**Exhibit10.6**

LUMP SUM DESIGN-BUILDAGREEMENT

BETWEEN

ABE NORTHFIELD, LLC (“**OWNER**”)

AND

FAGEN, INC. (“**DESIGN-BUILDER**”)

February 7, 2007

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

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**TABLE OFCONTENTS**
|                                                           | ** **                                                                                                                 | **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 SUMDESIGN-BUILD CONTRACT**

This LUMP SUM DESIGN-BUILD CONTRACT (the “Agreement”)is made as of February 7, 2007, (the “Effective Date”) by and betweenABE 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 Ownerdesires to develop, construct, own and operate a one hundred (100)  million gallons per year (“MGY”) drygrind denatured ethanol production facility located near Northfield, Minnesota(the “Plant”); and

B.    Design-Builderdesires to provide design, engineering, procurement and construction servicesfor the Plant.

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

**AGREEMENT**

# **Article 1**

# **Definitions; Rules of Interpretation**

**1.1         **Rulesof Construction.  The capitalized termslisted in this Article shall have the meanings set forth herein whenever theterms appear in this Agreement, whether in the singular or the plural or in thepresent or past tense.  Other terms usedin this Agreement but not listed in this Article shall have meanings as commonlyused in the English language and, where applicable, in generally acceptedconstruction and design-build standards of the fuel ethanol industry in theMidwest United States.  Words nototherwise defined herein that have well known and generally accepted technicalor trade meanings are used herein in accordance with such recognizedmeanings.  In addition, the followingrules of interpretation shall apply:

(a)                                  Themasculine shall include the feminine and neuter.

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

(c)                                  ThisAgreement was negotiated and prepared by each of the Parties with the adviceand participation of counsel.  TheParties have agreed to the wording of this Agreement and none of the provisionshereof shall be construed against one Party on the ground that such Party isthe author of this Agreement or any part hereof.

* *

 

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**1.2         **Defined Terms.** **In addition todefinitions appearing elsewhere in this Agreement, the following terms have thefollowing meanings:  

*AAA*is defined in Section 19.1.

*Agreement* is defined in the Preamble.

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

*ApplicableLaw*means

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

(b)                                 anyand all orders, judgments, writs, decrees, injunctions, Governmental Approvalsor other decisions of a Governmental Authority; and

(c)                                  anyand all legally binding announcements, directives or published practices orinterpretations, regarding any of the foregoing in (a) or (b) of thisdefinition, enacted, issued or promulgated by a Governmental Authority;

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

*Applicationfor Payment*is defined in Section 10.2.1.

*As BuiltPlans*is defined in Section 5.2.

*BankruptParty*is defined in Section 15.6.1.**

*BaselineIndex*is defined in Section 9.2.1.

*ChangeOrder*is defined in Section 13.1.1.

*CCI*is defined in Section 9.2.

*Certificateof Substantial Completion* is defined in Section 6.4.3.

*CommitmentFee* is defined in Section 10.1.1.

*ConfidentialInformation* is defined in Section 20.1.

*ConstructionDocuments*is defined in Section 3.2.1.

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*ContractDocuments* is defined in Section 2.2.

*ContractPrice*is defined in Section 9.1.

*ContractTime(s)*means scheduled dates provided for in the ContractDocuments including Scheduled Substantial Completion Date and Final CompletionDate.

*Damages*is defined in Section 14.3.1.

*Day*or *Days* shall mean calendar days unlessotherwise specifically noted in the Contract Documents.

*Design-Builder*is defined in the Preamble.

*Design-Builder’sRepresentative*is defined in Section 16.2.

*Design-Builder’sSenior Representative*is defined in Section 16.2.

*DesignConsultant*is a qualified, licensed design professional thatis not an employee of Design-Builder, but is retained by Design-Builder, oremployed or retained by anyone under contract with Design-Builder orSubcontractor, to furnish design services required under the ContractDocuments.

*DifferingSite Conditions* is defined in Section 11.2.1.

*EarlyCompletion Bonus*is defined in Section 6.4.4.

*EffectiveDate* is defined in the Preamble.

*FagenEngineering* is defined in Section 6.1.

*FinalApplication for Payment*is defined in Section 10.3. 

*FinalCompletion* is defined in Section 6.5.2.

*FinalCompletion Date*is defined in Section 6.5.1.

*FinalPayment* is defined in Section 10.3.

*FinancialClosing*means the execution of the Financing Documents by allthe parties thereto, and the fulfillment of all conditions precedent thereundernecessary to permit the advance of funds to pay amounts due under thisAgreement.

*FinancingDocuments* means the final loan documents with the Lender orLenders providing financing for the construction or term financing of the Plantand any and all agreements

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necessary todemonstrate a binding commitment of Owner or Lenders to fund the constructionof the Plant.

*ForceMajeure Event*is defined in Section 12.1. 

*GovernmentalApprovals* are any material authorizations or permissionsissued or granted by any Governmental Authority to the Project, its Owner, theDesign-Builder, Subcontractors and their affiliates in connection with anyactivity related to the Project.

*GovernmentalAuthority* means any federal, state, local or municipalgovernmental body; any governmental, quasi-governmental, regulatory or administrativeagency, commission, body or other authority exercising or entitled to exerciseany administrative, executive, judicial, legislative, policy, regulatory ortaxing authority or power; or any court or governmental tribunal; in each casehaving jurisdiction over the Owner, the Design-Builder, the Project, or theSite.  

*HazardousConditions* are any materials, wastes, substances andchemicals deemed to be hazardous under applicable Legal Requirements, or thehandling, storage, remediation, or disposal of which are regulated byapplicable Legal Requirements.

*ICM*means ICM, Inc., a Kansas corporation.

*ICMLicense Agreement*means the license agreement to be executedbetween Owner and ICM, Inc., substantially in the form attached hereto asExhibit D. 

*IndemnifiedParties*is defined in Section 5.2.

*IndependentEngineer*means Owner’s and Lenders’ independent engineer. 

*Industry-WideDisruption* is defined in Section 12.4.

*InformationalReport*is defined in Section 3.8.

*LegalRequirements*or*Laws*are allapplicable 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 orhereafter in effect, of any Governmental Authority, the practices involved inthe Project or Site, or any Work, including any consensus standards formaterials, products, systems, and services established by ASTM International,any successor organization thereto, or any Governmental Authority.

*Lenders*meansthe lenders that are party to the Financing Documents. 

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

*Manufacturer’sWarranty* shall mean a warranty provided by the originalmanufacturer or vendor of equipment used by Design-Builder in the Plant.

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*MGY*is defined in the Recitals.

*Notice toProceed*is defined in Section 6.2.

*OperatingProcedures*means, without limitation, the process equipmentand specifications manuals, standards of quality, service protocols, datacollection methods, construction specifications, training methods, engineeringstandards and any other information prescribed by Design-Builder and ICM fromtime to time concerning the ownership, operation, maintenance and repair of thePlant, subject to the limitations provided in the Agreement and in the ICMLicense Agreement.

*Owner*is defined in the Preamble.

*OwnerIndemnified Parties* is defined in Section 14.3.1.

*Owner’sMilestones* is defined in Section 13.4.

*Owner’sOperator* means the entity that Owner identifies, upon writtennotice to Design-Builder, as operator of the Project or any other entity thatOwner chooses, upon notice to Design-Builder, to replace such entity asoperator of the Project.

*Owner’sRepresentative*is defined in Section 16.1.

*Owner’sSenior Representative*is defined in Section 16.1.

*Party orParties* is defined in the Preamble.

*PassThrough Warranties*mean any warranties provided toDesign-Builder by a Subcontractor which are assigned to Owner.

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

*PaymentBond*is defined in Section 7.4.2. 

*PerformanceBond*is defined in Section 7.4.1. 

*PerformanceGuarantee Criteria*means the criteria listed in Exhibit A. 

*PerformanceTests*is defined in Section 7.2.1. 

*Phase I*isdefined in Exhibit L.

*Phase Iand Phase II Engineering Services Agreement* is defined inSection 6.1.

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*Phase II*isdefined in Exhibit L.

*Plant*isdefined in the Recitals.

*Project*isdefined in Section 2.1.

*ProjectScope*is defined in Exhibit B.

*PunchList*is defined in Section 6.4.3.

*QualifiedIndependent Expert*means an expert retained by Owner andapproved by Design-Builder pursuant to Section 11.1.2.

*SafetyRepresentative*is defined in Section 3.7.1.

*Scheduleof Values*is defined in Section 10.2.5.

*ScheduledSubstantial 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 entityretained directly or indirectly by Design-Builder, in each case as anindependent contractor to perform a portion of the Work, and shall includematerialmen and suppliers. 

*SubstantialCompletion* is defined in Section 6.4.2.

*Work*isdefined in Section 3.1.

*WorkProduct*is defined in Section 5.1. 

# **Article 2**

# **The Project**

## **2.1         **Servicesto be Performed.

  Pursuant to this Agreement, Design-Buildershall perform all work and services in connection with the engineering, design,procurement, construction startup, testing and training for the operation andmaintenance of the Plant, and provide all material, equipment, tools and labornecessary 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         **Extentof Agreement.  This Agreement consists ofthe following documents, and all exhibits, schedules, appendices and attachmentshereto and thereto (collectively, the “Contract Documents”):

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### **2.2.1      **Allwritten modifications,amendments and change orders to this Agreement.

### **2.2.2      **This Agreement, including all exhibits andattachments, 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 byDesign-Builder pursuant to Section 3.2.1 shall be incorporated in thisAgreement.

**2.3         **ConflictingProvisions.  In the event of any conflictor inconsistency between the body of this Agreement and any Exhibit or Schedulehereto, the terms and provisions of this Agreement, as amended from time totime, shall prevail and be given priority. Subject to the foregoing, the several documents and instruments formingpart of this Agreement are to be taken as mutually explanatory of one anotherand in the case of ambiguities or discrepancies within or between such partsthe same shall be explained and interpreted, if possible, in a manner whichgives effect to each part and which avoids or minimizes conflicts among suchparts.  No oral representations or otheragreements have been made by the Parties except as specifically stated in theContract Documents.

# **Article 3**

# **Design-Builder Responsibilities**

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

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other Work of theDesign-Builder shall be performed in accordance with (i) the Project Scope setforth in Exhibit B, (ii) the Construction Documents, (iii) all LegalRequirements, and (iv) generally accepted construction and design-buildstandards of the fuel ethanol industry in the United States during the relevanttime period.  Any design and engineeringor other professional service to be performed pursuant to this Agreement, whichunder Applicable Law must be performed by licensed personnel, shall beperformed by licensed personnel as required by Law.  The enumeration of specific duties andobligations to be performed by the Design-Builder under the Contract Documentsshall not be construed to limit in any way the general undertakings of theDesign-Builder as set forth herein. Design-Builder’s Representative shall be reasonably available to Ownerand shall have the necessary expertise and experience required to supervise theWork.  Design-Builder’s Representativeshall communicate regularly with Owner and shall be vested with the authorityto act on behalf of Design-Builder.

## **3.2         **DesignDevelopment and Services.

### **3.2.1      **Where required by Law, Design-Builder shallprovide through qualified, licensed design professionals employed byDesign-Builder, or procured from qualified, independent licensed DesignConsultants, the necessary design services, including architectural, engineeringand other design professional services, for the preparation of the requireddrawings, specifications and other design submittals required to permitconstruction of the Work in accordance with this Agreement (such drawings,specifications and design submittals collectively, the “ConstructionDocuments”). To the extent not prohibited by Legal Requirements,Design-Builder may prepare Construction Documents for a portion of the Work topermit construction to proceed on that portion of the Work prior to completionof the Construction Documents for the entire Work.

### **3.2.2      **Construction of the Plant shall be consistentwith 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 suchdrawings and specifications.  Owner andIndependent Engineer may not make copies of the available drawings andspecifications without Design-Builder’s written permission, and, granted suchpermission, may only do so to the extent such drawings and specificationsdirectly pertain to the Plant; provided however that, pursuant to Section 5.1of this Agreement, Design-Builder retains ownership of and property interestsin any drawing or specifications made available and/or copied.

### **3.2.4      **Except as provided elsewhere in thisAgreement, it is understood and agreed that review, comment and/or approval byOwner (or its designees) or Independent Engineer of any documents or submittalsthat Design-Builder is required to submit to Owner (or its designees) orIndependent Engineer hereunder for their review, comment and/or approval(including without limitation the Construction Documents pursuant to Sections3.2.1 and 3.2.3 hereof) shall not relieve or release Design-Builder from any ofits duties, obligations or liabilities 

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### providedfor under the terms of this Agreement or transfer any design liability fromDesign-Builder to Owner.

**3.3         **Standardof Care.  All services performed by theDesign-Builder and its Subcontractors pursuant to the Construction Documentsshall be performed in accordance with the standard of care and skill generally accepted in the fuel ethanolindustry in the Midwest United States during the relevant time period or inaccordance with any of the practices, methods and acts that in the exercise ofreasonable judgment in light of the facts known at the time the decision wasmade, could have been expected to accomplish the desired result at a reasonablecost consistent with good business practices, safety and expedition.  This standard of care is not intended to belimited to the optimum practice, method or act to the exclusion of all others,but rather to be acceptable practices, methods or acts generally accepted inthe construction and design-build standards of the fuel ethanol industry in theMidwest United States.  Design-Builderand its Subcontractors shall perform all construction activities efficientlyand with the requisite expertise, skill, competence, resources and care to satisfythe requirements of the Contract Documents and all applicable LegalRequirements.  Design-Builder shall atall times exercise complete and exclusive control over the means, methods,sequences and techniques of construction.

**3.4         **GovernmentApprovals and Permits.  Except asidentified in Exhibit C and, with respect to items identified as Owner’sresponsibility, in Exhibit G (which items shall be obtained by Owner pursuantto Section 4.5), Design-Builder shall obtain and pay for all necessary permits,approvals, licenses, government charges and inspection fees required for theprosecution of the Work by any government or quasi-government entity havingjurisdiction over the Project. Design-Builder shall provide reasonableassistance to Owner in obtaining those permits, approvals and licenses that areOwner’s responsibility.

## **3.5         **Subcontractors.

### **3.5.1      **Design-Builder may subcontract portions ofthe Work in accordance with the terms hereof.

### **3.5.2      **Design-Builder assumes responsibility toOwner for the proper performance of the Work of Subcontractors and any acts andomissions in connection with such performance. Nothing in the Contract Documents is intended or deemed to create anylegal 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 theactivities of all of Design-Builder’s Subcontractors.  If Owner performs other work on the Projector at the Site with separate contractors under Owner’s control, Design-Builderagrees to reasonably cooperate and coordinate its activities with thoseseparate contractors so that the Project can be completed in an orderly andcoordinated manner without unreasonable disruption.

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### **3.5.4      **Design-Builder shall ensure that eachsubcontract with a Subcontractor is assignable to Owner without consent of theSubcontractor or any other person or entity in the event that Design-Buildershall be in an uncured default or terminated with cause under the terms of thisAgreement.

**3.6         **Maintenanceof Site.  Design-Builder shall keep theSite reasonably free from debris, trash and construction wastes to permitDesign-Builder to perform its construction services efficiently, safely andwithout interfering with the use of adjacent land areas.  Upon Substantial Completion of the WorkDesign-Builder shall remove all debris, trash, construction wastes, materials,equipment, machinery and tools arising from the Work to permit Owner to occupythe Project for its intended use.

## **3.7         **ProjectSafety.

### **3.7.1      **Design-Builder recognizes the importance ofperforming 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-Siteor off-Site, and (iii) any other property at the Site or adjacent thereto.  Design-Builder assumes responsibility forimplementing and monitoring all safety precautions and programs related to theperformance of the Work.  Design-Buildershall, prior to commencing construction, designate a representative (the “SafetyRepresentative”) with the necessary qualifications and experience tosupervise the implementation and monitoring of all safety precautions andprograms related to the Work. Unless otherwise required by the ContractDocuments, Design-Builder’s Safety Representative shall be an individualstationed at the Site who may have responsibilities on the Project in additionto safety.  The Safety Representativeshall make routine daily inspections of the Site and shall hold weekly safetymeetings with Design-Builder’s personnel, Subcontractors and others asapplicable.

### **3.7.2      **Design-Builder and Subcontractors shallcomply with all Legal Requirements relating to safety, as well as anyOwner-specific safety requirements set forth in the Contract Documents;provided, that such Owner-specific requirements do not violate any applicableLegal Requirement.  As promptly aspracticable, 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 orquasi-government authorities having jurisdiction over safety-related mattersinvolving the Project or the Work.

### **3.7.3      **Design-Builder’s responsibility for safetyunder this Section 3.7****is notintended in any way to relieve Subcontractors of their own contractual andlegal obligations and responsibility for (i) complying with all LegalRequirements, including those related to health and safety matters, and (ii)taking all necessary measures to implement and monitor all safety precautionsand programs to guard against injury, losses, damages or accidents resultingfrom their performance of the Work.

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**3.8         **Submissionof Reports.**** Design-Builder shall provide Owner with amonthly informational report substantially in the form of Exhibit F attachedhereto (“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 facilitydesignated by ICM for all of Owner’s employees and Owner Operator’s employeesrequired for the operation and maintenance of the Plant in accordance with alldesign specifications therefor contained in the Contract Documents andnecessary in order to maintain the Performance Guarantee Criteria, includingoperators, laboratory personnel, general, plant and maintenance managers. Otherpersonnel of Owner and Owner Operator may receive such training by separatearrangement between Owner and Design-Builder and as time is available.  All training personnel and costs associatedwith such training personnel, including labor and all training materials willbe provided to Owner and Owner Operator within the Contract Price at noadditional cost. Owner and Owner Operator will be responsible for all traveland expenses of their employees and the Owner and Owner Operator will pay allwages and all other expenses for their personnel during the training. Thetraining services will include training on computers, laboratory procedures,field operating procedures, and overall plant section performanceexpectations.  Prior to the start-uptraining, Design-Builder shall provide Owner training manuals and operatingmanuals and other documents reasonably necessary for the start-up process.

# **Article 4**

# **Owner’s Responsibilities**

## **4.1         **Dutyto Cooperate.

### **4.1.1      **Owner shall, throughout the performance ofthe Work, cooperate with Design-Builder and perform its responsibilities,obligations and services in a timely manner to facilitate Design-Builder’stimely and efficient performance of the Work and so as not to delay orinterfere with Design-Builder’s performance of its obligations under theContract Documents.

### **4.1.2      **Owner shall pay all reasonable costs incurredby Design-Builder for frost removal so that winter construction canproceed.  Such costs may include, but arenot limited to, equipment costs, equipment rental costs, sheltering costs,special material costs, fuel costs and associated labor costs.  Owner acknowledges and agrees that such costsare in addition to, and not included in, the Contract Price, and that thepayment of such costs, which shall be billed on a weekly basis, shall notrequire the issuance of a Change Order or the obtaining of any Owner approvalprior to the issuance of invoices for such costs.

## **4.2         **Furnishingof Services and Information.

### **4.2.1      **Prior to the issuance of the Notice toProceed, at its own cost and expense, Owner shall provide the following itemsto Design-Builder for Design-Builder’s information and use and all of whichDesign-Builder is entitled to rely upon in performing the Work:

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(a)                                  surveysdescribing the property, boundaries, topography and reference points for useduring construction, including existing service and utility lines;

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

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

(d)                                 Alegal description of the Site;

(e)                                  tothe extent available, as-built and record drawings of any existing structuresat the Site; and

(f)                                    allenvironmental studies, reports and impact statements describing theenvironmental conditions, including Hazardous Conditions, in existence at theSite that have been conducted or performed.

### **4.2.2      **Owner shall provide to Design-Builder allOwner’s deliverables under Exhibit C pursuant to Owner’s Milestones.  Such deliverables shall be provided, at Owner’sown cost and expense, for Design-Builder’s information and use. Design-Builderis entitled to rely upon such deliverables in performing the Work.

### **4.2.3      **Owner is responsible for securing andexecuting all necessary agreements with adjacent land or property owners thatare necessary to enable Design-Builder to perform the Work and that have beenidentified and notified in writing by Design-Builder to Owner prior to theEffective Date.  Owner is furtherresponsible for all costs, including attorneys’ fees, incurred in securingthese necessary agreements.

**4.3         **FinancialInformation; Cooperation with Lenders; Failure to Obtain Financial Closing.  Design-Builder acknowledges that Owner isseeking financing for the Project. Design-Builder agrees to cooperate with Owner in good faith in order tosatisfy the reasonable requirements of Owners’ financing arrangements,including, where appropriate and reasonable, the execution and delivery ofdocuments or instruments necessary to accommodate the Financial Closing.  Owner agrees to pay all documented costsincurred by Design-Builder incurred prior to and at Financial Closing, andthereafter during the term of this Agreement, in connection with satisfying therequirements of Owners’ financing arrangements including all documentedattorney’s fees.  Design-Builder andOwner also acknowledge that the Lenders, as a condition to providing financingfor the Plant, shall require Owner to provide the Independent Engineer withcertain reasonable participation and review rights with respect toDesign-Builder’s performance of the Work. Design-Builder acknowledges and agrees that such reasonableparticipation and review rights shall consist of the right to (i) enter theSite and inspect the Work upon reasonable notice to Design-Builder; (ii) attendall start-up and testing procedures; and (iii) review and approve such otheritems for which Owner is required by Lenders to obtain the concurrence, opinionor a certificate of the Independent Engineer or the Lenders pursuant to theFinancing Documents which items do not alter the rights or impose additionalobligations on Design-

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Builder.  Nothing in this Section 4.3 shall be deemedto require Design-Builder to agree to any amendments to this Agreement thatwould adversely affect Design-Builder’s risks, rights or obligations under thisAgreement.  Upon Financial Closing, Ownershall promptly provide to Design-Builder an officer’s certificate certifyingthat Financial Closing has occurred and such Owner’s officer’s certificateshall constitute evidence satisfactory to Design-Builder that Owner hasadequate funds available and committed to fulfill its obligations under theContract Documents for all purposes hereunder. Owner must provide such officer’s certificate prior to issuing theNotice to Proceed.

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

**4.5         **GovernmentApprovals and Permits.  Owner shallobtain and pay for all necessary Governmental Approvals required by Law,including permits, approvals, licenses, government charges and inspection feesset forth in Exhibit C and, to the extent identified as Owner’s responsibility,Exhibit G.  Owner shall providereasonable assistance to Design-Builder in obtaining those permits, approvalsand licenses that are Design-Builder’s responsibility pursuant to Exhibit G andSection 3.4.

**4.6         **Owner’sSeparate Contractors.  Owner isresponsible for all work, including such work listed on Exhibit C, performed onthe Project or at the Site by separate contractors under Owner’s control.  Owner shall contractually require itsseparate contractors to cooperate with, and coordinate their activities so asnot to interfere with, Design-Builder in order to enable Design-Builder totimely 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) atall times during the term of this Agreement to prevent vandalism, theft anddanger to the Project, the Site, and personnel. Owner shall coordinate and supervise ingress and egress from the Site soas to minimize disruption to the Work.

# **Article 5**

# **Ownership of Work Product; Risk of Loss**

**5.1         **WorkProduct.** **Alldrawings, specifications, calculations, data, notes and other materials anddocuments, including electronic data furnished by Design-Builder to Owner underthis Agreement (“Work Product”) shall be instruments of service andDesign-Builder shall retain the ownership and property interests therein, includingthe copyrights thereto.

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**5.2         **Owner’sLimited License Upon Payment in Full. Upon Owner’s payment in full for all Work performed under the ContractDocuments, Design-Builder shall grant Owner a limited license to use the WorkProduct in connection with Owner’s occupancy and repair of the Plant.  Design-Builder acknowledges and agrees thatthe limited license to use the Work Product granted hereby shall provide Ownersufficient rights in and to the Work Product as shall be necessary for Owner tooperate and maintain the Plant and shall include any Pass Through Warranties inconnection therewith.  Design-Buildershall provide Owner with a copy of the plans of the Plant, as built, (the “AsBuilt Plans”) conditioned on Owner’s express understanding that its use ofthe Work Product and its acceptance of the As Built Plans is at Owner’s solerisk and without liability or legal exposure to Design-Builder or anyoneworking by or through Design-Builder, including Design Consultants of any tier(collectively the “Indemnified Parties”); provided, however, that anyperformance guarantees and warranties (of equipment or otherwise) shall remainin effect according to the terms of this Agreement.

### **5.2.1      **Design-Builder is utilizing certainproprietary property and information of ICM in the design and construction ofthe Project and Design-Builder may incorporate proprietary property andinformation of ICM into the Work Product. Owner’s use of the proprietary property and information of ICM shall begoverned by the terms and provisions of the ICM License Agreement, to beexecuted by Owner and ICM in connection with the execution of thisAgreement.  Owner shall be entitled touse the Work Product solely for purposes relating to the Plant, but shall notbe entitled to use the Work Product for any other purposes whatsoever,including without limitation, expansion of the Plant.  Notwithstanding the foregoing sentence, Ownershall be entitled to use the Work Product for the operation, maintenance andrepair of the plant including the interconnection of, but not the design of,any future expansions to the Plant.  Thelimited license granted to Owner under Sections 5.2, 5.3 or 5.4 to use the WorkProduct shall be limited by and construed according to the same terms containedin the ICM License Agreement, attached hereto as Exhibit D and incorporatedherein by reference thereto, except (i) references in such ICM LicenseAgreement to ICM and Proprietary Property shall refer to Design-Builder andWork Product, respectively, (ii) the Laws of the State of Minnesota shallgovern such limited license, and (iii) the dispute resolution provisionscontained in Article 19 hereof shall apply to any breach or threatened breachof Owner’s duties or obligations under such limited license, except thatDesign-Builder shall have the right to seek injunctive relief in a court ofcompetent jurisdiction against Owner or its Representatives for any such breachor threatened breach.  This paragraphalso applies to Sections 5.3 and 5.4 below.

**5.3         **Owner’sLimited License Upon Owner’s Termination for Convenience or Design-Builder’sElection to Terminate.  If Ownerterminates the Project for its convenience as set forth in Section 15.3 hereof,or if Design-Builder elects to terminate this Agreement in accordance withSection 15.5, Design-Builder shall, upon Owner’s payment in full of the amountsdue Design-Builder under this Agreement, grant Owner a limited license to usethe Work Product to complete the Plant and subsequently occupy and repair thePlant, subject to the following:

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

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

**5.4         **Owner’sLimited License Upon Design-Builder’s Default. If this Agreement is terminated due to Design-Builder’s default pursuantto 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 ContractDocuments through the time of Design-Builder’s default, then Design-Buildershall grant Owner a limited license to use the Work Product in connection withOwner’s completion and occupancy and repair of the Plant.  This limited license is conditioned on Owner’sexpress agreement that its use of the Work Product is at Owner’s sole riskwithout liability or legal exposure to any Indemnified Party; provided,however, that any Pass Through Warranties regarding equipment or expresswarranties regarding equipment provided by this Agreement shall remain ineffect according to their terms.  Thislimited license grants Owner the ability to repair the Plant at Owner’sdiscretion.

**5.5         **Owner’sIndemnification for Use of Work Product. If Owner uses the Work Product or Plant under any of the circumstancesidentified in this Article 5, to the fullest extent allowed by Law, Owner shalldefend, indemnify and hold harmless the Indemnified Parties from and againstany and all claims, damages, liabilities, losses and expenses, includingattorneys’ fees, arising out of or resulting from the use of the Work Productand Plant; provided, however, that any Pass Through Warranties regardingequipment or express warranties regarding equipment provided by this Agreementshall remain in effect according to their terms.

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

**Article 6**

**Commencement and Completion of the Project**

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

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engineering forthe Project as set forth therein.  Ownerhas agreed to pay Fagen Engineering Ninety-two Thousand Five Hundred Dollars($92,500.00) for such engineering services pursuant to the terms of thatagreement, the full amount of which shall be included in and credited to theContract Price.  Notwithstanding theforegoing sentence, if a Notice to Proceed is not issued pursuant to Section6.2, or Financial Closing is not obtained pursuant to Section 4.3, then noamount paid under the Phase I and Phase II Engineering Services Agreement shallbe refunded to Owner.

**6.2         **Noticeto Proceed; Commencement.  The Work shallcommence within five (5) Days of Design-Builder’s receipt of Owner’s writtenvalid notice to proceed (“Notice to Proceed”) unless the Partiesmutually agree otherwise in writing.  TheParties agree that a valid Owner’s Notice to Proceed cannot be givenuntil:  (1) Owner has title to the realestate on which the Project will be constructed; (2) the Phase I and Phase IISite work required of Owner, as described in Exhibit L is completed along withredline drawings and such Phase I and Phase II Site work and redline drawingshave been reviewed and deemed adequate by Design-Builder;****(3)the air permit(s) and/or other applicable local, state or federal permitsnecessary so that construction can begin, as listed on Exhibit G, have beenobtained; (4) Owner has obtained Financial Closing pursuant to Section 4.3; (5)if applicable, Owner has executed a sales tax exemption certificate andprovided the same to Design-Builder; (6) Owner has provided the name of itsproperty/all-risk insurance carrier and the specific requirements for fireprotection; (7) Owner has provided an insurance certificate or copy ofinsurance policy demonstrating that Owner has obtained builder’s risk insurancepursuant to Section 17.4.3 hereof, and (8) Design-Builder provides Ownerwritten notification of its acceptance of the Notice to Proceed, provided thatDesign-Builder shall not be required to accept the Notice to Proceed prior toOctober 8, 2007. Owner and Design-Builder mutually agree that time is of theessence with respect to the dates and times set forth in the ContractDocuments. Owner must complete the prerequisites to the issuance of a validNotice to Proceed, as listed in items number (1) through (7) of this Section6.2 and submit a Notice to Proceed to Design-Builder for Design-Builder’sacceptance by October 15, 2007; otherwise, this Agreement may be terminated, atDesign-Builder’s sole option.  IfDesign-Builder chooses to terminate this Agreement pursuant to its right underthe immediately preceding sentence, then Design-Builder shall have no furtherobligations hereunder.

### **6.2.1      **Notice to Proceed shall be delivered by Owner to Design-Builderpursuant to the notice requirements set forth in Section 21.7 hereof, with acopy to:

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

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

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initial start-up,operations supervision and corrective maintenance of all permanent Plantequipment within the scope of the Work. Notwithstanding the foregoing sentence, Design-Builder shall beresponsible for raw materials and consumables to the extent such amountsprovided by Owner are destroyed or damaged (as opposed to consumed in theordinary course of start-up and testing) by Design-Builder or its personnelduring start-up and testing. Design-Builder shall supervise and direct Owner’semployees and Owner Operator’s personnel who shall participate in the start-up activitieswith Design-Builder’s personnel to become familiar with all aspects of thePlant. Owner and the Independent Engineer may witness start-up and testingactivities.  Performance testing will beconducted in accordance with the provisions of Section 7.2 hereof.

## **6.4         **SubstantialCompletion.

### **6.4.1      **Substantial Completion of the entire Work shall be achieved no laterthan six hundred thirty-five (635) Days after the date of the Notice toProceed, 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 onwhich the Work is sufficiently complete so that Owner can occupy and use thePlant for its intended purposes. Substantial Completion shall be attained at the point in time when thePlant is ready to grind the first batch of corn and begin operation for itsintended use.  No production isguaranteed on the date of Substantial Completion.

### **6.4.3      **Procedures.  Design-Builder shallnotify Owner in writing when it believes Substantial Completion has beenachieved 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 issubstantially complete in accordance with the requirements of the ContractDocuments.  If such Work is deemedsubstantially complete, Design-Builder shall prepare and issue a “Certificate of Substantial Completion” forthe Work that will set forth (i) the date of Substantial Completion, (ii) theremaining items of Work that have to be completed before Final Payment (“PunchList”), (iii) provisions (to the extent not already provided in thisAgreement) establishing Owner’s and Design-Builder’s responsibility for theProject’s security, maintenance, utilities and insurance pending Final Payment,and (iv) an acknowledgment that warranties with respect to the Work commence onthe date of Substantial Completion, except as may otherwise be noted in theCertificate of Substantial Completion. Upon Substantial Completion of the entire Work and satisfaction of thePerformance Guarantee Criteria listed in Exhibit A, Owner shall release toDesign-Builder all retained amounts, less an amount equal to One Hundred FiftyPercent (150%) of the reasonable value of all remaining or incomplete items ofWork as noted in the Certificate of Substantial Completion, and less an amountequal 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 entireWork; provided, that (i) a Certificate of Substantial completion has beenissued for the portion of Work addressing the items set forth in Section 6.4.3above, (ii) Design-Builder and Owner have, to the extent required, obtained theconsent 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 thatOwner’s use or occupancy will not interfere with Design-Builder’s completion ofthe remaining Work in accordance with the Contract Documents.

### **6.4.4      **Early Completion Bonus.  IfSubstantial Completion is attained within four hundred eighty-five (485) Daysafter the date of the Notice to Proceed, Owner shall pay Design-Builder at thetime of Final Payment under Section 10.3 hereof an early completion bonus (“EarlyCompletionBonus”) of Twenty Thousand Dollars ($20,000.00) per Dayfor 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 inexcess 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 ofFinal Payment is subject to release of funds by senior lender.  If senior lender does not allow release offunds 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 payableby Owner to Design-Builder, accruing interest at Ten Percent (10%).  On each anniversary of the note, any unpaidaccrued interest shall be converted to principal and shall accrue interest asprincipal thereafter.  Owner shall pay saidpromissory 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 anydistributions to or for the benefit of its owners (shareholders, members,partners, etc.).  All payments shall beapplied first to accrued interest and then to principal.

## **6.5         **FinalCompletion.

### **6.5.1      **Final Completion of the Work shall be achieved within ninety (90) Daysafter the earlier of the actual date of Substantial Completion or the ScheduledSubstantial Completion Date (the “Final Completion Date”).

### **6.5.2      **“Final Completion” shall be achieved when the Owner reasonablydetermines that the following conditions have been met:

#### (a)                                  Substantial Completion has been achieved;

#### (b)                                 any outstanding amounts owed byDesign-Builder to Owner have been paid in full;

#### (c)                                  the items identified on the Punch List andall 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 byDesign-Builder have been obtained;

#### (f)                                    the information in Section 6.5.4 has beenprovided to Owner;

(g)                                 releaseand waiver of all claims and liens from Design-Builder and Subcontractors havebeen provided; and

(h)                                 thePerformance 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 amountequal 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 inconnection with the Work which will in any way affect Owner’s interests;

#### (b)                                 a general release executed by Design-Builderwaiving, upon receipt of final payment by Design-Builder, all claims forpayment, additional compensation, or damages for delay, except those previouslymade to Owner in writing and remaining unsettled at the time of Final Paymentprovided such general release shall not waive defenses to claims that may beasserted 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 andsubject in all respects to Article 5.

### **6.5.5      **Upon making Final Payment, Owner waives all claims againstDesign-Builder except claims relating to (i) Design-Builder’s failure tosatisfy its payment obligations, (ii) Design-Builder’s failure to complete theWork consistent with the Contract Documents, including defects appearing withinone (1) year after Substantial Completion, and (iii) the terms of anywarranties required by the Contract Documents.

**6.6         **PostCompletion Support.  Adequate personnelto complete all Work within the Contract Time(s) will be maintained on-Site byDesign-Builder or a Subcontractor until Final Completion has beenachieved.  In addition to prosecuting theWork until Final Completion has

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been achieved,Design-Builder or its Subcontractor will provide one (1) month of on-Siteoperational support for Owner’s and Owner Operator’s personnel after successfulcompletion of the Performance Tests and, from the date of SubstantialCompletion, will provide six (6) months of off-Site technical and operatingprocedure support by telephone and other electronic data transmission andcommunication.

**Article 7**

**Performance Testing and Liquidated Damages**

**7.1         **PerformanceGuarantee.  The Design-Builder guaranteesthat the Plant will meet the performance criteria listed in Exhibit A (the “PerformanceGuarantee Criteria”) during a performance test conducted and concludedpursuant to the terms hereof not later than ninety (90) Days after the date ofSubstantial Completion.  If there is aperformance shortfall, Design-Builder will pay all design and constructioncosts associated with making the necessary corrections.  Design-Builder retains the right to use itssole discretion in determining the method (which shall be in accordance withgenerally accepted construction and design-build standards of the fuel ethanolindustry in the Midwest United States) to remedy any performance relatedissues.

## **7.2         **PerformanceTesting.

### **7.2.1      **The Design-Builder shall direct and supervise the tests and, ifnecessary, the retests of the Plant using Design-Builder’s supervisorypersonnel and the Air Emissions Tester shall conduct the air emissions test, ineach case, in accordance with the testing procedures set forth in Exhibit A(the “Performance Tests”), to demonstrate, at a minimum, compliance withthe Performance Guarantee Criteria. Owner is responsible for obtaining Air Emissions Tester and for ensuringAir Emissions Tester’s timely performance. Design-Builder shall cooperate with the Air Emissions Tester tofacilitate performance of all air emissions tests.  Design-Builder shall not be held responsiblefor the actions of Owner’s employees and third parties involved in thePerformance Testing, including but not limited to Air Emissions Tester.

### **7.2.2      **No later than thirty (30) Days prior to the earlier of the ScheduledSubstantial Completion Date or Substantial Completion, Design-Builder shallprovide to Owner for review a detailed testing plan for the Performance Tests(other than for air emissions).  Ownerand Design-Builder shall agree upon a testing plan that shall be consistentwith 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 dateDesign-Builder intends to commence the Performance Tests and shall notify theOwner upon commencement of the Performance Tests. Owner and IndependentEngineer each have the right to witness all testing, including the PerformanceTests and any equipment testing, whether at the Site or at the Subcontractor’sor equipment supplier’s premises during the course of this Agreement.  Notwithstanding the foregoing sentence, Ownershall bear the costs of providing a witness to any such testing and all suchwitnesses shall comply at all times with Design-Builder’s, Subcontractor’s orequipment supplier’s safety and security procedures and other

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### reasonable requirements, andotherwise conduct themselves in a manner that does not interfere withDesign-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 testdata, calculations and certificates indicating the results of the PerformanceTests and, within five (5) business days of Owner’s receipt of such results,Owner, Independent Engineer and Design-Builder will jointly inspect such Workand review the results of the Performance Tests to verify that the PerformanceGuarantee Criteria have been met.   IfOwner or Independent Engineer reasonably determines that the PerformanceGuarantee Criteria have not been met, Owner shall notify Design-Builder thereasons why Owner determined that the Performance Guarantee Criteria have notbeen met and Design-Builder shall promptly take such action or perform suchadditional work as will achieve the Performance Guarantee Criteria and shallissue to the Owner another notice in accordance with Section 7.2.2; providedhowever that if the notice relates to a retest, the notice may be provided noless than two (2) business days prior to the Performance Tests.  Such procedure shall be repeated as necessaryuntil Owner and Independent Engineer verifies that the Performance GuaranteeCriteria have been met.

### **7.2.4      **If Owner, for whatever reason, prevents Design-Builder fromdemonstrating the Performance Guarantee Criteria within thirty (30) Days ofDesign-Builder’s notice that the Plant is ready for Performance Testing, thenDesign-Builder shall be excused from demonstrating compliance with thePerformance Guarantee Criteria during such period of time that Design-Builderis prevented from demonstrating compliance with the Performance GuaranteeCriteria; provided however that Design-Builder will be deemed to have fulfilledall of its obligations to demonstrate that the Plant meets the PerformanceGuarantee Criteria should such period of time during which Design-Builder isprevented from demonstrating the Performance Criteria exceed thirty (30) Daysor extend beyond the Final Completion Date.

## **7.3         **LiquidatedDamages.

### **7.3.1      **Design-Builder understands that if Final Completion is not attained bythe Final Completion Date, Owner will suffer damages which are difficult todetermine and accurately specify. Design-Builder agrees that if Final Completion is not attained by theend of the Final Completion Date, Design-Builder shall pay Owner TwentyThousand Dollars ($20,000.00) as liquidated damages, and not as a penalty, foreach Day that Final Completion extends beyond the Final Completion Date.  Owner, at its discretion, may elect to offsetany 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 damageswere incurred.  The liquidated damagesprovided 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 whichare occasioned solely by any delay in achieving Final Completion.

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### **7.3.2      **Maximum Liquidated Damages**.**  Design-Builder’s liability for liquidateddamages under Section 7.3.1 shall be capped at and shall not exceed One MillionDollars ($1,000,000).

### **7.3.3      **The liquidated damages provided herein shall be in lieu of allliability for any and all extra costs, losses, loss of profits, expenses,claims, penalties and any other damages, whether special or consequential, andof whatsoever nature incurred by Owner which arise solely due to a delay inachieving Final Completion by the Final Completion Date; provided that suchliquidated damages shall not in any way detract from or limit Owner’s remediesor Design-Builder’s liabilities in connection with any default byDesign-Builder under Section 15.2 hereof.

### **7.3.4      **Design-Builder shall not be liable for liquidated damages during anyperiod of time for which an extension of the Scheduled Substantial CompletionDate and/or  Final Completion Date isavailable pursuant to Article 12.

## **7.4         **Bonds andOther 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 formattached as Exhibit H (the “Performance Bond”) in an initial amountequivalent to the Contract Price.** **Owner shall pay on the date ofFinancial Closing all costs of obtaining such bond, plus pay Design-Builder afee of seven and one half percent (7.5%) for obtaining such bond, such fee tobe calculated by multiplying seven and one half percent (7.5%) times the costof the Performance Bond.  Any amountspayable to the surety due to Design-Builder’s default under this Agreement orthe Performance Bond shall be for the account of Design-Builder.

#### (a)                                  Design-Builder shall post additional bonds orsecurity (which must be in form and substance satisfactory to Owner and theLenders) or shall increase the amount of the Performance Bond by the amount ofany increases to the Contract Price; provided, however, that Owner shall payall costs of obtaining such bonds or security, plus pay Design-Builder a fee ofseven and one half percent (7.5%) for obtaining such bonds or security, suchfee to be calculated by multiplying seven and one half percent (7.5%) times thecost of the bonds or security.

#### (b)                                 The Performance Bond shall secure theDesign-Builder’s obligations to complete the Work in accordance with thisAgreement.

### **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 formattached as Exhibit I (the “Payment Bond”) in an initial amountequivalent to the Contract Price.** **Owner shall pay on the date ofFinancial Closing all costs of obtaining such bond, plus pay Design-Builder afee of seven and one half percent (7.5%) for obtaining such bond, such fee tobe calculated by multiplying seven and one half percent (7.5%) times the costof the Payment Bond but any

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### amounts payable to the surety due to Design-Builder’s default underthis Agreement or the Payment Bond shall be for the account of Design-Builder.

#### (a)                                  Design-Builder shall post additional bonds orsecurity (which must be in form and substance reasonably satisfactory to Ownerand the Lenders) or shall increase the amount of the Payment Bond by the amountof any increase to the Contract Price.

#### (b)                                 The Payment Bond shall secure theDesign-Builder’s obligations to pay its Subcontractors, vendors and suppliers.

#### (c)                                  The Payment Bond shall provide the conditionsupon which Subcontractors, vendors and suppliers may draw upon such PaymentBond following Design-Builder’s failure to pay amounts due such Subcontractors,vendors and suppliers.

**Article 8**

**Warranties**

**8.1         **Design-BuilderWarranty.  Design-Builder warrants toOwner that the construction, including all materials and equipment furnished aspart of the construction, shall be new, of good quality, in conformance withthe Contract Documents and all Legal Requirements, free of defects in materialsand workmanship.  Design-Builder’swarranty obligation excludes defects caused by abuse, alterations, or failureto maintain the Work by persons other than Design-Builder or anyone for whoseacts Design-Builder may be liable. Nothing in this warranty is intended tolimit any Manufacturer’s Warranty which provides Owner with greater warrantyrights than set forth in this Section 8.1 or the Contract Documents.  Design-Builder will provide to Owner allmanufacturers’ and Subcontractors’ warranties upon the earlier of SubstantialCompletion or termination of this Agreement.  Owner’s failure to comply with all Operating Procedures shall void thoseguarantees, representations and warranties, whether expressed or implied, thatwere given by Design-Builder to Owner, concerning the performance of the Plantthat are reasonably determined by Design-Builder to be affected by suchfailure.  If Design-Builder reasonablydetermines that all damage caused by such failure can be repaired and Ownermakes all repairs needed to correct such damage, as reasonably determined byDesign-Builder, all guarantees, representations and warranties shall bereinstated for the remaining term thereof, if any, from the date of the repair.

## **8.2         **Correction ofDefective Work.

### **8.2.1      **Design-Builder agrees to correct any Work that is found to notbe in conformance with the Contract Documents, including that part of the Worksubject to Section 8.1, within a period of one (1) year from the date ofSubstantial Completion of the Work; provided that Owner must report suchnon-conformance within ten (10) days of the earlier of (i)  the date that Owner becomes aware of suchfailure or non-conformance, or (ii) the date Owner should have become aware ofsuch failure or non-conformance had Owner acted in a reasonable manner andoperated pursuant to applicable operating manuals, inspection requirements, and

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### maintenance logs as provided byDesign-Builder or the appropriate vendor; and that such one (1)-year periodshall be extended one (1) Day for any part of the Work that is found to be notin conformance with the Contract Documents for each Day that such part of theWork is not operating in conformity with the Contract Documents, includingany  time during which any part of theWork is repaired or replaced pursuant to this Article 8.

### **8.2.2      **Design-Builder shall, within seven (7) Days of receipt of writtennotice from Owner that the Work is not in conformance with the ContractDocuments, take meaningful steps to commence correction of such nonconformingWork, including the correction, removal or replacement of the nonconformingWork and correction or replacement of any Work damaged by such nonconformingWork.  If Design-Builder fails tocommence the necessary steps within such seven (7) Day period or fails tocontinue to perform such steps through completion, Owner, in addition to anyother remedies provided under the Contract Documents, may provideDesign-Builder with written notice that Owner will commence or assumecorrection of such nonconforming Work and repair of such damaged Work with itsown resources.  If, following suchwritten notice, Owner performs such corrective and repair Work, Design-Buildershall be responsible for all reasonable costs incurred by Owner in performingthe correction.  If, following suchwritten notice, Owner performs such corrective and repair Work, Design-Buildershall be responsible for all reasonable costs incurred by Owner in performingthe correction. If the nonconforming Work creates an emergency requiring animmediate response, the seven (7) Day periods identified herein shall beinapplicable and Design-Builder shall immediately correct, remove or replacethe nonconforming Work.

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

**Article 9**

**Contract Price**

**9.1         **ContractPrice.  As full consideration toDesign-Builder for full and complete performance of the Work and all costsincurred in connection therewith, Owner shall pay Design-Builder in accordancewith the terms of Article 10, the sum of One Hundred Twenty-two Million FiveHundred Forty-two Thousand Three Hundred Sixty-three Dollars ($122,542,363.00)(“Contract Price”), subject to adjustments made in accordance withArticle 13.  The Contract Price does notinclude the water pre-treatment system and the fire protection system whichshall be provided by Design-Builder pursuant to a separate side-letteragreement executed by Owner and Design-Builder at Design-Builder’s standardtime plus material rates during the relevant time period and at the relevantlocale.  Owner acknowledges that it hastaken no action which would impose a union labor or prevailing wage requirementon Design-Builder, Owner or the Project. The Parties acknowledge and agree that if after the date hereof, an Owner’saction, a change in Applicable Law, or a Governmental Authority acting pursuantto a change in Applicable Law shall require Design-Builder to employ unionlabor or compensate labor at prevailing wages, the Contract Price shall beadjusted upwards to include any increased

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costs associatedwith such labor or wages.  Suchadjustment shall include, but not be limited to, increased labor,subcontractor, and material and equipment costs resulting from any union orprevailing wage requirement; provided, however, that if an option is madeavailable to either employ union labor, or to compensate labor at prevailingwages, such option shall be at Design-Builder’s sole discretion and that ifsuch option is executed by Owner without Design-Builder’s agreement,Design-Builder shall have the right to terminate this agreement and shall beentitled to compensation pursuant to Section 15.3.1 hereof.

**9.2         **Effectof Construction Cost Index Increase on Contract Price.  The Contract Price shall be subject toadjustment by Design-Builder as follows:

### **9.2.1      **Construction Cost Index Increase**. **The Baseline Index for thisAgreement shall be 7882.53 (October 2006) (“Baseline Index”).  If between the Effective Date and the date onwhich a valid Notice to Proceed is given to Design-Builder the ConstructionCost Index published by Engineering News-Record Magazine (“CCI”)increases over the Baseline Index, Design-Builder shall notify Owner in writingthat it is adjusting the Contract Price and the Contract Price shall beincreased by a percentage amount equal to the percentage increase in CCI.

# **Article 10**

# **Payment Procedures**

## **10.1       **Payment atFinancial Closing Prior to Notice to Proceed.

### **10.1.1    **Commitment Fee**. **As soon as possible afterexecution 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 anon-refundable commitment fee (“Commitment Fee”).  The Commitment Fee will be credited againstthe Contract Price upon the acceptance of Notice to Proceed pursuant to Section6.2.  If Owner fails to provide timelyNotice to Proceed pursuant to Section 6.2, Design-Builder, in addition to otherremedies available under the Agreement, shall retain the full amount of theCommitment Fee and Owner shall not be entitled to any refund or credit.  Should Owner fail to pay the Commitment Feeas provided herein, Design-Builder shall have the right to terminate thisAgreement 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 TwentyMillion Dollars ($20,000,000.00), as a mobilization fee, as soon as allowed byits organizational documents and any other agreements or Laws and at thelatest, at the earlier to occur of Financial Closing or the issuance of aNotice to Proceed. The Twenty Million Dollar ($20,000,000.00) mobilization feepayment 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 Noticeto Proceed pursuant to Section 6.2, Design-Builder shall submit to Owner, on orbefore the twenty-fifth (25th) Day of each month, its request for payment forall Work performed and not paid for during the previous Pay Period (the “Applicationfor Payment”).  The Application forPayment shall be substantially in the form attached hereto as Exhibit M.  Design-Builder shall submit to Owner, alongwith each Application for Payment, signed lien waivers, substantially in theform attached hereto as Exhibit N, received from Subcontractors and suppliers forthe Work included in the Application for Payment submitted for the immediatelypreceding Pay Period and for which payment has been received..

### **10.2.2    **The Application for Payment shall constitute Design-Builder’srepresentation that the Work has been performed consistent with the ContractDocuments and has progressed to the point indicated in the Application forPayment.  The Parties agree that the workcompleted at the Site, the comparison of the Application for Payment againstthe work schedule, and the Schedule of Values shall provide sufficientsubstantiation of the accuracy of the Application for Payment and that noadditional documentation will be provided to Owner or Independent Engineer insupport of an Application for Payment. Title to the Work, including Work reflected in an Application forPayment which is in process, is in transit, is in storage, or has beenincorporated into the Site, shall pass to Owner free and clear of all claims,liens, encumbrances, and security interests upon Design-Builder’s receipt ofpayment therefor.

### **10.2.3    **Within ten (10) Days after Owner’s receipt of each Application forPayment, Owner shall pay Design-Builder all amounts properly due, but in eachcase less the total of payments previously made, and less amounts properlywithheld under this Agreement.

### **10.2.4    **The Application for Payment may request payment for equipment andmaterials not yet incorporated into the Project; provided that (i) Owner issatisfied that the equipment and materials are suitably stored at either theSite or another acceptable location, (ii) the equipment and materials areprotected by suitable insurance, and (iii) upon payment, Owner will receive theequipment and materials free and clear of all liens and encumbrances except forliens of the Lenders and other liens and encumbrances permitted under theFinancing Documents.

### **10.2.5    **Schedule of Values**. **The schedule of values attachedhereto as Exhibit E (the “Schedule of Values”) (i) subdivides the Workinto its respective parts, (ii) includes values for all items comprising theWork, and (iii) serves as the basis for monthly progress payments made toDesign-Builder throughout the Work.

### **10.2.6    **Withholding of Payments.  On orbefore the date set forth in Section 10.2.3, Owner shall pay Design-Builder allamounts properly due.  If Ownerdetermines that Design-Builder is not entitled to all or part of an Applicationfor Payment, it will notify Design-Builder in writing at least five (5) Daysprior to the date payment is due.  Thenotice shall indicate the specific amounts Owner intends to withhold, thereasons and contractual basis for the withholding, and the specific measuresDesign-Builder must take to rectify Owner’s 

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### concerns.  Design-Builder andOwner will attempt to resolve Owner’s concerns prior to the date payment isdue.  If the Parties cannot resolve suchconcerns, Design-Builder may pursue its rights under the Contract Documents,including those under Article 19.  Notwithstandinganything to the contrary in the Contract Documents, Owner shall payDesign-Builder all undisputed amounts in an Application for Payment within thetimes 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-sevenThousand One Hundred Eighteen Dollars ($6,127,118.00). Once Six Million OneHundred Twenty-seven Thousand One Hundred Eighteen Dollars ($6,127,118.00) hasbeen retained, in total, Owner will not retain any additional amounts from anysubsequent payments. Owner will also reasonably consider reducing retainage forSubcontractors completing their work early in the Project.  Upon Substantial Completion of the Work Ownershall release to Design-Builder all retained amounts less an amount equal tothe reasonable value of all remaining or incomplete items of Work and less anamount equal to the value of any Subcontractor lien waivers not yet obtained,as noted in the Certificate of Substantial Completion, provided that suchpayment shall only be made if Design-Builder has met the Performance GuaranteeCriteria listed in Exhibit A.

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

## **10.4       **Failure to PayAmounts Due.

### **10.4.1    **Interest.  Payments which are dueand unpaid by Owner to Design-Builder, whether progress payments or FinalPayment, shall bear interest commencing five (5) Days after payment is due atthe rate of eighteen percent (18%) per annum, or  the maximum rate allowed by Law.

### **10.4.2    **Right to Suspend Work.  If Ownerfails to pay Design-Builder any undisputed amount that becomes due,Design-Builder, in addition to all other remedies provided in the ContractDocuments, may stop Work pursuant to Section 15.4 hereof.  All payments properly due and unpaid shallbear 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 Paymentpursuant to Section 10.3 hereof shall void any and all warranties, whetherexpress or implied, provided by Design-Builder pursuant to this Agreement.

**10.5       **Design-Builder’sPayment Obligations.  Design-Builder willpay Design Consultants and Subcontractors, in accordance with its contractualobligations to such parties, all the amounts Design-Builder has received fromOwner on account of their work.  Design-Builderwill impose similar requirements on Design Consultants and Subcontractors topay those parties with whom they have contracted.  Design-Builder will indemnify and defendOwner against any claims for payment and mechanic’s liens as set forth inSection 14.2 hereof.

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

# **Article 11**

# **Hazardous Conditions and Differing Site Conditions**

## **11.1       **HazardousConditions.

### **11.1.1    **Unless otherwise expressly provided in the Contract Documents to bepart of the Work, Design-Builder is not responsible for any HazardousConditions encountered at the Site.  Uponencountering any Hazardous Conditions, Design-Builder will stop Workimmediately in the affected area and as promptly as practicable notify Ownerand, 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 orhandle in any way (except in case of emergency) any Hazardous Conditionsencountered at the Site without prior written approval of Owner.

### **11.1.2    **Upon receiving notice of the presence of suspected HazardousConditions, Owner shall take the necessary measures required to ensure that theHazardous Conditions are remediated or rendered harmless.  Such necessary measures shall include Ownerretaining Qualified Independent Experts to (i) ascertain whether HazardousConditions have actually been encountered, and, if they have been encountered,(ii) prescribe the remedial measures that Owner is required under applicableLegal Requirements to take with respect to such Hazardous Conditions in orderfor the Work to proceed.  Owner’s choiceof such Qualified Independent Experts shall be subject to the prior approval ofDesign-Builder, which approval shall not be unreasonably withheld or delayed.

### **11.1.3    **Design-Builder shall be obligated to resume Work at the affected areaof the Project only after Owner’s Qualified Independent Expert provides it withwritten certification that (i) the Hazardous Conditions have been removed orrendered harmless, and (ii) all necessary approvals have been obtained from allgovernment entities having jurisdiction over the Project or Site and aremediation 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, toan adjustment in its Contract Price and/or Contract Time(s) to the extentDesign-Builder’s cost and/or time of performance have been adversely impactedby the presence of Hazardous Conditions, provided that such Hazardous Materialswere not introduced to the Site by Design-Builder, Subcontractors or anyone forwhose acts they may be liable.

### **11.1.5****    **To the fullest extent permitted by Law, Owner shall indemnify, defendand hold harmless Design-Builder, Design Consultants, Subcontractors, anyoneemployed 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 outof or resulting from the presence, removal or remediation of HazardousConditions at the Site.

### **11.1.6****    **Notwithstanding the preceding provisions of this Section 11.1, Owner isnot responsible for Hazardous Conditions introduced to the Site byDesign-Builder, Subcontractors or anyone for whose acts they may beliable.  Design-Builder shall indemnify,defend and hold harmless Owner and Owner’s officers, directors, employees andagents from and against all claims, losses, damages, liabilities and expenses,including attorneys’ fees and expenses, arising out of or resulting from thoseHazardous Conditions introduced to the Site by Design-Builder, Subcontractorsor anyone for whose acts they may be liable.

## **11.2****       **Differing SiteConditions; Inspection.

### **11.2.1****    **Concealed or latent physical conditions or subsurface conditions at theSite that (i) differ from the conditions indicated in the Contract Documents,or (ii) are of an unusual nature, differing from the conditions ordinarilyencountered and generally recognized as inherent in the Work are collectivelyreferred to herein as “Differing Site Conditions.”  If Design-Builder encounters a Differing SiteCondition, Design-Builder will be entitled to an adjustment in the Contract Priceand/or Contract Time(s) to the extent Design-Builder’s cost and/or time ofperformance are adversely impacted by the Differing Site Condition.

### **11.2.2****    **Upon encountering a Differing Site Condition, Design-Builder shallprovide prompt written notice to Owner of such condition, which notice shallnot be later than fourteen (14) business days after such condition has beenencountered.  Design-Builder shall, tothe extent reasonably possible, provide such notice before the Differing SiteCondition has been substantially disturbed or altered.

**Article 12**

**Force Majeure;Change in Legal Requirements**

**12.1****       **ForceMajeure Event.  A force Majeure eventshall mean a cause or event beyond the reasonable control of, and without thefault or negligence of a Party claiming Force Majeure, including, withoutlimitation, an emergency, floods, earthquakes, hurricanes, tornadoes, adverseweather conditions not reasonably anticipated or acts of God; sabotage;vandalism beyond that

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which couldreasonably be prevented by a Party claiming Force Majeure; terrorism; war;riots; fire; explosion; blockades; insurrection; strike; slow down or labordisruptions (even if such difficulties could be resolved by conceding to thedemands of a labor group); delay in the delivery of materials or equipment thatis beyond the control of a Party claiming Force Majeure, and action or failureto take action by any Governmental Authority after the Effective Date(including the adoption or change in any rule or regulation or environmentalconstraints lawfully imposed by such Governmental Authority), but only if suchrequirements, actions, or failures to act prevent or delay performance; andinability, despite due diligence, to obtain any licenses, permits, or approvalsrequired by any Governmental Authority (any such event, a “Force MajeureEvent”).   Economic hardship (exceptto the extent caused by a Force Majeure Event) is explicitly excluded as aForce Majeure Event and is solely the responsibility of the affected party.

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

#### (a)           the nonperforming Party, within forty-eight (48) hours after thenonperforming Party actually becomes aware of the occurrence and impact of theForce Majeure Event, gives the other Party written notice describing the eventor circumstance in detail, including an estimation of its expected duration andprobable impact on the performance of the affected Party’s obligationshereunder and continues to furnish timely regular reports with respect theretoduring 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 longerduration than is reasonably required by the Force Majeure Event;

#### (c)           the obligations of either Party that arose before the occurrencecausing the suspension of performance and the performance that is not preventedby the occurrence, shall not be excused as a result of such occurrence;

#### (d)           the nonperforming Party uses its best efforts to remedy its inabilityto perform and mitigate the effect of such event and resumes its performance atthe earliest practical time after cessation of such occurrence or until suchtime that performance is practicable;

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#### (e)           when the nonperforming Party is able to resume performance of itsobligations under the Contract Documents, that Party shall give the other Partywritten notice to that effect; and

#### (f)            Design-Builder shall be entitled to aDay-for-Day time extension for those events set forth in Section 12.1 to theextent the occurrence of such event delayed Design-Builder’s performance of itsobligations under this Agreement.

**12.3****       **Changein Legal Requirements.  The ContractPrice and/or the Contract Time(s) shall be adjusted to compensateDesign-Builder for the effects of any changes to the Legal Requirements that occurafter the date of this Agreement and as a result of such change, theperformance of the Work is adversely affected. Such effects may include, without limitation, revisions Design-Builderis required to make to the Construction Documents because of changes in LegalRequirements.

**12.4****       **Time Impact AndAvailability.  If the Design-Builder isdelayed at any time in the commencement or progress of the Work due to a delayin the delivery of, or unavailability of, essential materials or labor to theProject as a result of a significant industry-wide economic fluctuation ordisruption beyond the control of and without the fault of the Design-Builder orits Subcontractors which is experienced or expected to be experienced bycertain markets providing essential materials and equipment to the Projectduring the performance of the Work and such economic fluctuation or disruptionadversely impacts the price, availability, and delivery timeframes of essentialmaterials, equipment, or labor (such event an “Industry-Wide Disruption”),the Design-Builder shall be entitled to an equitable extension of the ContractTime(s) on a day-for-day basis equal to such delay.  The Owner and Design-Builder shall undertakereasonable steps to mitigate the effect of such delays.  Notwithstanding any other provision to thecontrary, the Design-Builder shall not be liable to the Owner for any expenses,losses or damages arising from a delay, or unavailability of, essentialmaterials or labor to the Project as a result of an Industry-Wide Disruption.

**12.5****       **Effectof Industry-Wide Disruption on Contract Price. In the event of an Industry-Wide Disruption, the Contract Price shall beadjusted to allocate the risk of such market conditions between the Owner andDesign-Builder through the following equitable escalation in the ContractPrice:

### **12.5.1****    **If during the course of the Project the CCI increases over the BaselineIndex established in Section 9.2.1, Design-Builder shall notify Owner inwriting that it is adjusting the Contract Price.

### **12.5.2****    **In the event that the CCI increases over the Baseline Index, theContract Price shall be adjusted to reflect such increase, but only withrespect to those Applications for Payment submitted after the date on whichwritten 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 thisArticle 12 shall be made in accordance with the terms of this Agreement.

**Article 13**

**Changes to theContract Price and Scheduled Completion Dates**

## **13.1****       **Change Orders.

### **13.1.1****    **A change order (“Change Order”) is a written instrument issuedafter execution of this Agreement signed by Owner and Design-Builder, statingtheir 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 shallbe performed under the applicable conditions of the Contract Documents.  Owner and Design-Builder shall negotiate ingood faith and as expeditiously as possible the appropriate adjustments forsuch changes.  Prior to incurring anycosts with respect to estimating services, design services and any otherservices involved in the preparation of the proposed revisions to the ContractDocuments, Design-Builder must obtain the written approval of Owner for suchcosts.

### **13.1.3****    **If Owner requests a proposal for a change in the Work fromDesign-Builder and subsequently elects not to proceed with the change, a ChangeOrder shall be issued to reimburse Design-Builder for reasonable costs incurredfor estimating services, design services and any other services involved in thepreparation of proposed revisions to the Contract Documents; provided that suchcosts were previously approved by Owner pursuant to Section 13.1.2.

## **13.2****       **Contract PriceAdjustments.

### **13.2.1****    **The increase or decrease in Contract Price resulting from a change inthe Work shall be a mutually accepted lump sum, properly itemized and supportedby sufficient substantiating data to permit evaluation by Owner.

### **13.2.2****    **If Owner and Design-Builder disagree upon whether Design-Builder isentitled to be paid for any services required by Owner, or if there are anyother disagreements over the scope of Work or proposed changes to the Work,Owner and Design-Builder shall

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### resolvethe disagreement pursuant to Article 19 hereof. As part of the negotiation process, Design-Builder shall furnish Ownerwith a good faith estimate of the costs to perform the disputed services inaccordance with Owner’s interpretations. If the Parties are unable to agree and Owner expects Design-Builder toperform the services in accordance with Owner’s interpretations, Design-Buildershall proceed to perform the disputed services, conditioned upon Owner issuinga written order to Design-Builder (i) directing Design-Builder to proceed, and(ii) specifying Owner’s interpretation of the services that are to beperformed.  If this occurs,Design-Builder shall be entitled to submit in its Applications for Payment anamount equal to fifty percent (50%) of its reasonable estimated direct cost toperform the services, and Owner agrees to pay such amounts, with the expressunderstanding that (x) such payment by Owner does not prejudice Owner’s rightto 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’sright to seek full payment of the disputed services if Owner’s order is deemedto be a change to the Work.

**13.3****       **Emergencies.  In any emergency affecting the safety ofpersons and/or property, Design-Builder shall act, at its discretion, toprevent threatened damage, injury or loss and shall notify the Owner as soon aspracticable and in any event within forty-eight (48) hours after Design-Builderbecomes aware of the emergency.  Thenotice to Owner shall describe the emergency in detail, including a reasonableestimation of its expected duration and impact, if any, on the performance ofDesign-Builder’s obligations hereunder. Any change in the Contract Price and/or the Contract Time(s) on accountof emergency work shall be determined as provided in this Article 13.

**13.4****       **Failureto Complete Owner’s Milestones.  Thedates when Owner’s obligations are required to be completed to enableDesign-Builder to achieve the Contract Time(s) are identified in Table 3 inExhibit C (“Owner’s Milestones”). The Contract Time(s) shall be revised to provide a Day-for-Day extensionof the Contract Time(s) for completion of the Work for each full Day duringwhich Owner fails to timely complete its obligations pursuant to the Owner’sMilestones.  In the event of Owner’sfailure to timely complete its obligations pursuant to Owner’s Milestonesresults in the extension of the Contract Time(s), the Contract Price shall beadjusted to compensate Design-Builder for the effects, if any, of such change,that are established by Design-Builder and could not have reasonably beenmitigated by Design-Builder.

**Article 14**

**Indemnity**

**14.1****       **TaxClaim Indemnification.  If, in accordancewith Owner’s direction, an exemption for all or part of the Work is claimed fortaxes, Owner shall indemnify, defend and hold harmless Design-Builder (and itsofficers, directors, agents, successors and assigns) from and against any andall damages, claims costs, losses, liabilities, and expenses (includingpenalties, interest, fines, taxes of any kind, attorneys’ fees, accountants andother professional fees and associated expenses) incurred by Design-Builder inconnection with or as a result of any action taken by Design-Builder inaccordance with Owner’s directive.

**14.2****       **PaymentClaim Indemnification.  To the extentDesign-Builder has received payment for the Work, Design-Builder shallindemnify, defend and hold harmless Owner

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IndemnifiedParties from any claims or mechanic’s liens brought against Owner IndemnifiedParties or against the Project as a result of the failure of Design-Builder, orthose for whose acts it is responsible, to pay for any services, materials,labor, equipment, taxes or other items or obligations furnished or incurred foror in connection with the Work.  Withinthree (3) business days of receiving written notice from Owner that such aclaim or mechanic’s lien has been filed, Design-Builder shall commence to takethe 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-Builderliable for costs and expenses incurred, including attorneys’ fees.

## **14.3****       **Design-Builder’sGeneral Indemnification.

### **14.3.1****    **Design-Builder, to the fullest extent permitted by Law, shallindemnify, hold harmless and defend Owner, Lenders, Lenders’ Agent, and theirsuccessors, assigns, officers, directors, employees and agents (“OwnerIndemnified Parties”) from and against any and all losses, costs, damages,injuries, liabilities, claims, demands, penalties, interest and causes ofaction, including without limitation attorney’s fees (collectively, the “Damages”)for bodily injury, sickness or death, and property damage or destruction (otherthan to the Work itself) to the extent resulting from the negligent orintentionally wrongful acts or omissions of Design-Builder, Design Consultants,Subcontractors, anyone employed directly or indirectly by any of them or anyonefor 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 actsany 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 shallnot be limited by any limitation on the amount of damages, compensation orbenefits 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 OwnerIndemnified Parties from and against any and all Damages in favor of anyGovernmental Authority or other third party to the extent caused by (a) failureof Design-Builder or any Subcontractor to comply with Legal Requirements asrequired by this Agreement, or (b) failure of Design-Builder or anySubcontractor to properly administer and pay any taxes or fees required to bepaid by Design-Builder under this Agreement.

### **14.3.4****    **Nothing in the Design-Builder’s General Indemnification contained inthis Section 14.3 shall be read to limit in any way any entitlementDesign-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’sGeneral Indemnification.  Owner, to thefullest extent permitted by Law, shall indemnify, hold harmless and defendDesign-Builder and any of Design-Builder’s officers, directors, employees, oragents from and against claims, losses, damages, liabilities, includingattorneys’ fees and expenses, for bodily injury, sickness or death, andproperty damage or destruction (other than to the Work itself) to the extentresulting from the negligent acts, willful misconduct, or omissions of Owner,its officers, directors, employees, agents, or anyone for whose acts any ofthem may be liable.

### **14.4.1****    **Without limiting the generality of Section 14.4 hereof, Owner shallfully indemnify, save harmless and defend the Design-Builder and any ofDesign-Builder’s officers, directors, employees, or agents from and against anyand all Damages in favor of any Governmental Authority or other third party tothe extent caused by (a) failure of Owner or any of Owner’s agents to complywith Legal Requirements as required by this Agreement, or (b) failure of Owneror Owner’s agents to properly administer and pay any taxes or fees required tobe paid by Owner under this Agreement.

### **14.4.2****    **Nothing in the Owner’s General Indemnification contained in thisSection 14.4 shall be read to limit in any way any entitlement Owner shall haveto insurance coverage under any insurance policy, including any insurancepolicy required by either Party under this Agreement.

## **14.5****       **Patent and CopyrightInfringement.

### **14.5.1****    **Design-Builder shall indemnify, hold harmless and defend OwnerIndemnified Parties from and against any and all Damages based on any claimthat the Work, the Work Product, or any part thereof, or the operation or useof the Work or any part thereof, constitutes infringement of any United Statesor foreign patent, copyright or other intellectual property, now or hereafterissued. Owner shall give prompt written notice to Design-Builder of any suchaction or proceeding and will reasonably provide authority, information andassistance in the defense of same. Design-Builder shall indemnify and holdharmless Owner Indemnified Parties from and against all damages and costs,including but not limited to, attorneys’ fees and expenses awarded against Owneror Design-Builder in any such action or proceeding.

### **14.5.2****    **If Owner is enjoined from the operation or use of the Work, WorkProduct, the Project, or any part thereof, as the result of any patent orcopyright suit, claim, or proceeding, Design-Builder shall at its sole expensetake reasonable steps to procure the right to operate or use the Work, WorkProduct or the Project. If Design-Builder cannot so procure such right within areasonable time, Design-Builder shall promptly, at Design-Builder’s option andat Design-Builder’s expense, (i) modify the Work or Work Product so as to avoidinfringement of any such patent or copyright or (ii) replace the Work or WorkProduct with Work or Work Product that does not infringe or violate any suchpatent, copyright, trade secret, proprietary right, confidential information orintellectual 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 byOwner and not offered or recommended by Design-Builder to Owner, or (ii)arising from modifications to the Work by Owner or its agents after acceptanceof the Work, or (iii) relating to the operation or use of the Work by the Ownerin a manner not permitted by this Agreement or the ICM License Agreement. Ifthe suit, claim or proceeding is based upon events set forth in the precedingsentence, Owner shall defend, indemnify and hold harmless Design-Builder to thesame extent Design-Builder is obligated to defend, indemnify and hold harmlessOwner in Section 14.5.1 above.

# **Article 15**

# **Stop Work; Termination for Cause**

**15.1****       **Owner’sRight to Stop Work.  Owner may, withoutcause and for its convenience, order Design-Builder in writing to stop andsuspend the Work.  Such suspension shallnot exceed sixty (60) consecutive Days or aggregate more than ninety (90) Daysduring the duration of the Project. Design-Builder is entitled to seek an adjustment of the Contract Priceand/or the Contract Time(s) if its cost or time to perform the Work has beenadversely impacted by any suspension or stoppage of work by Owner.

## **15.2****       **Owner’s Right toPerform and Terminate for Cause.

### **15.2.1****    **If Design-Builder persistently fails to: (i) provide a sufficientnumber of skilled workers; (ii) supply the materials required by the ContractDocuments; (iii) comply with applicable Legal Requirements; (iv) timely pay,without cause, Design Consultants or Subcontractors; (v)  perform the Work with promptness anddiligence to ensure that the Work is completed by the Contract Time(s), as suchtimes may be adjusted in accordance with this Agreement; or (vi) performmaterial obligations under the Contract Documents; then Owner, in addition toany other rights and remedies provided in the Contract Documents or by law orequity, 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 terminatethe Agreement unless the problem cited is cured, or commenced to be curedwithin seven (7) Days of Design-Builder’s receipt of such notice.  If Design-Builder fails to cure, orreasonably commence to cure such problem and thereafter diligently pursue suchcure to completion, then Owner may give a second written notice toDesign-Builder of its intent to terminate following an additional seven (7) Dayperiod.  If Design-Builder, within suchsecond seven (7) Day period, fails to cure, or reasonably commence to cure suchproblem and thereafter diligently pursue such cure to completion, then Ownermay declare the Agreement terminated for default by providing written notice toDesign-Builder of such declaration.  If(i) the insurance coverage required by Design-Builder pursuant Article 17hereof is suspended or cancelled without Design-Builder providing immediatereplacement coverage (and, in any case, within fourteen (14) Days of theoccurrence thereof) meeting the requirements specified in Article 17 hereof;(ii) if applicable, a default occurs under the Performance Bond or the PaymentBond, or the Performance Bond or Payment Bond is revoked or terminated and suchPerformance Bond or the Payment Bond is not immediately

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### replaced (and, in any case, within fourteen (14) Days of the occurrencethereof) by Design-Builder with a Performance Bond or a Payment Bond providingat least the same level of coverage in a form and from a surety acceptable toOwner and Lenders, or the surety under the Performance Bond or Payment Bondinstitutes or has instituted against it a case under the United StatesBankruptcy Code; (iii) Design-Builder purports to make an assignment of thisAgreement in breach of the provisions of Section 21.1 hereof, or (iv) anyrepresentation or warranty made by Design-Builder under Section 18.1 hereof wasfalse or materially misleading when made, then Owner may terminate thisAgreement upon written notice to Design-Builder.

### **15.2.3****    **Upon declaring the Agreement terminated pursuant to Section 15.2.2above, Owner may enter upon the premises and take possession, for the purposeof completing the Work, of all materials, equipment, scaffolds, tools,appliances and other items thereon, which have been purchased for theperformance of the Work, all of which Design-Builder hereby transfers, assignsand sets over to Owner for such purpose, and to employ any person or persons tocomplete the Work and provide all of the required labor, services, materials,equipment and other items.  In the eventof such termination, Design-Builder shall not be entitled to receive anyfurther payments under the Contract Documents until the Work shall be finallycompleted in accordance with the Contract Documents.  At such time, if the unpaid balance of theContract Price exceeds the cost and expense incurred by Owner in completing theWork, Design-Builder will be paid promptly by Owner for Work performed prior toits default.  If Owner’s cost and expenseof completing the Work exceeds the unpaid balance of the Contract Price, thenDesign-Builder shall be obligated to promptly pay the difference to Owner.  Such costs and expense shall include not onlythe cost of completing the Work, but also losses, damages, costs and expenses,including attorneys’ fees and expenses, incurred by Owner in connection withthe 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 andthe limitation of liability set forth in Section 19.5 hereof.

### **15.2.4****    **If Owner improperly terminates the Agreement for cause, the terminationfor cause will be converted to a termination for convenience in accordance withthe provisions of Section 15.3.

## **15.3****       **Owner’s Right toTerminate for Convenience.

### **15.3.1****    **Upon ten (10) Days’ written notice to Design-Builder, Owner may, forits convenience and without cause, elect to terminate this Agreement.  In such event, Owner shall pay Design-Builderfor 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 Subcontractorsand Design Consultants;

#### (d)           overhead and profit margin in the amount of fifteen percent (15%) onthe sum of items (a) and (b) above; and

#### (e)           all retainage withheld by Owner on account of Work that has beencompleted in accordance with the Contract Documents.

### **15.3.2****    **If Owner terminates this Agreement pursuant to this Section 15.3 andproceeds to design and construct the Project through its employees, agents orthird parties, Owner’s rights to use the Work Product shall be as set forth inSection 5.3.

## **15.4****       **Design-Builder’s Rightto Stop Work.

### **15.4.1****    **Design-Builder may, in addition to any other rights afforded under theContract Documents or at Law, stop work for Owner’s failure to pay amountsproperly 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 Ownerthat 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 orreasonably commence to cure such problem and thereafter diligently pursue suchcure to completion, then Design-Builder may give a second written notice toOwner of its intent to stop work within an additional seven (7) Dayperiod.  If Owner, within such secondseven (7) Day period, fails to cure, or reasonably commence to cure suchproblem and thereafter diligently pursue such cure to completion, thenDesign-Builder may stop work.  In suchcase, Design-Builder shall be entitled to make a claim for adjustment to theContract Price and Contract Time(s) to the extent it has been adverselyimpacted by such stoppage.

## **15.5****       **Design-Builder’s Rightto Terminate for Cause.

### **15.5.1****    **Design-Builder, in addition to any other rights and remedies providedin the Contract Documents or by Law, may terminate the Agreement for cause forthe following reasons:

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

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

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

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

(d)           Owner’s failure to curethe problems set forth in Section 15.4.1 above within seven (7) Days afterDesign-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 writtennotice to Owner that it intends to terminate the Agreement unless the problemcited is cured within seven (7) Days of Owner’s receipt of such notice.  If Owner fails to cure, or reasonablycommence to cure, such problem, then Design-Builder may give a second writtennotice to Owner of its intent to terminate within an additional seven (7) Dayperiod.  If Owner, within such secondseven (7) Day period, fails to cure such problem, then Design-Builder maydeclare the Agreement terminated for default by providing written notice toOwner of such declaration.  In such case,Design-Builder shall be entitled to recover in the same manner as if Owner hadterminated the Agreement for its convenience under Section 15.3.

## **15.6****       **Bankruptcy of Owner orDesign-Builder.

### **15.6.1****    **If either Owner or Design-Builder institutes or has instituted againstit a case under the United States Bankruptcy Code (such Party being referred toas the “BankruptParty”), such event may impair or frustrate theBankrupt Party’s ability to perform its obligations under the ContractDocuments.  Accordingly, should suchevent occur:

#### (a)           The Bankrupt Party, its trustee or other successor, shall furnish, uponrequest of the non-Bankrupt Party, adequate assurance of the ability of theBankrupt Party to perform all future obligations under the Contract Documents,which assurances shall be provided within ten (10) Days after receiving noticeof the request; and

#### (b)           The Bankrupt Party shall file an appropriate action within thebankruptcy court to seek assumption or rejection of the Agreement within sixty(60) Days of the institution of the bankruptcy filing and shall diligentlyprosecute 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 toreject the Agreement,

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### declare the Agreement terminated and pursue any other recourseavailable 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 tolimit the ability of the non-Bankrupt Party to seek any other rights and remediesprovided by the Contract Documents or by Law, including its ability to seekrelief from any automatic stays under the United States Bankruptcy Code or theright of Design-Builder to stop Work under any applicable provision of thisAgreement.

**15.7****       **Lenders’Right to Cure.  At any time after theoccurrence of any event set forth in Section 15.4.1 or Section 15.5.1, butwithin the timeframes set forth therein, the Lenders shall have the right, butnot the obligation, to cure such default on behalf of Owner.

# **Article 16**

# **Representatives of the Parties**

**16.1****       **Designationof Owner’s Representatives.  Ownerdesignates the individual listed below as its senior representative (“Owner’sSenior Representative”), which individual has the authority andresponsibility for avoiding and resolving disputes under Article 19:

**Revis L. Stephenson IIIChairman & CEO10201 Wayzata Blvd.  Suite 250Minneapolis, MN  55305Telephone: 763.226.2702Facsimile: 763.226.2703**

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

**Donald GalesPresident & COO10201 Wayzata Blvd.  Suite 250Minneapolis, MN  55305Telephone: 763.226.2702Facsimile: 763.226.2703**

**16.2****       **Designationof Design-Builder’s Representatives. Design-Builder designates the individual listed below as its seniorrepresentative (“Design-Builder’s Senior Representative”), whichindividual has the authority and responsibility for avoiding and resolvingdisputes under Article 19:

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**Roland “Ron”FagenCEO and President501 W. Highway 212P.O. Box 159Granite Falls, MN 56241Telephone:  (320) 564-3324Facsimile: (320) 564-3278**

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

**AaronFagenChief Operating Officer501 W. Highway 212P.O. Box 159Granite Falls, MN 56241Telephone:  (320) 564-3324 Facsimile: (320) 564-3278**

# **Article 17**

# **Insurance**

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

Commercial GeneralLiability:
| 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 theWork is performed.

Employers’Liability:
| Each Accident          |   | $1,000,000 |
|------------------------|--------|------------|
| Disease-Policy  Limit  |   | $1,000,000 |
| Disease-Each  Employee |   | $1,000,000 |

 

ProfessionalErrors and Omissions
| Per Claim |   | $5,000,000 |
|-----------|--------|------------|
| Annual    |   | $5,000,000 |

 

## **17.2****       **Design-Builder’sInsurance Requirements.

### **17.2.1****    **Design-Builder is responsible for procuring and maintaining frominsurance companies authorized to do business in the state in which the Projectis located, the following insurance coverages for certain claims which mayarise from or out of the performance of the Work and obligations under theContract Documents:

#### (a)           coverage for claims arising under workers’ compensation, disability andother 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 employeesfor bodily injury, sickness, disease, or death;

#### (d)           coverage for usual personal injury liability claims for damagessustained by a person as a direct or indirect result of Design-Builder’semployment of the person, or sustained by any other person;

#### (e)           coverage for claims for damages (other than to the Work) because ofinjury to or destruction of tangible property, including loss of use;

#### (f)            coverage for claims of damages because ofpersonal injury or death, or property damage resulting from ownership, use andmaintenance of any motor vehicle; and

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#### (g)           coverage for contractual liability claims arising out of Design-Builder’sobligations under Section 14.2.

### **17.2.2****    **Design-Builder’s liability insurance required by this Section 17.2shall be written for the coverage amounts set forth in Section 17.1 and shallinclude completed operations insurance for the period of time set forth in theAgreement.

### **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 similarexclusions that could compromise coverages because of the design-build deliveryof the Project.

### **17.2.4****    ** To the extent Owner requires Design-Builder or any Design Consultantto provide professional liability insurance for claims arising from thenegligent performance of design services by Design-Builder or the DesignConsultant, the coverage limits, duration and other specifics of such insuranceshall be as set forth in the Agreement. Any professional liability shall specifically delete any design-build orsimilar exclusions that could compromise coverages because of the design-builddelivery of the Project.  Such policiesshall be provided prior to the commencement of any design services hereunder.

### **17.2.5****    **Prior to commencing any construction services hereunder, Design-Buildershall provide Owner with certificates evidencing that (i) all insuranceobligations required by the Contract Documents are in full force and in effectand will remain in effect for the duration required by the Contract Documentsand (ii) no insurance coverage required hereunder will be canceled, renewalrefused, or changed unless at least thirty (30) Days prior written notice isgiven to Owner.

**17.3****       **Owner’sLiability Insurance.  Owner shall procureand maintain from insurance companies authorized to do business in the state inwhich the Project is located such liability insurance to protect Owner fromclaims which may arise from the performance of Owner’s obligations under theContract Documents or Owner’s conduct during the course of the Project.  The general and professional liabilityinsurance obtained by Owner shall name Design-Builder, Design Consultants,Subcontractors, the Lenders and Lenders’ Agent as additional insureds, withoutapplication of deductible, retention or retrospective premiums as to the additionalinsureds.

## **17.4****       **Owner’s PropertyInsurance.

### **17.4.1****    **Unless otherwise provided in the Contract Documents, Owner shallprocure from insurance companies authorized to do business in the state inwhich the Project is located, and maintain through Final Completion, propertyinsurance upon the entire Project in a minimum amount equal to the fullinsurable value of the Project, including professional fees, overtime premiumsand all other expenses incurred to replace or repair the insured property.  The property insurance obtained by Ownershall 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 otherperils or causes of loss as called for in the Contract Documents and withoutapplication of any deductible, retention or retrospective premium.  Owner shall maintain coverage equal to or inexcess of the value of each of Design-Builder’s, Design Consultants’, andSubcontractors’ property on the Site. The property insurance shall include physical loss or damage to theWork, including materials and equipment in transit, at the Site or at anotherlocation as may be included in Design-Builder’s Application for Paymentapproved by Owner.  Notwithstanding theforegoing, the property insurance provided by Owner hereunder shall not berequired to include Design-Builder’s, Design Consultants’, and Subcontractors’tools or construction equipment.

### **17.4.2****    **Unless the Contract Documents provide otherwise, Owner shall procureand maintain boiler and machinery insurance that will include as additionalinsureds the Owner, Design-Builder, Design Consultants, and Subcontractors, inan amount not less than Contract Price and without application of anydeductible, retention or retrospective premium as to the additional insureds.Owner shall maintain coverage equal to or in excess of the value of each ofDesign-Builder’s, Design Consultants’, and Subcontractors’ interest orinvestment in boiler or machinery equipment on the Site.

### **17.4.3****    **Prior to Design-Builder commencing any Work, Owner shall obtain abuilder’s risk insurance policy naming Owner as the insured, withDesign-Builder, Design Consultants and Subcontractors as additional insureds,in an amount not less than the Contract Price and without application ofdeductible, 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 RiskInsurance Extension Act of 2005, Pub. L. No. 109-144 (2005), or any successoract or renewing act for the period during which the Terrorism Risk InsuranceAct or any successor act or renewing act is in effect.

### **17.4.5****    **Prior to Design-Builder commencing any Work, Owner shall provideDesign-Builder with copies of the insurance certificates reflecting coveragesrequired under this Section 17.4 evidencing that (i) all Owner’s insuranceobligations required by the Contract Documents are in full force and in effectand will remain in effect until Design-Builder has completed all of the Workand has received Final Payment from Owner, and (ii) no insurance coverage willbe canceled, renewal refused, or changed unless at least thirty (30) Days priorwritten notice is given to Design-Builder. Owner’s property insurance shall not lapse or be cancelled during theterm of this Agreement.  Promptly afterOwner’s receipt thereof, Owner shall be required to provide Design-Builder withcopies of all insurance policies to which Design-Builder, Design Consultants,and Subcontractors are named as additional insureds.  In the event Owner replaces insuranceproviders 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 underthis 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 adjustedwith Owner and Design-Builder and made payable to both of them as trustees forthe insureds as their interests may appear, subject to any applicable mortgageclause.  All insurance proceeds receivedas a result of any loss will be placed in a separate account and distributed inaccordance with such agreement as the interested parties may reach.  Any disagreement concerning the distributionof 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 separatecontractors, Design Consultants, Subcontractors, agents and employees of eachand 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, whereappropriate, require similar waivers of subrogation from Owner’s separatecontractors, Design Consultants, Subcontractors, and insurance providers andshall require each of them to include similar waivers in their contracts orpolicies.

## **17.5****       **Coordination with LoanDocuments.

### **17.5.1****    **Notwithstanding anything herein to the contrary, all provisionsrelating to insurance and insurance proceeds shall be conformed to therequirements of the Lenders in connection with any financing.

# **Article 18**

# **Representations and Warranties**

**18.1****       **Design-Builderand 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 hasall requisite power and authority to execute and deliver this Agreement, toperform its obligations hereunder and to consummate the transactionscontemplated hereby;

(b)           this Agreement has beenduly executed and delivered by such Party and constitutes the legal, valid andbinding obligations of such Party, enforceable against such Party in accordancewith their respective terms, except as enforcement may be limited bybankruptcy, insolvency, moratorium or similar Laws affecting creditor’s rightsor by general equitable principles;

(c)           the execution, deliveryand performance of this Agreement and the consummation of the transactionscontemplated hereby do not and will not conflict with or violate (a) thecertificate of incorporation or bylaws or equivalent organizational documentsof such Party, or (b) any Law applicable to such Party and other than

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the permits listed onExhibit G, such execution, delivery and performance of this Agreement does notrequire any Governmental Approval; and

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

**18.2****       **Design-BuilderRepresentations and Warranties. Design-Builder further represents that it has the necessary financialresources to fulfill its obligations under this Agreement.

# **Article 19**

# **Dispute Resolution**

**19.1****       **DisputeAvoidance and Mediation.  The Parties arefully committed to working with each other throughout the Project and agree tocommunicate regularly with each other at all times so as to avoid or minimizedisputes or disagreements.  If disputesor disagreements do arise, Design-Builder and Owner each commit to resolvingsuch disputes or disagreements in an amicable, professional and expeditiousmanner so as to avoid unnecessary losses, delays and disruptions to the Work.

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

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

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

**19.2****       **Arbitration.  Any claims, disputes or controversies betweenthe 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 inSection 19.1 above shall be decided by arbitration to be conducted inMinneapolis, Minnesota in accordance with the Construction Industry ArbitrationRules and Mediation Procedures of the AAA then in effect, unless the Partiesmutually agree otherwise.

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The award of thearbitrator(s) shall be final and binding upon the Parties without the right ofappeal to the courts.  Judgment may beentered upon it in accordance with Applicable Law by any court havingjurisdiction thereof.

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

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

**19.3****       **Dutyto Continue Performance.  Unless providedto the contrary in the Contract Documents, Design-Builder shall continue toperform the Work and Owner shall continue to satisfy its payment obligations toDesign-Builder, pending the final resolution of any dispute or disagreementbetween Design-Builder and Owner.

## **19.4****       **No ConsequentialDamages.

### **19.4.1****    **Notwithstanding anything herein to the contrary (except as set forth inSection 19.4.2 below), neither Design-Builder nor Owner shall be liable to theother for any consequential losses or damages, whether arising in contract,warranty, tort (including negligence), strict liability or otherwise, includingbut not limited to, losses of use, profits, business, reputation or financing,except that Design-Builder does not waive any such damages resulting from orarising out of any breach of Owner’s duties and obligations under the limitedlicense granted by Design-Builder to Owner pursuant to Article 5.

### **19.4.2****    **The consequential damages limitation set forth in Section 19.4.1 aboveis not intended to affect the payment of liquidated damages, if any, set forthin Section 7.3 of the Agreement, which both Parties recognize has beenestablished, in part, to reimburse Owner for some damages that might otherwisebe deemed to be consequential.

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

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

**Article 20**

 

**Confidentiality of SharedInformation**

 

**20.1****       **Non-DisclosureObligation.  Except as required by courtorder, subpoena, or Applicable Law, the Parties will hold in confidence, andwill use only for the purposes of completing, maintaining, repairing,modifying, and operating the Project (but not for expansion and all relatedactivities), performing their respective obligations under this Agreement, andobtaining financing for the development of the Project, any and allConfidential Information disclosed to each other.  Neither Party shall otherwise disclose tothird parties any Confidential Information without the express written consentof the other Party, which consent shall not be unreasonably withheld.  The Parties shall at all times use theirrespective reasonable efforts to keep all Confidential Information andinformation regarding the terms and conditions of this Agreement confidential,except that Owner is authorized to publicly file this Agreement as necessary inconnection with seeking or selling or registering securities (after obtainingthe written consent of Design-Builder, which must not be unreasonably withheldor delayed).  However, the Parties maydisclose Confidential Information to their respective lenders, lenders’ agents,advisors and/or consultants only as reasonably necessary in connection with thefinancing of the Plant or to enable them to advise the Parties with regard tothe Contract Documents and the Project, provided that prior to such disclosureany party to whom Confidential Information is disclosed is informed by thedisclosing Party of the existence of this confidentiality obligation and agreesto be obligated to maintain the confidentiality of any information received.The term “Confidential Information” will mean (i) confidential orproprietary 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 thisAgreement or the Parties’ relationship prior thereto or is developed pursuantto this Agreement, (ii) any and all information concerning the ContractDocuments, the Agreement, or the terms thereof, and (iii) all information whichone Party, directly or indirectly, may acquire from another Party;however,    Confidential Information willnot include information falling into any of the following categories:

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

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

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

(d)                                 informationobtained by the recipient from a third party having an independent right todisclose this information; and

(e)                                  informationthat is available through discovery by independent research without use of oraccess to the Confidential Information acquired from the other Party; and

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

Each Party’sobligation to maintain Confidential Information in confidence will be deemedperformed if such Party observes with respect thereto the same safeguards andprecautions which such Party observes with respect to its own ConfidentialInformation of the same or similar kind. It will not be deemed to be a breach of the obligation to maintainConfidential Information in confidence if Confidential Information is disclosedupon the order of a court or other authorized Governmental Authority, orpursuant to other Legal Requirements. However, if Owner is required to file the Contract Documents or aportion thereof with a Governmental Authority, it agrees that it will not do sowithout first informing Design-Builder of the requirement and seekingconfidential treatment of the Contract Documents prior to filing the documentsor a portion thereof.

**20.2****       **Publicityand Advertising.  Neither Owner norDesign-Builder shall make or permit any of their subcontractors, agents, orvendors to make any external announcement or publication, release anyphotographs or information concerning the Project or any part thereof, or makeany other type of communication to any member of the public, press, businessentity, or any official body which names the other Party unless prior writtenconsent is obtained from the other Party, which consent shall not beunreasonably withheld.

**20.3****       **Termof Obligation.  The confidentialityobligations of the Parties pursuant to this Article 20 shall survive theexpiration 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, shallinure to the benefit of, and may be performed by, the successors and permittedassigns of the Parties, except that neither Design-Builder nor Owner shall,without the written consent of the other, assign or transfer this Agreement orany of the Contract Documents. Design-Builder’s subcontracting portions of the

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Work in accordancewith this Agreement shall not be deemed to be an assignment of thisAgreement.  Owner may assign all of itsrights and obligations under the Contract Documents to its Lenders or Lenders’Agent as collateral security in connection with Owner obtaining or arrangingany financing for the Project; provided, however, Owner shall deliver, at leastten (10) Days prior to any such assignment, to Design-Builder (i) writtennotice of such assignment and (ii) a copy of the instrument of assignment inform and substance reasonably acceptable to Design-Builder, whose approvalshall not be unreasonably withheld.  TheLenders or Lenders’ Agent may assign the Contract Documents or their rightsunder the Contract Documents, including without limitation in connection withany foreclosure or other enforcement of their security interest.  Design-Builder shall execute, if requested, aconsent to assignment for the benefit of the Lenders and/or the Lenders’ Agentin form and substance reasonably acceptable to Design-Builder, which form isattached hereto as Exhibit O, provided that with respect to any suchassignments such assignee demonstrates to Design-Builder’s satisfaction that ithas the capability to fulfill Owner’s obligations under this Agreement.

**21.2****       **Successors.  Design-Builder and Owner intend that theprovisions of the Contract Documents are binding upon the Parties, theiremployees, agents, heirs, successors and assigns.

**21.3****       **GoverningLaw.  This Agreement shall be governed byand construed and enforced in accordance with, the substantive laws of thestate of Minnesota, without regard to the conflict of laws provisions thereof.

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

**21.5****       **NoWaiver.  The failure of eitherDesign-Builder or Owner to insist, in any one (1) or more instances, on theperformance of any of the obligations required by the other under the ContractDocuments shall not be construed as a waiver or relinquishment of suchobligation or right with respect to future performance.

**21.6****       **Headings.  The table of contents and the headings usedin this Agreement or any other Contract Document, are for ease of referenceonly 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 thisAgreement.

**21.7****       **Notice.  Whenever the Contract Documents require thatnotice be provided to a Party, notice shall be delivered in writing to suchParty at the address listed below. Notice will be deemed to have been validly given if delivered (i) inperson to the individual intended to receive such notice, (ii) by registered orby certified mail, postage prepaid to the address indicated in the Agreementwithin four (4) Days after being sent, or (iii) by facsimile, by the timestated in a machine-generated confirmation that notice was received at thefacsimile 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****       **NoPrivity with Design Consultant/Subcontractors. Nothing in the Contract Documents is intended or deemed to create anylegal or contractual relationship between Owner and any Design Consultant orSubcontractor.

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

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**21.10****     **EntireAgreement.  This Agreement consists ofthe 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 andcomplete understanding of the Parties as of the Effective Date with respect tothe subject matter hereof.

**21.11****     **Third-PartyBeneficiaries.  Except as expresslyprovided herein, this Agreement is intended to be solely for the benefit of theOwner, the Design-Builder and permitted assigns, and is not intended to andshall not confer any rights or benefits on any person not a signatory hereto.

**21.12****     **Counterparts.  This Agreement may be executed in one (1) ormore counterparts, each of which shall be deemed an original and all of whichtogether shall be deemed one and the same Agreement, and may be executed anddelivered by facsimile signature, which shall be considered an original.

**21.13****     **Survival.   Notwithstanding any provisions herein to thecontrary, the Work Product provisions set forth in Article 5 and the indemnityobligations set forth herein shall survive (in full force and effect) theexpiration or termination of this Agreement and shall continue to apply to theParties to this Agreement even after termination of this Agreement or thetransfer of such Party’s interest in this Agreement.

[The next page isthe signature page.]

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**IN WITNESS WHEREOF**, the Partieshereto have caused their names to be hereunto subscribed by their officersthereunto duly authorized, intending thereby that this Agreement shall beeffective 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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AMENDMENT NUMBERONEtoLUMP SUM DESIGN-BUILD AGREEMENT (“DBA”)DATED February 7, 2007by and betweenFAGEN, INC. (“FAGEN”)andABE NORTHFIELD, LLC (“OWNER”)

This **Amendment Number One** is entered into this 6th day of June,2007, by and between Fagen, Inc., a Minnesota Corporation (“Fagen”) and ABENorthfield, LLC, a Delaware Limited Liability Company (“Owner”).

Anything to thecontrary contained in the DBA between the parties hereto, and in considerationof the mutual promises, covenants, and conditions contained in the DBA andcontained herein, and for other good valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereto covenant andagree that the terms and conditions of this Amendment Number One shall prevail.

The parties heretoagree as follows:

1.  Article 9 of the DBA shall be amended andreplaced as follows:

**9.1 Contract Price.**  As full consideration to Design-Builder forfull and complete performance of the Work and all costs incurred in connectiontherewith, Owner shall pay Design-Builder in accordance with the terms ofArticle 10, the sum of One Hundred Twenty-two Million Five Hundred Forty-twoThousand Three Hundred Sixty-three Dollars ($122,542,363.00) (“ContractPrice”), subject to adjustments made in accordance with Article 13.  The Contract Price does not include the waterpre-treatment system and the fire protection system which shall be provided byDesign-Builder pursuant to a separate side-letter agreement executed by Ownerand Design-Builder at Design-Builder’s standard time plus material rates duringthe relevant time period and at the relevant locale.  Owner acknowledges that it has taken noaction which would impose a union labor or prevailing wage requirement on Design-Builder,Owner or the Project.  The Partiesacknowledge and agree that if after the date hereof, an Owner’s action, achange in Applicable Law, or a Governmental Authority acting pursuant to achange in Applicable Law shall require Design-Builder to employ union labor orcompensate labor at prevailing wages, the Contract Price shall be adjustedupwards to include any increased costs, of any kind or nature, associated withsuch labor or wages including but not limited to site security and personnelcosts.  Such adjustments shall include,but not be limited to, increased labor, subcontractor, and material andequipment costs resulting from any union or prevailing wage requirement;provided, however, that if an option is made available to either employ unionlabor, or to compensate labor at prevailing wages, such option shall be atDesign-Builder’s sole discretion and that if such option is executed by Ownerwithout Design-Builder’s agreement, Design-Builder shall have the right toterminate this agreement and shall be entitled to compensation pursuant toSection 15.3.1 hereof.

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**9.2  Effectof Cost Increase on Contract Price.**  The Contract Price shall be subject toadjustment by Design-Builder as follows:

**9.2.1****                               ConstructionCost Index Increase. **The BaselineIndex for this Agreement shall be 7882.53 (October 2006) (“Baseline Index”).  The Baseline Index is based on theConstruction Cost Index published by Engineering News-Record Magazine (“CCI”).  If between the Effective Date and the date onwhich a valid Notice to Proceed is given to Design-Builder the CCIincreases over the Baseline Index, Design-Builder shall notify Owner in writingthat it is adjusting the Contract Price and the Contract Price shall beincreased by a percentage amount equal to the percentage increase in CCI.

**9.2.2****                               SpecialtyMaterials Fee. **Due to rapidlyaccelerating costs of certain specialty materials required for PlantConstruction, in addition to any Contract Price escalation set pursuant toSection 9.2.1, effective June 1, 2007, Design-Builder shall also add a surchargeto the Contract Price of one half of one percent (0.50%) for each calendarmonth that has passed between the month establishing the Baseline Indexreferenced in Section 9.2.1 and the month in which a valid Notice to Proceed isgiven to Design-Builder.

**9.2.3****                               AdjustmentsCumulative. **The Contract Priceadjustment provided for in Section 9.2.2 shall be in addition to any adjustmentprovided for in Section 9.2.1.  By way ofexample, if a valid Notice to Proceed is given one year after the month establishingthe Baseline Index and the CCI has increased two percent (2%) over such periodof time, the total adjustment to the Contract Price shall be two percent (2%)in accordance with Section 9.2.1 plus one half of one percent (0.50%) for eachof the twelve months from the establishment of the Baseline Index to thedelivery of a valid Notice to Proceed in accordance with Section 9.2.2, for atotal adjustment of eight percent (8%).

2.  Article 10.1.1 of the DBA shall be deleted inits entirety and replaced as follows:

**10.1.1**[Reserved].

3.** **Article 1.2 shall beamended to delete*******“CommitmentFee is defined in Section 10.1.1.”*

The other provisions ofthe DBA shall remain unchanged and in full force and effect.

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IN WITNESS WHEREOF, theparties hereto have executed this Amendment Number One on the date set forthabove.

 
| FAGEN, INC.              | ABE NORTHFIELD, LLC |
|--------------------------|---------------------|
|                     |                |   |
| By /s/ Ron Fagen         |                | By /s/ Donald Gales |
| Title CEO and  President |                | Title President |

 

 

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# **EXHIBIT APerformance 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.         |

 

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

A-1

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|   |   | 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 Criteriathe Plant shall operate in accordance with all Legal Requirements.

**DISCLAIMER:**

Owner’s failure to materially comply with theoperating procedures issued by ICM, Inc./Fagen, Inc. shall void all performanceguaranties and warranties set forth in this Design-Build Agreement to theextent affected by Owner’s failure to comply as reasonably determined byDesign-Builder.

Owner understands that thestartup of the plant requires resources and cooperation of the Owner, vendorsand other suppliers to the project. Design-Builder disclaims any liability and Owner indemnifiesDesign-Builder for non-attainment of the Performance Guarantee Criteriadirectly or indirectly caused by material non-performance or negligence ofthird parties not retained by Design-Builder.

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# **EXHIBIT B**

# **General Project Scope**

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

Delivered corn will be dumped in thereceiving building.  The receivingbuilding will have two truck grain receiving bays and a rail receiving bay,including an underground conveyor from the rail pit to the second truckreceiving bay both of which share a common receiving leg.  The truck driver will drive onto one of twopitless scales located near the administration building, be weighed andsampled, then drive to the receiving building, dump the grain, then proceedback to one of two pitless scales and obtain a final weight ticket from thescale operator.  Two independent 20,000-bushel legs will lift the corn to one of two 500,000 — bushel concrete storagebins.  A dust collection system will beinstalled on the grain receiving system to limit particulate emissions asdescribed 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 throughliquefaction tanks and into one of the fermenters.  Simultaneously, propagated yeast will beadded to the mash as the fermenter is filling. After batch fermentation is complete, the beer will be pumped to the beerwell and then to the beer column to vaporize the alcohol from the mash.

Alcohol streams are dehydrated in therectifier column, the side stripper and the molecular sieve system.  Two hundred proof alcohol is pumped to thetank farm day tank and blended with five percent natural gasoline as theproduct 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 for200 proof storage, one tank for denaturant storage and two one million fivehundred thousand (1,500,000) gallon tanks for denatured ethanol storage.

Corn mash from the beer stripper is dewateredin the centrifuge(s).  Wet cake from thecentrifuge(s) is conveyed to the DDGS dryer system. Wet cake is conveyed fromthe centrifuges to the dryer(s) where the water is removed from the cake andthe product is dried to 11% moisture.  Amodified wet or wet cake pad is located along side the DDGS dryer building todivert modified wet or wet cake to the pad when necessary or for limitedproduction of modified wet or wet cake for sales.  Water in the thin stillage is evaporated andrecycled 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 inthe DDGS storage building.  Shipping isaccomplished by scooping and pushing the product with a front-end loader intoan in-floor conveyor system.  The DDGSload out pit has capacity for approximately one semi-trailer load.  DDGS is weighed as it is loaded for shipmentthrough a bulk-weigh system.

Fresh water for the boilers, cooking, coolingtower and other processes will be obtained from the Owner supplied water pretreatmentsystem.  Boiler water conditioned inregenerative softeners will be pumped through a deaerator scrubber and into adeaerator tank.  Appropriate boilerchemicals will be added as preheated water is sent to the boiler.

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

The TO/Heat Recovery Steam Generator is aprocess used to thermally oxidize the exhaust gasses from the Dryers.  This process will be used to reduce VOCs andparticulates that are in the dryer exhaust and ensure compliance withenvironmental regulations.  The energyrequired to complete thermal oxidization will then be ducted to a waste heatboiler that will produce 100% of the steam requirements of the ethanolplant.  The exhaust gasses from the wasteheat boiler will be ducted through stack gas economizer(s) to recover themaximum amount of energy possible from the exhaust gas stream.  After the economizer(s), the gas stream willbe vented to atmosphere through a stack.

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

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

The design also incorporates the use of aclean-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, theplant will not have any wastewater discharges that have been in contact withcorn, corn mash, cleaning system, or contact process water.  An ICM/Phoenix Bio-Methanator will reduce theBOD in process water allowing complete reuse within the plant.  The plant will have blowdown discharges fromthe cooling tower and may have water discharge from any water pre-treatmentprocesses.  Owner shall provide on-siteconnection to sanitary sewer or septic system.

Most plant processes are computer controlledby a Siemens/Moore APACS distributed control system with graphical userinterface and three workstations.  Thecontrol room control console

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will have dual monitors tofacilitate operator interface between two graphics screens at the sametime.  Additional programmable logiccontrollers (PLCs) will control certain process equipment.  Design-Builder provides lab equipment.

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

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

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# **EXHIBIT COwner’s Responsibilities**

The Owner shall perform and provide thepermits, authorizations, services and construction as specifically describedhereafter:

1)**              Landand Grading —**Owner shall provide a site near Northfield, Minnesota.  Owner shall obtain all legal authority to usethe site for its intended purpose and perform technical due diligence to allowDesign-Builder to perform including, but not limited to, proper zoningapprovals, building permits, elevation restrictions, soil tests, and watertests. The site shall be rough graded per Design-Builder specifications and be+/- three inches of final grade including the rough grading for Siteroadways.  The site soils shall bemodified as required to provide a minimum allowable soil bearing pressure asdescribed in Table 1.

Other items to be provided by the Owner include, butare not limited to, the following: initial site survey (boundary andtopographic) as required by the Design-Builder, layout of the property cornersincluding two construction benchmarks, Soil Borings and subsequent GeotechnicalReport describing recommendation for Roads, foundations and if required, soilstabilization/remediation, land disturbance permit, erosion control permit,site grading as described above with minimum soil standards, placement oferosion control measures, plant access road from a county, state or federalroad designed to meet local county road standards, plant storm and sanitarysewers, fire water system with hydrants and plant water main branches taken fromthe system to be within five feet of the designated building locations, alltanks, motors and other equipment associated with or necessary to operate thefire water loop and associated systems, plant roads as specified and designedfor the permanent elevations and effective depth, spill containment anddrainage systems from both rail and truck loading spots into the tank farm orother location, “construction” grading plan as drawn (including site retentionpond), plant water well and associated permit(s).  The Owner shall provide for Design-Builderaggregate covered areas for construction trailers and parking along withadequate aggregate covered area or areas for material laydown purposes.  The recommended aggregate specificationsshall 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 preliminarydesigns/information and estimates of the cost of performing all Owner requiredpermits and services as stated in this Exhibit C.  Specifically, the cost of the fire watersystems (including associated fire water pumps, required tank, building (ifrequired), sprinklers, and all other equipment and materials associated withthe fire water delivery systems) is estimated being in excess of$2,000,000.  The requirements of eachstate and the decisions of each Owner will increase or decrease the actualcost.  Additionally, the cost of therequired 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 requirementsfor the grain and DDGS areas will be developed in coordination with thegrain/DDGS area subcontractor.  Ownershall prepare site according to Design-Builder’s engineering plans provided forthe 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, airquality permits, in a timely manner to allow construction and startup of theplant as scheduled by Design-Builder.

3)              **Storm WaterRunoff Permit** – Owner shall obtain the construction storm-waterrunoff permit, permanent storm-water runoff permit, and erosion control/landdisturbance permit.

4)              **MinnesotaPollutant Elimination Discharge Permit** – Owner shall obtain a permitto discharge cooling tower water, reverse osmosis (“R.O.”) reject water, andany other waste water directly to a designated waterway or other location.  If required by item 9 below, Owner willsecure appropriate permits for emergency process water discharges.

5)              **Natural GasSupply and Service Agreement** – Continuous supply of natural gas ofat least 3.2 billion cubic feet per year, at a minimum rate of 450-550 MCF perhour and at a minimum pressure of 75 – 200 psi at the plant site.  Pressure reducing stations must be located soas to provide stable pressure at the point of use.  Owner shall provide all gas piping to the usepoints and supply meters and regulators to provide burner tip pressures asspecified by Design-Builder.  Owner shallalso supply a digital flowmeter on-site with appropriate output for monitoringby the plant’s computer control system.

6)              **TemporaryElectrical Service**– Owner shall secure electrical service to supplya minimum 750 KW of electrical power during construction.  Owner shall procure, install, and maintaintemporary service to up to three 3-phase, 480/277 volt temporary servicetransformers and one 1-Phase, 240/120 volt temporary service transformerlocated throughout the site.  Thetransformer sizing, locations, and underground electrical feed routing layoutare to be determined jointly by the Owner, the Design-Builder and the energysupplier.  Design-Builder shall payenergy demand and usage charges up to Substantial Completion.

7)              **PermanentElectrical Service**– (1) Owner is responsible to securecontinuous service from an energy supplier to serve the facility.  The service from the energy supplier shall beof sufficient size to provide at a minimum 12.5 MW of electrical capacity tothe site.  (2) The Owner is responsiblefor procurement, installation and maintenance of the site supply anddistribution system, including but not limited to the required substation andall associated distribution lines.  Anon-site digital meter is also to be supplied for monitoring of electricalusage.  (3) The responsibility of theDesign-Builder starts at the secondary electrical terminals of the sitedistribution system transformers that have been installed by Owner (i.e., the480 volt terminals for the process building transformers; the 480 voltterminals for the energy center transformers; the 480 volt terminals for thegrains transformer; the 480 volt terminals for the pumphouse transformer; andthe 4160 volt terminals for the chiller transformer). (4)  The site distribution system requirements,layout, and meters are to be determined jointly by the Owner, theDesign-Builder and the energy supplier.

Design-Builder will be providing soft start motorcontrollers for all motors greater than 150 horsepower and where demanded byprocess requirements.  Owner isencouraged to discuss

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with its electrical supplier whether additional softstart 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 to0.92 lagging at plant nameplate capacity. Owner is encouraged to discuss with its electrical service supplier anyrequirements for power factor correction above 0.92 lagging.  Additional power factor correction can beadded with any increased cost being an Owner’s cost.

8)              **WaterSupply, Service Agreement, and Pre-Treatment System –** Owner shallsupply on-site process wells or other water source that is capable of providinga quantity of raw water satisfying the needs of the Plant.  Owner should consider providing a redundantwater supply source.  Owner will supplyone process fresh water supply line terminating within five (5) feet of thepoint of entry designated by Design-Builder, and one potable supply lineterminating within five (5) feet of the process building and to theadministration building at a point of entry designated by administrationbuilding contractor.

Owner shall pay for a water pre-treatment system to bedesigned and constructed by Design-Builder and to be integrated into thePlant.  The pre-treatment system will bedesigned to provide the Plant with the quantity and quality of raw and treatedwater needed to supply the Plant’s process needs. Owner shall maintain and usethe water pre-treatment system, including the use of all chemicals specifiedfor the operation of such water pre-treatment system, for the entirety of thewarranty period set forth in the Design-Build agreement as such may be extendedin accordance therewith.  Owner’s failureto maintain and to properly use such water pre-treatment system for thewarranty period set forth in the Design-Build Agreement shall void any and allwarranties affected by such failure.  Thepre-treatment system shall be supplied by a vendor selected and approved byDesign-Builder and shall meet specifications and designs approved byDesign-Builder.  The water pre-treatmentsystem design will be required to meet the discharge requirements under thePlant’s wastewater discharge permit. Owner shall execute side-letter agreements with Design-Builder asnecessary for the design and construction of such water pre-treatmentsystem.  Design-Builder shall recovercosts for the design and construction of such system from the Owner atDesign-Builder’s standard time plus material rates during the relevant timeperiod and at the relevant locale.

9)              **WastewaterDischarge System, Permits and/or Service Agreement –**Owner toprovide discharge piping, septic tank and drainfield system or connect tomunicipal system as required for the sanitary sewer requirements of thePlant.  These provisions shall complywith all federal, state, and local regulations, including any permitting issues.

10)        **Roads andUtilities****–** Owner shallprovide and maintain the ditches and permanent roads, including the gravel,pavement or concrete, with the roads passing standard compaction tests.  (Design-Builder will maintain aggregateconstruction roads during construction of the Plant and will return to originalpre-construction condition prior to Owner completing final grade andsurfacing.)

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

11)        **AdministrationBuilding****–** Theadministration building **–** one storyfree standing, office computer system, telephone system, office copier and faxmachine and office furniture and any other office equipment and personalproperty for the administration building shall be the sole and absolute costand responsibility of Owner and Design-Builder shall have no responsibility inregards thereto.

12)**Maintenanceand Power Equipment****–** Themaintenance and power equipment as described in Table 2 and any othermaintenance and power equipment as required by the plant or desired by Ownershall be the sole and absolute cost and responsibility of Owner andDesign-Builder shall have no responsibility in regards thereto.

13)**        Railroads –**Owner isresponsible for any costs associated with the railroads including, but notlimited to, all rail design and engineering and construction and Design-Buildershall have no responsibility in regards thereto.  Owner shall supply drawings and Phase IIredline drawings to Design-Builder.

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

15)**        Fire Protection System –**Fire Protection System requirements vary by governmental requirements perlocation and by insurance carrier requirements. Owner is responsible to provide the required fire protection system forthe Plant.  This may include storagetanks, pumps, underground fire water mains, fire hydrants, foam or watermonitor valves, sprinkler systems, smoke and heat detection, deluge systems, orother provisions as required by governmental codes or Owner’s insurance carrier’sfire protection criteria.

Owner shall pay for a Fire Protection System to bedesigned and constructed by Design-Builder and to be integrated into thePlant.  The Fire Protection System shallbe designed and constructed to meet the governmental and insurancerequirements.  Owner is to execute side-letteragreements as necessary for the design and construction of such Fire ProtectionSystem.  Design-Builder shall recovercosts for the design and construction of such system from Owner atDesign-Builder’s standard time plus material rates during the relevant timeperiod and at the relevant locale.  Aside-letter agreement between Owner and Design-Builder shall be executed byOwner and Design-Builder to compensate Design-Builder, at Design-Builder’sstandard time plus materials rates during the relevant time period and at therelevant locale, for any costs and expenses related to such Fire ProtectionSystem.

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**Table 1 Minimum Soil BearingPressure – 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                                                                                                     |       |

 

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**Table 2 Maintenance and Power Equipment – Responsibilityof 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 1⁄2 yard front end loader

New Skid loader

Used Fork lift

Used Scissors lift, 30 foot

Used Pickup truck

Track Mobile                                                                                                                                                                                                                                                               |       |       |

 

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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                                                                                                                                                                        |       | [*]                                                          |

 

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

 

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# **EXHIBIT DICM License Agreement**

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

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

WHEREAS, ICM hasgranted Fagen the right to use certain proprietary technology and informationof ICM in the design and construction of the Plant; and

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

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

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

2.     The“Proprietary Property” means, without limitation, documents, OperatingProcedures (hereinafter defined), materials and other information that arefurnished 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 inwhatever 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 associatedelectronic control equipment) and all documents supporting those combinations;(ii) the combination of the distillers grain drying (DGD), and heat recoverysteam generation (HRSG) equipment (including, but not limited to, pumps,vessels, tanks, heat exchangers, piping and associated electronic controlequipment) and all documents supporting those combinations; and (iii) thecomputer 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 systemhardware connections) and all documents supporting that system.  The “Operating Procedures” means, withoutlimitation, the process equipment and specifications manuals, standards ofquality, service protocols, data collection methods, constructionspecifications, training methods, engineering standards and any otherinformation prescribed by ICM from time to time concerning the Purpose.  Proprietary Property shall not include anyinformation or materials that OWNER can demonstrate by clear and convincingwritten evidence:  (i) was lawfully inthe possession of OWNER prior to disclosure by ICM or Fagen; (ii) was in thepublic domain prior to disclosure by ICM or Fagen; (iii) was disclosed to OWNERby a third party other than Fagen having the legal right to

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possess and disclose such information ormaterials; or (iv) after disclosure by ICM or Fagen comes into the publicdomain 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 deemedto be in the public domain merely because such information is embraced by moregeneral disclosures in the public domain, and any combination of features shallnot be deemed to be within the foregoing exceptions merely because individualfeatures are in the public domain if the combination itself and its principlesof operation are not in the public domain.

3.     OWNERshall not use the Proprietary Property for any purpose other than thePurpose.  OWNER shall not use theProprietary Property in connection with any expansion or enlargement of thePlant.  ICM and its Representatives shallhave the express right at any time to enter upon the premises of the Plant toinspect the Plant and its operation to ensure that OWNER is complying with theterms of this License Agreement.

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

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

6.     ICMhas the exclusive right and interest in and to the Proprietary Property and thegoodwill associated therewith.  OWNERwill not, directly or indirectly, contest ICM’s ownership of the ProprietaryProperty.  OWNER’s use of the ProprietaryProperty does not give OWNER any ownership interest or other interest in or tothe Proprietary Property except for the limited license granted to OWNERherein.  Goodwill created by theoperation of the Plant and all financial benefits therefrom shall be theproperty of OWNER.

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

8.     OWNERmay not assign the perpetual limited license granted herein, in whole or inpart, without the prior written consent of ICM, which will not be unreasonablywithheld or delayed.  Prior to anyassignment, OWNER shall obtain from such assignee a written instrument, in formand substance

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reasonably acceptable to ICM, agreeing to bebound by all the terms and provisions of this License Agreement.  Any assignment of this License Agreementshall not release OWNER from (i) its duties and obligations hereunderconcerning the disclosure and use of the Proprietary Property by OWNER or itsRepresentatives, or (ii) damages to ICM resulting from, or arising out of, abreach of such duties or obligations by OWNER or its Representatives.  ICM may assign its right, title and interestin the Proprietary Property, in whole or part, subject to the limited licensegranted herein.

9.     TheProprietary Property is confidential and proprietary.  OWNER shall keep the Proprietary Propertyconfidential and shall use all reasonable efforts to maintain the ProprietaryProperty as secret and confidential for the sole use of OWNER and itsRepresentatives for the Purpose.  OWNERshall retain all Proprietary Property at its principal place of business and/orthe Plant.  OWNER shall not at any timewithout ICM’s prior written consent, copy, duplicate, record, or otherwisereproduce the Proprietary Property, in whole or in part, or otherwise make thesame available to any unauthorized person provided, OWNER shall be permitted tocopy, duplicate or otherwise reproduce the Proprietary Property in whole or inpart 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 atits principal place of business and/or the Plant and are treated the same asany other Proprietary Property.  OWNERshall not disclose the Proprietary Property except to its Representatives whoare directly involved with the Purpose, and even then only to such extent as isnecessary and essential for such Representative’s involvement.  OWNER shall inform such Representatives ofthe confidential and proprietary nature of such information and, if requestedby ICM, OWNER shall obtain from such Representative a written instrument, in formand substance reasonably acceptable to ICM, agreeing to be bound by all of theterms and provisions of this License Agreement to the same extent asOWNER.  OWNER shall make all reasonableefforts to safeguard the Proprietary Property from disclosure by its Representativesto anyone other than permitted hereby. OWNER shall notify ICM immediately upon discovery of any unauthorizeduse or disclosure of the Proprietary Property, or any other breach of thisLicense Agreement by OWNER or its Representatives, and shall cooperate with ICMin every reasonable way to help ICM regain possession of the ProprietaryProperty and prevent its further unauthorized use or disclosure.  In the event that OWNER or itsRepresentatives are required by law to disclose the Proprietary Property, OWNERshall provide ICM with prompt written notice of same so that ICM may seek aprotective order or other appropriate remedy. In the event that such protective order or other appropriate remedy isnot obtained, OWNER or its Representatives will furnish only that portion ofthe Proprietary Property which in the reasonable opinion of its or their legalcounsel is legally required and will exercise its reasonable efforts to obtainreliable assurance that the Proprietary Property so disclosed will be accordedconfidential treatment.

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

D-3

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11.   The duties and obligations of OWNER underthis License Agreement, and all provisions relating to the enforcement of suchduties and obligations shall survive and remain in full force and effectnotwithstanding any termination or expiration of the Contract or this LicenseAgreement.

12.   ICM may terminate this License Agreement uponwritten notice to OWNER if OWNER willfully or wantonly (a) uses the ProprietaryProperty 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 theProprietary Property for any purpose (including the Purpose) and, upon requestby ICM, shall promptly return to ICM all documents or other materials in OWNER’sor its Representatives’ possession that contain Proprietary Property inwhatever format, whether written or electronic, including any and all copies orreproductions of the Proprietary Property. OWNER shall permanently delete all such Proprietary Property from itscomputer hard drives and any other electronic storage medium (including anybackup or archive system).  OWNER shalldeliver to ICM a written certificate which certifies that all electronic copiesor reproductions of the Proprietary Property have been permanently deleted.

13.   The laws ofthe State of Kansas, United States of America (or US), shall govern thevalidity 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 orconstrue the provisions of this License Agreement shall be brought in thefederal or state courts located in Wichita, Kansas, and the parties agree toand hereby submit to the exclusive jurisdiction of such courts and agree thatthey will not invoke the doctrine of forum non conveniens or other similardefenses in any such action brought in such courts.  Notwithstanding the foregoing, nothing inthis License Agreement will affect any right ICM may otherwise have to bringany action or proceeding relating to this License Agreement against OWNER orits properties in the courts of any jurisdiction.

14.   OWNER hereby agrees to waive all claims against ICM and ICM’sRepresentatives for any consequential damages that may arise out of or relateto this License Agreement, the Contract or the Proprietary Property whetherarising in contract, warranty, tort (including negligence), strict liability orotherwise, including but not limited to losses of use, profits, business,reputation or financing.  OWNER furtheragrees that the aggregate recovery of OWNER and Fagen (and everyone claiming byor 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 resultfrom this License Agreement, the Proprietary Property or the Contract, whetherarising in contract, warranty, tort (including negligence), strict liability orotherwise, shall not exceed One Million US Dollars ($1,000,000).

15.   The terms and conditions ofthis License Agreement constitute the entire agreement between the parties withrespect 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 thatany ambiguity is to be resolved against the drafting party shall not beapplicable in the interpretation of this License Agreement.  This License Agreement may not be modified oramended at any time without the written consent of the parties.

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

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

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

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

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

D-5

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IN WITNESS WHEREOF, the parties hereto haveexecuted this License Agreement, the Effective Date of which is indicated onpage 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

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# **EXHIBIT E Schedule of Values**

Schedule of Values for:

**ABENORTHFIELD, LLC**

**Northfield,MN**

**100 MGYDry 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** | ** ** |

 

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

 

E-1

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# **EXHIBIT F**

# **Form ofInformational Report**

|  | **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

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| 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

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# **EXHIBIT GRequired 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                                    |                           |                                         |

 

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# **EXHIBIT H**

# **Form ofPerformance Bond**

PERFORMANCE BONDThe American Institute of Architects,AIA Document No. A312 (December, 1984 Edition)Any singular reference to Contractor, Surety, Owner or otherparty 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 assignsto the Owner for the performance of the Construction Contract, which isincorporated herein by reference.

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

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

3.1           The Owner has notified the Contractorand the Surety at its address described in Paragraph 10 below that the Owner isconsidering declaring a Contractor Default and has requested and attempted toarrange a conference with the Contractor and the Surety to be held not laterthan fifteen days after receipt of such notice to discuss methods of performingthe Construction Contract.  If the Owner,the Contractor and the Surety agree, the Contractor shall be allowed areasonable time to perform the Construction Contract, but such an agreementshall not waive the Owner’s right, if any, subsequently to declare a ContractorDefault; and

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

 

H-1

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

4.             When the Owner has satisfied the conditions of Paragraph3, the Surety shall promptly and at the Surety’s expense take one of thefollowing actions:

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

4.2           Undertake to perform and complete theConstruction Contract itself, through its agents or through independentcontractors; or

4.3           Obtain bids or negotiated proposalsfrom qualified contractors acceptable to the Owner for a contract forperformance and completion of the Construction Contract, arrange for a contractto be prepared for execution by the Owner and the contractor selected with theOwner’s concurrence, to be secured with performance and payment bonds executedby a qualified surety equivalent to the bonds issued on the ConstructionContract, and pay to the Owner the amount of damages as described in Paragraph6 in excess of the Balance of the Contract Price incurred by the Ownerresulting from the Contractor’s default; or

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

.1             Afterinvestigation, determine the amount for which it may be liable to the Ownerand, as soon as practicable after the amount is determined, tender paymenttherefor to the Owner; or

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

5.             If the Surety does not proceed as provided in Paragraph4 with reasonable promptness, the Surety shall be deemed to be in default onthis Bond fifteen days after receipt of an additional written notice from theOwner to the Surety demanding that the Surety perform its Obligations underthis Bond, and the Owner shall be entitled to enforce any remedy available to theOwner.  If the Surety proceeds asprovided in Subparagraph 4.4, and the Owner refuses the payment tendered or theSurety has denied liability, in whole or in part, without further notice theOwner shall be entitled to enforce any remedy available to the Owner.

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

6.1           The responsibilities of theContractor for correction of defective work and completion of the ConstructionContract;

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

H-2

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

7.             The Surety shall not be liable to the Owner or othersfor obligations of the Contractor that are unrelated to the ConstructionContract and the Balance of the Contract Price shall not be reduced or set offon account of any such unrelated obligations. No right of action shall accrueon 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, includingchanges of time, to the Construction Contract or to related subcontracts,purchase orders and other obligations.

9.             Any proceeding, legal or equitable, under this Bond maybe instituted in any court of competent jurisdiction in the location in whichthe work or part of the work is located and shall be instituted within twoyears after Contractor Default or within two years after the Contractor ceasedworking or within two years after the Surety refuses or fails to perform itsobligations under this Bond, whichever occurs first.  If the provisions of this Paragraph are voidor prohibited by law, the minimum period of limitation available to sureties asa defense in the jurisdiction of the suit shall be applicable.

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

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

12.           DEFINITIONS

12.1         Balance of the Contract Price: Thetotal amount payable by the Owner to the Contractor under the ConstructionContract after all proper adjustments have been made, including allowance tothe Contractor of any amounts received or to be received by the Owner insettlement of insurance or other claims for damages to which the Contractor isentitled, reduced by all valid and proper payments made to or on behalf of theContractor under the Construction Contract.

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

12.3         Contractor Default: Failure of theContractor, which has neither been remedied nor waived, to perform or otherwiseto 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 requiredby the Construction Contract or to perform and complete or comply with theother terms thereof.

**MODIFICATIONS TO THIS BOND ARE ASFOLLOWS:**
| This bond is subject to the  attached Dual Obligee Rider dated |   |   |   |
|----------------------------------------------------------------|--------|--------|--------|
|                                                           |   |   |
|                                                           |   |   |
|                                                           |   |   |
|                                                           |   |   |

*(Space is provided belowfor additional signatures of added parties other than those appearing on thecover page.)*

H-3

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| CONTRACTOR AS PRINCIPAL |   | SURETY           |            |
|-------------------------|--------|------------------|-----------------|
|                    |   | (Corporate Seal) |            |   |   | (Corporate Seal) |
| Company:                |   |             | Company:        |   |
| Address:                |   |             | Address:        |   |   |
| Name and Title:         |   |             | Name and Title: |   |   |
| Signature:              |   |             | Signature:      |   |   |
|                         |        |                  |                 |  |  |  |  |  |  |  |  |  |

 

H-4

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**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 concurrentlywith 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 describedbond(s) are hereby amended to include the following paragraph:

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

IT IS FURTHER UNDERSTOOD AND AGREED that nothingherein contained shall be held to change, alter or vary the terms of the abovedescribed bond(s) except as hereinbefore set forth.

SIGNED, SEALED AND DATEDthis ____ day of _____________, 200_.
|   |       | **Fagen, Inc.**                                                                                                                                                          |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |       | ** **                                                                                                                                                               |
|   |       | ** **                                                                                                                                                               | ** ** |
|   |       | *(Contractor)*                                                                                                                                                           |
|   |       | * *                                                                                                                                                                 |
|   |       | * *                                                                                                                                                                 |
|   |       | By:                                                                                                                                                                      |   |   |
|   |       |                                                                                                                                                                     |
|   |       |                                                                                                                                                                     |
|   | ** ** | **[                           ]** |
|   | ** ** | ** **                                                                                                                                                               |
|   |       |                                                                                                                                                                     |   |
|   |       | *(Surety)*                                                                                                                                                               |
|   |       | * *                                                                                                                                                                 |
|   |       | * *                                                                                                                                                                 |
|   |       | By:                                                                                                                                                                      |   |   |

 

H-5

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# **EXHIBIT I****Form of Payment Bond**

PAYMENT BONDThe American Institute of Architects,AIA Document No. A312 (December, 1984 Edition)Any singular reference to Contractor, Surety, Owner or otherparty 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 assignsto the Owner to pay for labor, materials and equipment furnished for use in theperformance of the Construction Contract, which is incorporated herein byreference.

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

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

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

 

I-1

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

3.             With respect to Claimants, this obligation shall be nulland void if the Contractor promptly makes payment, directly or Indirectly, forall sums due.

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

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

4.2           Claimantswho do not have a direct contract with the Contractor:

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

4.2.2        Haveeither received a rejection in whole or in part from the Contractor, or notreceived within 30 days of furnishing the above notice any communication fromthe Contractor by which the Contractor has indicated the claim will be paiddirectly or Indirectly; and

4.2.3        Nothaving been paid within the above 30 days, have sent a written notice to theSurety (at the address described in Paragraph 12) and sent a copy, or noticethereof, to the Owner, stating that a claim is being made under this Bond andenclosing a copy of the previous written notice furnished to the Contractor.

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

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

6.1           Sendan answer to the Claimant, with a copy to the Owner, within 45 days afterreceipt of the claim, stating the amounts that are undisputed and the basis forchallenging any amounts that are disputed.

6.2           Payor arrange for payment of any undisputed amounts.

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

I-2

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

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

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

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

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

13.           When this Bond has been furnished tocomply with a statutory or other legal requirement in the location where theconstruction was to be performed, any provision in this Bond conflicting withsaid statutory or legal requirement shall be deemed deleted herefrom andprovisions conforming to such statutory or other legal requirement shall bedeemed incorporated herein.  The intentis that this Bond shall be construed as a statutory bond and not as a commonlaw bond.

14.           Upon request by any person or entityappearing to be a potential beneficiary of this Bond, the Contractor shallpromptly 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 asubcontractor of the Contractor to furnish labor, materials or equipment foruse in the performance of the Contract. The intent of this Bond shall be toinclude without limitation in the terms “labor, materials or equipment” thatpart of water, gas, power, light, heat, oil, gasoline, telephone service orrental equipment used in the Construction Contract,

I-3

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architectural andengineering services required for performance of the work of the Contractor andthe Contractor’s subcontractors, and all other items for which a mechanic’slien may be asserted in the jurisdiction where the labor, materials orequipment were furnished.

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

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

**MODIFICATIONS TO THIS BOND ARE ASFOLLOWS:**
| This bond is subject to the attached Dual Obligee  Rider dated [                   ]. |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                            |   |
|                                                                                                                                                                            |   |

(Space is provided belowfor additional signatures of added parties other than those appearing on thecover page.)
| CONTRACTOR AS PRINCIPAL | SURETY |
|-------------------------|--------|
| (Corporate Seal)        |   | (Corporate Seal) |   |
| Company:                |   |   | Company: |   |
|                    |   |   |
| Address:                |   |   | Address: |   |
| Name and Title:         |   |   | Name and Title: |   |
| Signature:              |   |   | Signature: |   |
|                         |        |  |  |  |  |  |  |  |  |  |  |  |

 

**DUALOBLIGEE RIDER**

(TO BE ATTACHED TOBOND AT TIME OF ISSUANCE)

TO BE ATTACHED TO ANDFORM 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.**, asPrincipal, and in favor of **                                  **,as Obligee.

IT IS HEREBY UNDERSTOODAND AGREED that the above described bond(s) are hereby amended to include thefollowing paragraph:

Notwithstandinganything contained herein to the contrary, there shall be no liability on thepart of the Principal or Surety under this bond to the Obligees, or either ofthem, unless the Obligees, or either of them, shall make payments to thePrincipal or to the Surety in case it arranges for completion of the Contractupon default of the Principal, strictly in accordance with the terms of saidContract as to payments, and shall perform all the other obligations requiredto be performed under said Contract at the time and in the manner therein setforth.

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

SIGNED, SEALED AND DATEDthis **        **day of **                          **,200  .

I-4

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|       | **Fagen, Inc.**                                                                                                                                                                                        |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                   |
|       |                                                                                                                                                                                                   |
| * *   | *(Contractor)*                                                                                                                                                                                         |
| * *   | * *                                                                                                                                                                                               |
| * *   | * *                                                                                                                                                                                               |
| * *   | * *                                                                                                                                                                                               |
|       | By:                                                                                                                                                                                                    |   |
|       |                                                                                                                                                                                                   |
|       |                                                                                                                                                                                                   |
|       |                                                                                                                                                                                                   |
| ** ** | **[                                ]** |
| ** ** | ** **                                                                                                                                                                                             |
|       |                                                                                                                                                                                                   |
| * *   | *(Surety)*                                                                                                                                                                                             |
| * *   | * *                                                                                                                                                                                               |
| * *   | * *                                                                                                                                                                                               |
| * *   | * *                                                                                                                                                                                               |
|       | By:                                                                                                                                                                                                    |   |

 

I-5

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|  | By: |   |
|--|-----|--------|

 

I-6

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# **EXHIBIT JDraw (Payment) Schedule**

**ABENORTHFIELD, 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 Feeincluded in 1st Billing**

 

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

J-1

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# ** EXHIBIT K**

# **AirEmissions Application or Permit**

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

K-1

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# **EXHIBIT L**

# **Phase Iand Phase II Engineering Services Agreement**

See attached Phase I andPhase 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

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| 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

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| 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

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**PHASE IAND PHASE II**

**ENGINEERINGSERVICES AGREEMENT**

**THIS PHASE I AND PHASE II ENGINEERINGSERVICES AGREEMENT**(the “Agreement”) is made as ofJanuary 9, 2007, (the “Effective Date”) by and between AdvancedBioEnergy, LLC, a Delaware Limited Liability Company (the “Client”) andFagen Engineering, LLC a Minnesota Limited Liability Company (the “Engineer”).  Each of the Client and Engineer are referredto herein individually as a “Party” and collectively as the “Parties.”

**RECITALS**

**WHEREAS**,** **Clientis developing a one hundred (100) million gallons per year dry grind ethanolproduction 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-BuildAgreement”) under which Fagen, Inc., an affiliate of Engineer, will serveas the design-builder for the Plant and provide design, engineering,procurement and construction services for the development and construction ofthe Plant; and

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

**NOW, THEREFORE**, in consideration of themutual promises contained herein and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, and intending to belegally bound by this Agreement, the parties do hereby agree as follows:

**Article 1Definitions; Rules of Interpretation**

**1.1****                               Rulesof Construction.**

Thecapitalized terms listed in this Article 1 shall have the meanings set forthherein whenever the terms appear in this Agreement, whether in the singular orthe plural or in the present or past tense. Other terms used in this Agreement but not listed in this Article shallhave 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 havewell known and generally accepted technical or trade meanings are used hereinin accordance with such recognized meanings. In addition, the following rules of interpretation shall apply:

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### **1.1.1****                    **(a)                                  Themasculine shall include the feminine and neuter.

### **1.1.2****                        **(b)                             Referencesto “Articles,” “Sections,” “Schedules,” or “Exhibits” shall be to Articles,Sections, Schedules or Exhibits of this Agreement.

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

**1.2****                               DefinedTerms.**

Inaddition to definitions appearing elsewhere in this Agreement, the followingterms have the following meanings:

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

*ApplicableLaw*means

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

(b)                                 anyand all orders, judgments, writs, decrees, injunctions, Governmental Approvalsor other decisions of a Governmental Authority; and

(c)                                  anyand all legally binding announcements, directives or published practices orinterpretations, regarding any of the foregoing in (a) or (b) of thisdefinition, enacted, issued or promulgated by a Governmental Authority; 

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

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

*Client’sRepresentative* will have the meaning given to such term inSection 4.1.

*Design-BuildAgreement* will have the meaning given to such term in theRecitals to this Agreement.

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

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

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*EngineerResponsible Parties*will have the meaning given to such termin Section 4.10.

*GovernmentalApprovals*will mean any material authorizations orpermissions issued or granted by any Governmental Authority to the Project, theClient, the Engineer, subcontractors and their affiliates in connection withany activity related to the Services.

*GovernmentalAuthority* will mean any federal, state, local or municipalgovernmental body; any governmental, quasi-governmental, regulatory oradministrative agency, commission, body or other authority exercising orentitled to exercise any administrative, executive, judicial, legislative,policy, regulatory or taxing authority or power; or any court or governmentaltribunal; in each case having jurisdiction over the Client, the Engineer, thePlant, or the Site.

*MonthlyInvoice* will have the meaning given to such term in Section5.7.

*Partyor Parties* will have the meaning given to such term in thePreamble to this Agreement.

*PhaseI Design Package* will have the meaning given to such term inSection 3.2.

*PhaseI Owner Deliverables*will mean the Client’s deliverableobligations pursuant to Exhibit C to this Agreement.

*PhaseII Design Package* will have the meaning given to such term inSection 3.4.

*PhaseII Owner Deliverables* will mean the Client’s deliverableobligations 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, andconsultants, retained by Engineer, or by any person or entity retained directlyor indirectly by Engineer, in each case as an independent contractor, toperform a portion of the Services.

*Work Product* will have the meaning given tosuch term in Section 8.1.

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**Article 2**

**Retentionof the Agent**

## **2.1****                               Retentionof Services.**  On the terms andsubject to the conditions hereinafter set forth, Client hereby retains Engineerto perform, and Engineer hereby agrees to perform, the Services.  Engineer will provide such Services solelypursuant to the terms and conditions set forth herein including anyindemnifications and limitations on liability.

**Article 3**

**EngineerResponsibilities**

### **3.1****                               Services. **Engineer shall perform the Phase I DesignPackage and Phase II Design Package engineering services necessary tofacilitate Client’s completion of the Phase I and Phase II Site work requiredof Client prior to the issuance of a Notice to Proceed pursuant to theDesign-Build Agreement (collectively, the “Services”).

## **3.2****                               PhaseI Design Package. (Grading and Drainage).**The Phase I Design Package to beprovided by Engineer shall consist of the engineering and design of the PlantSite and shall include the following drawings:

a)              CoverSheet

b)             PropertyLayout Drawing

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

*i.**                *Usedfor Land Disturbance Permitting

*ii.**            *Sitegrading is held 6-inches low for topsoil and seeding

d)             RoadwayAlignment Drawing

e)              CulvertCross Sections and Details (Multiple Drawings)

f)                Seedingand Landscaping (If Required)

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

Plan sets alongwith a Bid Tabulation Sheet will be supplied to the Client so all contractorsbid the same quantities.  A telephoneconference call for a Phase I pre-bid meeting will be provided upon Client’srequest.

**3.3****                               Deliveryof Phase I Design Package. **Engineershall 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 thanMay 17, 2007.

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## **3.4****                               PhaseII Design Package. **The Phase IIDesign Package to be provided by Engineer shall provide the engineering anddesign of Site work and utilities for the Plant, all within the property lineof Plant, and shall consist of the following:

a)              CoverSheet

b)             PropertyLayout Drawing

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

d)             RoadwayAlignment

e)              UtilityLayout (Fire Loop)

f)                UtilityLayout (Potable Water)

g)             UtilityLayout (Well Water) if using on-Site wells

h)             UtilityLayout (Sanitary Sewer)

i)                 UtilityLayout (Utility Water Blowdown)

j)                 UtilityLayout (Natural Gas)

*i.**                *FagenEngineering provides a preferred routing through the Site, line size and pipespecifications are typically provided by the gas supplier.

k)              GeometricLayout (For Project Control Verification)

l)                 SiteUtility Piping Tables Drawing

m)           TankFarm Layout Drawing

n)             TankFarm Details Drawing

o)             Sectionsand Details Drawing (If required)

p)             Miscellaneous DetailsDrawing (If required)

A telephoneconference call for a Phase II pre-bid meeting will be provided upon Client’srequest.

**3.5****                               Deliveryof Phase II Design Package. **Engineershall 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 notbe responsible for delays in providing the Services under this Agreement due tofactors beyond Engineer’s control.

**3.7****                               UtilityRouting and Design Services Limited. **TheParties agree that Engineer shall provide the routing and design for theutilities necessary for the Plant only within the Plant property line and up tothe Plant property line, and that, for purposes of this Agreement, Engineerassumes a tie-in point to a city utility. The Parties agree that, if there is no city tie-in point, Engineer willroute the utilities to the Plant property line and stop.  Any special tie-in requirements necessary toconnect the utilities at the Plant property line are not included in thecompensation or the scope of this Agreement and shall only be designed andengineered by Engineer as change in the Project which affects the Serviceshereunder.

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**Article 4**

**ClientResponsibilities**

## **4.1****                               Client’sRepresentative. **Client shall, priorto the commencement of Services by Engineer, name a representative (“Client’sRepresentative”) with authority to receive information and transmitinstructions for Client.  Client’s Representativeshall be vested with authority to act on behalf of Client and Engineer shall beentitled to rely on Client’s Representative’s communications with regard to theServices.

## **4.2****                               Client’sRequirements. **Client shall, prior tothe commencement of Services by Engineer, provide Engineer with Client’srequirements for the Project, including objectives and constraints, design andconstruction standards, bonding and insurance requirements, and contractforms.  Engineer shall be compensated as set forth in Section 5.4 of thisAgreement 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****                               OtherInformation. **Prior to thecommencement of Services by Engineer, Client shall provide Engineer with allother information available to Client and pertinent to the Project and theServices including, but not limited to, all items required pursuant to ExhibitC.  The items required by Client pursuantto this Section 4.3 shall be furnished at Client’s expense, and Engineer shallbe entitled to rely upon the accuracy and completeness thereof.

## **4.4****                               Accessto Property. **Prior to the commencement of Services and as necessary during theperformance of Services, Client shall arrange for access by Engineerupon public and private property, as required for the performance of theServices under this Agreement.

## **4.5****                               Reviewof Documents.**  As related to theperformance of Services hereunder, Client shall examine documents presented byEngineer, obtain legal and other advice as Client deems appropriate, and renderwritten decisions within reasonable time. The items required by Client pursuant to this Section 4.5 shall befurnished at Client’s expense, and Engineer shall be entitled to rely upon theaccuracy and completeness thereof.

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

**4.7****                               Bids. **Client shall advertise for and open bidswhen scheduled.

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

**4.9****                               ServiceOutside Scope of Engineer’s Services. **Client shall, at its own expense, asnecessary for the performance and completions of the Services, provideany additional services necessary for the Project that are outside the scope ofthe Services provided by Engineer under this Agreement.  Engineer shall be entitled to rely upon, asapplicable, the completeness and accuracy of such additional services.

**4.10****                        Deviationfrom Design. **Client shall indemnify and hold harmless Engineer, itsemployees, its agents, its affiliates, and any other persons or entities withinits control or for whom Engineer would otherwise be responsible (“EngineerResponsible Parties”) against claims arising out of Engineer’s design, ifthere has been, in the completion of the Phase I and Phase II Site workrequired of Client prior to the issuance of a Notice to Proceed pursuant to theDesign-Build Agreement, a failure to follow Engineer’s recommendation and suchdeviation or failure caused the claims.

**4.11****                        DevelopmentsAffecting Scope or Timing of Services. **Clientshall promptly notify Engineer, in writing, when Client learns of contractorerror or any development that affects the scope or timing of Engineer’sServices.

**Article5**

**Compensationand Payment**

## **5.1****                               Compensation.**** **In****considerationof its performance of the Services, Client shall pay Engineer for Engineer’stime in the performance of the Services at a fixed fee of Ninety-two ThousandFive Hundred Dollars ($92,500.00) (“Fixed Fee”) as compensation.  Engineer’s compensation under this Section5.1 shall be pursuant to the Fee schedule attached hereto as Exhibit A, as suchschedule may be modified from time to time. The full amount of compensationpaid by Client under this Section 5.1 shall be included in and credited to theDesign-Build Agreement’s contract price if entered into upon payment in full byClient.

## **5.2****                               Reimbursementof Engineer Expenses. **In addition to the fixed fee in 5.1, Clientshall reimburse Engineer for its expenses related to the performance of theServices in accordance with Engineer’s current reimbursable expense scheduleattached hereto as Exhibit B.

## **5.3****                               Reimbursementof Subcontractor Expenses.**

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**5.3.1****                    **Subcontractorcharges related to time spent in the performance of the Services shall not bemarked-up by Engineer.  Client shallreimburse Engineer for costs related to Subcontractors’ time in accordance withthe Subcontractors’ invoices for the work.

**5.3.2****                    **Subcontractorreimbursable expenses will be marked up in accordance with the currentreimbursable expense schedule attached hereto as Exhibit B.

**5.4****                               Feesfor Work Outside Scope of Services. **Feesfor all work outside the scope of Engineer’s responsibilities described inArticles 3 and 4, includingchange order work and acceptable Clientrequirements, shall be computed in accordance with Engineer’s currentfee schedules, attached hereto as Exhibits A and B, as such schedules may berevised from time to time, unless otherwise agreed to in writing. Any compensation paid to Engineer pursuant tothis Section 5.4 shall not be included in or credited to the Design-BuildAgreement’s contract price.

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

**5.6****                               ReimbursementSchedules Subject to Change.** Engineer’s reimbursement schedule andreimbursable expense schedule attached hereto as Exhibits A and B are subjectto change on January 1 of each year.

## **5.7****                               Invoices. **Engineer shall submit a monthly invoice (“MonthlyInvoice”) for Services provided and for reimbursable expenses incurred byEngineer and any Subcontractors.

## **5.8****                               Payment.**  Within thirty (30) days after Client’sreceipt of each Monthly Invoice, Client shall pay Engineer all amounts due.

## **5.9****                               LatePayment and Interest. **If Clientfails 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 isless, shall accrue.

## **5.10****                        Suspensionfor Failure to Pay. **If Client failsto 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 infull.

**5.11****                        Paymentsfrom Lawful Sources. **Client shallprovide for payment from one or more lawful source of all sums to be paidEngineer.

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**5.12****                        WithholdingPayments. **Engineer’s compensationshall not be reduced on account of any amounts withheld from payment toSubcontractors.

**5.13****                        Purchase Orders.**  IfClient issues a purchase order or other document to initiate the commencementof Services hereunder, it is expressly agreed that any terms and conditionsappearing thereon shall have no application and only the provisions of thisAgreement shall apply.

**5.14****                        Changes inProject. **If Client requests changesin the Project which affect the Services, compensation for and time ofperformance of Engineer’s services shall be adjusted appropriately.

**Article 6**

**ConstructionCost and Cost Estimates**

**6.1****                               CostEstimates**.  Client and Engineeracknowledge that Engineer has no control over cost of labor, materials,equipment or services furnished by others, over contractors’ methods of determiningprices, or other competitive bidding or market conditions and that Engineer’sestimates of Project construction cost will be made on the basis of itsemployees’ experience and qualifications and will represent Engineer’semployees’ best judgment as experienced and qualified professionals, familiarwith the construction industry.  Engineerdoes not guarantee that proposal, bids, or actual construction cost will notvary from its estimates of Project cost and Client acknowledges the same.

**Article 7**

**Termination**

**7.1****                               TerminationUpon Default. **Either party mayterminate this Agreement upon twenty (20) days’ written notice if thenon-terminating party has defaulted through no fault of the terminating party.

**7.2****                               TerminationUpon Abandonment of Plant. **Clientmay 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 forservices rendered (including Subcontractor’s fees, if any) and any unpaidreimbursable expenses shall be immediately due and payable by Client.

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**Article 8**

**Ownershipof Work Product**

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

**8.2****                               CopiesProvided to Client. **Client mayretain copies of Work Product for reference; provided, however, that Client maynot make copies of the Work Product available without Engineer’s writtenpermission, and, granted such permission, may only do so to the extent the useof such copies of the Work Product directly pertains to the Services, thePlant, or the construction thereof. Pursuant to Section 8.1 of this Agreement, Engineer retains ownership ofand property interests in any Work Product made available and/or copied.

**8.3****                               ProhibitedUse of Work Product. **Reuse of theWork Product on any another Project without Engineer’s written consent isprohibited.  Client shall indemnify andhold harmless Engineer Responsible Parties against claims resulting from suchprohibited reuse.  Said items are notintended to be suitable for completion of this Project by others.

**8.4****                               Derogationof Engineer’s Rights to Work Product. **Submittalor distribution of Work Product in connection with the performance andcompletion of the Services and the construction of the Project does notconstitute publication in derogation of Engineer’s rights and does not in anyway diminish Engineer’s Work Product rights established herein.

**Article 9**

**Successorsand Assigns**

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

**9.2****                               WrittenConsent Required. **Neither Partyshall assign, sublet, or transfer any interest in this Agreement withoutwritten consent of the other; provided, however, that Engineer may employ suchSubcontractors as it may deem appropriate and may transfer or assign anyinterest in this Agreement or the Work Product to Design-Builder withoutconsent of Client.

**9.3****                               NoThird-Party Beneficiaries.**  None ofthe provisions of this Agreement will be for the benefit of or enforceable byany person other than the Parties hereto, their successors and permittedassigns and legal representatives.

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**Article10**

**Warranty**

**10.1****                        NoWarranty Extended. **Engineer shalluse reasonable care to reflect requirements of all Applicable Laws, rules, orregulations of which Engineer has knowledge or about which Client specificallyadvises in writing, which are in effect on the date of this Agreement.  ENGINEER INTENDS TO RENDER SERVICES INACCORDANCE WITH GENERALLY ACCEPTED PROFESSIONAL STANDARDS, BUT NO OTHERWARRANTY IS EXTENDED, EITHER EXPRESS OR IMPLIED, IN CONNECTION WITH SUCHSERVICES.  Client’s rights and remediesin this Agreement are exclusive.

**10.2****                        NoResponsibility for Construction. **Engineershall not be responsible for construction of the Plant, contractors’construction means, methods, techniques, sequences, or procedures, or forcontractors’ safety precautions and programs, or for contractors’ failureaccording to contract documents.

**Article 11**

**Indemnification**

## **11.1****                        Engineer’sIndemnification. **To the fullestextent permitted by law, Engineer shall indemnify and hold harmless Client,Client’s officers, directors, partners, employees, and agents from and againstany and all claims for bodily injury and for damage to tangible property causedsolely by the negligent acts or omissions of Engineer or Engineer ResponsibleParties and Engineer’s Engineers in the performance and furnishing of Engineer’sServices under this Agreement.  Anyindemnification shall be limited to the terms and amounts of coverage of theEngineer’s insurance policies.

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

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

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**Article12**

**Article2Dispute Resolution**

## **12.1****                        Arbitration. **In an effort to resolve any conflictsthat arise out of or relate to this Agreement, the Client and the Engineeragree 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 inMinneapolis, Minnesota in accordance with the Construction Industry ArbitrationRules of the American Arbitration Association then in effect, unless theParties mutually agree otherwise.

The award ofthe arbitrator(s) shall be final and binding upon the Parties without the rightof appeal to the courts.  Judgment may beentered upon it in accordance with Applicable Law by any court havingjurisdiction thereof.

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

## **2.1****                              **Theprevailing Party in any arbitration, or any other final, binding disputeproceeding upon which the Parties may agree, shall be entitled to recover fromthe other Party reasonable attorneys’ fees and expenses incurred by theprevailing Party.

**Article13**

**Confidentiality**

## **13.1****                        Non-DisclosureObligation.**  Except as required bycourt order, subpoena, or Applicable Law, neither Party shall disclose to thirdparties any confidential or proprietary information regarding the other Party’sbusiness affairs, finances, technology, processes, plans or installations,product information, know-how, or other information that is received from theother Party pursuant to this Agreement or the Parties’ relationship priorthereto or is developed pursuant to this Agreement, without the express writtenconsent of the other Party, which consent shall not be unreasonablywithheld.  The Parties shall at all timesuse their respective reasonable efforts to keep all information regarding theterms and conditions of this Agreement confidential and shall disclose suchinformation to third Persons only as reasonably required for the permitting ofthe Project; financing the development, construction, ownership, operation andmaintenance of the Plant; or as reasonably required by either Party forperforming its obligations hereunder and if prior to such disclosure, thedisclosing Party informs such third Persons of the

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## existence of this confidentiality obligation and only if such thirdPersons agree to maintain the confidentiality of any information received.  This Article 13 shall not apply toinformation that was already in the possession of one Party prior to receiptfrom the other, that is now or hereafter becomes a part of the public domainthrough no fault of the Party wishing to disclose, or that corresponds insubstance to information heretofore or hereafter furnished by third partieswithout restriction on disclosure.

## **13.2****                        Publicityand Advertising.**  Neither Client norEngineer shall make or permit any of their subcontractors, agents, or vendorsto make any external announcement or publication, release any photographs orinformation concerning the Project or any part thereof, or make any other typeof communication to any member of the public, press, business entity, or anyofficial body which names the other Party unless prior written consent isobtained from the other Party, which consent shall not be unreasonably withheld.

## **13.3****                        Term ofObligation.**  The confidentialityobligations of the Parties pursuant to this Article 13 shall survive for aperiod five (5) years following the later to occur of termination of thisAgreement or completion of the Plant.

**Article14**

**Miscellaneous**

## **14.1****                       ****Governing Law****. **This Agreement shall be governedby and construed and enforced in accordance with, the substantive laws of thestate of Minnesota, without regard to the conflict of laws provisions thereof.

## **14.2****                       ****Severability****.** If any provision or any part of a provision ofthe Agreement shall be finally determined to be superseded, invalid, illegal,or otherwise unenforceable pursuant to any applicable Legal Requirements, suchdetermination shall not impair or otherwise affect the validity, legality, orenforceability of the remaining provision or parts of the provision of theAgreement, which shall remain in full force and effect as if the unenforceableprovision or part were deleted.

## **14.3****                       ****No Waiver****. **The failure of either Engineer orClient to insist, in any one or more instances, on the performance of any ofthe obligations required by the other under this Agreement shall not beconstrued as a waiver or relinquishment of such obligation or right withrespect to future performance.

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## **14.4****                        Captionsand****Headings****. **The table ofcontents and the headings used in this Agreement are for ease of reference onlyand 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 thisAgreement.

**14.5****                        Engineer’sAccounting Records.**  Records ofEngineer’s personnel time, reimbursable expenses, and accounts between partiesshall be maintained on a generally recognized accounting basis.

## **14.6****                        Counterparts.**  This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original and all of whichtogether shall be deemed one and the same Agreement, and may be executed anddelivered by facsimile signature, which shall be considered an original.

## **14.7****                        Survival. **Notwithstanding any provisions herein tothe contrary, the Work Product provisions set forth in Article 8 and theindemnity obligations set forth herein shall survive (in full force) theexpiration or termination of this Agreement, and shall continue to apply to theParties to this Agreement even after termination of this Agreement or thetransfer of such Party’s interest in this Agreement.

## **14.8****                       ****No Privity with Client’s Contractors****.**  Nothing in thisAgreement is intended or deemed to create any legal or contractual relationshipbetween Engineer and any Client contractor or subcontractor retained to performthe Phase I and Phase II Site work required of Client prior to the issuance ofa 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 authorizedrepresentative of each Party.

## **14.10****                ****Entire Agreement****. **This Agreement consists of theterms and conditions set forth herein, as well as the Exhibits hereto, whichare incorporated by reference herein and made a part hereof.  This Agreement sets forth the full andcomplete understanding of the Parties as of the Effective Date with respect tothe subject matter hereof.

## **14.11****                ****Notice****. **Whenever the Agreement requiresthat notice be provided to a Party, notice shall be delivered in writing tosuch party at the address listed below. Notice will be deemed to have been validly given if delivered (i) inperson to the individual intended to receive such notice, (ii) by registered orby certified mail, postage prepaid to the address indicated in the Agreementwithin four (4) days after being sent, or (iii) by facsimile, by the timestated in a machine-generated confirmation that notice was received at thefacsimile number of the intended recipient.

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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, Suite250

Minneapolis, MN 55305

Attention:  Don Gales

Fax:  (763)226-2725

## **14.12****                 Extent ofAgreement.**  This Agreement and theExhibits incorporated therein represent the entire agreement between theParties and may be amended only by written instrument signed by both Parties.

**14.13****                 SubrogationWaiver.**  The Parties waive all rightsagainst each other, and against the contractors, Engineers, agents, andemployees of the other for damages covered by any property insurance duringconstruction, and each shall require similar waivers from their contractors,Engineers, and agents.

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**IN WITNESS WHEREOF**, the Parties hereto havecaused their names to be hereunto subscribed by their officers thereunto dulyauthorized, intending thereby that this Agreement shall be effective as of thisJanuary 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: |   |
|                         |            |                            |  |  |

 

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**EXHIBITA**

**FAGENENGINEERING LLC**

**FeeSchedule 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                |   $                                            [*] |

 

**Subjectto Revision January 1, 2008**

----

* Portions omittedpursuant to a request for confidential treatment and filed separately with theSEC.

17

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**EXHIBITB**

**FagenEngineering LLCReimbursable Expense Billing Schedule**

**EffectiveJanuary 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 31⁄2”/ea               |       | $                     | [*]        |   |
| FAX                   |       | Fax  Machine Usage/Page                     |       | $                     | [*]        |   |
| LD                    |       | Long  Distance Phone Calls                  |       | [*]                   |       |
| LODGING               |       | Lodging                                     |       | [*]                   |       |
| MEALS                 |       | Meal  Expense                               |       | [*]                   |       |
| MILEAGE               |       | Mileage/Mile                                |       | $                     | [*]        |   |
| PC1                   |       | Photocopies  81⁄2x11 (<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                 |       | $                     | [*]        |   |
|                  |       |                                        |       |                  |       |

 

**Subjectto Revision January 1, 2008**

----

* Portions omittedpursuant to a request for confidential treatment and filed separately with theSEC.

18

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**EXHIBIT C**

**Client’sDeliverable Site Obligations**

**PhaseI Deliverables**

Priorto Engineer’s commencement of the Phase I Design Package work, the Client shallprovide Engineer with the following Phase I Deliverables:

1.         Alegal description of the Site

2.         Temporaryand permanent easements, zoning, and other requirements and encumbrancesaffecting land use or necessary to permit the proper design and construction ofthe Project and enable Design-Builder to perform the Work

3.         Tothe extent available, as-built and record drawings of any existing structuresat the Site

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

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

6.         Anyspecial sizing or other requirements for ethanol storage tank farm.

7.         Preliminaryapproval from Client’s Rail service provider of rail design as prepared byClient’s Rail Designer.

8.         Preliminarylocation and design of administration building.

9.         Client’swritten approval of final site layout including rail design and environmentalpermitting emission points.

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

11.       GeotechnicalReport regarding subsurface conditions with Client’s Geotechnical Engineer’srecommendations from Engineer approved Geotechnical Engineer (Terracon ispreferred) including soil borings, and any other surveys or informationavailable describing other latent or concealed physical conditions at the Site.

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

13.       Owneris required to provide approval of and understand the cost implications of thesoil stabilization and foundation systems required for the project.  This approval will be based on therecommendations of the geotechnical and structural engineers.

14.       Locationand form for delivery of temporary electrical service.

15.       On-sitelocation for Storm Water discharge.

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

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

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

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

19

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**PhaseII Deliverables**

Priorto Engineer’s commencement of the Phase II Design Package work, the Clientshall provide Engineer with the following Phase II Deliverables:

1.         Off-siteutility tie-in locations at or near the property lines (this includes, but isnot limited to, gas supply, electrical supply, water supply if no on-sitewells, on-site or off-site sanitary sewer)

2.         FinalNPDES discharge location for Utility Water Blowdown.

3.         Aninsurance provider to allow the proper positioning and number of requiredhydrants and hydrants with monitors.

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

5.         Finallocation and design (general arrangement) of the Client’s administrationbuilding.

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

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

20

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**EXHIBIT M**

**Form ofApplication for Payment**

See attached Form ofApplication 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 tothe best of the Contractor’s knowledge, information, and belief the Workcovered by this Application for Payment has been completed in accordance withthe Contract Documents, that all amounts have been paid by the Contractor forWork for which previous Certificates for Payment were issued and paymentsreceived from the Owner, and that current payment shown herein is now due.

 

 
| CONTRACTOR: FAGEN, INC. |   |
|-------------------------|--------|
|                    |   |
| By:                     |   |   | Date: |   |
|                         |        |  |  |  |

 

Application is made for Payment, as shownbelow, in connection with the contract.  ContinuationSheet 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

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FAGEN, INC.

AIA CONTINUATIONSHEET
|                                                                  |   |                  |   | 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 omittedpursuant to a request for confidential treatment and filed separately with theSEC.

M-3

----

**EXHIBIT N**

**Form ofLien Waiver**

GENERAL CONTRACTOR’SPARTIAL WAIVER OF MECHANIC’S LIEN RIGHTS ANDAFFIDAVIT OF DEBTS AND CLAIMS

CONDITIONAL LIENWAIVER

STATE:  (  INSERT STATE   )                                                                                                          FAGEN,INC.

COUNTY:  (  INSERT COUNTY   )

The undersigned is theGeneral Contractor (aka Design-Builder) regarding labor and materials forconstruction 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 receivingfull payment for billings up to date hereof under the termsof the above mentioned contract, and other good and valuable consideration, thereceipt of which is hereby acknowledged, the undersigned does hereby waive andrelease any and all liens, and any and all claims and rights to lien on theFacility  (including all buildings on thepremises) under the statutes of the State of (   INSERT STATE   ) relating to mechanic’s liens onaccount of labor and materials furnished by the undersigned up to the datehereof 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 undersignedfurther certifies that all obligations of General Contractor entered intobetween suppliers/subcontractors and General Contractor regarding this Facilityare current as of this date, including all obligations of General Contractorfor all work, labor and services performed; materials and equipment furnished;and all known indebtedness and claims against General Contractor for damagesarising in any manner in connection with General Contractor’s performance ofthe contract mentioned above for which General Contractor or property ofGeneral 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 andsworn to before me this

_______ day of_______________, 200__.
|  |   |
|--|--------|
|  |   | Notary Public |
|  |        |  |  |

 

My Commission Expires: ____________________

N-2

----

**EXHIBIT O**

**Form ofConsent to Assignment**

**FAGEN CONSENT TOASSIGNMENT**

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

The Assignor seeks to construct and operate a onehundred (100) million gallon per year fuel-grade ethanol production plant inNorthfield, Minnesota (the “Project”). The Obligor and the Assignor have entered into the Lump-Sum Design-BuildAgreement dated as of February 7, 2007 (as amended, modified, supplemented andin effect from time to time, the “Assigned Agreement”).  The Assignor and certain other financialinstitutions (the “Lenders”) intend to finance certain costs of theAssignor for the development, construction and operation of the Projectpursuant to various financing arrangements (the “Financing Arrangements”).  The Assignor and the Collateral Agent (onbehalf of the Lenders) intend to enter into certain security arrangements (the “SecurityDocuments”), pursuant to which the Assignor will pledge and assign to theCollateral Agent a lien on and a security interest in all of the Assignor’sright, title and interest in, among other things, the Assigned Agreement.

SECTION 1.                                CONSENTTO ASSIGNMENTS; LIABILITY; CURE RIGHTS; ETC.

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

1.2                                 Limitationon Assumption of Obligations.  TheCollateral Agent shall not be liable for the performance or observance of anyof the obligations or duties of the Assignor under the Assigned Agreement, norshall the Security Documents give rise to any duties or obligations whatsoever,except that, insofar as the Collateral Agent exercises any of Assignor’s rightsunder the Assigned Agreement and/or makes any claims with respect to anypayments, deliveries or

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other obligations underthe Assigned Agreement, the satisfaction of the terms and conditions of theAssigned Agreement applicable to such exercise of rights or such claims shallbe a condition precedent to the Obligor’s obligations with respectthereto.  Upon any transfer to a thirdparty of the rights of the Collateral Agent under the Assigned Agreementpursuant to its exercise of its remedies under the Security Documents asdescribed in Section 1.4 below which transfer of the Assigned Agreementshall be subject in all respects  to theterms and conditions of the Assigned Agreement, including Section 21.1 thereof(i) the transferee shall succeed to all right, title and interest of theAssignor and the Collateral Agent and (ii) the Collateral Agent shall have nofurther liabilities, duties or obligations to the Assignor under the AssignedAgreement.

1.3                                 CurePeriods.  The Obligor hereby confirmsthat it will provide to the Collateral Agent the same notices as are to beprovided to the Assignor pursuant to Sections 15.4.2, 15.5.1(d), and 15.5.2 ofthe Assigned Agreement.

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

1.5                                 NoAmendments.  The Obligor acknowledgesthat under the terms of the Financing Arrangements, the Assignor is required toobtain the consent of the Lenders for certain amendments to the AssignedAgreement.

SECTION2.                                NOTICES.  The first paragraphof Section 21.7 of the Assigned Agreement is hereby incorporated in thisConsent, as if set forth herein in its entirety.  For purposes of Section 21.7 of the AssignedAgreement, the initial address for notice to the Collateral Agent shall be asfollows:

[BANK]

[ADDRESS]

Attn: [NAME/TITLE]

Fax:  [FAX NUMBER]

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TheObligor acknowledges and agrees that the delivery of the Collateral Agent’snotice information in this Section 2 shall be deemed to satisfy the requirementof the Owner in Section 21.7 of the Assigned Agreement to deliver suchinformation to the Obligor.

SECTION 3.                                MISCELLANEOUS.

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

[THE NEXT PAGE IS THESIGNATURE PAGE]

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IN WITNESS WHEREOF, the parties hereto have causedthis Consent to be duly executed and delivered by their respective officersthereunto 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                           |

 

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