF PROPOSED REVISIONS TO THE CONTRACT DOCUMENTS; PROVIDED THAT SUCH
COSTS WERE PREVIOUSLY APPROVED BY OWNER PURSUANT TO SECTION 13.1.2.

13.2        CONTRACT PRICE ADJUSTMENTS.

13.2.1     THE INCREASE OR DECREASE IN CONTRACT PRICE RESULTING FROM A CHANGE IN
THE WORK SHALL BE A MUTUALLY ACCEPTED LUMP SUM, PROPERLY ITEMIZED AND SUPPORTED
BY SUFFICIENT SUBSTANTIATING DATA TO PERMIT EVALUATION BY OWNER.

13.2.2     IF OWNER AND DESIGN-BUILDER DISAGREE UPON WHETHER DESIGN-BUILDER IS
ENTITLED TO BE PAID FOR ANY SERVICES REQUIRED BY OWNER, OR IF THERE ARE ANY
OTHER DISAGREEMENTS OVER THE SCOPE OF WORK OR PROPOSED CHANGES TO THE WORK,
OWNER AND DESIGN-BUILDER SHALL

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RESOLVE THE DISAGREEMENT PURSUANT TO ARTICLE 19 HEREOF.  AS PART OF THE
NEGOTIATION PROCESS, DESIGN-BUILDER SHALL FURNISH OWNER WITH A GOOD FAITH
ESTIMATE OF THE COSTS TO PERFORM THE DISPUTED SERVICES IN ACCORDANCE WITH
OWNER’S INTERPRETATIONS.  IF THE PARTIES ARE UNABLE TO AGREE AND OWNER EXPECTS
DESIGN-BUILDER TO PERFORM THE SERVICES IN ACCORDANCE WITH OWNER’S
INTERPRETATIONS, DESIGN-BUILDER SHALL PROCEED TO PERFORM THE DISPUTED SERVICES,
CONDITIONED UPON OWNER ISSUING A WRITTEN ORDER TO DESIGN-BUILDER (I) DIRECTING
DESIGN-BUILDER TO PROCEED, AND (II) SPECIFYING OWNER’S INTERPRETATION OF THE
SERVICES THAT ARE TO BE PERFORMED.  IF THIS OCCURS, DESIGN-BUILDER SHALL BE
ENTITLED TO SUBMIT IN ITS APPLICATIONS FOR PAYMENT AN AMOUNT EQUAL TO FIFTY
PERCENT (50%) OF ITS REASONABLE ESTIMATED DIRECT COST TO PERFORM THE SERVICES,
AND OWNER AGREES TO PAY SUCH AMOUNTS, WITH THE EXPRESS UNDERSTANDING THAT (X)
SUCH PAYMENT BY OWNER DOES NOT PREJUDICE OWNER’S RIGHT TO ARGUE THAT IT HAS NO
RESPONSIBILITY TO PAY FOR SUCH SERVICES, AND (Y) RECEIPT OF SUCH PAYMENT BY
DESIGN-BUILDER DOES NOT PREJUDICE DESIGN-BUILDER’S RIGHT TO SEEK FULL PAYMENT OF
THE DISPUTED SERVICES IF OWNER’S ORDER IS DEEMED TO BE A CHANGE TO THE WORK.

13.3        Emergencies.  In any emergency affecting the safety of persons
and/or property, Design-Builder shall act, at its discretion, to prevent
threatened damage, injury or loss and shall notify the Owner as soon as
practicable and in any event within forty-eight (48) hours after Design-Builder
becomes aware of the emergency.  The notice to Owner shall describe the
emergency in detail, including a reasonable estimation of its expected duration
and impact, if any, on the performance of Design-Builder’s obligations
hereunder.  Any change in the Contract Price and/or the Contract Time(s) on
account of emergency work shall be determined as provided in this Article 13.

13.4        Failure to Complete Owner’s Milestones.  The dates when Owner’s
obligations are required to be completed to enable Design-Builder to achieve the
Contract Time(s) are identified in Table 3 in Exhibit C (“Owner’s Milestones”). 
The Contract Time(s) shall be revised to provide a Day-for-Day extension of the
Contract Time(s) for completion of the Work for each full Day during which Owner
fails to timely complete its obligations pursuant to the Owner’s Milestones.  In
the event of Owner’s failure to timely complete its obligations pursuant to
Owner’s Milestones results in the extension of the Contract Time(s), the
Contract Price shall be adjusted to compensate Design-Builder for the effects,
if any, of such change, that are established by Design-Builder and could not
have reasonably been mitigated by Design-Builder.

Article 14

Indemnity

14.1        Tax Claim Indemnification.  If, in accordance with Owner’s
direction, an exemption for all or part of the Work is claimed for taxes, Owner
shall indemnify, defend and hold harmless Design-Builder (and its officers,
directors, agents, successors and assigns) from and against any and all damages,
claims costs, losses, liabilities, and expenses (including penalties, interest,
fines, taxes of any kind, attorneys’ fees, accountants and other professional
fees and associated expenses) incurred by Design-Builder in connection with or
as a result of any action taken by Design-Builder in accordance with Owner’s
directive.

14.2        Payment Claim Indemnification.  To the extent Design-Builder has
received payment for the Work, Design-Builder shall indemnify, defend and hold
harmless Owner

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Indemnified Parties from any claims or mechanic’s liens brought against Owner
Indemnified Parties or against the Project as a result of the failure of
Design-Builder, or those for whose acts it is responsible, to pay for any
services, materials, labor, equipment, taxes or other items or obligations
furnished or incurred for or in connection with the Work.  Within three (3)
business days of receiving written notice from Owner that such a claim or
mechanic’s lien has been filed, Design-Builder shall commence to take the steps
necessary to discharge such claim or lien, including, if necessary, the
furnishing of a mechanic’s lien bond. If Design-Builder fails to do so, Owner
will have the right to discharge the claim or lien and hold Design-Builder
liable for costs and expenses incurred, including attorneys’ fees.

14.3        DESIGN-BUILDER’S GENERAL INDEMNIFICATION.

14.3.1     DESIGN-BUILDER, TO THE FULLEST EXTENT PERMITTED BY LAW, SHALL
INDEMNIFY, HOLD HARMLESS AND DEFEND OWNER, LENDERS, LENDERS’ AGENT, AND THEIR
SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (“OWNER
INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND ALL LOSSES, COSTS, DAMAGES,
INJURIES, LIABILITIES, CLAIMS, DEMANDS, PENALTIES, INTEREST AND CAUSES OF
ACTION, INCLUDING WITHOUT LIMITATION ATTORNEY’S FEES (COLLECTIVELY, THE
“DAMAGES”) FOR BODILY INJURY, SICKNESS OR DEATH, AND PROPERTY DAMAGE OR
DESTRUCTION (OTHER THAN TO THE WORK ITSELF) TO THE EXTENT RESULTING FROM THE
NEGLIGENT OR INTENTIONALLY WRONGFUL ACTS OR OMISSIONS OF DESIGN-BUILDER, DESIGN
CONSULTANTS, SUBCONTRACTORS, ANYONE EMPLOYED DIRECTLY OR INDIRECTLY BY ANY OF
THEM OR ANYONE FOR WHOSE ACTS ANY OF THEM MAY BE LIABLE.

14.3.2     IF AN EMPLOYEE OF DESIGN-BUILDER, DESIGN CONSULTANTS, SUBCONTRACTORS,
ANYONE EMPLOYED DIRECTLY OR INDIRECTLY BY ANY OF THEM OR ANYONE FOR WHOSE ACTS
ANY OF THEM MAY BE LIABLE HAS A CLAIM AGAINST OWNER INDEMNIFIED PARTIES,
DESIGN-BUILDER’S INDEMNITY OBLIGATION SET FORTH IN SECTION 14.3.1 ABOVE SHALL
NOT BE LIMITED BY ANY LIMITATION ON THE AMOUNT OF DAMAGES, COMPENSATION OR
BENEFITS PAYABLE BY OR FOR DESIGN-BUILDER, DESIGN CONSULTANTS, SUBCONTRACTORS,
OR OTHER ENTITY UNDER ANY EMPLOYEE BENEFIT ACTS, INCLUDING WORKERS’ COMPENSATION
OR DISABILITY ACTS.

14.3.3     WITHOUT LIMITING THE GENERALITY OF SECTION 14.3.1 HEREOF,
DESIGN-BUILDER SHALL FULLY INDEMNIFY, SAVE HARMLESS AND DEFEND THE OWNER
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL DAMAGES IN FAVOR OF ANY
GOVERNMENTAL AUTHORITY OR OTHER THIRD PARTY TO THE EXTENT CAUSED BY (A) FAILURE
OF DESIGN-BUILDER OR ANY SUBCONTRACTOR TO COMPLY WITH LEGAL REQUIREMENTS AS
REQUIRED BY THIS AGREEMENT, OR (B) FAILURE OF DESIGN-BUILDER OR ANY
SUBCONTRACTOR TO PROPERLY ADMINISTER AND PAY ANY TAXES OR FEES REQUIRED TO BE
PAID BY DESIGN-BUILDER UNDER THIS AGREEMENT.

14.3.4     NOTHING IN THE DESIGN-BUILDER’S GENERAL INDEMNIFICATION CONTAINED IN
THIS SECTION 14.3 SHALL BE READ TO LIMIT IN ANY WAY ANY ENTITLEMENT
DESIGN-BUILDER SHALL HAVE TO INSURANCE COVERAGE UNDER ANY INSURANCE POLICY,
INCLUDING ANY INSURANCE POLICY REQUIRED BY EITHER PARTY UNDER THIS AGREEMENT.

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14.4        Owner’s General Indemnification.  Owner, to the fullest extent
permitted by Law, shall indemnify, hold harmless and defend Design-Builder and
any of Design-Builder’s officers, directors, employees, or agents from and
against claims, losses, damages, liabilities, including attorneys’ fees and
expenses, for bodily injury, sickness or death, and property damage or
destruction (other than to the Work itself) to the extent resulting from the
negligent acts, willful misconduct, or omissions of Owner, its officers,
directors, employees, agents, or anyone for whose acts any of them may be
liable.

14.4.1     WITHOUT LIMITING THE GENERALITY OF SECTION 14.4 HEREOF, OWNER SHALL
FULLY INDEMNIFY, SAVE HARMLESS AND DEFEND THE DESIGN-BUILDER AND ANY OF
DESIGN-BUILDER’S OFFICERS, DIRECTORS, EMPLOYEES, OR AGENTS FROM AND AGAINST ANY
AND ALL DAMAGES IN FAVOR OF ANY GOVERNMENTAL AUTHORITY OR OTHER THIRD PARTY TO
THE EXTENT CAUSED BY (A) FAILURE OF OWNER OR ANY OF OWNER’S AGENTS TO COMPLY
WITH LEGAL REQUIREMENTS AS REQUIRED BY THIS AGREEMENT, OR (B) FAILURE OF OWNER
OR OWNER’S AGENTS TO PROPERLY ADMINISTER AND PAY ANY TAXES OR FEES REQUIRED TO
BE PAID BY OWNER UNDER THIS AGREEMENT.

14.4.2     NOTHING IN THE OWNER’S GENERAL INDEMNIFICATION CONTAINED IN THIS
SECTION 14.4 SHALL BE READ TO LIMIT IN ANY WAY ANY ENTITLEMENT OWNER SHALL HAVE
TO INSURANCE COVERAGE UNDER ANY INSURANCE POLICY, INCLUDING ANY INSURANCE POLICY
REQUIRED BY EITHER PARTY UNDER THIS AGREEMENT.

14.5        PATENT AND COPYRIGHT INFRINGEMENT.

14.5.1     DESIGN-BUILDER SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND OWNER
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL DAMAGES BASED ON ANY CLAIM THAT
THE WORK, THE WORK PRODUCT, OR ANY PART THEREOF, OR THE OPERATION OR USE OF THE
WORK OR ANY PART THEREOF, CONSTITUTES INFRINGEMENT OF ANY UNITED STATES OR
FOREIGN PATENT, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY, NOW OR HEREAFTER
ISSUED. OWNER SHALL GIVE PROMPT WRITTEN NOTICE TO DESIGN-BUILDER OF ANY SUCH
ACTION OR PROCEEDING AND WILL REASONABLY PROVIDE AUTHORITY, INFORMATION AND
ASSISTANCE IN THE DEFENSE OF SAME. DESIGN-BUILDER SHALL INDEMNIFY AND HOLD
HARMLESS OWNER INDEMNIFIED PARTIES FROM AND AGAINST ALL DAMAGES AND COSTS,
INCLUDING BUT NOT LIMITED TO, ATTORNEYS’ FEES AND EXPENSES AWARDED AGAINST OWNER
OR DESIGN-BUILDER IN ANY SUCH ACTION OR PROCEEDING.

14.5.2     IF OWNER IS ENJOINED FROM THE OPERATION OR USE OF THE WORK, WORK
PRODUCT, THE PROJECT, OR ANY PART THEREOF, AS THE RESULT OF ANY PATENT OR
COPYRIGHT SUIT, CLAIM, OR PROCEEDING, DESIGN-BUILDER SHALL AT ITS SOLE EXPENSE
TAKE REASONABLE STEPS TO PROCURE THE RIGHT TO OPERATE OR USE THE WORK, WORK
PRODUCT OR THE PROJECT. IF DESIGN-BUILDER CANNOT SO PROCURE SUCH RIGHT WITHIN A
REASONABLE TIME, DESIGN-BUILDER SHALL PROMPTLY, AT DESIGN-BUILDER’S OPTION AND
AT DESIGN-BUILDER’S EXPENSE, (I) MODIFY THE WORK OR WORK PRODUCT SO AS TO AVOID
INFRINGEMENT OF ANY SUCH PATENT OR COPYRIGHT OR (II) REPLACE THE WORK OR WORK
PRODUCT WITH WORK OR WORK PRODUCT THAT DOES NOT INFRINGE OR VIOLATE ANY SUCH
PATENT, COPYRIGHT, TRADE SECRET, PROPRIETARY RIGHT, CONFIDENTIAL INFORMATION OR
INTELLECTUAL PROPERTY RIGHT.

14.5.3     SECTIONS 14.5.1 AND 14.5.2 ABOVE SHALL NOT BE APPLICABLE TO ANY SUIT,
CLAIM OR PROCEEDING BASED ON INFRINGEMENT OR VIOLATION OF A PATENT OR COPYRIGHT
(I) RELATING SOLELY TO A

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PARTICULAR PROCESS OR PRODUCT OF A PARTICULAR MANUFACTURER SPECIFIED BY OWNER
AND NOT OFFERED OR RECOMMENDED BY DESIGN-BUILDER TO OWNER, OR (II) ARISING FROM
MODIFICATIONS TO THE WORK BY OWNER OR ITS AGENTS AFTER ACCEPTANCE OF THE WORK,
OR (III) RELATING TO THE OPERATION OR USE OF THE WORK BY THE OWNER IN A MANNER
NOT PERMITTED BY THIS AGREEMENT OR THE ICM LICENSE AGREEMENT. IF THE SUIT, CLAIM
OR PROCEEDING IS BASED UPON EVENTS SET FORTH IN THE PRECEDING SENTENCE, OWNER
SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS DESIGN-BUILDER TO THE SAME EXTENT
DESIGN-BUILDER IS OBLIGATED TO DEFEND, INDEMNIFY AND HOLD HARMLESS OWNER IN
SECTION 14.5.1 ABOVE.

ARTICLE 15

STOP WORK; TERMINATION FOR CAUSE

15.1        Owner’s Right to Stop Work.  Owner may, without cause and for its
convenience, order Design-Builder in writing to stop and suspend the Work.  Such
suspension shall not exceed sixty (60) consecutive Days or aggregate more than
ninety (90) Days during the duration of the Project.  Design-Builder is entitled
to seek an adjustment of the Contract Price and/or the Contract Time(s) if its
cost or time to perform the Work has been adversely impacted by any suspension
or stoppage of work by Owner.

15.2        OWNER’S RIGHT TO PERFORM AND TERMINATE FOR CAUSE.

15.2.1     IF DESIGN-BUILDER PERSISTENTLY FAILS TO: (I) PROVIDE A SUFFICIENT
NUMBER OF SKILLED WORKERS; (II) SUPPLY THE MATERIALS REQUIRED BY THE CONTRACT
DOCUMENTS; (III) COMPLY WITH APPLICABLE LEGAL REQUIREMENTS; (IV) TIMELY PAY,
WITHOUT CAUSE, DESIGN CONSULTANTS OR SUBCONTRACTORS; (V)  PERFORM THE WORK WITH
PROMPTNESS AND DILIGENCE TO ENSURE THAT THE WORK IS COMPLETED BY THE CONTRACT
TIME(S), AS SUCH TIMES MAY BE ADJUSTED IN ACCORDANCE WITH THIS AGREEMENT; OR
(VI) PERFORM MATERIAL OBLIGATIONS UNDER THE CONTRACT DOCUMENTS; THEN OWNER, IN
ADDITION TO ANY OTHER RIGHTS AND REMEDIES PROVIDED IN THE CONTRACT DOCUMENTS OR
BY LAW OR EQUITY, SHALL HAVE THE RIGHTS SET FORTH IN SECTIONS 15.2.2 AND 15.2.3
BELOW.

15.2.2     UPON THE OCCURRENCE OF AN EVENT SET FORTH IN SECTION 15.2.1 ABOVE,
OWNER MAY PROVIDE WRITTEN NOTICE TO DESIGN-BUILDER THAT IT INTENDS TO TERMINATE
THE AGREEMENT UNLESS THE PROBLEM CITED IS CURED, OR COMMENCED TO BE CURED WITHIN
SEVEN (7) DAYS OF DESIGN-BUILDER’S RECEIPT OF SUCH NOTICE.  IF DESIGN-BUILDER
FAILS TO CURE, OR REASONABLY COMMENCE TO CURE SUCH PROBLEM AND THEREAFTER
DILIGENTLY PURSUE SUCH CURE TO COMPLETION, THEN OWNER MAY GIVE A SECOND WRITTEN
NOTICE TO DESIGN-BUILDER OF ITS INTENT TO TERMINATE FOLLOWING AN ADDITIONAL
SEVEN (7) DAY PERIOD.  IF DESIGN-BUILDER, WITHIN SUCH SECOND SEVEN (7) DAY
PERIOD, FAILS TO CURE, OR REASONABLY COMMENCE TO CURE SUCH PROBLEM AND
THEREAFTER DILIGENTLY PURSUE SUCH CURE TO COMPLETION, THEN OWNER MAY DECLARE THE
AGREEMENT TERMINATED FOR DEFAULT BY PROVIDING WRITTEN NOTICE TO DESIGN-BUILDER
OF SUCH DECLARATION.  IF (I) THE INSURANCE COVERAGE REQUIRED BY DESIGN-BUILDER
PURSUANT ARTICLE 17 HEREOF IS SUSPENDED OR CANCELLED WITHOUT DESIGN-BUILDER
PROVIDING IMMEDIATE REPLACEMENT COVERAGE (AND, IN ANY CASE, WITHIN FOURTEEN (14)
DAYS OF THE OCCURRENCE THEREOF) MEETING THE REQUIREMENTS SPECIFIED IN ARTICLE 17
HEREOF; (II) IF APPLICABLE, A DEFAULT OCCURS UNDER THE PERFORMANCE BOND OR THE
PAYMENT BOND, OR THE PERFORMANCE BOND OR PAYMENT BOND IS REVOKED OR TERMINATED
AND SUCH PERFORMANCE BOND OR THE PAYMENT BOND IS NOT IMMEDIATELY

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REPLACED (AND, IN ANY CASE, WITHIN FOURTEEN (14) DAYS OF THE OCCURRENCE THEREOF)
BY DESIGN-BUILDER WITH A PERFORMANCE BOND OR A PAYMENT BOND PROVIDING AT LEAST
THE SAME LEVEL OF COVERAGE IN A FORM AND FROM A SURETY ACCEPTABLE TO OWNER AND
LENDERS, OR THE SURETY UNDER THE PERFORMANCE BOND OR PAYMENT BOND INSTITUTES OR
HAS INSTITUTED AGAINST IT A CASE UNDER THE UNITED STATES BANKRUPTCY CODE; (III)
DESIGN-BUILDER PURPORTS TO MAKE AN ASSIGNMENT OF THIS AGREEMENT IN BREACH OF THE
PROVISIONS OF SECTION 21.1 HEREOF, OR (IV) ANY REPRESENTATION OR WARRANTY MADE
BY DESIGN-BUILDER UNDER SECTION 18.1 HEREOF WAS FALSE OR MATERIALLY MISLEADING
WHEN MADE, THEN OWNER MAY TERMINATE THIS AGREEMENT UPON WRITTEN NOTICE TO
DESIGN-BUILDER.

15.2.3     UPON DECLARING THE AGREEMENT TERMINATED PURSUANT TO SECTION 15.2.2
ABOVE, OWNER MAY ENTER UPON THE PREMISES AND TAKE POSSESSION, FOR THE PURPOSE OF
COMPLETING THE WORK, OF ALL MATERIALS, EQUIPMENT, SCAFFOLDS, TOOLS, APPLIANCES
AND OTHER ITEMS THEREON, WHICH HAVE BEEN PURCHASED FOR THE PERFORMANCE OF THE
WORK, ALL OF WHICH DESIGN-BUILDER HEREBY TRANSFERS, ASSIGNS AND SETS OVER TO
OWNER FOR SUCH PURPOSE, AND TO EMPLOY ANY PERSON OR PERSONS TO COMPLETE THE WORK
AND PROVIDE ALL OF THE REQUIRED LABOR, SERVICES, MATERIALS, EQUIPMENT AND OTHER
ITEMS.  IN THE EVENT OF SUCH TERMINATION, DESIGN-BUILDER SHALL NOT BE ENTITLED
TO RECEIVE ANY FURTHER PAYMENTS UNDER THE CONTRACT DOCUMENTS UNTIL THE WORK
SHALL BE FINALLY COMPLETED IN ACCORDANCE WITH THE CONTRACT DOCUMENTS.  AT SUCH
TIME, IF THE UNPAID BALANCE OF THE CONTRACT PRICE EXCEEDS THE COST AND EXPENSE
INCURRED BY OWNER IN COMPLETING THE WORK, DESIGN-BUILDER WILL BE PAID PROMPTLY
BY OWNER FOR WORK PERFORMED PRIOR TO ITS DEFAULT.  IF OWNER’S COST AND EXPENSE
OF COMPLETING THE WORK EXCEEDS THE UNPAID BALANCE OF THE CONTRACT PRICE, THEN
DESIGN-BUILDER SHALL BE OBLIGATED TO PROMPTLY PAY THE DIFFERENCE TO OWNER.  SUCH
COSTS AND EXPENSE SHALL INCLUDE NOT ONLY THE COST OF COMPLETING THE WORK, BUT
ALSO LOSSES, DAMAGES, COSTS AND EXPENSES, INCLUDING ATTORNEYS’ FEES AND
EXPENSES, INCURRED BY OWNER IN CONNECTION WITH THE RE-PROCUREMENT AND DEFENSE OF
CLAIMS ARISING FROM DESIGN-BUILDER’S DEFAULT, SUBJECT TO THE WAIVER OF
CONSEQUENTIAL DAMAGES SET FORTH IN SECTION 19.4 AND THE LIMITATION OF LIABILITY
SET FORTH IN SECTION 19.5 HEREOF.

15.2.4     IF OWNER IMPROPERLY TERMINATES THE AGREEMENT FOR CAUSE, THE
TERMINATION FOR CAUSE WILL BE CONVERTED TO A TERMINATION FOR CONVENIENCE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 15.3.

15.3        OWNER’S RIGHT TO TERMINATE FOR CONVENIENCE.

15.3.1     UPON TEN (10) DAYS’ WRITTEN NOTICE TO DESIGN-BUILDER, OWNER MAY, FOR
ITS CONVENIENCE AND WITHOUT CAUSE, ELECT TO TERMINATE THIS AGREEMENT.  IN SUCH
EVENT, OWNER SHALL PAY DESIGN-BUILDER FOR THE FOLLOWING:

(A)           TO THE EXTENT NOT ALREADY PAID, ALL WORK EXECUTED, AND FOR PROVEN
LOSS, COST OR EXPENSE IN CONNECTION WITH THE WORK;

(B)           THE REASONABLE COSTS AND EXPENSES ATTRIBUTABLE TO SUCH
TERMINATION, INCLUDING DEMOBILIZATION COSTS;

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(C)           AMOUNTS DUE IN SETTLEMENT OF TERMINATED CONTRACTS WITH
SUBCONTRACTORS AND DESIGN CONSULTANTS;

(D)           OVERHEAD AND PROFIT MARGIN IN THE AMOUNT OF FIFTEEN PERCENT (15%)
ON THE SUM OF ITEMS (A) AND (B) ABOVE; AND

(E)           ALL RETAINAGE WITHHELD BY OWNER ON ACCOUNT OF WORK THAT HAS BEEN
COMPLETED IN ACCORDANCE WITH THE CONTRACT DOCUMENTS.

15.3.2     IF OWNER TERMINATES THIS AGREEMENT PURSUANT TO THIS SECTION 15.3 AND
PROCEEDS TO DESIGN AND CONSTRUCT THE PROJECT THROUGH ITS EMPLOYEES, AGENTS OR
THIRD PARTIES, OWNER’S RIGHTS TO USE THE WORK PRODUCT SHALL BE AS SET FORTH IN
SECTION 5.3.

15.4        DESIGN-BUILDER’S RIGHT TO STOP WORK.

15.4.1     DESIGN-BUILDER MAY, IN ADDITION TO ANY OTHER RIGHTS AFFORDED UNDER
THE CONTRACT DOCUMENTS OR AT LAW, STOP WORK FOR OWNER’S FAILURE TO PAY AMOUNTS
PROPERLY DUE UNDER DESIGN-BUILDER’S APPLICATION FOR PAYMENT.

15.4.2     IF ANY OF THE EVENTS SET FORTH IN SECTION 15.4.1 ABOVE OCCUR,
DESIGN-BUILDER HAS THE RIGHT TO STOP WORK BY PROVIDING WRITTEN NOTICE TO OWNER
THAT DESIGN-BUILDER WILL STOP WORK UNLESS SUCH EVENT IS CURED WITHIN SEVEN (7)
DAYS FROM OWNER’S RECEIPT OF DESIGN-BUILDER’S NOTICE. IF OWNER FAILS TO CURE OR
REASONABLY COMMENCE TO CURE SUCH PROBLEM AND THEREAFTER DILIGENTLY PURSUE SUCH
CURE TO COMPLETION, THEN DESIGN-BUILDER MAY GIVE A SECOND WRITTEN NOTICE TO
OWNER OF ITS INTENT TO STOP WORK WITHIN AN ADDITIONAL SEVEN (7) DAY PERIOD.  IF
OWNER, WITHIN SUCH SECOND SEVEN (7) DAY PERIOD, FAILS TO CURE, OR REASONABLY
COMMENCE TO CURE SUCH PROBLEM AND THEREAFTER DILIGENTLY PURSUE SUCH CURE TO
COMPLETION, THEN DESIGN-BUILDER MAY STOP WORK.  IN SUCH CASE, DESIGN-BUILDER
SHALL BE ENTITLED TO MAKE A CLAIM FOR ADJUSTMENT TO THE CONTRACT PRICE AND
CONTRACT TIME(S) TO THE EXTENT IT HAS BEEN ADVERSELY IMPACTED BY SUCH STOPPAGE.

15.5        DESIGN-BUILDER’S RIGHT TO TERMINATE FOR CAUSE.

15.5.1     DESIGN-BUILDER, IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES PROVIDED
IN THE CONTRACT DOCUMENTS OR BY LAW, MAY TERMINATE THE AGREEMENT FOR CAUSE FOR
THE FOLLOWING REASONS:

(a)           The Work has been stopped for sixty (60) consecutive Days, or more
than ninety (90) Days during the duration of the Project, because of court
order, any Governmental Authority having jurisdiction over the Work, or orders
by Owner under Section 15.1 hereof, provided that such stoppages are not due to
the acts or omissions of Design-Builder, Design Consultant and their respective
officers,

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agents, employees, Subcontractors or any other person for whose acts the
Design-Builder may be liable under Law.

(b)           Owner’s failure to provide Design-Builder with any information,
permits or approvals that are Owner’s responsibility under the Contract
Documents which result in the Work being stopped for sixty (60) consecutive
Days, or more than ninety (90) Days during the duration of the Project, even
though Owner has not ordered Design-Builder in writing to stop and suspend the
Work pursuant to Section 15.1 hereof.

(c)           Owner fails to meet its obligations under Exhibit C and such
failure results in the Work being stopped for sixty (60) consecutive Days, or
more than ninety (90) Days during the duration of the Project even though Owner
has not ordered Design-Builder in writing to stop and suspend the Work pursuant
to Section 15.1 hereof.

(d)           Owner’s failure to cure the problems set forth in Section 15.4.1
above within seven (7) Days after Design-Builder has stopped the Work.

15.5.2     UPON THE OCCURRENCE OF AN EVENT SET FORTH IN SECTION 15.5.1 ABOVE,
DESIGN-BUILDER MAY ELECT TO TERMINATE THIS AGREEMENT BY PROVIDING WRITTEN NOTICE
TO OWNER THAT IT INTENDS TO TERMINATE THE AGREEMENT UNLESS THE PROBLEM CITED IS
CURED WITHIN SEVEN (7) DAYS OF OWNER’S RECEIPT OF SUCH NOTICE.  IF OWNER FAILS
TO CURE, OR REASONABLY COMMENCE TO CURE, SUCH PROBLEM, THEN DESIGN-BUILDER MAY
GIVE A SECOND WRITTEN NOTICE TO OWNER OF ITS INTENT TO TERMINATE WITHIN AN
ADDITIONAL SEVEN (7) DAY PERIOD.  IF OWNER, WITHIN SUCH SECOND SEVEN (7) DAY
PERIOD, FAILS TO CURE SUCH PROBLEM, THEN DESIGN-BUILDER MAY DECLARE THE
AGREEMENT TERMINATED FOR DEFAULT BY PROVIDING WRITTEN NOTICE TO OWNER OF SUCH
DECLARATION.  IN SUCH CASE, DESIGN-BUILDER SHALL BE ENTITLED TO RECOVER IN THE
SAME MANNER AS IF OWNER HAD TERMINATED THE AGREEMENT FOR ITS CONVENIENCE UNDER
SECTION 15.3.

15.6        BANKRUPTCY OF OWNER OR DESIGN-BUILDER.

15.6.1     IF EITHER OWNER OR DESIGN-BUILDER INSTITUTES OR HAS INSTITUTED
AGAINST IT A CASE UNDER THE UNITED STATES BANKRUPTCY CODE (SUCH PARTY BEING
REFERRED TO AS THE “BANKRUPT PARTY”), SUCH EVENT MAY IMPAIR OR FRUSTRATE THE
BANKRUPT PARTY’S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE CONTRACT
DOCUMENTS.  ACCORDINGLY, SHOULD SUCH EVENT OCCUR:

(A)           THE BANKRUPT PARTY, ITS TRUSTEE OR OTHER SUCCESSOR, SHALL FURNISH,
UPON REQUEST OF THE NON-BANKRUPT PARTY, ADEQUATE ASSURANCE OF THE ABILITY OF THE
BANKRUPT PARTY TO PERFORM ALL FUTURE OBLIGATIONS UNDER THE CONTRACT DOCUMENTS,
WHICH ASSURANCES SHALL BE PROVIDED WITHIN TEN (10) DAYS AFTER RECEIVING NOTICE
OF THE REQUEST; AND

(B)           THE BANKRUPT PARTY SHALL FILE AN APPROPRIATE ACTION WITHIN THE
BANKRUPTCY COURT TO SEEK ASSUMPTION OR REJECTION OF THE AGREEMENT WITHIN SIXTY
(60) DAYS OF THE INSTITUTION OF THE BANKRUPTCY FILING AND SHALL DILIGENTLY
PROSECUTE SUCH ACTION.

15.6.2     IF THE BANKRUPT PARTY FAILS TO COMPLY WITH ITS FOREGOING OBLIGATIONS,
THE NON-BANKRUPT PARTY SHALL BE ENTITLED TO REQUEST THE BANKRUPTCY COURT TO
REJECT THE AGREEMENT,

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DECLARE THE AGREEMENT TERMINATED AND PURSUE ANY OTHER RECOURSE AVAILABLE TO THE
NON-BANKRUPT PARTY UNDER THIS ARTICLE 15.

15.6.3     THE RIGHTS AND REMEDIES UNDER THIS SECTION 15.6 SHALL NOT BE DEEMED
TO LIMIT THE ABILITY OF THE NON-BANKRUPT PARTY TO SEEK ANY OTHER RIGHTS AND
REMEDIES PROVIDED BY THE CONTRACT DOCUMENTS OR BY LAW, INCLUDING ITS ABILITY TO
SEEK RELIEF FROM ANY AUTOMATIC STAYS UNDER THE UNITED STATES BANKRUPTCY CODE OR
THE RIGHT OF DESIGN-BUILDER TO STOP WORK UNDER ANY APPLICABLE PROVISION OF THIS
AGREEMENT.

15.7        Lenders’ Right to Cure.  At any time after the occurrence of any
event set forth in Section 15.4.1 or Section 15.5.1, but within the timeframes
set forth therein, the Lenders shall have the right, but not the obligation, to
cure such default on behalf of Owner.

ARTICLE 16

REPRESENTATIVES OF THE PARTIES

16.1        Designation of Owner’s Representatives.  Owner designates the
individual listed below as its senior representative (“Owner’s Senior
Representative”), which individual has the authority and responsibility for
avoiding and resolving disputes under Article 19:

Revis L. Stephenson III
Chairman & CEO
10201 Wayzata Blvd.  Suite 250
Minneapolis, MN  55305
Telephone: 763.226.2702
Facsimile: 763.226.2703

Owner designates the individual listed below as its representative (“Owner’s
Representative”), which individual has the authority and responsibility set
forth in Section 4.4:

Donald Gales
President & COO
10201 Wayzata Blvd.  Suite 250
Minneapolis, MN  55305
Telephone: 763.226.2702
Facsimile: 763.226.2703

16.2        Designation of Design-Builder’s Representatives.  Design-Builder
designates the individual listed below as its senior representative
(“Design-Builder’s Senior Representative”), which individual has the authority
and responsibility for avoiding and resolving disputes under Article 19:

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Roland “Ron” Fagen
CEO and President
501 W. Highway 212
P.O. Box 159
Granite Falls, MN 56241
Telephone:  (320) 564-3324
Facsimile: (320) 564-3278

Design-Builder designates the individual listed below as its representative
(“Design-Builder’s Representative”), which individual has the authority and
responsibility set forth in Section 3.1:

Aaron Fagen
Chief Operating Officer
501 W. Highway 212
P.O. Box 159
Granite Falls, MN 56241
Telephone:  (320) 564-3324
Facsimile: (320) 564-3278

ARTICLE 17

INSURANCE

17.1        Insurance.  Design-Builder shall procure and maintain in force
through the Final Completion Date the following insurance coverages with the
policy limits indicated, and otherwise in compliance with the provisions of this
Agreement:

Commercial General Liability:

General Aggregate

 

 

Products-Comp/Op AGG

 

$

2,000,000

Personal & Adv Injury

 

$

1,000,000

Each Occurrence

 

$

1,000,000

Fire Damage (Any one fire)

 

$

50,000

Med Exp (Any one person)

 

$

5,000

 

Automobile Liability:

Combined Single Limit

 

 

Each Occurrence

 

$1,000,000

 

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Excess Liability – Umbrella Form:

Each Occurrence

 

$20,000,000

Aggregate

 

$20,000,000

 

Workers’ Compensation

Statutory limits as required by the state in which the Work is performed.

Employers’ Liability:

Each Accident

 

$1,000,000

Disease-Policy Limit

 

$1,000,000

Disease-Each Employee

 

$1,000,000

 

Professional Errors and Omissions

Per Claim

 

$5,000,000

Annual

 

$5,000,000

 

17.2        DESIGN-BUILDER’S INSURANCE REQUIREMENTS.

17.2.1     DESIGN-BUILDER IS RESPONSIBLE FOR PROCURING AND MAINTAINING FROM
INSURANCE COMPANIES AUTHORIZED TO DO BUSINESS IN THE STATE IN WHICH THE PROJECT
IS LOCATED, THE FOLLOWING INSURANCE COVERAGES FOR CERTAIN CLAIMS WHICH MAY ARISE
FROM OR OUT OF THE PERFORMANCE OF THE WORK AND OBLIGATIONS UNDER THE CONTRACT
DOCUMENTS:

(A)           COVERAGE FOR CLAIMS ARISING UNDER WORKERS’ COMPENSATION,
DISABILITY AND OTHER SIMILAR EMPLOYEE BENEFIT LAWS APPLICABLE TO THE WORK;

(B)           COVERAGE FOR CLAIMS BY DESIGN-BUILDER’S EMPLOYEES FOR BODILY
INJURY, SICKNESS, DISEASE, OR DEATH;

(C)           COVERAGE FOR CLAIMS BY ANY PERSON OTHER THAN DESIGN-BUILDER’S
EMPLOYEES FOR BODILY INJURY, SICKNESS, DISEASE, OR DEATH;

(D)           COVERAGE FOR USUAL PERSONAL INJURY LIABILITY CLAIMS FOR DAMAGES
SUSTAINED BY A PERSON AS A DIRECT OR INDIRECT RESULT OF DESIGN-BUILDER’S
EMPLOYMENT OF THE PERSON, OR SUSTAINED BY ANY OTHER PERSON;

(E)           COVERAGE FOR CLAIMS FOR DAMAGES (OTHER THAN TO THE WORK) BECAUSE
OF INJURY TO OR DESTRUCTION OF TANGIBLE PROPERTY, INCLUDING LOSS OF USE;

(F)            COVERAGE FOR CLAIMS OF DAMAGES BECAUSE OF PERSONAL INJURY OR
DEATH, OR PROPERTY DAMAGE RESULTING FROM OWNERSHIP, USE AND MAINTENANCE OF ANY
MOTOR VEHICLE; AND

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(G)           COVERAGE FOR CONTRACTUAL LIABILITY CLAIMS ARISING OUT OF
DESIGN-BUILDER’S OBLIGATIONS UNDER SECTION 14.2.

17.2.2     DESIGN-BUILDER’S LIABILITY INSURANCE REQUIRED BY THIS SECTION 17.2
SHALL BE WRITTEN FOR THE COVERAGE AMOUNTS SET FORTH IN SECTION 17.1 AND SHALL
INCLUDE COMPLETED OPERATIONS INSURANCE FOR THE PERIOD OF TIME SET FORTH IN THE
AGREEMENT.

17.2.3     DESIGN-BUILDER’S LIABILITY INSURANCE SET FORTH IN SECTIONS 17.2.1 (A)
THROUGH (G) ABOVE SHALL SPECIFICALLY DELETE ANY DESIGN-BUILD OR SIMILAR
EXCLUSIONS THAT COULD COMPROMISE COVERAGES BECAUSE OF THE DESIGN-BUILD DELIVERY
OF THE PROJECT.

17.2.4     TO THE EXTENT OWNER REQUIRES DESIGN-BUILDER OR ANY DESIGN CONSULTANT
TO PROVIDE PROFESSIONAL LIABILITY INSURANCE FOR CLAIMS ARISING FROM THE
NEGLIGENT PERFORMANCE OF DESIGN SERVICES BY DESIGN-BUILDER OR THE DESIGN
CONSULTANT, THE COVERAGE LIMITS, DURATION AND OTHER SPECIFICS OF SUCH INSURANCE
SHALL BE AS SET FORTH IN THE AGREEMENT.  ANY PROFESSIONAL LIABILITY SHALL
SPECIFICALLY DELETE ANY DESIGN-BUILD OR SIMILAR EXCLUSIONS THAT COULD COMPROMISE
COVERAGES BECAUSE OF THE DESIGN-BUILD DELIVERY OF THE PROJECT.  SUCH POLICIES
SHALL BE PROVIDED PRIOR TO THE COMMENCEMENT OF ANY DESIGN SERVICES HEREUNDER.

17.2.5     PRIOR TO COMMENCING ANY CONSTRUCTION SERVICES HEREUNDER,
DESIGN-BUILDER SHALL PROVIDE OWNER WITH CERTIFICATES EVIDENCING THAT (I) ALL
INSURANCE OBLIGATIONS REQUIRED BY THE CONTRACT DOCUMENTS ARE IN FULL FORCE AND
IN EFFECT AND WILL REMAIN IN EFFECT FOR THE DURATION REQUIRED BY THE CONTRACT
DOCUMENTS AND (II) NO INSURANCE COVERAGE REQUIRED HEREUNDER WILL BE CANCELED,
RENEWAL REFUSED, OR CHANGED UNLESS AT LEAST THIRTY (30) DAYS PRIOR WRITTEN
NOTICE IS GIVEN TO OWNER.

17.3        Owner’s Liability Insurance.  Owner shall procure and maintain from
insurance companies authorized to do business in the state in which the Project
is located such liability insurance to protect Owner from claims which may arise
from the performance of Owner’s obligations under the Contract Documents or
Owner’s conduct during the course of the Project.  The general and professional
liability insurance obtained by Owner shall name Design-Builder, Design
Consultants, Subcontractors, the Lenders and Lenders’ Agent as additional
insureds, without application of deductible, retention or retrospective premiums
as to the additional insureds.

17.4        OWNER’S PROPERTY INSURANCE.

17.4.1     UNLESS OTHERWISE PROVIDED IN THE CONTRACT DOCUMENTS, OWNER SHALL
PROCURE FROM INSURANCE COMPANIES AUTHORIZED TO DO BUSINESS IN THE STATE IN WHICH
THE PROJECT IS LOCATED, AND MAINTAIN THROUGH FINAL COMPLETION, PROPERTY
INSURANCE UPON THE ENTIRE PROJECT IN A MINIMUM AMOUNT EQUAL TO THE FULL
INSURABLE VALUE OF THE PROJECT, INCLUDING PROFESSIONAL FEES, OVERTIME PREMIUMS
AND ALL OTHER EXPENSES INCURRED TO REPLACE OR REPAIR THE INSURED PROPERTY.  THE
PROPERTY INSURANCE OBTAINED BY OWNER SHALL INCLUDE AS ADDITIONAL INSUREDS THE
INTERESTS OF OWNER, DESIGN-BUILDER, DESIGN CONSULTANTS, SUBCONTRACTORS, THE
LENDERS AND LENDERS’ AGENT AND SHALL

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INSURE AGAINST THE PERILS OF FIRE AND EXTENDED COVERAGE, THEFT, VANDALISM,
MALICIOUS MISCHIEF, COLLAPSE, FLOOD, EARTHQUAKE, DEBRIS REMOVAL AND OTHER PERILS
OR CAUSES OF LOSS AS CALLED FOR IN THE CONTRACT DOCUMENTS AND WITHOUT
APPLICATION OF ANY DEDUCTIBLE, RETENTION OR RETROSPECTIVE PREMIUM.  OWNER SHALL
MAINTAIN COVERAGE EQUAL TO OR IN EXCESS OF THE VALUE OF EACH OF
DESIGN-BUILDER’S, DESIGN CONSULTANTS’, AND SUBCONTRACTORS’ PROPERTY ON THE
SITE.  THE PROPERTY INSURANCE SHALL INCLUDE PHYSICAL LOSS OR DAMAGE TO THE WORK,
INCLUDING MATERIALS AND EQUIPMENT IN TRANSIT, AT THE SITE OR AT ANOTHER LOCATION
AS MAY BE INCLUDED IN DESIGN-BUILDER’S APPLICATION FOR PAYMENT APPROVED BY
OWNER.  NOTWITHSTANDING THE FOREGOING, THE PROPERTY INSURANCE PROVIDED BY OWNER
HEREUNDER SHALL NOT BE REQUIRED TO INCLUDE DESIGN-BUILDER’S, DESIGN
CONSULTANTS’, AND SUBCONTRACTORS’ TOOLS OR CONSTRUCTION EQUIPMENT.

17.4.2     UNLESS THE CONTRACT DOCUMENTS PROVIDE OTHERWISE, OWNER SHALL PROCURE
AND MAINTAIN BOILER AND MACHINERY INSURANCE THAT WILL INCLUDE AS ADDITIONAL
INSUREDS THE OWNER, DESIGN-BUILDER, DESIGN CONSULTANTS, AND SUBCONTRACTORS, IN
AN AMOUNT NOT LESS THAN CONTRACT PRICE AND WITHOUT APPLICATION OF ANY
DEDUCTIBLE, RETENTION OR RETROSPECTIVE PREMIUM AS TO THE ADDITIONAL INSUREDS.
OWNER SHALL MAINTAIN COVERAGE EQUAL TO OR IN EXCESS OF THE VALUE OF EACH OF
DESIGN-BUILDER’S, DESIGN CONSULTANTS’, AND SUBCONTRACTORS’ INTEREST OR
INVESTMENT IN BOILER OR MACHINERY EQUIPMENT ON THE SITE.

17.4.3     PRIOR TO DESIGN-BUILDER COMMENCING ANY WORK, OWNER SHALL OBTAIN A
BUILDER’S RISK INSURANCE POLICY NAMING OWNER AS THE INSURED, WITH
DESIGN-BUILDER, DESIGN CONSULTANTS AND SUBCONTRACTORS AS ADDITIONAL INSUREDS, IN
AN AMOUNT NOT LESS THAN THE CONTRACT PRICE AND WITHOUT APPLICATION OF
DEDUCTIBLE, RETENTION OR RETROSPECTIVE PREMIUM AS TO THE ADDITIONAL INSUREDS.

17.4.4     OWNER SHALL ALSO OBTAIN, PRIOR TO DESIGN-BUILDER COMMENCING ANY WORK,
TERRORISM COVERAGE AS DESCRIBED BY THE TERRORISM RISK INSURANCE ACT OF 2002,
PUB. L. NO. 107-297, 116 STAT. 2322 (2002), AS EXTENDED BY THE TERRORISM RISK
INSURANCE EXTENSION ACT OF 2005, PUB. L. NO. 109-144 (2005), OR ANY SUCCESSOR
ACT OR RENEWING ACT FOR THE PERIOD DURING WHICH THE TERRORISM RISK INSURANCE ACT
OR ANY SUCCESSOR ACT OR RENEWING ACT IS IN EFFECT.

17.4.5     PRIOR TO DESIGN-BUILDER COMMENCING ANY WORK, OWNER SHALL PROVIDE
DESIGN-BUILDER WITH COPIES OF THE INSURANCE CERTIFICATES REFLECTING COVERAGES
REQUIRED UNDER THIS SECTION 17.4 EVIDENCING THAT (I) ALL OWNER’S INSURANCE
OBLIGATIONS REQUIRED BY THE CONTRACT DOCUMENTS ARE IN FULL FORCE AND IN EFFECT
AND WILL REMAIN IN EFFECT UNTIL DESIGN-BUILDER HAS COMPLETED ALL OF THE WORK AND
HAS RECEIVED FINAL PAYMENT FROM OWNER, AND (II) NO INSURANCE COVERAGE WILL BE
CANCELED, RENEWAL REFUSED, OR CHANGED UNLESS AT LEAST THIRTY (30) DAYS PRIOR
WRITTEN NOTICE IS GIVEN TO DESIGN-BUILDER.  OWNER’S PROPERTY INSURANCE SHALL NOT
LAPSE OR BE CANCELLED DURING THE TERM OF THIS AGREEMENT.  PROMPTLY AFTER OWNER’S
RECEIPT THEREOF, OWNER SHALL BE REQUIRED TO PROVIDE DESIGN-BUILDER WITH COPIES
OF ALL INSURANCE POLICIES TO WHICH DESIGN-BUILDER, DESIGN CONSULTANTS, AND
SUBCONTRACTORS ARE NAMED AS ADDITIONAL INSUREDS.  IN THE EVENT OWNER REPLACES
INSURANCE PROVIDERS FOR ANY POLICY REQUIRED UNDER THIS SECTION, REVISES POLICY
COVERAGES, OR OTHERWISE MODIFIES ANY APPLICABLE INSURANCE POLICY IN ANY WAY,
OWNER SHALL

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PROVIDE DESIGN-BUILDER, FOR ITS REVIEW OR POSSESSION AS PROVIDED UNDER THIS
SECTION 17.4.5, THE CERTIFICATE OF INSURANCE AND A COPY OF SUCH NEW, REVISED OR
MODIFIED POLICY WHEN AVAILABLE.

17.4.6     ANY LOSS COVERED UNDER OWNER’S PROPERTY INSURANCE SHALL BE ADJUSTED
WITH OWNER AND DESIGN-BUILDER AND MADE PAYABLE TO BOTH OF THEM AS TRUSTEES FOR
THE INSUREDS AS THEIR INTERESTS MAY APPEAR, SUBJECT TO ANY APPLICABLE MORTGAGE
CLAUSE.  ALL INSURANCE PROCEEDS RECEIVED AS A RESULT OF ANY LOSS WILL BE PLACED
IN A SEPARATE ACCOUNT AND DISTRIBUTED IN ACCORDANCE WITH SUCH AGREEMENT AS THE
INTERESTED PARTIES MAY REACH.  ANY DISAGREEMENT CONCERNING THE DISTRIBUTION OF
ANY PROCEEDS WILL BE RESOLVED IN ACCORDANCE WITH ARTICLE 19 HEREOF.

17.4.7     OWNER AND DESIGN-BUILDER WAIVE AGAINST EACH OTHER AND OWNER’S
SEPARATE CONTRACTORS, DESIGN CONSULTANTS, SUBCONTRACTORS, AGENTS AND EMPLOYEES
OF EACH AND ALL OF THEM ALL DAMAGES COVERED BY PROPERTY INSURANCE PROVIDED
HEREIN, EXCEPT SUCH RIGHTS AS THEY MAY HAVE TO THE PROCEEDS OF SUCH INSURANCE. 
DESIGN-BUILDER AND OWNER SHALL, WHERE APPROPRIATE, REQUIRE SIMILAR WAIVERS OF
SUBROGATION FROM OWNER’S SEPARATE CONTRACTORS, DESIGN CONSULTANTS,
SUBCONTRACTORS, AND INSURANCE PROVIDERS AND SHALL REQUIRE EACH OF THEM TO
INCLUDE SIMILAR WAIVERS IN THEIR CONTRACTS OR POLICIES.

17.5        COORDINATION WITH LOAN DOCUMENTS.

17.5.1     NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, ALL PROVISIONS
RELATING TO INSURANCE AND INSURANCE PROCEEDS SHALL BE CONFORMED TO THE
REQUIREMENTS OF THE LENDERS IN CONNECTION WITH ANY FINANCING.

ARTICLE 18

REPRESENTATIONS AND WARRANTIES

18.1        Design-Builder and Owner Representations and Warranties.  Each of
Design-Builder and Owner represents that:

(a)           it is duly organized, validly existing and in good standing under
the Laws of its formation and has all requisite power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby;

(b)           this Agreement has been duly executed and delivered by such Party
and constitutes the legal, valid and binding obligations of such Party,
enforceable against such Party in accordance with their respective terms, except
as enforcement may be limited by bankruptcy, insolvency, moratorium or similar
Laws affecting creditor’s rights or by general equitable principles;

(c)           the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
conflict with or violate (a) the certificate of incorporation or bylaws or
equivalent organizational documents of such Party, or (b) any Law applicable to
such Party and other than

45

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the permits listed on Exhibit G, such execution, delivery and performance of
this Agreement does not require any Governmental Approval; and

(d)           there is no action pending or, to the knowledge of such Party,
threatened, which would hinder, modify, delay or otherwise adversely affect such
Party’s ability to perform its obligations under the Contract Documents.

18.2        Design-Builder Representations and Warranties.  Design-Builder
further represents that it has the necessary financial resources to fulfill its
obligations under this Agreement.

ARTICLE 19

DISPUTE RESOLUTION

19.1        Dispute Avoidance and Mediation.  The Parties are fully committed to
working with each other throughout the Project and agree to communicate
regularly with each other at all times so as to avoid or minimize disputes or
disagreements.  If disputes or disagreements do arise, Design-Builder and Owner
each commit to resolving such disputes or disagreements in an amicable,
professional and expeditious manner so as to avoid unnecessary losses, delays
and disruptions to the Work.

Design-Builder and Owner will first attempt to resolve disputes or disagreements
at the field level through discussions between Design-Builder’s Representative
and Owner’s Representative.

If a dispute or disagreement cannot be resolved through Design-Builder’s
Representative and Owner’s Representative, Design-Builder’s Senior
Representative and Owner’s Senior Representative, upon the request of either
Party, shall meet as soon as conveniently possible, but in no case later than
thirty (30) Days after such a request is made, to attempt to resolve such
dispute or disagreement.  Prior to any meetings between the Senior
Representatives, the Parties will exchange relevant information that will assist
the Parties in resolving their dispute or disagreement.

If, after meeting, the Senior Representatives determine that the dispute or
disagreement cannot be resolved on terms satisfactory to both Parties, the
Parties shall submit the dispute or disagreement to non-binding mediation.  The
mediation shall be conducted in Minneapolis, Minnesota by a mutually agreeable
impartial mediator or, if the Parties cannot so agree, a mediator designated by
the American Arbitration Association (“AAA”) pursuant to its Construction
Industry Arbitration Rules and Mediation Procedures.  The mediation will be
governed by and conducted pursuant to a mediation agreement negotiated by the
Parties or, if the Parties cannot so agree, by procedures established by the
mediator.

19.2        Arbitration.  Any claims, disputes or controversies between the
Parties arising out of or relating to the Agreement, or the breach thereof,
which have not been resolved in accordance with the procedures set forth in
Section 19.1 above shall be decided by arbitration to be conducted in
Minneapolis, Minnesota in accordance with the Construction Industry Arbitration
Rules and Mediation Procedures of the AAA then in effect, unless the Parties
mutually agree otherwise.

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The award of the arbitrator(s) shall be final and binding upon the Parties
without the right of appeal to the courts.  Judgment may be entered upon it in
accordance with Applicable Law by any court having jurisdiction thereof.

Design-Builder and Owner expressly agree that any arbitration pursuant to this
Section 19.2 may be joined or consolidated with any arbitration involving any
other person or entity (i) necessary to resolve the claim, dispute or
controversy, or (ii) substantially involved in or affected by such claim,
dispute or controversy.  Both Design-Builder and Owner will include appropriate
provisions in all contracts they execute with other parties in connection with
the Project to require such joinder or consolidation.

The prevailing Party in any arbitration, or any other final, binding dispute
proceeding upon which the Parties may agree, shall be entitled to recover from
the other Party reasonable attorneys’ fees and expenses incurred by the
prevailing Party.

19.3        Duty to Continue Performance.  Unless provided to the contrary in
the Contract Documents, Design-Builder shall continue to perform the Work and
Owner shall continue to satisfy its payment obligations to Design-Builder,
pending the final resolution of any dispute or disagreement between
Design-Builder and Owner.

19.4        NO CONSEQUENTIAL DAMAGES.

19.4.1     NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY (EXCEPT AS SET FORTH
IN SECTION 19.4.2 BELOW), NEITHER DESIGN-BUILDER NOR OWNER SHALL BE LIABLE TO
THE OTHER FOR ANY CONSEQUENTIAL LOSSES OR DAMAGES, WHETHER ARISING IN CONTRACT,
WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, INCLUDING
BUT NOT LIMITED TO, LOSSES OF USE, PROFITS, BUSINESS, REPUTATION OR FINANCING,
EXCEPT THAT DESIGN-BUILDER DOES NOT WAIVE ANY SUCH DAMAGES RESULTING FROM OR
ARISING OUT OF ANY BREACH OF OWNER’S DUTIES AND OBLIGATIONS UNDER THE LIMITED
LICENSE GRANTED BY DESIGN-BUILDER TO OWNER PURSUANT TO ARTICLE 5.

19.4.2     THE CONSEQUENTIAL DAMAGES LIMITATION SET FORTH IN SECTION 19.4.1
ABOVE IS NOT INTENDED TO AFFECT THE PAYMENT OF LIQUIDATED DAMAGES, IF ANY, SET
FORTH IN SECTION 7.3 OF THE AGREEMENT, WHICH BOTH PARTIES RECOGNIZE HAS BEEN
ESTABLISHED, IN PART, TO REIMBURSE OWNER FOR SOME DAMAGES THAT MIGHT OTHERWISE
BE DEEMED TO BE CONSEQUENTIAL.

19.5        Limitation of Liability.  Notwithstanding anything else in this
Agreement to the contrary, the aggregate liability of Design-Builder, its
Subcontractors, vendors, suppliers, agents and employees,  to Owner (or any
successor thereto or assignee thereof) for any and all claims and/or liabilities
arising out of or relating in any manner to the Work or to Design-Builder’s
performance or non-performance of its obligations hereunder, whether based in
contract, tort (including negligence), strict liability, or otherwise, shall not
exceed, in the aggregate, the Contract Price and shall be reduced, upon the
issuance of each Application for Payment, by seventy-five percent (75%) of the
total value of such Application for Payment; provided, however, that upon the
earlier of Substantial Completion or such point in time requests for payment
pursuant to Article 10 have been made for ninety percent (90%) of the Contract
Price,

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Design-Builder’s aggregate liability shall be limited to the greater of (1) Ten
Percent (10%) of the Contract Price or (2) the amount of insurance coverage
available to respond to the claim or liability under any policy of insurance
provided by Design-Builder under this Agreement. The aggregate liability of
Design-Builder shall not include increased costs of purchasing equipment,
materials, supplies, or services, except to the extent Owner has terminated the
Agreement pursuant to Section 15.2 and such equipment, materials, supplies, and
services are required to complete the Work or to the extent that any of such
equipment, materials, supplies, and services may be included in the payment of
liquidated damages pursuant to Section 7.3 hereof.  Notwithstanding the
foregoing, the maximum aggregate liability of Design-Builder for failure to
achieve the Contract Time(s) shall be as set forth in Section 7.3.

Article 20

 

Confidentiality of Shared Information

 

20.1        Non-Disclosure Obligation.  Except as required by court order,
subpoena, or Applicable Law, the Parties will hold in confidence, and will use
only for the purposes of completing, maintaining, repairing, modifying, and
operating the Project (but not for expansion and all related activities),
performing their respective obligations under this Agreement, and obtaining
financing for the development of the Project, any and all Confidential
Information disclosed to each other.  Neither Party shall otherwise disclose to
third parties any Confidential Information without the express written consent
of the other Party, which consent shall not be unreasonably withheld.  The
Parties shall at all times use their respective reasonable efforts to keep all
Confidential Information and information regarding the terms and conditions of
this Agreement confidential, except that Owner is authorized to publicly file
this Agreement as necessary in connection with seeking or selling or registering
securities (after obtaining the written consent of Design-Builder, which must
not be unreasonably withheld or delayed).  However, the Parties may disclose
Confidential Information to their respective lenders, lenders’ agents, advisors
and/or consultants only as reasonably necessary in connection with the financing
of the Plant or to enable them to advise the Parties with regard to the Contract
Documents and the Project, provided that prior to such disclosure any party to
whom Confidential Information is disclosed is informed by the disclosing Party
of the existence of this confidentiality obligation and agrees to be obligated
to maintain the confidentiality of any information received. The term
“Confidential Information” will mean (i) confidential or proprietary information
regarding the other Party’s business affairs, finances, technology, processes,
plans or installations, product information, know-how, or other information that
is received from the other Party pursuant to this Agreement or the Parties’
relationship prior thereto or is developed pursuant to this Agreement, (ii) any
and all information concerning the Contract Documents, the Agreement, or the
terms thereof, and (iii) all information which one Party, directly or
indirectly, may acquire from another Party; however,    Confidential Information
will not include information falling into any of the following categories:

(a)                                  information that, at the time of disclosure
hereunder, is in the public domain;

(b)                                 information that, after disclosure
hereunder, enters the public domain other than by breach of this Agreement or
the obligation of confidentiality;

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(c)                                  information that, prior to disclosure
hereunder, was already in the recipient’s possession, either without limitation
on disclosure to others or subsequently becoming free of such limitation;

(d)                                 information obtained by the recipient from a
third party having an independent right to disclose this information; and

(e)                                  information that is available through
discovery by independent research without use of or access to the Confidential
Information acquired from the other Party; and

(f)                                    photographs and descriptive information
regarding the Project, including Plant capacity, Owner’s name, Design-Builder’s
name, the names of others performing portions of the Work, and the Project
location, as used by Owner or Design-Builder for purposes of marketing and
promotion or for meeting legal requirements.

Each Party’s obligation to maintain Confidential Information in confidence will
be deemed performed if such Party observes with respect thereto the same
safeguards and precautions which such Party observes with respect to its own
Confidential Information of the same or similar kind.  It will not be deemed to
be a breach of the obligation to maintain Confidential Information in confidence
if Confidential Information is disclosed upon the order of a court or other
authorized Governmental Authority, or pursuant to other Legal Requirements. 
However, if Owner is required to file the Contract Documents or a portion
thereof with a Governmental Authority, it agrees that it will not do so without
first informing Design-Builder of the requirement and seeking confidential
treatment of the Contract Documents prior to filing the documents or a portion
thereof.

20.2        Publicity and Advertising.  Neither Owner nor Design-Builder shall
make or permit any of their subcontractors, agents, or vendors to make any
external announcement or publication, release any photographs or information
concerning the Project or any part thereof, or make any other type of
communication to any member of the public, press, business entity, or any
official body which names the other Party unless prior written consent is
obtained from the other Party, which consent shall not be unreasonably withheld.

20.3        Term of Obligation.  The confidentiality obligations of the Parties
pursuant to this Article 20 shall survive the expiration or other termination of
this Agreement for a period of five (5) years.

Article 21

 

Miscellaneous

 

21.1        Assignment.  This Agreement shall be binding upon, shall inure to
the benefit of, and may be performed by, the successors and permitted assigns of
the Parties, except that neither Design-Builder nor Owner shall, without the
written consent of the other, assign or transfer this Agreement or any of the
Contract Documents.  Design-Builder’s subcontracting portions of the

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Work in accordance with this Agreement shall not be deemed to be an assignment
of this Agreement.  Owner may assign all of its rights and obligations under the
Contract Documents to its Lenders or Lenders’ Agent as collateral security in
connection with Owner obtaining or arranging any financing for the Project;
provided, however, Owner shall deliver, at least ten (10) Days prior to any such
assignment, to Design-Builder (i) written notice of such assignment and (ii) a
copy of the instrument of assignment in form and substance reasonably acceptable
to Design-Builder, whose approval shall not be unreasonably withheld.  The
Lenders or Lenders’ Agent may assign the Contract Documents or their rights
under the Contract Documents, including without limitation in connection with
any foreclosure or other enforcement of their security interest.  Design-Builder
shall execute, if requested, a consent to assignment for the benefit of the
Lenders and/or the Lenders’ Agent in form and substance reasonably acceptable to
Design-Builder, which form is attached hereto as Exhibit O, provided that with
respect to any such assignments such assignee demonstrates to Design-Builder’s
satisfaction that it has the capability to fulfill Owner’s obligations under
this Agreement.

21.2        Successors.  Design-Builder and Owner intend that the provisions of
the Contract Documents are binding upon the Parties, their employees, agents,
heirs, successors and assigns.

21.3        Governing Law.  This Agreement shall be governed by and construed
and enforced in accordance with, the substantive laws of the state of Minnesota,
without regard to the conflict of laws provisions thereof.

21.4        Severability.  If any provision or any part of a provision of the
Contract Documents shall be finally determined to be superseded, invalid,
illegal, or otherwise unenforceable pursuant to any applicable Legal
Requirements, such determination shall not impair or otherwise affect the
validity, legality, or enforceability of the remaining provision or parts of the
provision of the Contract Documents, which shall remain in full force and effect
as if the unenforceable provision or part were deleted.

21.5        No Waiver.  The failure of either Design-Builder or Owner to insist,
in any one (1) or more instances, on the performance of any of the obligations
required by the other under the Contract Documents shall not be construed as a
waiver or relinquishment of such obligation or right with respect to future
performance.

21.6        Headings.  The table of contents and the headings used in this
Agreement or any other Contract Document, are for ease of reference only and
shall not in any way be construed to limit, define, extend, describe, alter, or
otherwise affect the scope or the meaning of any provision of this Agreement.

21.7        Notice.  Whenever the Contract Documents require that notice be
provided to a Party, notice shall be delivered in writing to such Party at the
address listed below.  Notice will be deemed to have been validly given if
delivered (i) in person to the individual intended to receive such notice, (ii)
by registered or by certified mail, postage prepaid to the address indicated in
the Agreement within four (4) Days after being sent, or (iii) by facsimile, by
the time stated in a machine-generated confirmation that notice was received at
the facsimile number of the intended recipient.

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If to Design-Builder, to:

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Aaron Fagen

Fax: (320) 564-3278

 

with a copy to:

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Jennifer Johnson

Fax: (320) 564-3278

 

and to:

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Ryan Manthey

Fax: (320) 564-5190

 

If to Owner, to:

 

ABE Northfield, LLC

10201 Wayzata Blvd. Suite 250

Minneapolis, MN 55305

Attention: Revis L. Stephenson III

Fax: (763) 226-2725

 

and

Lender’s Agent at the address provided for Lender’s Agent to Design-Builder by
Owner by notice within five (5) Days following the Financial Closing.

 

21.8        No Privity with Design Consultant/Subcontractors.  Nothing in the
Contract Documents is intended or deemed to create any legal or contractual
relationship between Owner and any Design Consultant or Subcontractor.

21.9        Amendments.  The Contract Documents may not be changed, altered, or
amended in any way except in writing signed by a duly authorized representative
of each Party.

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21.10      Entire Agreement.  This Agreement consists of the terms and
conditions set forth herein, as well as the Exhibits hereto, which are
incorporated by reference herein and made a part hereof.  This Agreement sets
forth the full and complete understanding of the Parties as of the Effective
Date with respect to the subject matter hereof.

21.11      Third-Party Beneficiaries.  Except as expressly provided herein, this
Agreement is intended to be solely for the benefit of the Owner, the
Design-Builder and permitted assigns, and is not intended to and shall not
confer any rights or benefits on any person not a signatory hereto.

21.12      Counterparts.  This Agreement may be executed in one (1) or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one and the same Agreement, and may be executed and
delivered by facsimile signature, which shall be considered an original.

21.13      Survival.   Notwithstanding any provisions herein to the contrary,
the Work Product provisions set forth in Article 5 and the indemnity obligations
set forth herein shall survive (in full force and effect) the expiration or
termination of this Agreement and shall continue to apply to the Parties to this
Agreement even after termination of this Agreement or the transfer of such
Party’s interest in this Agreement.

[The next page is the signature page.]

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IN WITNESS WHEREOF, the Parties hereto have caused their names to be hereunto
subscribed by their officers thereunto duly authorized, intending thereby that
this Agreement shall be effective as of this February 7, 2007.

OWNER:

 

DESIGN-BUILDER:

 

 

 

ABE Northfield, LLC

 

Fagen, Inc.

(Name of Owner)

 

(Name of Design-Builder)

 

 

 

 

 

 

 /s/ Revis L. Stephenson III

 

/s/ Ron Fagen

(Signature)

 

(Signature)

 

 

 

 

 

 

Revis L. Stephenson III

 

Roland “Ron” Fagen

(Printed Name)

 

(Printed Name)

 

 

 

 

 

 

Chairman

 

CEO and President

(Title)

 

(Title)

 

 

 

 

 

 

Date:

2/7/07

 

Date:

2/13/07

 

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EXHIBIT A

PERFORMANCE GUARANTEE CRITERIA

Criteria

 

Specification

 

Testing Statement

 

Documentation

Plant Capacity – fuel grade ethanol

 

Operate at a rate of 100 million gallons per year of denatured fuel grade
ethanol meeting the specifications of ASTM 4806 based on 353 days of operation
per calendar year and 4.76% denaturant.

 

Seven day performance test

 

Production records and written report by Design-Builder.

Corn to Ethanol Conversion ratio; [*]

 

Not be less than 2.80 denatured gallons of ethanol per bushel (56#) of corn

 

As determined by meter readings during a seven day performance test.

 

Production records and written analysis by Design-Builder.

Electrical Energy

 

0.75 kWh per denatured gallon of fuel grade ethanol [*]

 

As determined by meter readings during a seven day performance test.

 

Production records and written analysis by Design-Builder.

Natural Gas

 

Shall not exceed 34,000 Btu per denatured gallon of fuel grade ethanol. (This
Performance Criteria relates to production of ethanol and excludes any natural
gas usage that may occur for drying corn.)

 

As determined by meter readings during a seven day performance test.

 

Production records and written analysis by Design-Builder.

Process Water Discharge (not including cooling tower and boiler blowdown and
water pre-treatment (RO) discharge)

 

Zero gallons under normal operations.

 

Process discharge meter.

 

Control System reports.

Air Emissions

 

Must meet the requirements prescribed as of the

 

Must meet the requirements as prescribed in the Air

 

Written report by Owner’s Air Emission Tester.

 

--------------------------------------------------------------------------------

* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

A-1

--------------------------------------------------------------------------------

 

 

 

date hereof by the State of Minnesota Pollution Control Agency, Air Quality
Division.

 

Permit Application to be provided by Owner, approved in a separate signed
writing by Design-Builder, and attached as Exhibit K. At least five (5) business
days prior to submission to all appropriate Governmental Authorities, Owner
shall provide a copy of such proposed Air Permit Application to Design-Builder
for its review.

 

 

As part of the Performance Guarantee Criteria the Plant shall operate in
accordance with all Legal Requirements.

DISCLAIMER:

Owner’s failure to materially comply with the operating procedures issued by
ICM, Inc./Fagen, Inc. shall void all performance guaranties and warranties set
forth in this Design-Build Agreement to the extent affected by Owner’s failure
to comply as reasonably determined by Design-Builder.

Owner understands that the startup of the plant requires resources and
cooperation of the Owner, vendors and other suppliers to the project. 
Design-Builder disclaims any liability and Owner indemnifies Design-Builder for
non-attainment of the Performance Guarantee Criteria directly or indirectly
caused by material non-performance or negligence of third parties not retained
by Design-Builder.

A-2

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EXHIBIT B

GENERAL PROJECT SCOPE

Construct a one hundred (100) MGY dry mill fuel ethanol plant near Northfield,
Minnesota.  The plant will grind approximately thirty-five million eight hundred
thousand (35,800,000) bushels of corn per year to produce approximately one
hundred (100) MGY of denatured fuel ethanol.  The plant will also produce
approximately three hundred twenty-one thousand (321,000) tons per year of 11%
moisture dried distillers grains with solubles (DDGS), and approximately two
hundred eighty-five thousand seven hundred (285,700) tons per year of raw carbon
dioxide (CO2) gas.

Delivered corn will be dumped in the receiving building.  The receiving building
will have two truck grain receiving bays and a rail receiving bay, including an
underground conveyor from the rail pit to the second truck receiving bay both of
which share a common receiving leg.  The truck driver will drive onto one of two
pitless scales located near the administration building, be weighed and sampled,
then drive to the receiving building, dump the grain, then proceed back to one
of two pitless scales and obtain a final weight ticket from the scale operator. 
Two independent 20,000 -bushel legs will lift the corn to one of two 500,000 —
bushel concrete storage bins.  A dust collection system will be installed on the
grain receiving system to limit particulate emissions as described in the Air
Quality Permit application.

Ground corn will be mixed in a slurry tank, routed through a pressure vessel and
steam flashed off in a flash vessel.  Cooked mash will continue through
liquefaction tanks and into one of the fermenters.  Simultaneously, propagated
yeast will be added to the mash as the fermenter is filling.  After batch
fermentation is complete, the beer will be pumped to the beer well and then to
the beer column to vaporize the alcohol from the mash.

Alcohol streams are dehydrated in the rectifier column, the side stripper and
the molecular sieve system.  Two hundred proof alcohol is pumped to the tank
farm day tank and blended with five percent natural gasoline as the product is
being pumped into one of two one million five hundred thousand (1,500,000)
gallon final storage tanks.  Loading facilities for truck and rail cars will be
provided.  Tank farm tanks include:  one tank for 190 proof storage, one tank
for 200 proof storage, one tank for denaturant storage and two one million five
hundred thousand (1,500,000) gallon tanks for denatured ethanol storage.

Corn mash from the beer stripper is dewatered in the centrifuge(s).  Wet cake
from the centrifuge(s) is conveyed to the DDGS dryer system. Wet cake is
conveyed from the centrifuges to the dryer(s) where the water is removed from
the cake and the product is dried to 11% moisture.  A modified wet or wet cake
pad is located along side the DDGS dryer building to divert modified wet or wet
cake to the pad when necessary or for limited production of modified wet or wet
cake for sales.  Water in the thin stillage is evaporated and recycled by the
Bio-Methanation system.  Syrup is added to the wet cake entering the dryer(s). 
DDGS is cooled and

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conveyed to flat storage in the DDGS storage building.  Shipping is accomplished
by scooping and pushing the product with a front-end loader into an in-floor
conveyor system.  The DDGS load out pit has capacity for approximately one
semi-trailer load.  DDGS is weighed as it is loaded for shipment through a
bulk-weigh system.

Fresh water for the boilers, cooking, cooling tower and other processes will be
obtained from the Owner supplied water pretreatment system.  Boiler water
conditioned in regenerative softeners will be pumped through a deaerator
scrubber and into a deaerator tank.  Appropriate boiler chemicals will be added
as preheated water is sent to the boiler.

Steam energy will be provided by two Thermal Oxidizer (TO) driven boiler systems
utilizing a high percentage of condensate return to a condensate receiver tank.

The TO/Heat Recovery Steam Generator is a process used to thermally oxidize the
exhaust gasses from the Dryers.  This process will be used to reduce VOCs and
particulates that are in the dryer exhaust and ensure compliance with
environmental regulations.  The energy required to complete thermal oxidization
will then be ducted to a waste heat boiler that will produce 100% of the steam
requirements of the ethanol plant.  The exhaust gasses from the waste heat
boiler will be ducted through stack gas economizer(s) to recover the maximum
amount of energy possible from the exhaust gas stream.  After the economizer(s),
the gas stream will be vented to atmosphere through a stack.

The process will be cooled by circulating water through heat exchangers, a
chiller, and a cooling tower.

The design includes a compressed air system consisting of air compressor(s), a
receiver tank, pre-filter, coalescing filter, and double air dryer(s).

The design also incorporates the use of a clean-in-place (CIP) system for
cleaning cook, fermentation, distillation, evaporation, centrifuges, and other
systems.  Fifty percent caustic soda is received by truck and stored in a tank.

Under normal operating circumstances, the plant will not have any wastewater
discharges that have been in contact with corn, corn mash, cleaning system, or
contact process water.  An ICM/Phoenix Bio-Methanator will reduce the BOD in
process water allowing complete reuse within the plant.  The plant will have
blowdown discharges from the cooling tower and may have water discharge from any
water pre-treatment processes.  Owner shall provide on-site connection to
sanitary sewer or septic system.

Most plant processes are computer controlled by a Siemens/Moore APACS
distributed control system with graphical user interface and three
workstations.  The control room control console

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will have dual monitors to facilitate operator interface between two graphics
screens at the same time.  Additional programmable logic controllers (PLCs) will
control certain process equipment.  Design-Builder provides lab equipment.

The cooking system requires the use of anhydrous ammonia, and other systems
require the use of sulfuric acid.  Therefore, a storage tank for ammonia and a
storage tank for acid will be on site to provide the quantities necessary.  The
ammonia storage requires that plant management implement and enforce a Process
Safety Management (PSM) program.  The plant design may require additional
programs to ensure safety and to satisfy regulatory authorities.

NOTE:  This Exhibit B is a general description of the Plant’s basic design and
operation only.  It is not intended to be the final Project scope or to
establish the final specifications.  The final design of the Plant, including
equipment incorporated, and equipment specifications will be reflected in the As
Built Plans.

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EXHIBIT C

OWNER’S RESPONSIBILITIES

The Owner shall perform and provide the permits, authorizations, services and
construction as specifically described hereafter:

1)              Land and Grading — Owner shall provide a site near Northfield,
Minnesota.  Owner shall obtain all legal authority to use the site for its
intended purpose and perform technical due diligence to allow Design-Builder to
perform including, but not limited to, proper zoning approvals, building
permits, elevation restrictions, soil tests, and water tests. The site shall be
rough graded per Design-Builder specifications and be +/- three inches of final
grade including the rough grading for Site roadways.  The site soils shall be
modified as required to provide a minimum allowable soil bearing pressure as
described in Table 1.

Other items to be provided by the Owner include, but are not limited to, the
following: initial site survey (boundary and topographic) as required by the
Design-Builder, layout of the property corners including two construction
benchmarks, Soil Borings and subsequent Geotechnical Report describing
recommendation for Roads, foundations and if required, soil
stabilization/remediation, land disturbance permit, erosion control permit, site
grading as described above with minimum soil standards, placement of erosion
control measures, plant access road from a county, state or federal road
designed to meet local county road standards, plant storm and sanitary sewers,
fire water system with hydrants and plant water main branches taken from the
system to be within five feet of the designated building locations, all tanks,
motors and other equipment associated with or necessary to operate the fire
water loop and associated systems, plant roads as specified and designed for the
permanent elevations and effective depth, spill containment and drainage systems
from both rail and truck loading spots into the tank farm or other location,
“construction” grading plan as drawn (including site retention pond), plant
water well and associated permit(s).  The Owner shall provide for Design-Builder
aggregate covered areas for construction trailers and parking along with
adequate aggregate covered area or areas for material laydown purposes.  The
recommended aggregate specifications shall be as specified by the Owner’s
geotechnical engineer.  Owner shall also provide the final grading, seeding, and
mulching, and the site fencing at the site.

Owner is encouraged to obtain preliminary designs/information and estimates of
the cost of performing all Owner required permits and services as stated in this
Exhibit C.  Specifically, the cost of the fire water systems (including
associated fire water pumps, required tank, building (if required), sprinklers,
and all other equipment and materials associated with the fire water delivery
systems) is estimated being in excess of $2,000,000.  The requirements of each
state and the decisions of each Owner will increase or decrease the actual
cost.  Additionally, the cost of the required soil stabilization in Table 1 can
be in the range of, or may exceed, $2.5MM which cost is not included in the
Contract Price.  The specific soil stabilization requirements for the grain and
DDGS areas will be developed in coordination with the grain/DDGS area
subcontractor.  Owner shall prepare site according to Design-Builder’s
engineering plans provided for the site work under the Phase I and Phase II
Engineering Services Agreement.

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2)              Permits - Owner shall obtain all Operating Permits including,
but not limited to, air quality permits, in a timely manner to allow
construction and startup of the plant as scheduled by Design-Builder.

3)              Storm Water Runoff Permit – Owner shall obtain the construction
storm-water runoff permit, permanent storm-water runoff permit, and erosion
control/land disturbance permit.

4)              Minnesota Pollutant Elimination Discharge Permit – Owner shall
obtain a permit to discharge cooling tower water, reverse osmosis (“R.O.”)
reject water, and any other waste water directly to a designated waterway or
other location.  If required by item 9 below, Owner will secure appropriate
permits for emergency process water discharges.

5)              Natural Gas Supply and Service Agreement – Continuous supply of
natural gas of at least 3.2 billion cubic feet per year, at a minimum rate of
450-550 MCF per hour and at a minimum pressure of 75 – 200 psi at the plant
site.  Pressure reducing stations must be located so as to provide stable
pressure at the point of use.  Owner shall provide all gas piping to the use
points and supply meters and regulators to provide burner tip pressures as
specified by Design-Builder.  Owner shall also supply a digital flowmeter
on-site with appropriate output for monitoring by the plant’s computer control
system.

6)              Temporary Electrical Service – Owner shall secure electrical
service to supply a minimum 750 KW of electrical power during construction. 
Owner shall procure, install, and maintain temporary service to up to three
3-phase, 480/277 volt temporary service transformers and one 1-Phase, 240/120
volt temporary service transformer located throughout the site.  The transformer
sizing, locations, and underground electrical feed routing layout are to be
determined jointly by the Owner, the Design-Builder and the energy supplier. 
Design-Builder shall pay energy demand and usage charges up to Substantial
Completion.

7)              Permanent Electrical Service – (1) Owner is responsible to
secure continuous service from an energy supplier to serve the facility.  The
service from the energy supplier shall be of sufficient size to provide at a
minimum 12.5 MW of electrical capacity to the site.  (2) The Owner is
responsible for procurement, installation and maintenance of the site supply and
distribution system, including but not limited to the required substation and
all associated distribution lines.  An on-site digital meter is also to be
supplied for monitoring of electrical usage.  (3) The responsibility of the
Design-Builder starts at the secondary electrical terminals of the site
distribution system transformers that have been installed by Owner (i.e., the
480 volt terminals for the process building transformers; the 480 volt terminals
for the energy center transformers; the 480 volt terminals for the grains
transformer; the 480 volt terminals for the pumphouse transformer; and the 4160
volt terminals for the chiller transformer). (4)  The site distribution system
requirements, layout, and meters are to be determined jointly by the Owner, the
Design-Builder and the energy supplier.

Design-Builder will be providing soft start motor controllers for all motors
greater than 150 horsepower and where demanded by process requirements.  Owner
is encouraged to discuss

C-2

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with its electrical supplier whether additional soft start motor controllers are
advisable for this facility and such can be added, with any increased cost being
an Owner’s cost.

Design-Builder will provide power factor correction to 0.92 lagging at plant
nameplate capacity.  Owner is encouraged to discuss with its electrical service
supplier any requirements for power factor correction above 0.92 lagging. 
Additional power factor correction can be added with any increased cost being an
Owner’s cost.

8)              Water Supply, Service Agreement, and Pre-Treatment System –
Owner shall supply on-site process wells or other water source that is capable
of providing a quantity of raw water satisfying the needs of the Plant.  Owner
should consider providing a redundant water supply source.  Owner will supply
one process fresh water supply line terminating within five (5) feet of the
point of entry designated by Design-Builder, and one potable supply line
terminating within five (5) feet of the process building and to the
administration building at a point of entry designated by administration
building contractor.

Owner shall pay for a water pre-treatment system to be designed and constructed
by Design-Builder and to be integrated into the Plant.  The pre-treatment system
will be designed to provide the Plant with the quantity and quality of raw and
treated water needed to supply the Plant’s process needs. Owner shall maintain
and use the water pre-treatment system, including the use of all chemicals
specified for the operation of such water pre-treatment system, for the entirety
of the warranty period set forth in the Design-Build agreement as such may be
extended in accordance therewith.  Owner’s failure to maintain and to properly
use such water pre-treatment system for the warranty period set forth in the
Design-Build Agreement shall void any and all warranties affected by such
failure.  The pre-treatment system shall be supplied by a vendor selected and
approved by Design-Builder and shall meet specifications and designs approved by
Design-Builder.  The water pre-treatment system design will be required to meet
the discharge requirements under the Plant’s wastewater discharge permit.  Owner
shall execute side-letter agreements with Design-Builder as necessary for the
design and construction of such water pre-treatment system.  Design-Builder
shall recover costs for the design and construction of such system from the
Owner at Design-Builder’s standard time plus material rates during the relevant
time period and at the relevant locale.

9)              Wastewater Discharge System, Permits and/or Service Agreement –
Owner to provide discharge piping, septic tank and drainfield system or connect
to municipal system as required for the sanitary sewer requirements of the
Plant.  These provisions shall comply with all federal, state, and local
regulations, including any permitting issues.

10)        Roads and Utilities – Owner shall provide and maintain the ditches
and permanent roads, including the gravel, pavement or concrete, with the roads
passing standard compaction tests.  (Design-Builder will maintain aggregate
construction roads during construction of the Plant and will return to original
pre-construction condition prior to Owner completing final grade and surfacing.)

C-3

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Except as otherwise specifically stated herein the Owner shall install all
utilities so that they are within five (5) feet of the designated
building/structure locations.

11)        Administration Building – The administration building – one story
free standing, office computer system, telephone system, office copier and fax
machine and office furniture and any other office equipment and personal
property for the administration building shall be the sole and absolute cost and
responsibility of Owner and Design-Builder shall have no responsibility in
regards thereto.

12) Maintenance and Power Equipment – The maintenance and power equipment as
described in Table 2 and any other maintenance and power equipment as required
by the plant or desired by Owner shall be the sole and absolute cost and
responsibility of Owner and Design-Builder shall have no responsibility in
regards thereto.

13)        Railroads – Owner is responsible for any costs associated with the
railroads including, but not limited to, all rail design and engineering and
construction and Design-Builder shall have no responsibility in regards
thereto.  Owner shall supply drawings and Phase II redline drawings to
Design-Builder.

14)        Drawings – Owner shall supply drawings to Design-Builder of items
supplied under items 11) and 13) and also supply Phase II redline drawings.

15)        Fire Protection System – Fire Protection System requirements vary by
governmental requirements per location and by insurance carrier requirements. 
Owner is responsible to provide the required fire protection system for the
Plant.  This may include storage tanks, pumps, underground fire water mains,
fire hydrants, foam or water monitor valves, sprinkler systems, smoke and heat
detection, deluge systems, or other provisions as required by governmental codes
or Owner’s insurance carrier’s fire protection criteria.

Owner shall pay for a Fire Protection System to be designed and constructed by
Design-Builder and to be integrated into the Plant.  The Fire Protection System
shall be designed and constructed to meet the governmental and insurance
requirements.  Owner is to execute side-letter agreements as necessary for the
design and construction of such Fire Protection System.  Design-Builder shall
recover costs for the design and construction of such system from Owner at
Design-Builder’s standard time plus material rates during the relevant time
period and at the relevant locale.  A side-letter agreement between Owner and
Design-Builder shall be executed by Owner and Design-Builder to compensate
Design-Builder, at Design-Builder’s standard time plus materials rates during
the relevant time period and at the relevant locale, for any costs and expenses
related to such Fire Protection System.

C-4

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Table 1 Minimum Soil Bearing Pressure – Responsibility of Owner
** Subject to revision based on detailed design and engineering.

Description

 

Required Allowable Soil Bearing
Pressure (pounds per square foot)

 

Grain Storage Silos

 

7,000

 

DDGS Storage Silos

 

6,000

 

Corn/DDGS Building

 

4,000

 

Cook Water Tank

 

3,500

 

Methanator Feed Tank

 

3,500

 

Liquefaction Tank #1

 

3,500

 

Liquefaction Tank #2

 

3,500

 

Fermentation Tank #1

 

5,000

 

Fermentation Tank #2

 

5,000

 

Fermentation Tank #3

 

5,000

 

Fermentation Tank #4

 

5,000

 

Fermentation Tank #5

 

5,000

 

Fermentation Tank #6

 

5,000

 

Fermentation Tank #7

 

5,000

 

Beerwell

 

5,000

 

Whole Stillage Tank

 

3,500

 

Thin Stillage Tank

 

3,500

 

Syrup Tank

 

3,500

 

190 Proof Day Tank

 

3,000

 

200 Proof Day Tank

 

3,000

 

Denaturant Tank

 

3,000

 

Fire Water Tank

 

3,000

 

Denatured Ethanol Tank #1

 

3,000

 

Denatured Ethanol Tank #2

 

3,000

 

All Other Areas

 

3,000

 

 

C-5

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Table 2 Maintenance and Power Equipment – Responsibility of Owner

Description

 

Additional Description

 

 

Spare Parts

 

Spare parts

Parts bins

Misc. materials, supplies and equipment

 

 

Shop supplies and equipment

 

One shop welder

One portable gas welder

One plasma torch

One acetylene torch

One set of power tools

Two sets of hand tools with tool boxes

Carts and dollies

Hoists (except centrifuge overhead crane)

Shop tables

Maintenance office furnishings & supplies

Fire Extinguishers

Reference books

Safety manuals

Safety cabinets & supplies, etc.

Safety showers as required

 

 

Rolling stock

 

Used 1 ½ yard front end loader

New Skid loader

Used Fork lift

Used Scissors lift, 30 foot

Used Pickup truck

Track Mobile

 

 

 

C-6

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Table 3 Owner’s Milestones

Owner’s Responsibilities

 

Number Of Days To Be
Completed After Notice To
Proceed

Temporary Electrical Service In Place

 

[*]

Obtain Builder’s Risk policy in the amount of the Contract Price, obtain Boiler
and Machinery Insurance, and obtain Terrorism Coverage per TRIA as long as it is
required under Article 17 of the Agreement.

 

[*]

Storm Water Permits Complete: Modify the existing storm water discharge permit
to reflect the ethanol plant, if required.

 

[*]

Natural Gas/Propane Transportation / Storage Agreement Complete

 

[*]

Water Supply and Service Agreements Complete

 

[*]

Electrical Service Arrangement

 

[*]

Wastewater Discharge System Complete

 

[*]

TTB Operating Permits Complete

 

[*]

Discharge Permits Complete

 

[*]

Pumphouse/Water System Complete

 

[*]

Fire Protection System Complete

 

[*]

Paving (Plant Roads) Complete

 

[*]

Rail Spur Complete

 

[*]

Permanent Electrical Service Complete

 

[*]

Maintenance and Power Equipment Onsite (Table 2)

 

[*]

Employees Hired and Ready for Training

 

[*]

Natural Gas Pipeline/Delivery System Complete

 

[*]

 

--------------------------------------------------------------------------------

* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

 

C-7

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EXHIBIT D

ICM LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “License Agreement”) is entered into and made
effective as of the 7th day of February, 2007 (“Effective Date”) by and between
ABE Northfield, LLC, a Delaware limited liability company (“OWNER”), and ICM,
Inc., a Kansas corporation (“ICM”).

WHEREAS, OWNER has entered into that certain Design-Build Lump Sum Contract
dated February 7, 2007 (the “Contract”) with Fagen, Inc., a Minnesota
corporation (“Fagen”), under which Fagen is to design and construct a 100
million gallon per year ethanol plant for OWNER to be located in or near
Northfield, Minnesota (the “Plant”);

WHEREAS, ICM has granted Fagen the right to use certain proprietary technology
and information of ICM in the design and construction of the Plant; and

WHEREAS, OWNER desires from ICM, and ICM desires to grant to OWNER, a license to
use such proprietary technology and information in connection with OWNER’s
ownership, operation, maintenance and repair of the Plant, all upon the terms
and conditions set forth herein;

NOW, THEREFORE, the parties, in consideration of the foregoing premises and the
mutual promises contained herein and for other good and valuable consideration,
receipt of which is hereby acknowledged, agree as follows:

1.     Upon substantial completion of the Plant by Fagen pursuant to the terms
of the Contract or, if later, payment by OWNER of all amounts due and owing to
Fagen under the Contract, ICM grants to OWNER a perpetual limited license to use
the Proprietary Property (hereinafter defined) solely in connection with the
ownership, operation, maintenance and repair of the Plant, subject to the
limitations provided herein (the “Purpose”).

2.     The “Proprietary Property” means, without limitation, documents,
Operating Procedures (hereinafter defined), materials and other information that
are furnished by ICM to OWNER in connection with the Purpose, whether orally,
visually, in writing, or by any other means, whether tangible or intangible,
directly or indirectly (including, without limitation, through Fagen) and in
whatever form or medium including, without limitation, the design, arrangement,
configuration, and specifications of (i) the combinations of distillation,
evaporation, and alcohol dehydration equipment (including, but not limited to,
pumps, vessels, tanks, heat exchangers, piping, valves and associated electronic
control equipment) and all documents supporting those combinations; (ii) the
combination of the distillers grain drying (DGD), and heat recovery steam
generation (HRSG) equipment (including, but not limited to, pumps, vessels,
tanks, heat exchangers, piping and associated electronic control equipment) and
all documents supporting those combinations; and (iii) the computer system,
known as the distributed control system (DCS and/or PLC) (including, but not
limited to, the software configuration, programming, parameters, set points,
alarm points, ranges, graphical interface, and system hardware connections) and
all documents supporting that system.  The “Operating Procedures” means, without
limitation, the process equipment and specifications manuals, standards of
quality, service protocols, data collection methods, construction
specifications, training methods, engineering standards and any other
information prescribed by ICM from time to time concerning the Purpose. 
Proprietary Property shall not include any information or materials that OWNER
can demonstrate by clear and convincing written evidence:  (i) was lawfully in
the possession of OWNER prior to disclosure by ICM or Fagen; (ii) was in the
public domain prior to disclosure by ICM or Fagen; (iii) was disclosed to OWNER
by a third party other than Fagen having the legal right to

D-1

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possess and disclose such information or materials; or (iv) after disclosure by
ICM or Fagen comes into the public domain through no fault of OWNER or its
members, directors, officers, employees, agents, contractors, consultants or
other representatives (hereinafter collectively referred to as
“Representatives”).  Information and materials shall not be deemed to be in the
public domain merely because such information is embraced by more general
disclosures in the public domain, and any combination of features shall not be
deemed to be within the foregoing exceptions merely because individual features
are in the public domain if the combination itself and its principles of
operation are not in the public domain.

3.     OWNER shall not use the Proprietary Property for any purpose other than
the Purpose.  OWNER shall not use the Proprietary Property in connection with
any expansion or enlargement of the Plant.  ICM and its Representatives shall
have the express right at any time to enter upon the premises of the Plant to
inspect the Plant and its operation to ensure that OWNER is complying with the
terms of this License Agreement.

4.     OWNER’s failure to materially comply with the Operating Procedures shall
void all guarantees, representations and warranties, whether expressed or
implied, if any, that were given by ICM to OWNER, directly or indirectly through
Fagen, concerning the performance of the Plant that ICM reasonably determines
are materially affected by OWNER’s failure to materially comply with such
Operating Procedures.  OWNER agrees to indemnify, defend and hold harmless ICM,
Fagen and their respective Representatives from any and all losses, damages and
expenses including, without limitation, reasonable attorneys’ fees resulting
from, relating to or arising out of Owner’s or its Representatives’ (a) failure
to materially comply with the Operating Procedures or (b) negligent use of the
Proprietary Property.

5.     Any and all modifications to the Proprietary Property made by OWNER or
its Representatives shall be the property of ICM.  OWNER shall promptly notify
ICM of any such modification and OWNER agrees to assign all right, title and
interest in such modification to ICM; provided, however, OWNER shall retain the
right, at no cost, to use such modification in connection with the Purpose.

6.     ICM has the exclusive right and interest in and to the Proprietary
Property and the goodwill associated therewith.  OWNER will not, directly or
indirectly, contest ICM’s ownership of the Proprietary Property.  OWNER’s use of
the Proprietary Property does not give OWNER any ownership interest or other
interest in or to the Proprietary Property except for the limited license
granted to OWNER herein.  Goodwill created by the operation of the Plant and all
financial benefits therefrom shall be the property of OWNER.

7.     OWNER shall pay no license fee or royalty to ICM for OWNER’s use of the
Proprietary Property pursuant to this License Agreement, the consideration for
the perpetual limited license granted herein is included in the amounts payable
by OWNER to Fagen for the construction of the Plant under the Contract.

8.     OWNER may not assign the perpetual limited license granted herein, in
whole or in part, without the prior written consent of ICM, which will not be
unreasonably withheld or delayed.  Prior to any assignment, OWNER shall obtain
from such assignee a written instrument, in form and substance

D-2

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reasonably acceptable to ICM, agreeing to be bound by all the terms and
provisions of this License Agreement.  Any assignment of this License Agreement
shall not release OWNER from (i) its duties and obligations hereunder concerning
the disclosure and use of the Proprietary Property by OWNER or its
Representatives, or (ii) damages to ICM resulting from, or arising out of, a
breach of such duties or obligations by OWNER or its Representatives.  ICM may
assign its right, title and interest in the Proprietary Property, in whole or
part, subject to the limited license granted herein.

9.     The Proprietary Property is confidential and proprietary.  OWNER shall
keep the Proprietary Property confidential and shall use all reasonable efforts
to maintain the Proprietary Property as secret and confidential for the sole use
of OWNER and its Representatives for the Purpose.  OWNER shall retain all
Proprietary Property at its principal place of business and/or the Plant.  OWNER
shall not at any time without ICM’s prior written consent, copy, duplicate,
record, or otherwise reproduce the Proprietary Property, in whole or in part, or
otherwise make the same available to any unauthorized person provided, OWNER
shall be permitted to copy, duplicate or otherwise reproduce the Proprietary
Property in whole or in part in connection with, and to the extent it is
necessary and essential for, the Purpose so long as all such copies, duplicates
or reproductions are kept at its principal place of business and/or the Plant
and are treated the same as any other Proprietary Property.  OWNER shall not
disclose the Proprietary Property except to its Representatives who are directly
involved with the Purpose, and even then only to such extent as is necessary and
essential for such Representative’s involvement.  OWNER shall inform such
Representatives of the confidential and proprietary nature of such information
and, if requested by ICM, OWNER shall obtain from such Representative a written
instrument, in form and substance reasonably acceptable to ICM, agreeing to be
bound by all of the terms and provisions of this License Agreement to the same
extent as OWNER.  OWNER shall make all reasonable efforts to safeguard the
Proprietary Property from disclosure by its Representatives to anyone other than
permitted hereby.  OWNER shall notify ICM immediately upon discovery of any
unauthorized use or disclosure of the Proprietary Property, or any other breach
of this License Agreement by OWNER or its Representatives, and shall cooperate
with ICM in every reasonable way to help ICM regain possession of the
Proprietary Property and prevent its further unauthorized use or disclosure.  In
the event that OWNER or its Representatives are required by law to disclose the
Proprietary Property, OWNER shall provide ICM with prompt written notice of same
so that ICM may seek a protective order or other appropriate remedy.  In the
event that such protective order or other appropriate remedy is not obtained,
OWNER or its Representatives will furnish only that portion of the Proprietary
Property which in the reasonable opinion of its or their legal counsel is
legally required and will exercise its reasonable efforts to obtain reliable
assurance that the Proprietary Property so disclosed will be accorded
confidential treatment.

10.   OWNER agrees to indemnify ICM for any and all damages (including, without
limitation, reasonable attorneys’ fees) arising out of or resulting from any
unauthorized disclosure or use of the Proprietary Property by OWNER or its
Representatives.  OWNER agrees that ICM would be irreparably damaged by reason
of a violation of the provisions contained herein and that any remedy at law for
a breach of such provisions would be inadequate.  OWNER agrees that ICM shall be
entitled to seek injunctive or other equitable relief in a court of competent
jurisdiction against OWNER or its Representatives for any unauthorized
disclosure or use of the Proprietary Property without the necessity of proving
actual monetary loss or posting any bond.  It is expressly understood that the
remedy described herein shall not be the exclusive remedy of ICM for any breach
of such covenants, and ICM shall be entitled to seek such other relief or
remedy, at law or in equity, to which it may be entitled as a consequence of any
breach of such duties or obligations.

D-3

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11.   The duties and obligations of OWNER under this License Agreement, and all
provisions relating to the enforcement of such duties and obligations shall
survive and remain in full force and effect notwithstanding any termination or
expiration of the Contract or this License Agreement.

12.   ICM may terminate this License Agreement upon written notice to OWNER if
OWNER willfully or wantonly (a) uses the Proprietary Property for any purpose,
or (b) discloses the Proprietary Property to anyone, in each case other than
permitted herein.  Upon termination of this License Agreement, OWNER shall cease
using the Proprietary Property for any purpose (including the Purpose) and, upon
request by ICM, shall promptly return to ICM all documents or other materials in
OWNER’s or its Representatives’ possession that contain Proprietary Property in
whatever format, whether written or electronic, including any and all copies or
reproductions of the Proprietary Property.  OWNER shall permanently delete all
such Proprietary Property from its computer hard drives and any other electronic
storage medium (including any backup or archive system).  OWNER shall deliver to
ICM a written certificate which certifies that all electronic copies or
reproductions of the Proprietary Property have been permanently deleted.

13.   The laws of the State of Kansas, United States of America (or US), shall
govern the validity of the provisions contained herein, the construction of such
provisions, and the interpretation of the rights and duties of the parties.  Any
legal action brought to enforce or construe the provisions of this License
Agreement shall be brought in the federal or state courts located in Wichita,
Kansas, and the parties agree to and hereby submit to the exclusive jurisdiction
of such courts and agree that they will not invoke the doctrine of forum non
conveniens or other similar defenses in any such action brought in such courts. 
Notwithstanding the foregoing, nothing in this License Agreement will affect any
right ICM may otherwise have to bring any action or proceeding relating to this
License Agreement against OWNER or its properties in the courts of any
jurisdiction.

14.   OWNER hereby agrees to waive all claims against ICM and ICM’s
Representatives for any consequential damages that may arise out of or relate to
this License Agreement, the Contract or the Proprietary Property whether arising
in contract, warranty, tort (including negligence), strict liability or
otherwise, including but not limited to losses of use, profits, business,
reputation or financing.  OWNER further agrees that the aggregate recovery of
OWNER and Fagen (and everyone claiming by or through OWNER and Fagen), as a
whole, against ICM and ICM’s Representatives, collectively, for any and all
claims that arise out of, relate to or result from this License Agreement, the
Proprietary Property or the Contract, whether arising in contract, warranty,
tort (including negligence), strict liability or otherwise, shall not exceed One
Million US Dollars ($1,000,000).

15.   The terms and conditions of this License Agreement constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral.  Any rule of construction to the effect that any
ambiguity is to be resolved against the drafting party shall not be applicable
in the interpretation of this License Agreement.  This License Agreement may not
be modified or amended at any time without the written consent of the parties.

16.   All notices, requests, demands, reports, statements or other
communications (herein referred to collectively as “Notices”) required to be
given hereunder or relating to this License Agreement shall be in writing and
shall be deemed to have been duly given if transmitted by personal delivery or

D-4

--------------------------------------------------------------------------------

mailed by certified mail, return receipt requested, postage prepaid, to the
address of the party as set forth below.  Any such Notice shall be deemed to be
delivered and received as of the date so delivered, if delivered personally, or
as of the third business day following the day sent, if sent by certified mail. 
Any party may, at any time, designate a different address to which Notices shall
be directed by providing written notice in the manner set forth in this
paragraph.

17.   In the event that any of the terms, conditions, covenants or agreements
contained in this License Agreement, or the application of any thereof, shall be
held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such term, condition, covenant or agreement shall be deemed void
ab initio and shall be deemed severed from this License Agreement.  In such
event, and except if such determination by a court of competent jurisdiction
materially changes the rights, benefits and obligations of the parties under
this License Agreement, the remaining provisions of this License Agreement shall
remain unchanged unaffected and unimpaired thereby and, to the extent possible,
such remaining provisions shall be construed such that the purpose of this
License Agreement and the intent of the parties can be achieved in a lawful
manner.

18.   The duties and obligations herein contained shall bind, and the benefits
and advantages shall inure to, the respective successors and permitted assigns
of the parties hereto.

19.   The waiver by any party hereto of the breach of any term, covenant,
agreement or condition herein contained shall not be deemed a waiver of any
subsequent breach of the same or any other term, covenant, agreement or
condition herein, nor shall any custom, practice or course of dealings arising
among the parties hereto in the administration hereof be construed as a waiver
or diminution of the right of any party hereto to insist upon the strict
performance by any other party of the terms, covenants, agreement and conditions
herein contained.

20.   In this License Agreement, where applicable, (i) references to the
singular shall include the plural and references to the plural shall include the
singular, and (ii) references to the male, female, or neuter gender shall
include references to all other such genders where the context so requires.

D-5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this License Agreement, the
Effective Date of which is indicated on page 1 of this License Agreement.

 

OWNER:

 

ICM:

 

 

 

ABE Northfield, LLC

 

ICM, Inc.

 

 

 

By:

 

By:

 

 

 

Title:

 

Title:

 

 

 

Date Signed:

 

Date Signed:

 

 

 

Address for giving notices:

 

Address for giving notices:

 

 

 

10201 Wayzata Blvd, Suite 250
Minneapolis, MN 55305

 

301 N First Street
Colwich, KS 67030

 

D-6

--------------------------------------------------------------------------------

EXHIBIT E

SCHEDULE OF VALUES

Schedule of Values for:

ABE NORTHFIELD, LLC

Northfield, MN

100 MGY Dry Grind Ethanol Plant

 

 

DESCRIPTION

 

 

 

 

 

 

 

 

 

1

 

MOBILIZATION

 

$

[*]

 

2

 

ENGINEERING

 

$

[*]

 

3

 

GENERAL CONDITIONS

 

$

[*]

 

4

 

SITEWORK

 

$

[*]

 

5

 

CONCRETE

 

$

[*]

 

6

 

MASONRY / ARCHITECTURAL

 

$

[*]

 

7

 

STRUCTURAL STEEL - MISC. METALS

 

$

[*]

 

8

 

PRE-ENGINEERED BUILDINGS

 

$

[*]

 

9

 

GRAIN HANDLING SYSTEM

 

$

[*]

 

10

 

PROCESS TANKS & VESSELS

 

$

[*]

 

11

 

FIELD ERECTED TANKS

 

$

[*]

 

12

 

HEAT EXCHANGERS

 

$

[*]

 

13

 

PROCESS EQUIPMENT

 

$

[*]

 

14

 

CENTRIFUGES

 

$

[*]

 

15

 

CHILLER

 

$

[*]

 

16

 

TRUCK SCALES & PROBE

 

$

[*]

 

17

 

ETHANOL LOADOUT & FLARE SYSTEM

 

$

[*]

 

18

 

COOLING TOWER

 

$

[*]

 

19

 

DRYER SYSTEM

 

$

[*]

 

20

 

THERMAL OXIDIZER

 

$

[*]

 

21

 

METHANATOR

 

$

[*]

 

22

 

PROCESS PIPING & VALVES

 

$

[*]

 

23

 

PAINTING

 

$

[*]

 

24

 

INSULATION

 

$

[*]

 

25

 

PLUMBING & HVAC

 

$

[*]

 

26

 

ELECTRICAL

 

$

[*]

 

27

 

START-UP

 

$

[*]

 

28

 

DEMOBILIZATION

 

$

[*]

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

TOTAL

 

$

122,542,363

 

 

--------------------------------------------------------------------------------

* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

 

E-1

--------------------------------------------------------------------------------

EXHIBIT F

FORM OF INFORMATIONAL REPORT

[g42441kg23i001.jpg]

PROJECT MEETING:  Two-Week Look Ahead(s)

 

JOBSITE:

 

 

MEETING
DATE:

 

 

q MANPOWER

TOTALS q

Fagen, Inc.

0

(sub)

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

JOBSITE TOTAL

0

 

q SAFETY ISSUES

 

 

1. text

 

 

2. text

 

 

 

q WAREHOUSE ISSUES

 

 

1. text

 

 

2. text

 

 

 

q PROCUREMENT ISSUES

 

 

1. text

 

 

2. text

 

 

 

q OPERATIONS ISSUES

 

 

1. text

 

 

2. text

 

 

 

q CIVIL

 

 

1. text

 

 

2. text

 

 

 

F-1

--------------------------------------------------------------------------------

 

q STRUCTURAL

 

 

Area

 

 

1. text

 

 

2. text

 

 

 

q SIDING / INSULATION

 

 

Area

 

 

1. text

 

 

2.

 

 

 

q MILLWRIGHT

 

 

Area

 

 

1. text

 

 

2.

 

 

 

q PIPE

 

 

Area

 

 

1. text

 

 

2.

 

 

 

q ELECTRICAL

 

 

Area

 

 

1. text

 

 

2.

 

 

 

q DELIVERIES

 

 

Area

 

 

1. text

 

 

 

q SUBCONTRACTOR

 

 

Subcontractor Name

 

 

1. text

 

 

 

F-2

--------------------------------------------------------------------------------

EXHIBIT G
REQUIRED PERMITS

No.

Type of Application/Permit

Responsibility for
Obtaining Permit

Assistance in
Preparation

Notes

 

 

 

 

 

1

Underground Utility Locating Service

Design-Builder/Owner

 

Notification service for underground work.

 

 

 

 

 

2

Septic Tank & Drain Field Permit

Owner

 

 

 

 

 

 

 

3

Railroad Permit/Approval

Owner

Design-Builder

 

 

 

 

 

 

4

Archeological Survey

Owner

 

 

 

 

 

 

 

5

Highway Access Permit

Owner

 

State Department of Transportation or County

 

 

 

 

 

6

Building Permits

Design-Builder

 

 

 

Mechanical

Design-Builder

 

 

 

Electrical

Design-Builder

 

 

 

Structures

Design-Builder

 

 

 

 

 

 

 

7

Construction Air Permit

Owner

Design-Builder

 

 

 

 

 

 

8

Construction Permit

Owner

Design-Builder

 

 

 

 

 

 

9

Operations Permit

Owner

Design-Builder

 

 

 

 

 

 

10

Wastewater Permit

Owner

Design-Builder

 

 

 

 

 

 

11

Water Appropriation Permit

Owner

Design-Builder

 

 

 

 

 

 

12

Fire Protection

Owner

Design-Builder

 

 

 

 

 

 

13

Above Ground Storage Tank Permit

Owner

 

 

 

 

 

 

 

14

TTB Permit

Owner

 

 

 

 

 

 

 

15

Industrial Wastewater Treatment Pond Permit

Owner

 

 

 

G-1

--------------------------------------------------------------------------------

EXHIBIT H

FORM OF PERFORMANCE BOND

PERFORMANCE BOND
The American Institute of Architects,
AIA Document No. A312 (December, 1984 Edition)
Any singular reference to Contractor, Surety, Owner or other
party shall be considered plural where applicable.

CONTRACTOR (Name and Address):

 

Amount: [Amount]

Fagen, Inc.

 

Description (Name and Location):

P. O. Box 159

 

[Project Name and Location]

Granite Falls, MN 56241

 

OWNER (Name and Address):

CONSTRUCTION CONTRACT

 

[Owner Name/Address]

Date:

 

SURETY (Name and Principal Place of

 

 

Business): [Name/Place of Business]

BOND#

Date (Not earlier than Construction Contract Date):

Amount:

Modifications to this Bond:

o None

 

o See Page 2

CONTRACTOR AS PRINCIPAL

 

SURETY

 

Company:

(Corporate Seal)

 

Company:

(Corporate Seal)

Fagen, Inc.

 

 

 

 

Signature:

 

 

Signature:

 

Name and Title:

 

 

Name and Title:

 

(Any additional signatures appear an page 2.)

 

 

 

(FOR INFORMATION Only- Name, Address and Telephone)

 

OWNER’S REPRESENTATIVE (Architect, Engineer or other party):

AGENT or BROKER:

1.             The Contractor and the Surety, jointly and severally, bind
themselves, their heirs, executors, administrators, successors and assigns to
the Owner for the performance of the Construction Contract, which is
incorporated herein by reference.

2.             If the Contractor performs the Construction Contract, the Surety
and the Contractor shall have no obligation under this Bond, except to
participate in conferences as provided in Subparagraph 3.1.

3.             If there is no Owner Default, the Surety’s obligation under this
Bond shall arise after:

3.1           The Owner has notified the Contractor and the Surety at its
address described in Paragraph 10 below that the Owner is considering declaring
a Contractor Default and has requested and attempted to arrange a conference
with the Contractor and the Surety to be held not later than fifteen days after
receipt of such notice to discuss methods of performing the Construction
Contract.  If the Owner, the Contractor and the Surety agree, the Contractor
shall be allowed a reasonable time to perform the Construction Contract, but
such an agreement shall not waive the Owner’s right, if any, subsequently to
declare a Contractor Default; and

3.2           The Owner has declared a Contractor Default and formally
terminated the Contractor’s right to complete the contract.  Such Contractor
Default shall not be declared earlier than twenty days after the Contractor and
Surety have received notice as provided in Subparagraph 3.1; and

 

H-1

--------------------------------------------------------------------------------

3.3           The Owner has agreed to pay the Balance of the Contract Price to
the Surety in accordance with the terms of the Construction Contract or to a
contractor selected to perform the Construction Contract in accordance with the
terms of the contract with the Owner.

4.             When the Owner has satisfied the conditions of Paragraph 3, the
Surety shall promptly and at the Surety’s expense take one of the following
actions:

4.1           Arrange for the Contractor with consent of the Owner, to perform
and complete the Construction Contract; or

4.2           Undertake to perform and complete the Construction Contract
itself, through its agents or through independent contractors; or

4.3           Obtain bids or negotiated proposals from qualified contractors
acceptable to the Owner for a contract for performance and completion of the
Construction Contract, arrange for a contract to be prepared for execution by
the Owner and the contractor selected with the Owner’s concurrence, to be
secured with performance and payment bonds executed by a qualified surety
equivalent to the bonds issued on the Construction Contract, and pay to the
Owner the amount of damages as described in Paragraph 6 in excess of the Balance
of the Contract Price incurred by the Owner resulting from the Contractor’s
default; or

4.4           Waive its right to perform and complete, arrange for completion,
or obtain a new contractor and with reasonable promptness under the
circumstances:

.1             After investigation, determine the amount for which it may be
liable to the Owner and, as soon as practicable after the amount is determined,
tender payment therefor to the Owner; or

.2             Deny liability in whole or in part and notify the Owner citing
reasons therefor.

5.             If the Surety does not proceed as provided in Paragraph 4 with
reasonable promptness, the Surety shall be deemed to be in default on this Bond
fifteen days after receipt of an additional written notice from the Owner to the
Surety demanding that the Surety perform its Obligations under this Bond, and
the Owner shall be entitled to enforce any remedy available to the Owner.  If
the Surety proceeds as provided in Subparagraph 4.4, and the Owner refuses the
payment tendered or the Surety has denied liability, in whole or in part,
without further notice the Owner shall be entitled to enforce any remedy
available to the Owner.

6.             After the Owner has terminated the Contractor’s right to complete
the Construction Contract, and if the Surety elects to act under Subparagraph
4.1, 4.2, or 4.3 above, then the responsibilities of the Surety to the Owner
shall not be greater than those of the Contractor under the Construction
Contract, and the responsibilities of the Owner to the Surety shall not be
greater than those of the Owner under the Construction Contract.  To the limit
of the amount of this Bond, but subject to commitment by the Owner of the
Balance of the Contract Price to mitigation of costs and damages on the
Construction Contract, the Surety is obligated without duplication for:

6.1           The responsibilities of the Contractor for correction of defective
work and completion of the Construction Contract;

6.2           Additional legal design professional and delay costs resulting
from the Contractor’s Default, and resulting from the actions or failure to act
of the Surety under Paragraph 4; and

H-2

--------------------------------------------------------------------------------

6.3           Liquidated damages, or if no liquidated damages are specified in
the Construction Contract, actual damages caused by delayed performance or
non-performance of the Contractor.

7.             The Surety shall not be liable to the Owner or others for
obligations of the Contractor that are unrelated to the Construction Contract
and the Balance of the Contract Price shall not be reduced or set off on account
of any such unrelated obligations. No right of action shall accrue on this Bond
to any person or entity other than the Owner or its heirs, executors,
administrators or successors.

8.             The Surety hereby waives notice of any change, including changes
of time, to the Construction Contract or to related subcontracts, purchase
orders and other obligations.

9.             Any proceeding, legal or equitable, under this Bond may be
instituted in any court of competent jurisdiction in the location in which the
work or part of the work is located and shall be instituted within two years
after Contractor Default or within two years after the Contractor ceased working
or within two years after the Surety refuses or fails to perform its obligations
under this Bond, whichever occurs first.  If the provisions of this Paragraph
are void or prohibited by law, the minimum period of limitation available to
sureties as a defense in the jurisdiction of the suit shall be applicable.

10.           Notice to the Surety, the Owner or the Contractor shall be mailed
or delivered to the address shown on the signature page.

11.           When this Bond has been furnished to comply with a statutory or
other legal requirement in the location where the construction was to be
performed, any provision in this Bond conflicting with said statutory or legal
requirement shall be deemed deleted herefrom and provisions conforming to such
statutory or other legal requirement shall be deemed incorporated herein. The
intent is that this Bond shall be construed as a statutory bond and not as a
common law bond.

12.           DEFINITIONS

12.1         Balance of the Contract Price: The total amount payable by the
Owner to the Contractor under the Construction Contract after all proper
adjustments have been made, including allowance to the Contractor of any amounts
received or to be received by the Owner in settlement of insurance or other
claims for damages to which the Contractor is entitled, reduced by all valid and
proper payments made to or on behalf of the Contractor under the Construction
Contract.

12.2         Construction Contract: The agreement between the Owner and the
Contractor identified on the signature page, including all Contract Documents
and changes thereto.

12.3         Contractor Default: Failure of the Contractor, which has neither
been remedied nor waived, to perform or otherwise to comply with the terms of
the Construction Contract.

12.4         Owner Default: Failure of the Owner, which has neither been
remedied nor waived, to pay the Contractor as required by the Construction
Contract or to perform and complete or comply with the other terms thereof.

MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:

This bond is subject to the attached Dual Obligee Rider dated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Space is provided below for additional signatures of added parties other than
those appearing on the cover page.)

H-3

--------------------------------------------------------------------------------

 

CONTRACTOR AS PRINCIPAL

 

SURETY

 

 

 

(Corporate Seal)

 

 

 

(Corporate Seal)

Company:

 

 

Company:

 

Address:

 

 

Address:

 

 

Name and Title:

 

 

Name and Title:

 

 

Signature:

 

 

Signature:

 

 

 

H-4

--------------------------------------------------------------------------------

DUAL OBLIGEE RIDER

(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)

TO BE ATTACHED TO AND FORM PART OF Performance and Payment Bond NO. __________,
dated concurrently with the execution of this Rider, issued by the
_______________, a _____________ corporation, as Surety, on behalf of Fagen,
Inc., as Principal, and in favor of _________________, as Obligee.

IT IS HEREBY UNDERSTOOD AND AGREED that the above described bond(s) are hereby
amended to include the following paragraph:

Notwithstanding anything contained herein to the contrary, there shall be no
liability on the part of the Principal or Surety under this bond to the
Obligees, or either of them, unless the Obligees, or either of them, shall make
payments to the Principal or to the Surety in case it arranges for completion of
the Contract upon default of the Principal, strictly in accordance with the
terms of said Contract as to payments, and shall perform all the other
obligations required to be performed under said Contract at the time and in the
manner therein set forth.

IT IS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held
to change, alter or vary the terms of the above described bond(s) except as
hereinbefore set forth.

SIGNED, SEALED AND DATED this ____ day of _____________, 200_.

 

 

Fagen, Inc.

 

 

 

 

 

 

 

 

 

(Contractor)

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

[                           ]

 

 

 

 

 

 

 

 

 

(Surety)

 

 

 

 

 

 

 

 

By:

 

 

 

H-5

--------------------------------------------------------------------------------

EXHIBIT I

FORM OF PAYMENT BOND

PAYMENT BOND
The American Institute of Architects,
AIA Document No. A312 (December, 1984 Edition)
Any singular reference to Contractor, Surety, Owner or other
party shall be considered plural where applicable.

CONTRACTOR (Name and Address):
Fagen, Inc.
P. O. Box 159
Granite Falls, MN 56241

SURETY (Name and Principal Place of Business):

OWNER (Name and Address):
[NAME AND ADDRESS]

 

CONSTRUCTION CONTRACT
Date:
Amount:
Description (Name and Location):

 

BOND #
Date (Not earlier than Construction Contract Date):
Amount:

 

Modifications to this Bond:    o  None    o  See Page 2

 

CONTRACTOR AS PRINCIPAL

SURETY

Company:              (Corporate
Seal)              Company:              (Corporate Seal)

Fagen, Inc.

 

Signature:

 

 

Signature:

 

Name and Title:

 

 

Name and Title:

 

(Any additional signatures appear an page 2.)

(FOR INFORMATION Only—Name, Address and Telephone)

OWNER’S REPRESENTATIVE (Architect, Engineer or other party):

AGENT or BROKER:

 

 

1.             The Contractor and the Surety, jointly and severally, bind
themselves, their heirs, executors, administrators, successors and assigns to
the Owner to pay for labor, materials and equipment furnished for use in the
performance of the Construction Contract, which is incorporated herein by
reference.

2.             With respect to the Owner, this obligation shall be null and void
if the Contractor:

2.1           Promptly makes payment, directly or indirectly, for all sums due
Claimants, and

2.2           Defends, indemnifies and holds harmless the Owner from claims,
demands, liens or suits by any person or entity whose claim, demand, lien or
suit is for the payment for labor, materials or equipment furnished for use in
the performance of the Construction Contract, provided the Owner has promptly
notified the Contractor and the Surety

 

I-1

--------------------------------------------------------------------------------

(at the address described in Paragraph 12) of any claims; demands, liens or
suits and tendered defense of such claims, demands, liens or suits to the
Contractor and the Surety, and provided there is no Owner Default.

3.             With respect to Claimants, this obligation shall be null and void
if the Contractor promptly makes payment, directly or Indirectly, for all sums
due.

4.             The Surety shall have no obligation to Claimants under this Bond
until:

4.1           Claimants who are employed by or have a direct contract with the
Contractor have given notice to the Surety (at the address described in
Paragraph 12) and sent a copy, or notice thereof, to the owner, stating that a
claim is being made under this Bond and, with substantial accuracy, the amount
of the claim.

4.2           Claimants who do not have a direct contract with the Contractor:

4.2.1        Have furnished written notice to the Contractor and sent a copy, or
notice thereof, to the Owner, within 90 days after having last performed labor
or last furnished materials or equipment included in the claim stating, with
substantial accuracy, the amount of the claim and the name of the party to whom
the materials were furnished or supplied or for whom the labor was done or
performed; and

4.2.2        Have either received a rejection in whole or in part from the
Contractor, or not received within 30 days of furnishing the above notice any
communication from the Contractor by which the Contractor has indicated the
claim will be paid directly or Indirectly; and

4.2.3        Not having been paid within the above 30 days, have sent a written
notice to the Surety (at the address described in Paragraph 12) and sent a copy,
or notice thereof, to the Owner, stating that a claim is being made under this
Bond and enclosing a copy of the previous written notice furnished to the
Contractor.

5.             If a notice required by Paragraph 4 is given by the Owner to the
Contractor or to the Surety that is sufficient compliance.

6.             When the Claimant has satisfied the conditions of Paragraph 4,
the Surety shall promptly and at the Surety’s expense take the following
actions:

6.1           Send an answer to the Claimant, with a copy to the Owner, within
45 days after receipt of the claim, stating the amounts that are undisputed and
the basis for challenging any amounts that are disputed.

6.2           Pay or arrange for payment of any undisputed amounts.

7.             The Surety’s total obligation shall not exceed the amount of this
Bond, and the amount of this Bond shall be credited for any payments made in
good faith by the Surety.

I-2

--------------------------------------------------------------------------------

8.             Amounts owed by the Owner to the Contractor under the
Construction Contract shall be used for the performance of the Construction
Contract and to satisfy claims, if any, under any Construction Performance
Bond.  By the Contractor furnishing and the Owner accepting this Bond, they
agree that all funds earned by the Contractor in the performance of the
Construction Contract are dedicated to satisfy obligations of the Contractor and
the Surety under this Bond, subject to the Owner’s priority to use the funds for
the completion of the work.

9.             The Surety shall not be liable to the Owner, Claimants or others
for obligations of the Contractor that are unrelated to the Construction
Contract.  The Owner shall not be liable for payment of any costs or expenses of
any Claimant under this Bond, and shall have under this Bond no obligation to
make payments to, give notices on behalf of, or otherwise have obligations to
Claimants under this Bond.

10.           The Surety hereby waives notice of any change, including changes
of time, to the Construction Contract or to related subcontracts, purchase
orders and other obligations.

11.           No suit or action shall be commenced by a Claimant under this Bond
other than in a court of competent jurisdiction in the location in which the
work or part of the work is located or after the expiration of one year from the
date (1) on which the Claimant gave the notice required by Subparagraph 4.1 or
Clause 4.2.3, or (2) on which the last labor or service was performed by anyone
or the last materials or equipment were furnished by anyone under the
Construction Contract, whichever of (1) or (2) first occurs. If the provisions
of this Paragraph are void or prohibited by law, the minimum period of
limitation available to sureties as a defense in the jurisdiction of the suit
shall be applicable.

12.           Notice to the Surety, the Owner or the Contractor shall be mailed
or delivered to the address shown on the signature page. Actual receipt of
notice by Surety, the Owner or the Contractor, however accomplished, shall be
sufficient compliance as of the date received at the address shown on the
signature page.

13.           When this Bond has been furnished to comply with a statutory or
other legal requirement in the location where the construction was to be
performed, any provision in this Bond conflicting with said statutory or legal
requirement shall be deemed deleted herefrom and provisions conforming to such
statutory or other legal requirement shall be deemed incorporated herein.  The
intent is that this Bond shall be construed as a statutory bond and not as a
common law bond.

14.           Upon request by any person or entity appearing to be a potential
beneficiary of this Bond, the Contractor shall promptly furnish a copy of this
Bond or shall permit a copy to be made.

15.           DEFINITIONS

15.1         Claimant: An individual or entity having a direct contract with the
Contractor or with a subcontractor of the Contractor to furnish labor, materials
or equipment for use in the performance of the Contract. The intent of this Bond
shall be to include without limitation in the terms “labor, materials or
equipment” that part of water, gas, power, light, heat, oil, gasoline, telephone
service or rental equipment used in the Construction Contract,

I-3

--------------------------------------------------------------------------------

architectural and engineering services required for performance of the work of
the Contractor and the Contractor’s subcontractors, and all other items for
which a mechanic’s lien may be asserted in the jurisdiction where the labor,
materials or equipment were furnished.

15.2         Construction Contract: The agreement between the Owner and the
Contractor identified on the signature page, including all Contract Documents
and changes thereto.

15.3         Owner Default: Failure of the Owner, which has neither been
remedied nor waived, to pay the Contractor as required by the Construction
Contract or to perform and complete or comply with the other terms thereof.

MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:

This bond is subject to the attached Dual Obligee Rider dated
[                   ].

 

 

 

 

 

(Space is provided below for additional signatures of added parties other than
those appearing on the cover page.)

CONTRACTOR AS PRINCIPAL

SURETY

(Corporate Seal)

 

(Corporate Seal)

 

Company:

 

 

Company:

 

 

 

 

Address:

 

 

Address:

 

Name and Title:

 

 

Name and Title:

 

Signature:

 

 

Signature:

 

 

DUAL OBLIGEE RIDER

(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)

TO BE ATTACHED TO AND FORM PART OF Performance and Payment Bond NO.
                    , dated concurrently with the execution of this Rider,
issued by the                               , a                           
corporation, as Surety, on behalf of Fagen, Inc., as Principal, and in favor of
                                  , as Obligee.

IT IS HEREBY UNDERSTOOD AND AGREED that the above described bond(s) are hereby
amended to include the following paragraph:

Notwithstanding anything contained herein to the contrary, there shall be no
liability on the part of the Principal or Surety under this bond to the
Obligees, or either of them, unless the Obligees, or either of them, shall make
payments to the Principal or to the Surety in case it arranges for completion of
the Contract upon default of the Principal, strictly in accordance with the
terms of said Contract as to payments, and shall perform all the other
obligations required to be performed under said Contract at the time and in the
manner therein set forth.

IT IS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held
to change, alter or vary the terms of the above described bond(s) except as
hereinbefore set forth.

SIGNED, SEALED AND DATED this          day of                           , 200  .

I-4

--------------------------------------------------------------------------------

 

 

Fagen, Inc.

 

 

 

 

 

(Contractor)

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

[                                ]

 

 

 

 

 

(Surety)

 

 

 

 

 

 

 

By:

 

 

I-5

--------------------------------------------------------------------------------

 

By:

 

 

I-6

--------------------------------------------------------------------------------

EXHIBIT J

DRAW (PAYMENT) SCHEDULE

ABE NORTHFIELD, LLC

Northfield,
MN

Monthly Draw Schedule - 21 Month Project (635 Days)

 

 

 

 

 

Previously

 

 

 

Month #

 

This Month

 

Completed

 

Total

 

1

 

$

[*]

 

$

[*]

 

$

[*]

 

2

 

$

[*]

 

$

[*]

 

$

[*]

 

3

 

$

[*]

 

$

[*]

 

$

[*]

 

4

 

$

[*]

 

$

[*]

 

$

[*]

 

5

 

$

[*]

 

$

[*]

 

$

[*]

 

6

 

$

[*]

 

$

[*]

 

$

[*]

 

7

 

$

[*]

 

$

[*]

 

$

[*]

 

8

 

$

[*]

 

$

[*]

 

$

[*]

 

9

 

$

[*]

 

$

[*]

 

$

[*]

 

10

 

$

[*]

 

$

[*]

 

$

[*]

 

11

 

$

[*]

 

$

[*]

 

$

[*]

 

12

 

$

[*]

 

$

[*]

 

$

[*]

 

13

 

$

[*]

 

$

[*]

 

$

[*]

 

14

 

$

[*]

 

$

[*]

 

$

[*]

 

15

 

$

[*]

 

$

[*]

 

$

[*]

 

16

 

$

[*]

 

$

[*]

 

$

[*]

 

17

 

$

[*]

 

$

[*]

 

$

[*]

 

18

 

$

[*]

 

$

[*]

 

$

[*]

 

19

 

$

[*]

 

$

[*]

 

$

[*]

 

20

 

$

[*]

 

$

[*]

 

$

[*]

 

21

 

$

[*]

 

$

[*]

 

$

122,545,363

 

 

 

 

 

$

122,545,363

 

 

 

 

--------------------------------------------------------------------------------

*** $20,000,000 Mobilization Fee included in 1st Billing

 

* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

J-1

--------------------------------------------------------------------------------

EXHIBIT K

AIR EMISSIONS APPLICATION OR PERMIT

Air Permit Application to be provided by Owner and approved in writing by
Design-Builder.

K-1

--------------------------------------------------------------------------------

EXHIBIT L

PHASE I AND PHASE II ENGINEERING SERVICES AGREEMENT

See attached Phase I and Phase II Engineering Services Agreement

--------------------------------------------------------------------------------

PHASE I AND PHASE II

ENGINEERING SERVICES AGREEMENT

BETWEEN

ADVANCED BIOENERGY, LLC

AND

FAGEN ENGINEERING, LLC

January 9, 2007

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

 

Article 1

 

Definitions; Rules of Interpretation

 

1

 

 

 

 

 

1.1

 

Rules of Construction

 

1

1.2

 

Defined Terms

 

2

 

 

 

 

 

Article 2

 

Retention of Agent

 

4

 

 

 

 

 

2.1

 

Retention of Services

 

4

 

 

 

 

 

Article 3

 

Engineer Responsibilities

 

4

 

 

 

 

 

3.1

 

Services

 

4

3.2

 

Phase I Design Package

 

4

3.3

 

Delivery of Phase I Design Package

 

4

3.4

 

The Phase II Design Package

 

5

3.5

 

Delivery of Phase II Design Package

 

5

3.6

 

Delays

 

5

3.7

 

Utility Routing and Design Services Limited

 

5

 

 

 

 

 

Article 4

 

Client Responsibilities

 

6

 

 

 

 

 

4.1

 

Client’s Representative

 

6

4.2

 

Client’s Requirements

 

6

4.3

 

Other Information

 

6

4.4

 

Access to Property

 

6

4.5

 

Review of Documents

 

6

4.6

 

Consents, Approvals, Licenses, and Permits

 

6

4.7

 

Bids

 

6

4.8

 

Other Services

 

7

4.9

 

Services Outside Scope of Engineer’s Services

 

7

4.10

 

Deviation from Design

 

7

4.11

 

Developments Affecting Scope or Timing of Services

 

7

 

 

 

 

 

Article 5

 

Compensation And Payment

 

7

 

 

 

 

 

5.1

 

Compensation

 

7

5.2

 

Reimbursement of Engineer Expenses

 

7

5.3

 

Reimbursement of Subcontractor Expenses

 

7

5.4

 

Fees for Work Outside Scope of Services

 

8

5.5

 

Collection of Unpaid Amounts

 

8

5.6

 

Reimbursement Schedules Subject to Change

 

8

5.7

 

Invoices

 

8

5.8

 

Payment

 

8

 

i

--------------------------------------------------------------------------------

 

5.9

 

Late Payment and Interest

 

8

5.10

 

Suspension for Failure to Pay

 

8

5.11

 

Payment

 

8

5.12

 

Withholding Payments

 

9

5.13

 

Purchase Orders

 

9

5.14

 

Changes in Project

 

9

 

 

 

 

 

Article 6

 

Construction Cost And Cost Estimates

 

9

 

 

 

 

 

6.1

 

Cost Estimates

 

9

 

 

 

 

 

Article 7

 

Termination

 

9

 

 

 

 

 

7.1

 

Termination Upon Default

 

9

7.2

 

Termination Upon Abandonment of Plant

 

9

 

 

 

 

 

Article 8

 

Ownership of Work Product

 

10

 

 

 

 

 

8.1

 

Work Product

 

10

8.2

 

Copies Provided to Client

 

10

8.3

 

Prohibited Use of Work Product

 

10

8.4

 

Derogation of Engineer’s Rights to Work Product

 

10

 

 

 

 

 

Article 9

 

Successors and Assigns

 

10

 

 

 

 

 

9.1

 

Successors

 

10

9.2

 

Written Consent Required

 

10

9.3

 

No Third-Party Beneficiaries

 

10

 

 

 

 

 

Article 10

 

Warranty

 

11

 

 

 

 

 

10.1

 

No Warranty Extended

 

11

10.2

 

No Responsibility for Construction

 

11

 

 

 

 

 

Article 11

 

Indemnification

 

11

 

 

 

 

 

11.1

 

Engineer’s Indemnification

 

11

11.2

 

Client’s Indemnification

 

11

11.3

 

Hazardous Materials Indemnification

 

11

 

 

 

 

 

Article 12

 

Dispute Resolution

 

12

 

 

 

 

 

12.1

 

Arbitration

 

12

 

 

 

 

 

Article 13

 

Confidentiality

 

12

 

 

 

 

 

13.1

 

Non-Disclosure Obligation

 

12

13.2

 

Publicity and Advertising

 

13

13.3

 

Term of Obligation

 

13

 

 

 

 

 

Article 14

 

Miscellaneous

 

13

 

ii

--------------------------------------------------------------------------------

 

14.1

 

Governing Law

 

13

14.2

 

Severability

 

13

14.3

 

No Waiver

 

13

14.4

 

Captions and Headings

 

14

14.5

 

Engineer’s Accounting Records

 

14

14.6

 

Counterparts

 

14

14.7

 

Survival

 

14

14.8

 

No Privity with Client’s Contractors

 

14

14.9

 

Amendments

 

14

14.10

 

Entire Agreement

 

14

14.11

 

Notice

 

14

14.12

 

Extent of Agreement

 

15

14.13

 

Subrogation Waiver

 

15

 

 

 

 

 

EXHIBIT A

 

Reimbursement Schedule

 

17

 

 

 

 

 

EXHIBIT B

 

Reimbursable Expense Schedule

 

18

 

 

 

 

 

EXHIBIT C

 

Client’s Deliverable Site Obligations

 

19

 

iii

--------------------------------------------------------------------------------

PHASE I AND PHASE II

ENGINEERING SERVICES AGREEMENT

THIS PHASE I AND PHASE II ENGINEERING SERVICES AGREEMENT (the “Agreement”) is
made as of January 9, 2007, (the “Effective Date”) by and between Advanced
BioEnergy, LLC, a Delaware Limited Liability Company (the “Client”) and Fagen
Engineering, LLC a Minnesota Limited Liability Company (the “Engineer”).  Each
of the Client and Engineer are referred to herein individually as a “Party” and
collectively as the “Parties.”

RECITALS

WHEREAS,  Client is developing a one hundred (100) million gallons per year dry
grind ethanol production facility to be located in Northfield, Minnesota (the
“Plant”) to be owned and operated by Client; and

WHEREAS,  Client and Fagen, Inc. (“Design - Builder”) intend to enter into that
certain Lump-Sum Design-Build Agreement (“Design-Build Agreement”) under which
Fagen, Inc., an affiliate of Engineer, will serve as the design-builder for the
Plant and provide design, engineering, procurement and construction services for
the development and construction of the Plant; and

WHEREAS,  Client wishes to retain an entity in advance of entering into the
Design-Build Agreement to perform certain engineering and design work that will
be required under the Design-Build Agreement on the terms and conditions set
forth in this Agreement, and Engineer desires to act as such entity upon the
terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound by this Agreement, the
parties do hereby agree as follows:

Article 1
Definitions; Rules of Interpretation

1.1                               Rules of Construction.

The capitalized terms listed in this Article 1 shall have the meanings set forth
herein whenever the terms appear in this Agreement, whether in the singular or
the plural or in the present or past tense.  Other terms used in this Agreement
but not listed in this Article shall have meanings as commonly used in the
English language and, where applicable, in generally accepted construction and
design-build industry standards.  Words not otherwise defined herein that have
well known and generally accepted technical or trade meanings are used herein in
accordance with such recognized meanings.  In addition, the following rules of
interpretation shall apply:

1

--------------------------------------------------------------------------------

1.1.1                     (A)                                  THE MASCULINE
SHALL INCLUDE THE FEMININE AND NEUTER.

1.1.2                         (B)                             REFERENCES TO
“ARTICLES,” “SECTIONS,” “SCHEDULES,” OR “EXHIBITS” SHALL BE TO ARTICLES,
SECTIONS, SCHEDULES OR EXHIBITS OF THIS AGREEMENT.

(c)                                  This Agreement was negotiated and prepared
by each of the Parties with the advice and participation of counsel.  The
Parties have agreed to the wording of this Agreement and none of the provisions
hereof shall be construed against one Party on the ground that such Party is the
author of this Agreement or any part hereof.  The following definitions will
apply in this Agreement:

1.2                               Defined Terms.

In addition to definitions appearing elsewhere in this Agreement, the following
terms have the following meanings:

Agreement will have the meaning given to such term in the Preamble to this
Agreement.

Applicable Law means

(a)                                  any and all laws, legislation, statutes,
codes, acts, rules, regulations, ordinances, treaties or other similar legal
requirements enacted, issued or promulgated by a Governmental Authority;

(b)                                 any and all orders, judgments, writs,
decrees, injunctions, Governmental Approvals or other decisions of a
Governmental Authority; and

(c)                                  any and all legally binding announcements,
directives or published practices or interpretations, regarding any of the
foregoing in (a) or (b) of this definition, enacted, issued or promulgated by a
Governmental Authority;

to the extent, for each of the foregoing in (a), (b) and (c) of this definition,
applicable to or binding upon (i) a Party, its affiliates, its shareholders, its
members, it partners or their respective representatives, to the extent any such
person is engaged in activities related to the Services; or (ii) the property of
a Party, its affiliates, its shareholders, its members, its partners or their
respective representatives, to the extent such property is used in connection
with the Services or an activity related to the Services.

Client will have the meaning given to such term in the Preamble to this
Agreement.

Client’s Representative will have the meaning given to such term in Section 4.1.

Design-Build Agreement will have the meaning given to such term in the Recitals
to this Agreement.

Effective Date will have the meaning given to such term in the Preamble to this
Agreement.

Engineer will have the meaning given to such term in the Preamble to this
Agreement.

2

--------------------------------------------------------------------------------

Engineer Responsible Parties will have the meaning given to such term in Section
4.10.

Governmental Approvals will mean any material authorizations or permissions
issued or granted by any Governmental Authority to the Project, the Client, the
Engineer, subcontractors and their affiliates in connection with any activity
related to the Services.

Governmental Authority will mean any federal, state, local or municipal
governmental body; any governmental, quasi-governmental, regulatory or
administrative agency, commission, body or other authority exercising or
entitled to exercise any administrative, executive, judicial, legislative,
policy, regulatory or taxing authority or power; or any court or governmental
tribunal; in each case having jurisdiction over the Client, the Engineer, the
Plant, or the Site.

Monthly Invoice will have the meaning given to such term in Section 5.7.

Party or Parties will have the meaning given to such term in the Preamble to
this Agreement.

Phase I Design Package will have the meaning given to such term in Section 3.2.

Phase I Owner Deliverables will mean the Client’s deliverable obligations
pursuant to Exhibit C to this Agreement.

Phase II Design Package will have the meaning given to such term in Section 3.4.

Phase II Owner Deliverables will mean the Client’s deliverable obligations
pursuant to Exhibit C to this Agreement.

Plant will have the meaning given to such term in the Recitals to this
Agreement.

Project will mean the Plant, together with all equipment, labor, services and
materials furnished under the Design-Build Agreement.

Services will have the meaning given to such term in Section 3.1.

Site will mean the land or premises on which the Plant is located.

Subcontractor will mean any person or entity, including but not limited to
independent engineers, associates, and consultants, retained by Engineer, or by
any person or entity retained directly or indirectly by Engineer, in each case
as an independent contractor, to perform a portion of the Services.

Work Product will have the meaning given to such term in Section 8.1.

3

--------------------------------------------------------------------------------

Article 2

Retention of the Agent

2.1                               RETENTION OF SERVICES.  ON THE TERMS AND
SUBJECT TO THE CONDITIONS HEREINAFTER SET FORTH, CLIENT HEREBY RETAINS ENGINEER
TO PERFORM, AND ENGINEER HEREBY AGREES TO PERFORM, THE SERVICES.  ENGINEER WILL
PROVIDE SUCH SERVICES SOLELY PURSUANT TO THE TERMS AND CONDITIONS SET FORTH
HEREIN INCLUDING ANY INDEMNIFICATIONS AND LIMITATIONS ON LIABILITY.

Article 3

Engineer Responsibilities

3.1                               SERVICES.  ENGINEER SHALL PERFORM THE PHASE I
DESIGN PACKAGE AND PHASE II DESIGN PACKAGE ENGINEERING SERVICES NECESSARY TO
FACILITATE CLIENT’S COMPLETION OF THE PHASE I AND PHASE II SITE WORK REQUIRED OF
CLIENT PRIOR TO THE ISSUANCE OF A NOTICE TO PROCEED PURSUANT TO THE DESIGN-BUILD
AGREEMENT (COLLECTIVELY, THE “SERVICES”).

3.2                               PHASE I DESIGN PACKAGE. (GRADING AND
DRAINAGE). THE PHASE I DESIGN PACKAGE TO BE PROVIDED BY ENGINEER SHALL CONSIST
OF THE ENGINEERING AND DESIGN OF THE PLANT SITE AND SHALL INCLUDE THE FOLLOWING
DRAWINGS:

a)              Cover Sheet

b)             Property Layout Drawing

c)              Grading, Drainage and Erosion Control Plan Drawing (Multiple
Drawings if Required)

i.                 Used for Land Disturbance Permitting

ii.             Site grading is held 6-inches low for topsoil and seeding

d)             Roadway Alignment Drawing

e)              Culvert Cross Sections and Details (Multiple Drawings)

f)                Seeding and Landscaping (If Required)

g)             Geometric layout drawing (includes contractor’s trailer, parking
and laydown areas)

Plan sets along with a Bid Tabulation Sheet will be supplied to the Client so
all contractors bid the same quantities.  A telephone conference call for a
Phase I pre-bid meeting will be provided upon Client’s request.

3.3                               Delivery of Phase I Design Package.  Engineer
shall deliver the completed Phase I Design Package no later than sixty (60) days
after the receipt of all Phase I Owner Deliverables, however, the sixty (60) day
timeframe provided for in this section will commence no sooner than May 17,
2007.

4

--------------------------------------------------------------------------------

3.4                               PHASE II DESIGN PACKAGE.  THE PHASE II DESIGN
PACKAGE TO BE PROVIDED BY ENGINEER SHALL PROVIDE THE ENGINEERING AND DESIGN OF
SITE WORK AND UTILITIES FOR THE PLANT, ALL WITHIN THE PROPERTY LINE OF PLANT,
AND SHALL CONSIST OF THE FOLLOWING:

a)              Cover Sheet

b)             Property Layout Drawing

c)              Site Grading and Drainage Drawing (Final Interior Plant Grading)

d)             Roadway Alignment

e)              Utility Layout (Fire Loop)

f)                Utility Layout (Potable Water)

g)             Utility Layout (Well Water) if using on-Site wells

h)             Utility Layout (Sanitary Sewer)

i)                 Utility Layout (Utility Water Blowdown)

j)                 Utility Layout (Natural Gas)

i.                 Fagen Engineering provides a preferred routing through the
Site, line size and pipe specifications are typically provided by the gas
supplier.

k)              Geometric Layout (For Project Control Verification)

l)                 Site Utility Piping Tables Drawing

m)           Tank Farm Layout Drawing

n)             Tank Farm Details Drawing

o)             Sections and Details Drawing (If required)

p)             Miscellaneous Details Drawing (If required)

A telephone conference call for a Phase II pre-bid meeting will be provided upon
Client’s request.

3.5                               Delivery of Phase II Design Package.  Engineer
shall deliver the completed Phase II Design Package no later than sixty (60)
days after the receipt of all Phase II Owner Deliverables.

3.6                               Delays.  The Parties agree that Engineer shall
not be responsible for delays in providing the Services under this Agreement due
to factors beyond Engineer’s control.

3.7                               Utility Routing and Design Services Limited. 
The Parties agree that Engineer shall provide the routing and design for the
utilities necessary for the Plant only within the Plant property line and up to
the Plant property line, and that, for purposes of this Agreement, Engineer
assumes a tie-in point to a city utility.  The Parties agree that, if there is
no city tie-in point, Engineer will route the utilities to the Plant property
line and stop.  Any special tie-in requirements necessary to connect the
utilities at the Plant property line are not included in the compensation or the
scope of this Agreement and shall only be designed and engineered by Engineer as
change in the Project which affects the Services hereunder.

5

--------------------------------------------------------------------------------

Article 4

Client Responsibilities

4.1                               CLIENT’S REPRESENTATIVE.  CLIENT SHALL, PRIOR
TO THE COMMENCEMENT OF SERVICES BY ENGINEER, NAME A REPRESENTATIVE (“CLIENT’S
REPRESENTATIVE”) WITH AUTHORITY TO RECEIVE INFORMATION AND TRANSMIT INSTRUCTIONS
FOR CLIENT.  CLIENT’S REPRESENTATIVE SHALL BE VESTED WITH AUTHORITY TO ACT ON
BEHALF OF CLIENT AND ENGINEER SHALL BE ENTITLED TO RELY ON CLIENT’S
REPRESENTATIVE’S COMMUNICATIONS WITH REGARD TO THE SERVICES.

4.2                               CLIENT’S REQUIREMENTS.  CLIENT SHALL, PRIOR TO
THE COMMENCEMENT OF SERVICES BY ENGINEER, PROVIDE ENGINEER WITH CLIENT’S
REQUIREMENTS FOR THE PROJECT, INCLUDING OBJECTIVES AND CONSTRAINTS, DESIGN AND
CONSTRUCTION STANDARDS, BONDING AND INSURANCE REQUIREMENTS, AND CONTRACT FORMS. 
ENGINEER SHALL BE COMPENSATED AS SET FORTH IN SECTION 5.4 OF THIS AGREEMENT FOR
ANY AND ALL CLIENT REQUIREMENTS WHICH ARE AGREED TO BY ENGINEER, AND
INCORPORATED INTO THE PHASE I AND PHASE II DESIGN PACKAGES.

4.3                               Other Information.  Prior to the commencement
of Services by Engineer, Client shall provide Engineer with all other
information available to Client and pertinent to the Project and the Services
including, but not limited to, all items required pursuant to Exhibit C.  The
items required by Client pursuant to this Section 4.3 shall be furnished at
Client’s expense, and Engineer shall be entitled to rely upon the accuracy and
completeness thereof.

4.4                               ACCESS TO PROPERTY.  PRIOR TO THE COMMENCEMENT
OF SERVICES AND AS NECESSARY DURING THE PERFORMANCE OF SERVICES, CLIENT SHALL
ARRANGE FOR ACCESS BY ENGINEER UPON PUBLIC AND PRIVATE PROPERTY, AS REQUIRED FOR
THE PERFORMANCE OF THE SERVICES UNDER THIS AGREEMENT.

4.5                               REVIEW OF DOCUMENTS.  AS RELATED TO THE
PERFORMANCE OF SERVICES HEREUNDER, CLIENT SHALL EXAMINE DOCUMENTS PRESENTED BY
ENGINEER, OBTAIN LEGAL AND OTHER ADVICE AS CLIENT DEEMS APPROPRIATE, AND RENDER
WRITTEN DECISIONS WITHIN REASONABLE TIME.  THE ITEMS REQUIRED BY CLIENT PURSUANT
TO THIS SECTION 4.5 SHALL BE FURNISHED AT CLIENT’S EXPENSE, AND ENGINEER SHALL
BE ENTITLED TO RELY UPON THE ACCURACY AND COMPLETENESS THEREOF.

4.6                               Consents, Approvals, Licenses and Permits. 
Prior to the commencement of Services and as necessary during the performance of
the Services, Client shall obtain all consents, approvals, licenses, permits,
and other Governmental Approvals necessary for the Project and for the
performance of the Services.  The items required by Client pursuant to this
Section 4.6 shall be furnished at Client’s expense, and Engineer shall be
entitled to rely upon the accuracy and completeness thereof.

4.7                               Bids.  Client shall advertise for and open
bids when scheduled.

6

--------------------------------------------------------------------------------

4.8                               Other Services.  Client shall furnish all
legal, accounting and insurance counseling services as may be necessary at any
time for the Services, including auditing services the Client may require to
verify the monthly invoices or to ascertain how or for what purposes the
Engineer and/or Subcontractors have used the money paid by or on behalf of the
Client.

4.9                               Service Outside Scope of Engineer’s Services. 
Client shall, at its own expense, as necessary for the performance and
completions of the Services, provide any additional services necessary for the
Project that are outside the scope of the Services provided by Engineer under
this Agreement.  Engineer shall be entitled to rely upon, as applicable, the
completeness and accuracy of such additional services.

4.10                        Deviation from Design.  Client shall indemnify and
hold harmless Engineer, its employees, its agents, its affiliates, and any other
persons or entities within its control or for whom Engineer would otherwise be
responsible (“Engineer Responsible Parties”) against claims arising out of
Engineer’s design, if there has been, in the completion of the Phase I and Phase
II Site work required of Client prior to the issuance of a Notice to Proceed
pursuant to the Design-Build Agreement, a failure to follow Engineer’s
recommendation and such deviation or failure caused the claims.

4.11                        Developments Affecting Scope or Timing of Services. 
Client shall promptly notify Engineer, in writing, when Client learns of
contractor error or any development that affects the scope or timing of
Engineer’s Services.

Article 5

Compensation and Payment

5.1                               COMPENSATION. INCONSIDERATION OF ITS
PERFORMANCE OF THE SERVICES, CLIENT SHALL PAY ENGINEER FOR ENGINEER’S TIME IN
THE PERFORMANCE OF THE SERVICES AT A FIXED FEE OF NINETY-TWO THOUSAND FIVE
HUNDRED DOLLARS ($92,500.00) (“FIXED FEE”) AS COMPENSATION.  ENGINEER’S
COMPENSATION UNDER THIS SECTION 5.1 SHALL BE PURSUANT TO THE FEE SCHEDULE
ATTACHED HERETO AS EXHIBIT A, AS SUCH SCHEDULE MAY BE MODIFIED FROM TIME TO
TIME. THE FULL AMOUNT OF COMPENSATION PAID BY CLIENT UNDER THIS SECTION 5.1
SHALL BE INCLUDED IN AND CREDITED TO THE DESIGN-BUILD AGREEMENT’S CONTRACT PRICE
IF ENTERED INTO UPON PAYMENT IN FULL BY CLIENT.

5.2                               REIMBURSEMENT OF ENGINEER EXPENSES.  IN
ADDITION TO THE FIXED FEE IN 5.1, CLIENT SHALL REIMBURSE ENGINEER FOR ITS
EXPENSES RELATED TO THE PERFORMANCE OF THE SERVICES IN ACCORDANCE WITH
ENGINEER’S CURRENT REIMBURSABLE EXPENSE SCHEDULE ATTACHED HERETO AS EXHIBIT B.

5.3                               REIMBURSEMENT OF SUBCONTRACTOR EXPENSES.

7

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5.3.1                     Subcontractor charges related to time spent in the
performance of the Services shall not be marked-up by Engineer.  Client shall
reimburse Engineer for costs related to Subcontractors’ time in accordance with
the Subcontractors’ invoices for the work.

5.3.2                     Subcontractor reimbursable expenses will be marked up
in accordance with the current reimbursable expense schedule attached hereto as
Exhibit B.

5.4                               Fees for Work Outside Scope of Services.  Fees
for all work outside the scope of Engineer’s responsibilities described in
Articles 3 and 4, including change order work and acceptable Client
requirements, shall be computed in accordance with Engineer’s current fee
schedules, attached hereto as Exhibits A and B, as such schedules may be revised
from time to time, unless otherwise agreed to in writing. Any compensation paid
to Engineer pursuant to this Section 5.4 shall not be included in or credited to
the Design-Build Agreement’s contract price.

5.5                               Collection of Unpaid Amounts.  If any amount
due is not paid in accordance with this Agreement and Engineer must collect that
amount, Engineer shall be entitled to recover, in addition to the amount due,
the cost of collection, including reasonable attorney’s fees in connection with
those collection efforts.

5.6                               Reimbursement Schedules Subject to Change.
 Engineer’s reimbursement schedule and reimbursable expense schedule attached
hereto as Exhibits A and B are subject to change on January 1 of each year.

5.7                               INVOICES.  ENGINEER SHALL SUBMIT A MONTHLY
INVOICE (“MONTHLY INVOICE”) FOR SERVICES PROVIDED AND FOR REIMBURSABLE EXPENSES
INCURRED BY ENGINEER AND ANY SUBCONTRACTORS.

5.8                               PAYMENT.  WITHIN THIRTY (30) DAYS AFTER
CLIENT’S RECEIPT OF EACH MONTHLY INVOICE, CLIENT SHALL PAY ENGINEER ALL AMOUNTS
DUE.

5.9                               LATE PAYMENT AND INTEREST.  IF CLIENT FAILS TO
MAKE PAYMENT WITHIN THIRTY (30) DAYS AFTER RECEIPT OF MONTHLY INVOICE, INTEREST
AT THE MAXIMUM LEGAL RATE OR AT AN ANNUAL RATE OF 18%, WHICHEVER IS LESS, SHALL
ACCRUE.

5.10                        SUSPENSION FOR FAILURE TO PAY.  IF CLIENT FAILS TO
MAKE PAYMENT WITHIN THIRTY (30) DAYS AFTER RECEIPT OF MONTHLY INVOICE, ENGINEER
MAY, AT ITS OPTION, AFTER GIVING SEVEN (7) DAYS’ WRITTEN NOTICE, SUSPEND
SERVICES UNTIL ALL AMOUNTS DUE TO ENGINEER BY CLIENT HAVE BEEN PAID IN FULL.

5.11                        Payments from Lawful Sources.  Client shall provide
for payment from one or more lawful source of all sums to be paid Engineer.

8

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5.12                        Withholding Payments.  Engineer’s compensation shall
not be reduced on account of any amounts withheld from payment to
Subcontractors.

5.13                        Purchase Orders.  If Client issues a purchase order
or other document to initiate the commencement of Services hereunder, it is
expressly agreed that any terms and conditions appearing thereon shall have no
application and only the provisions of this Agreement shall apply.

5.14                        Changes in Project.  If Client requests changes in
the Project which affect the Services, compensation for and time of performance
of Engineer’s services shall be adjusted appropriately.

Article 6

Construction Cost and Cost Estimates

6.1                               Cost Estimates.  Client and Engineer
acknowledge that Engineer has no control over cost of labor, materials,
equipment or services furnished by others, over contractors’ methods of
determining prices, or other competitive bidding or market conditions and that
Engineer’s estimates of Project construction cost will be made on the basis of
its employees’ experience and qualifications and will represent Engineer’s
employees’ best judgment as experienced and qualified professionals, familiar
with the construction industry.  Engineer does not guarantee that proposal,
bids, or actual construction cost will not vary from its estimates of Project
cost and Client acknowledges the same.

Article 7

Termination

7.1                               Termination Upon Default.  Either party may
terminate this Agreement upon twenty (20) days’ written notice if the
non-terminating party has defaulted through no fault of the terminating party.

7.2                               Termination Upon Abandonment of Plant.  Client
may terminate Engineer’s obligation to provide further services upon twenty (20)
days’ written notice if Client abandons development of the Plant.  In such
event, all past due amounts for services rendered (including Subcontractor’s
fees, if any) and any unpaid reimbursable expenses shall be immediately due and
payable by Client.

9

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Article 8

Ownership of Work Product

8.1                               Work Product.  All tangible items prepared by
Engineer, including but not limited to all drawings, specifications,
calculations, data, notes and other materials and documents, including
electronic data furnished by Engineer to Client and to Subcontractors under this
Agreement (“Work Product”) shall be instruments of service, and Engineer shall
retain the ownership and property interests therein, including the copyrights
thereto.

8.2                               Copies Provided to Client.  Client may retain
copies of Work Product for reference; provided, however, that Client may not
make copies of the Work Product available without Engineer’s written permission,
and, granted such permission, may only do so to the extent the use of such
copies of the Work Product directly pertains to the Services, the Plant, or the
construction thereof.  Pursuant to Section 8.1 of this Agreement, Engineer
retains ownership of and property interests in any Work Product made available
and/or copied.

8.3                               Prohibited Use of Work Product.  Reuse of the
Work Product on any another Project without Engineer’s written consent is
prohibited.  Client shall indemnify and hold harmless Engineer Responsible
Parties against claims resulting from such prohibited reuse.  Said items are not
intended to be suitable for completion of this Project by others.

8.4                               Derogation of Engineer’s Rights to Work
Product.  Submittal or distribution of Work Product in connection with the
performance and completion of the Services and the construction of the Project
does not constitute publication in derogation of Engineer’s rights and does not
in any way diminish Engineer’s Work Product rights established herein.

Article 9

Successors and Assigns

9.1                               Successors.  The Parties intend that the
provisions of this Agreement are binding upon the Parties, their employees,
agents, heirs, successors and assigns.

9.2                               Written Consent Required.  Neither Party shall
assign, sublet, or transfer any interest in this Agreement without written
consent of the other; provided, however, that Engineer may employ such
Subcontractors as it may deem appropriate and may transfer or assign any
interest in this Agreement or the Work Product to Design-Builder without consent
of Client.

9.3                               No Third-Party Beneficiaries.  None of the
provisions of this Agreement will be for the benefit of or enforceable by any
person other than the Parties hereto, their successors and permitted assigns and
legal representatives.

10

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Article 10

Warranty

10.1                        No Warranty Extended.  Engineer shall use reasonable
care to reflect requirements of all Applicable Laws, rules, or regulations of
which Engineer has knowledge or about which Client specifically advises in
writing, which are in effect on the date of this Agreement.  ENGINEER INTENDS TO
RENDER SERVICES IN ACCORDANCE WITH GENERALLY ACCEPTED PROFESSIONAL STANDARDS,
BUT NO OTHER WARRANTY IS EXTENDED, EITHER EXPRESS OR IMPLIED, IN CONNECTION WITH
SUCH SERVICES.  Client’s rights and remedies in this Agreement are exclusive.

10.2                        No Responsibility for Construction.  Engineer shall
not be responsible for construction of the Plant, contractors’ construction
means, methods, techniques, sequences, or procedures, or for contractors’ safety
precautions and programs, or for contractors’ failure according to contract
documents.

Article 11

Indemnification

11.1                        ENGINEER’S INDEMNIFICATION.  TO THE FULLEST EXTENT
PERMITTED BY LAW, ENGINEER SHALL INDEMNIFY AND HOLD HARMLESS CLIENT, CLIENT’S
OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES, AND AGENTS FROM AND AGAINST ANY AND
ALL CLAIMS FOR BODILY INJURY AND FOR DAMAGE TO TANGIBLE PROPERTY CAUSED SOLELY
BY THE NEGLIGENT ACTS OR OMISSIONS OF ENGINEER OR ENGINEER RESPONSIBLE PARTIES
AND ENGINEER’S ENGINEERS IN THE PERFORMANCE AND FURNISHING OF ENGINEER’S
SERVICES UNDER THIS AGREEMENT.  ANY INDEMNIFICATION SHALL BE LIMITED TO THE
TERMS AND AMOUNTS OF COVERAGE OF THE ENGINEER’S INSURANCE POLICIES.

11.2                        Client’s Indemnification.  To the fullest extent
permitted by law, Client shall indemnify and hold harmless Engineer, Engineer’s
officers, directors, partners, employees, and agents and Engineer’s Engineers
from and against any and all claims for bodily injury and for damage to tangible
property caused solely by the negligent acts of omission of Client or Client’s
officers, directors, partners, employees, agents, and Client’s Engineers with
respect to this Agreement or the Project.

11.3                        Hazardous Materials Indemnification. In addition to
the indemnity provided under this section, and to the fullest extent permitted
by law, Client shall indemnify and hold harmless Engineer and its officers,
directors, partners, employees, and agents and Engineer’s Engineers from and
against all claims, costs, losses, and damages (including but not limited to all
fees and charges of engineers, architects, attorneys, and other professionals
and all court or arbitration or other dispute resolution costs) caused by,
arising out of, or relating to the presence, discharge, release, or escape of
asbestos, PCBs, petroleum, hazardous waste, or radioactive materials at, on,
under, or from the Site.

11

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Article 12

Article 2Dispute Resolution

12.1                        ARBITRATION.  IN AN EFFORT TO RESOLVE ANY CONFLICTS
THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT, THE CLIENT AND THE ENGINEER AGREE
THAT ALL DISPUTES SHALL BE SUBMITTED FIRST TO NONBINDING MEDIATION.  IF
MEDIATION DOES NOT RESOLVE THE CONFLICTS, THE CONTROVERSY SHALL BE DECIDED BY
FINAL AND BINDING ARBITRATION CONDUCTED IN MINNEAPOLIS, MINNESOTA IN ACCORDANCE
WITH THE CONSTRUCTION INDUSTRY ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION THEN IN EFFECT, UNLESS THE PARTIES MUTUALLY AGREE OTHERWISE.

The award of the arbitrator(s) shall be final and binding upon the Parties
without the right of appeal to the courts.  Judgment may be entered upon it in
accordance with Applicable Law by any court having jurisdiction thereof.

Engineer and Client expressly agree that any arbitration pursuant to this
Section 12.1 may be joined or consolidated with any arbitration involving any
other person or entity (i) necessary to resolve the claim, dispute or
controversy, or (ii) substantially involved in or affected by such claim,
dispute or controversy.  Both Engineer and Client will include appropriate
provisions in all contracts they execute with other parties in connection with
the Services to require such joinder or consolidation.

2.1                               THE PREVAILING PARTY IN ANY ARBITRATION, OR
ANY OTHER FINAL, BINDING DISPUTE PROCEEDING UPON WHICH THE PARTIES MAY AGREE,
SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY REASONABLE ATTORNEYS’ FEES AND
EXPENSES INCURRED BY THE PREVAILING PARTY.

Article 13

Confidentiality

13.1                        NON-DISCLOSURE OBLIGATION.  EXCEPT AS REQUIRED BY
COURT ORDER, SUBPOENA, OR APPLICABLE LAW, NEITHER PARTY SHALL DISCLOSE TO THIRD
PARTIES ANY CONFIDENTIAL OR PROPRIETARY INFORMATION REGARDING THE OTHER PARTY’S
BUSINESS AFFAIRS, FINANCES, TECHNOLOGY, PROCESSES, PLANS OR INSTALLATIONS,
PRODUCT INFORMATION, KNOW-HOW, OR OTHER INFORMATION THAT IS RECEIVED FROM THE
OTHER PARTY PURSUANT TO THIS AGREEMENT OR THE PARTIES’ RELATIONSHIP PRIOR
THERETO OR IS DEVELOPED PURSUANT TO THIS AGREEMENT, WITHOUT THE EXPRESS WRITTEN
CONSENT OF THE OTHER PARTY, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD. 
THE PARTIES SHALL AT ALL TIMES USE THEIR RESPECTIVE REASONABLE EFFORTS TO KEEP
ALL INFORMATION REGARDING THE TERMS AND CONDITIONS OF THIS AGREEMENT
CONFIDENTIAL AND SHALL DISCLOSE SUCH INFORMATION TO THIRD PERSONS ONLY AS
REASONABLY REQUIRED FOR THE PERMITTING OF THE PROJECT; FINANCING THE
DEVELOPMENT, CONSTRUCTION, OWNERSHIP, OPERATION AND MAINTENANCE OF THE PLANT; OR
AS REASONABLY REQUIRED BY EITHER PARTY FOR PERFORMING ITS OBLIGATIONS HEREUNDER
AND IF PRIOR TO SUCH DISCLOSURE, THE DISCLOSING PARTY INFORMS SUCH THIRD PERSONS
OF THE

12

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EXISTENCE OF THIS CONFIDENTIALITY OBLIGATION AND ONLY IF SUCH THIRD PERSONS
AGREE TO MAINTAIN THE CONFIDENTIALITY OF ANY INFORMATION RECEIVED.  THIS ARTICLE
13 SHALL NOT APPLY TO INFORMATION THAT WAS ALREADY IN THE POSSESSION OF ONE
PARTY PRIOR TO RECEIPT FROM THE OTHER, THAT IS NOW OR HEREAFTER BECOMES A PART
OF THE PUBLIC DOMAIN THROUGH NO FAULT OF THE PARTY WISHING TO DISCLOSE, OR THAT
CORRESPONDS IN SUBSTANCE TO INFORMATION HERETOFORE OR HEREAFTER FURNISHED BY
THIRD PARTIES WITHOUT RESTRICTION ON DISCLOSURE.

13.2                        PUBLICITY AND ADVERTISING.  NEITHER CLIENT NOR
ENGINEER SHALL MAKE OR PERMIT ANY OF THEIR SUBCONTRACTORS, AGENTS, OR VENDORS TO
MAKE ANY EXTERNAL ANNOUNCEMENT OR PUBLICATION, RELEASE ANY PHOTOGRAPHS OR
INFORMATION CONCERNING THE PROJECT OR ANY PART THEREOF, OR MAKE ANY OTHER TYPE
OF COMMUNICATION TO ANY MEMBER OF THE PUBLIC, PRESS, BUSINESS ENTITY, OR ANY
OFFICIAL BODY WHICH NAMES THE OTHER PARTY UNLESS PRIOR WRITTEN CONSENT IS
OBTAINED FROM THE OTHER PARTY, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.

13.3                        TERM OF OBLIGATION.  THE CONFIDENTIALITY OBLIGATIONS
OF THE PARTIES PURSUANT TO THIS ARTICLE 13 SHALL SURVIVE FOR A PERIOD FIVE (5)
YEARS FOLLOWING THE LATER TO OCCUR OF TERMINATION OF THIS AGREEMENT OR
COMPLETION OF THE PLANT.

Article 14

Miscellaneous

14.1                        GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE
OF MINNESOTA, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

14.2                        SEVERABILITY.  IF ANY PROVISION OR ANY PART OF A
PROVISION OF THE AGREEMENT SHALL BE FINALLY DETERMINED TO BE SUPERSEDED,
INVALID, ILLEGAL, OR OTHERWISE UNENFORCEABLE PURSUANT TO ANY APPLICABLE LEGAL
REQUIREMENTS, SUCH DETERMINATION SHALL NOT IMPAIR OR OTHERWISE AFFECT THE
VALIDITY, LEGALITY, OR ENFORCEABILITY OF THE REMAINING PROVISION OR PARTS OF THE
PROVISION OF THE AGREEMENT, WHICH SHALL REMAIN IN FULL FORCE AND EFFECT AS IF
THE UNENFORCEABLE PROVISION OR PART WERE DELETED.

14.3                        NO WAIVER.  THE FAILURE OF EITHER ENGINEER OR CLIENT
TO INSIST, IN ANY ONE OR MORE INSTANCES, ON THE PERFORMANCE OF ANY OF THE
OBLIGATIONS REQUIRED BY THE OTHER UNDER THIS AGREEMENT SHALL NOT BE CONSTRUED AS
A WAIVER OR RELINQUISHMENT OF SUCH OBLIGATION OR RIGHT WITH RESPECT TO FUTURE
PERFORMANCE.

13

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14.4                        CAPTIONS AND HEADINGS.  THE TABLE OF CONTENTS AND
THE HEADINGS USED IN THIS AGREEMENT ARE FOR EASE OF REFERENCE ONLY AND SHALL NOT
IN ANY WAY BE CONSTRUED TO LIMIT, DEFINE, EXTEND, DESCRIBE, ALTER, OR OTHERWISE
AFFECT THE SCOPE OR THE MEANING OF ANY PROVISION OF THIS AGREEMENT.

14.5                        Engineer’s Accounting Records.  Records of
Engineer’s personnel time, reimbursable expenses, and accounts between parties
shall be maintained on a generally recognized accounting basis.

14.6                        COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ONE
OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL AND ALL OF WHICH
TOGETHER SHALL BE DEEMED ONE AND THE SAME AGREEMENT, AND MAY BE EXECUTED AND
DELIVERED BY FACSIMILE SIGNATURE, WHICH SHALL BE CONSIDERED AN ORIGINAL.

14.7                        SURVIVAL.  NOTWITHSTANDING ANY PROVISIONS HEREIN TO
THE CONTRARY, THE WORK PRODUCT PROVISIONS SET FORTH IN ARTICLE 8 AND THE
INDEMNITY OBLIGATIONS SET FORTH HEREIN SHALL SURVIVE (IN FULL FORCE) THE
EXPIRATION OR TERMINATION OF THIS AGREEMENT, AND SHALL CONTINUE TO APPLY TO THE
PARTIES TO THIS AGREEMENT EVEN AFTER TERMINATION OF THIS AGREEMENT OR THE
TRANSFER OF SUCH PARTY’S INTEREST IN THIS AGREEMENT.

14.8                        NO PRIVITY WITH CLIENT’S CONTRACTORS.  NOTHING IN
THIS AGREEMENT IS INTENDED OR DEEMED TO CREATE ANY LEGAL OR CONTRACTUAL
RELATIONSHIP BETWEEN ENGINEER AND ANY CLIENT CONTRACTOR OR SUBCONTRACTOR
RETAINED TO PERFORM THE PHASE I AND PHASE II SITE WORK REQUIRED OF CLIENT PRIOR
TO THE ISSUANCE OF A NOTICE TO PROCEED PURSUANT TO THE DESIGN-BUILD AGREEMENT.

14.9                        AMENDMENTS.  THIS AGREEMENT MAY NOT BE CHANGED,
ALTERED, OR AMENDED IN ANY WAY EXCEPT IN WRITING SIGNED BY A DULY AUTHORIZED
REPRESENTATIVE OF EACH PARTY.

14.10                 ENTIRE AGREEMENT.  THIS AGREEMENT CONSISTS OF THE TERMS
AND CONDITIONS SET FORTH HEREIN, AS WELL AS THE EXHIBITS HERETO, WHICH ARE
INCORPORATED BY REFERENCE HEREIN AND MADE A PART HEREOF.  THIS AGREEMENT SETS
FORTH THE FULL AND COMPLETE UNDERSTANDING OF THE PARTIES AS OF THE EFFECTIVE
DATE WITH RESPECT TO THE SUBJECT MATTER HEREOF.

14.11                 NOTICE.  WHENEVER THE AGREEMENT REQUIRES THAT NOTICE BE
PROVIDED TO A PARTY, NOTICE SHALL BE DELIVERED IN WRITING TO SUCH PARTY AT THE
ADDRESS LISTED BELOW.  NOTICE WILL BE DEEMED TO HAVE BEEN VALIDLY GIVEN IF
DELIVERED (I) IN PERSON TO THE INDIVIDUAL INTENDED TO RECEIVE SUCH NOTICE, (II)
BY REGISTERED OR BY CERTIFIED MAIL, POSTAGE PREPAID TO THE ADDRESS INDICATED IN
THE AGREEMENT WITHIN FOUR (4) DAYS AFTER BEING SENT, OR (III) BY FACSIMILE, BY
THE TIME STATED IN A MACHINE-GENERATED CONFIRMATION THAT NOTICE WAS RECEIVED AT
THE FACSIMILE NUMBER OF THE INTENDED RECIPIENT.

14

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If to Engineer, to:

Fagen Engineering LLC

501 W. Highway 212

P. O. Box 159

Granite Falls, MN  56241

Attention: Terrin Torvik

Fax:  (320) 564-4861

with a copy to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN  56241

Attention: Bruce Langseth

Fax:  (320) 564-3278

If to Client, to:

Advanced BioEnergy, LLC

10201 Wayzata Blvd, Suite 250

Minneapolis, MN 55305

Attention:  Don Gales

Fax:  (763) 226-2725

14.12                 EXTENT OF AGREEMENT.  THIS AGREEMENT AND THE EXHIBITS
INCORPORATED THEREIN REPRESENT THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND MAY
BE AMENDED ONLY BY WRITTEN INSTRUMENT SIGNED BY BOTH PARTIES.

14.13                 Subrogation Waiver.  The Parties waive all rights against
each other, and against the contractors, Engineers, agents, and employees of the
other for damages covered by any property insurance during construction, and
each shall require similar waivers from their contractors, Engineers, and
agents.

15

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IN WITNESS WHEREOF, the Parties hereto have caused their names to be hereunto
subscribed by their officers thereunto duly authorized, intending thereby that
this Agreement shall be effective as of this January 9, 2007.

CLIENT:

 

ENGINEER:

 

 

 

Advanced BioEnergy, LLC

 

Fagen Engineering, LLC

(Name of Owner)

 

(Name of Design-Builder)

 

 

 

 

 

 

(Signature)

 

(Signature)

 

 

 

 

 

 

(Printed Name)

 

(Printed Name)

 

 

 

 

 

 

(Title)

 

(Title)

 

 

 

 

 

 

Date:

 

 

Date:

 

 

16

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EXHIBIT A

FAGEN ENGINEERING LLC

Fee Schedule FY 2007

CONFIDENTIAL

TYPICAL ASSIGNMENT

BILLING CLASS

BILLING RATE

Clerical / CADD Operator

1

  $                                            [*]

Clerical / CADD Operator

2

  $                                            [*]

CADD Operator / Designer

3

  $                                            [*]

CADD Operator / Designer / Engineer

4

  $                                            [*]

Designer / Engineer / PM

5

  $                                            [*]

Engineer / Senior Engineer / PM

6

  $                                            [*]

Senior Engineer / PM

7

  $                                            [*]

Senior Engineer / PM

8

  $                                            [*]

Senior Engineer / PM / Principal

9

  $                                            [*]

PM / Principal

10

  $                                            [*]

Principal

11

  $                                            [*]

Principal

12

  $                                            [*]

Principal

13

  $                                            [*]

 

Subject to Revision January 1, 2008

--------------------------------------------------------------------------------

* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

17

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EXHIBIT B

Fagen Engineering LLC
Reimbursable Expense Billing Schedule

Effective January 1, 2007

CONFIDENTIAL

Expense Code

 

Expense Description

 

Billing Rate

 

 

 

 

 

 

 

BCA

 

Blackline Print Copy – A

 

$

[*]

 

BCB

 

Blackline Print Copy – B

 

$

[*]

 

BCC

 

Blackline Print Copy – C

 

$

[*]

 

BCD

 

Blackline Print Copy – D

 

$

[*]

 

BCE

 

Blackline Print Copy – E

 

$

[*]

 

BOA

 

Paper Print Original – A

 

$

[*]

 

BOB

 

Paper Print Original – B

 

$

[*]

 

BOC

 

Paper Print Original – C

 

$

[*]

 

BOD

 

Paper Print Original – D

 

$

[*]

 

BOE

 

Paper Print Original – E

 

$

[*]

 

DISK

 

Floppy Disk 3½”/ea

 

$

[*]

 

FAX

 

Fax Machine Usage/Page

 

$

[*]

 

LD

 

Long Distance Phone Calls

 

[*]

 

LODGING

 

Lodging

 

[*]

 

MEALS

 

Meal Expense

 

[*]

 

MILEAGE

 

Mileage/Mile

 

$

[*]

 

PC1

 

Photocopies 8½x11 (<100)/ea

 

$

[*]

 

PC2

 

Photocopies 11x17/ea

 

$

[*]

 

PC3

 

Photocopies 8(1/2)x11 (>100)/ea

 

$

[*]

 

PO

 

Postage

 

[*]

 

PROSVC

 

Outside Professional Services

 

[*]

 

PROSVCEXP

 

Outside Professional Services Expenses

 

[*]

 

FLM

 

Film & Developing

 

[*]

 

SPECCOV

 

Specification Book - Cover & Binder/ea

 

$

[*]

 

TRANS

 

Transportation

 

[*]

 

UPS

 

Delivery Service Charges

 

[*]

 

VELLUM

 

Original Print/square foot

 

$

[*]

 

 

 

 

 

 

 

 

Subject to Revision January 1, 2008

--------------------------------------------------------------------------------

* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

18

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EXHIBIT C

Client’s Deliverable Site Obligations

Phase I Deliverables

Prior to Engineer’s commencement of the Phase I Design Package work, the Client
shall provide Engineer with the following Phase I Deliverables:

1.         A legal description of the Site

2.         Temporary and permanent easements, zoning, and other requirements and
encumbrances affecting land use or necessary to permit the proper design and
construction of the Project and enable Design-Builder to perform the Work

3.         To the extent available, as-built and record drawings of any existing
structures at the Site

4.         Environmental studies, reports and impact statements describing the
environmental conditions, including Hazardous Conditions, in existence at the
Site

5.         Topographic Survey to one (1) foot contours including property
boundaries and at least two (2) benchmarks including existing service and
utility lines.

6.         Any special sizing or other requirements for ethanol storage tank
farm.

7.         Preliminary approval from Client’s Rail service provider of rail
design as prepared by Client’s Rail Designer.

8.         Preliminary location and design of administration building.

9.         Client’s written approval of final site layout including rail design
and environmental permitting emission points.

10.       Soil borings logs for all soil borings complete at Engineer’s
specified locations.

11.       Geotechnical Report regarding subsurface conditions with Client’s
Geotechnical Engineer’s recommendations from Engineer approved Geotechnical
Engineer (Terracon is preferred) including soil borings, and any other surveys
or information available describing other latent or concealed physical
conditions at the Site.

12.       Review, comment, and written approval of Client’s air permit
application.

13.       Owner is required to provide approval of and understand the cost
implications of the soil stabilization and foundation systems required for the
project.  This approval will be based on the recommendations of the geotechnical
and structural engineers.

14.       Location and form for delivery of temporary electrical service.

15.       On-site location for Storm Water discharge.

16.       Preliminary NPDES discharge location for water discharges from utility
discharges including, but not limited to the water pre-treatment system, water
softeners, and cooling tower blowdown.

17.       Final indication of source, analysis, and location of Client’s water
supply.

18.       Client’s risk insurance provider’s specific requirements for fire
protection or approval to design fire protection to Liberty Insurance standards.

19.       Construction of a lined settling pond with wetland discharge for
receiving the ethanol plant non-contact waste streams and filter backwash (if
applicable) is required.  Provide verification that an application for a permit
to construct the settling pond has been applied for.  The approval process can
take in excess of 6 months.  Pond construction cannot begin until receipt of
permit.

19

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Phase II Deliverables

Prior to Engineer’s commencement of the Phase II Design Package work, the Client
shall provide Engineer with the following Phase II Deliverables:

1.         Off-site utility tie-in locations at or near the property lines (this
includes, but is not limited to, gas supply, electrical supply, water supply if
no on-site wells, on-site or off-site sanitary sewer)

2.         Final NPDES discharge location for Utility Water Blowdown.

3.         An insurance provider to allow the proper positioning and number of
required hydrants and hydrants with monitors.

4.         Written approval of final rail design from the Client’s rail service
provider.

5.         Final location and design (general arrangement) of the Client’s
administration building.

6.         Owner is to execute side-letter agreements with Design-Builder as
necessary for the design and construction of a water pre-treatment as outlined
in Exhibit C of the Design/Build Contract.

7.         Design and location of sanitary sewer discharge point of septic
system.

20

--------------------------------------------------------------------------------

EXHIBIT M

Form of Application for Payment

See attached Form of Application for Payment

M-1

--------------------------------------------------------------------------------

 

APPLICATION AND CERTIFICATE FOR PAYMENT

 

TO (OWNER):

SAMPLE

PROJECT:

100 MGY Ethanol Plant

APPLICATION NO:  1

DISTRIBUTION TO:

 

123 Any Street

 

 

 

o OWNER

 

Anywhere, US 12345-6789

 

Granite Falls, MN

PERIOD TO:  10/25/2005

o ARCHITECT

 

 

 

 

 

o CONTRACTOR

FROM:

FAGEN, INC.

VIA (ARCHITECT):

SAMPLE

ARCHITECT’S

 

 

501 WEST HWY 212

 

 

PROJECT NO.:  SAMPLE

 

 

GRANITE FALLS, MN 56241-0159

 

 

 

 

 

 

 

 

 

CONTRACT FOR:

100 MGY Ethanol Plant

 

CONTRACT DATE:

 

 

 

                                        

 

CONTRACTOR’S APPLICATION FOR PAYMENT

 

 

CHANGE ORDER SUMMARY

 

 

 

 

 

 

 

 

ADDITIONS

 

DEDUCTIONS

 

Change Orders approved in previous months by owner

 

 

 

 

 

TOTAL

 

 

 

 

 

Approved this Month

 

 

 

 

 

Number

Date Approved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTALS

 

 

 

 

 

Net Change by Change Orders

 

$

.00

 

 

 

 

The undersigned Contractor certifies that to the best of the Contractor’s
knowledge, information, and belief the Work covered by this Application for
Payment has been completed in accordance with the Contract Documents, that all
amounts have been paid by the Contractor for Work for which previous
Certificates for Payment were issued and payments received from the Owner, and
that current payment shown herein is now due.

 

 

CONTRACTOR: FAGEN, INC.

 

 

 

By:

 

 

Date:

 

 

Application is made for Payment, as shown below, in connection with the
contract.  Continuation Sheet is attached.

 

1.

 

ORIGINAL CONTRACT SUM

 

 

 

$

99500000.00

 

2.

 

Net Change by Change Orders

 

 

 

$

.00

 

3.

 

CONTRACT SUM TO DATE

 

 

 

$

99500000.00

 

4.

 

TOTAL COMPLETED & STORED TO DATE
(Column 6)

 

 

 

$

00

 

5.

 

RETAINAGE:

 

 

 

 

 

 

 

a.

10.00% of Completed Work
(Column D&E0

 

$

.00

 

 

 

 

b.

10.00% of Stored Material
(Column F)

 

$

.00

 

 

 

 

 

Total Retainage (Line 5a&5b) or
(Total in Column I)

 

 

 

 

 

6.

 

TOTAL EARNED LESS RETAINAGE
(Line 4 less Line 5 Total)

 

 

 

$

.00

 

7.

 

LESS PREVIOUS CERTIFICATES FOR PAYMENT
(Line 6 from prior Certificate)

 

 

 

$

.00

 

8.

 

CURRENT PAYMENT DUE

 

 

 

$

.00

 

9.

 

BALANCE TO FINISH, PLUS RETAINAGE

 

 

 

$

99500000.00

 

(Line 3 less Line 6)

 

 

 

 

 

 

 

 

 

 

 

 

State of:

County of:

Subscribed and Sworn to before me this                   day of
                                 ,

 

Notary Public

 

My Commission expires:

 

 

 

 

 

ARCHITECT’S CERTIFICATE FOR PAYMENT

AMOUNT CERTIFIED                                 $

 

(Attach explanation if amount certified differs from the amount applied for.)

 

 

 

ARCHITECT:  SAMPLE

In accordance with the Contract Documents, based on on-

By:

 

Date:

 

site observations and the data comprising the above

 

 

 

 

application, the Architect certifies to the Owner that to the best of the
Architect’s knowledge, information, and belief the Work has progressed as
indicated, the quality of the Work is in accordance with the Contract Documents,
and the Contractor is entitled to payment of the AMOUNT CERTIFIED.

This Certificate is not negotiable.  The AMOUNT CERTIFIED is payable only to the
Contractor named herein.  Issuance, payment and acceptance of payment are
without prejudice to any rights of the Owner or Contractor under this contract.

 

M-2

--------------------------------------------------------------------------------

FAGEN, INC.

AIA CONTINUATION SHEET

 

 

 

Application No.

:

1

 

 

 

 

Application Date

:

10/06/05

 

 

 

 

Period to

:

10/25/2005

Job : SAMPLE     100 MGY Ethanol Plant

 

Architect Project No.

:

SAMPLE

 

Item
No.

 

Description of Work

 

Scheduled
Value

 

Previous
Compltd

 

Current
Compltd

 

Stored
Material

 

Tot
Compl.
& Stored

 

% Comp

 

Balance To
Finish

 

Retainage

 

000001

 

Mobilization

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000002

 

Engineering

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000003

 

General Conditions

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000004

 

Sitework

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000005

 

Concrete

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000006

 

Masonry/Architectural

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000007

 

Structural Steel & Misc Metals

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000008

 

Girts Siding Roof Deck PE Build

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000009

 

Grain Handling System

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000010

 

DDG Storage Building

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000011

 

Process Tanks & Vessels

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000012

 

Field Erected Tanks

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000013

 

Heat Exchangers

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000014

 

Process Equipment

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000015

 

Centrifuges

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000016

 

Chiller

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000017

 

Truck Scales & Probe

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000018

 

Ethanol Loadout/Vapor Flare

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000019

 

Cooling Tower

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000020

 

Dryer System

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000021

 

Thermal Oxidizer

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000022

 

Methanatar

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000023

 

Process Piping & Valves

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000024

 

Painting

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000025

 

Insulation

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000026

 

Plumbing & HVAC

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000027

 

Electrical

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000028

 

Instrumentation

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

000029

 

Start-Up

 

[*]

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

[*]

 

0.00

 

Totals

 

 

 

99500000.00

 

0.00

 

0.00

 

0.00

 

0.00

 

0.00

 

99500000.00

 

0.00

 

Percent:

 

 

 

 

 

0.00

 

0.00

 

0.00

 

0.00

 

 

 

100.00

 

 

 

 

--------------------------------------------------------------------------------

* Portions omitted pursuant to a request for confidential treatment and filed
separately with the SEC.

M-3

--------------------------------------------------------------------------------

EXHIBIT N

Form of Lien Waiver

GENERAL CONTRACTOR’S PARTIAL WAIVER OF MECHANIC’S LIEN RIGHTS AND
AFFIDAVIT OF DEBTS AND CLAIMS

CONDITIONAL LIEN WAIVER

STATE:  (   INSERT STATE  
)                                                                                                         
FAGEN, INC.

COUNTY:  (   INSERT COUNTY   )

The undersigned is the General Contractor (aka Design-Builder) regarding labor
and materials for construction and maintenance work performed for (   INSERT
OWNER/PLANT NAME   ), at the Facility located at or near (   INSERT PLANT CITY &
STATE   ) under the terms of a contract.

On condition of receiving full payment for billings up to date hereof under the
terms of the above mentioned contract, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the undersigned does
hereby waive and release any and all liens, and any and all claims and rights to
lien on the Facility  (including all buildings on the premises) under the
statutes of the State of (   INSERT STATE   ) relating to mechanic’s liens on
account of labor and materials furnished by the undersigned up to the date
hereof at the Facility, as located on real estate legally described as follows:

TRACT 1:  (   INSERT LEGAL DESCRIPTION   )

TRACT 2:  (   INSERT LEGAL DESCRIPTION   )

N-1

--------------------------------------------------------------------------------

The undersigned further certifies that all obligations of General Contractor
entered into between suppliers/subcontractors and General Contractor regarding
this Facility are current as of this date, including all obligations of General
Contractor for all work, labor and services performed; materials and equipment
furnished; and all known indebtedness and claims against General Contractor for
damages arising in any manner in connection with General Contractor’s
performance of the contract mentioned above for which General Contractor or
property of General Contractor might in any way be held responsible.

Dated this ______ day of ___________________, 200__

GENERAL CONTRACTOR:

 

 

 

FAGEN, INC.

 

 

 

 

 

By (Print):

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

(Signature):

 

 

 

 

 

 

 

 

Witness (Print):

 

 

 

 

 

 

 

 

(Signature):

 

 

In the alternative (or if requested):

Subscribed and sworn to before me this

_______ day of _______________, 200__.

 

 

Notary Public

 

My Commission Expires: ____________________

N-2

--------------------------------------------------------------------------------

EXHIBIT O

Form of Consent to Assignment

FAGEN CONSENT TO ASSIGNMENT

THIS CONSENT TO ASSIGNMENT (this “Consent”), dated as of February 7, 2007, is
made among FAGEN, INC., a Minnesota corporation (the “Obligor”), ABE Northfield,
LLC, a Delaware limited liability company (“Assignor”), and the financial
institution party to this Agreement, not in its individual capacity, but acting
solely in the capacity of collateral agent on behalf of the below defined
Lenders (such financial institution in such capacity, or such other financial
institution acting in such capacity, the “Collateral Agent”).

The Assignor seeks to construct and operate a one hundred (100) million gallon
per year fuel-grade ethanol production plant in Northfield, Minnesota (the
“Project”).  The Obligor and the Assignor have entered into the Lump-Sum
Design-Build Agreement dated as of February 7, 2007 (as amended, modified,
supplemented and in effect from time to time, the “Assigned Agreement”).  The
Assignor and certain other financial institutions (the “Lenders”) intend to
finance certain costs of the Assignor for the development, construction and
operation of the Project pursuant to various financing arrangements (the
“Financing Arrangements”).  The Assignor and the Collateral Agent (on behalf of
the Lenders) intend to enter into certain security arrangements (the “Security
Documents”), pursuant to which the Assignor will pledge and assign to the
Collateral Agent a lien on and a security interest in all of the Assignor’s
right, title and interest in, among other things, the Assigned Agreement.

SECTION 1.                                CONSENT TO ASSIGNMENTS; LIABILITY;
CURE RIGHTS; ETC.

1.1                                 Acknowledgments and Consents. The Obligor
(i) acknowledges that the Assigned Agreement is in full force and effect and
that there are no other amendments, modifications or supplements thereto, either
oral or written; (ii) represents and warrants that it has not assigned,
transferred or pledged the Assigned Agreement to any third party; (iii)
represents and warrants that it has no knowledge of any existing default by the
Assignor in the performance of any provision of the Assigned Agreement; (iv)
acknowledges and consents to the Assignor’s pledge and assignment of the
Assigned Agreement to the Collateral Agent; (v) acknowledges the right of the
Collateral Agent in the exercise of its rights and remedies under the Security
Documents to take all actions and exercise all rights of the Assignor under the
Assigned Agreement as if it were the Assignor; (vi) acknowledges and agrees that
this Consent satisfies Section 21.1 of the Assigned Agreement; and (vii)
acknowledges and agrees that the Collateral Agent is entitled to notices under
the Assigned Agreement pursuant to Section 21.7 thereof.

1.2                                 Limitation on Assumption of Obligations. 
The Collateral Agent shall not be liable for the performance or observance of
any of the obligations or duties of the Assignor under the Assigned Agreement,
nor shall the Security Documents give rise to any duties or obligations
whatsoever, except that, insofar as the Collateral Agent exercises any of
Assignor’s rights under the Assigned Agreement and/or makes any claims with
respect to any payments, deliveries or

O-1

--------------------------------------------------------------------------------

other obligations under the Assigned Agreement, the satisfaction of the terms
and conditions of the Assigned Agreement applicable to such exercise of rights
or such claims shall be a condition precedent to the Obligor’s obligations with
respect thereto.  Upon any transfer to a third party of the rights of the
Collateral Agent under the Assigned Agreement pursuant to its exercise of its
remedies under the Security Documents as described in Section 1.4 below which
transfer of the Assigned Agreement shall be subject in all respects  to the
terms and conditions of the Assigned Agreement, including Section 21.1 thereof
(i) the transferee shall succeed to all right, title and interest of the
Assignor and the Collateral Agent and (ii) the Collateral Agent shall have no
further liabilities, duties or obligations to the Assignor under the Assigned
Agreement.

1.3                                 Cure Periods.  The Obligor hereby confirms
that it will provide to the Collateral Agent the same notices as are to be
provided to the Assignor pursuant to Sections 15.4.2, 15.5.1(d), and 15.5.2 of
the Assigned Agreement.

1.4                                 Substitute Owner.  The Obligor acknowledges
that upon an event of default by the Assignor under the Financing Arrangements
and an exercise of remedies by the Collateral Agent under the Security
Documents, the Collateral Agent may (but shall not be obligated to) assume, or
cause any purchaser at any foreclosure sale or any assignee or transferee under
any instrument of assignment or transfer in lieu of foreclosure to assume, all
of the interests, rights and obligations of the Assignor thereafter arising
under the Assigned Agreement.  Each assuming party shall agree in writing to be
bound by, and to assume the terms and conditions of, the Assigned Agreement
pursuant to an assignment agreement in form and substance satisfactory to the
Obligor pursuant to Section 21.1 of the Assigned Agreement, and the Obligor
shall continue to perform its obligations under the Assigned Agreement in favor
of the assuming party as if such party had been an original party to the
Assigned Agreement; provided, that the assuming party shall cure any  defaults,
whether monetary or otherwise, then existing under the Assigned Agreement in
such assuming party’s capacity as “Owner” under the Assigned Agreement (as
defined in such agreement) after giving effect to assignment of Assignor’s
rights and obligations to such assuming party; but provided, further, that the
liability of the Collateral Agent (or any entity acting on behalf of the
Collateral Agent or any of the other Secured Parties) shall not exceed all of
its right, title and interest in and to the Project.

1.5                                 No Amendments.  The Obligor acknowledges
that under the terms of the Financing Arrangements, the Assignor is required to
obtain the consent of the Lenders for certain amendments to the Assigned
Agreement.

SECTION 2.                                NOTICES.  The first paragraph of
Section 21.7 of the Assigned Agreement is hereby incorporated in this Consent,
as if set forth herein in its entirety.  For purposes of Section 21.7 of the
Assigned Agreement, the initial address for notice to the Collateral Agent shall
be as follows:

[BANK]

[ADDRESS]

Attn: [NAME/TITLE]

Fax:  [FAX NUMBER]

O-2

--------------------------------------------------------------------------------

The Obligor acknowledges and agrees that the delivery of the Collateral Agent’s
notice information in this Section 2 shall be deemed to satisfy the requirement
of the Owner in Section 21.7 of the Assigned Agreement to deliver such
information to the Obligor.

SECTION 3.                                MISCELLANEOUS.

THIS CONSENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK AND SHALL BE BINDING UPON THE PARTIES HERETO AND THEIR
PERMITTED SUCCESSORS AND ASSIGNS AND SHALL INURE TO THE BENEFIT OF THE PARTIES
HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.  THE PARTIES HERETO HEREBY
AGREE TO EXECUTE AND DELIVER ALL SUCH INSTRUMENTS AND TAKE ALL SUCH ACTION AS
MAY BE REASONABLY NECESSARY TO EFFECTUATE FULLY THE PURPOSES OF THIS CONSENT.

[THE NEXT PAGE IS THE SIGNATURE PAGE]

O-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Consent to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

FAGEN, INC.,

as Obligor

By:

 

 

 

 

Name:

 

 

Title:

 

[BANK NAME]

 

 

not in its individual capacity, but solely as

Address for Notices:

 

Collateral Agent

 

 

By:

 

 

Fagen, Inc.

 

Name:

501 W. Highway 212

 

Title:

P.O. Box 159

 

 

Granite Falls, MN 56241

 

Address for Notices:

Attn: Aaron Fagen

 

 

Fax: (320) 564-3278

 

[BANK]

 

 

[ADDRESS]

With a copy to:

 

Attn: [NAME/TITLE]

 

 

Fax: [FAX NUMBER]

Fagen, Inc.

 

 

501 W. Highway 212

 

Consented and Agreed to:

P.O. Box 159

 

 

Granite Falls, MN 56241

 

ABE NORTHFIELD, LLC

Attn: Bruce Langseth

 

as Assignor

Fax: (320) 564-3278

 

 

 

 

By:

 

 

And a copy to:

 

Name:

 

 

Title:

Fagen, Inc.

 

 

501 W. Highway 212

 

ABE Northfield, LLC

P.O. Box 159

 

10201 Wayzata Blvd. Suite 250

Granite Falls, MN 56241

 

Minneapolis, MN 55305

Attn: Jennifer Johnson

 

Attn: Revis L. Stephenson III

Fax (320) 564-3278

 

Fax: (763) 226-2725

 

O-4

--------------------------------------------------------------------------------