exv10w7



 





Exhibit 10.7




DESIGN/BUILD

CONSTRUCTION CONTRACT

(LUMP SUM COST)




THIS AGREEMENT, made this  21st  day of  December , 2007
, by and between Hogenson Construction Company, a North Dakota corporation, hereinafter called
“Contractor”, and One Earth Energy, of Gibson City, Illinois hereinafter called “Owner”.



WITNESSETH, that the Contractor and the Owner for the considerations hereinafter named agree as
follows:



ARTICLE 1 — SCOPE OF WORK




The Contractor shall furnish all of the materials and perform all of the work as described in the
Specifications entitled “SPECIFICATIONS for AUGER CAST PILE SYSTEM UNDER CORN AND DDG SILOS, C0730”
and shall do everything required by this Agreement and the Specifications.



ARTICLE 2 — TIME OF COMPLETION




The engineering and purchasing required under this Contract shall be commenced immediately.
Construction installation is to be commenced in early January with the use of cold weather expenses
and/or cold weather protection costs, and shall be continuous on a timely basis, as weather allows,
through to substantial completion and final completion of the Scope of Work contracted herein.
Final completion is projected by March 1st.



ARTICLE 3 — THE CONTRACT SUM




The “LUMP SUM” price for this Contract shall be One Million Seventy Two Thousand One Hundred Ninety
Eight and 00/100 Dollars ($1,072,198.00).



ARTICLE 4 — CHANGE ORDERS





	 	 	Change orders may be added to this Contract in written form only. Change order pricing by the
Contractor to the Owner will include the following items:




 









 












	 	1.	 	All Engineering costs (based on published hourly rates and direct expenses).
	 
	 	2.	 	All Material direct costs including Freight.
	 
	 	3.	 	All Labor direct costs including Supervision.
	 
	 	4.	 	All Subcontractor direct costs.
	 
	 	5.	 	All Construction Equipment Rental costs that the Contractor may incur in performing
the change.
	 
	 	6.	 	All Taxes and Insurance costs that the Contractor may incur on direct materials,
labor, subcontracts, or other areas.
	 
	 	7.	 	Any reasonable General Condition costs that the Contractor may incur in performing
the change.
	 
	 	8.	 	The Contractor’s Overhead of 10% on total costs.

	 
	 	9.	 	The Contractor’s Commission of 10% on total costs.





The Contractor and the Owner will agree to the Lump Sum amount for each change order to be added to
this Contact based on the above listed items.



Each change order will be signed in duplicate with one (1) original being for the Owner and one (1)
original being for the Contractor. To not deter construction progress, change orders may be
handled via fax with originals to be mailed in order to expedite their handling.



ARTICLE 5 — DOWN PAYMENT ADVANCES




Upon signing of the Contract, the Owner shall immediately make a $107,220.00 down payment advance
to the Contractor for the initiation of the Contract and the continuation of engineering and
procurement for the Project.



ARTICLE 6 — PROGRESS PAYMENTS




The Owner shall make payments to the Contractor on account of the Contract as follows:



Progress billings by the Contractor to the Owner, shall be submitted on timely intervals of not
less than two (2) weeks and not more than one (1) month. Each billing shall be certified by the
Contractor to be true and accurate, shall be based on the percentage of Project completion as of
the date of billing, and shall include all engineering, material, labor, equipment, construction
equipment rental, and direct Project related expenses, plus overhead expenses and commission. The
Contractor will bill on the 15th of each month throughout the project’s completion.



Payments shall be due upon receipt. Amounts past due over fifteen (15) days shall be subject to
interest at 2% over prime as adjusted monthly by State Bank of West Fargo, West Fargo, North
Dakota.



 









 





ARTICLE 7 — ACCEPTANCE AND FINAL PAYMENT




Upon receipt of written notice from the Contractor that the Project is completed and ready for
final inspection and acceptance, the Owner shall promptly, but not later than three (3) days after
receipt of such notice, make such final inspection and write a final punch list of any and all
outstanding items found to exist that are to be completed under the Contract. The Contractor shall
then promptly correct or complete the final punch list items. When the Owner finds the Project
acceptable and the Contract performed in full, meaning the Owner has no punch list to submit, the
Owner shall promptly, but not later than two (2) days after acceptance, issue a final certificate
for payment, over his own signature, stating that the Project provided for in this Contract has
been completed and is accepted under the terms and conditions thereof, and the entire balance due
to the Contractor is due and payable immediately.



If after the Project is substantially completed, and final completion thereof is materially delayed
by the Owner, the Owner shall, without terminating the Contract, make payment to the Contractor on
the balance due for that portion of the Project fully completed and accepted, and make extra
payment to the Contractor for all reasonable costs as a result of the delay. Such payment shall be
made under the terms and conditions governing final payment, except that it shall not constitute a
waiver of claims.



ARTICLE 8 — NOTICE TO OWNER OF LIEN RIGHTS




THE CONTRACTOR RESERVES ALL LIEN RIGHTS ALLOWED UNDER ILLINOIS STATE LAW.



Any person or company supplying labor or materials for improving the Owner’s property, may file a
lien against the Owner’s property, if that person or company is not paid for their contributions.
This shall be no responsibility of the Contractor, if the Owner, at the time the lien is filed, has
not paid the Contractor in full for all invoices billed and due to the Contractor.



ARTICLE 9 — THE CONTRACT DOCUMENTS




This Agreement, the Specifications and the proposal submitted by Contractor shall form the
Contract. The Specifications and Contract Drawings are as fully a part of the Contract as if
hereto attached or herein repeated.



In the event of any conflict in and between the Contract Documents, the following order of Final
Authority between the Contract Documents shall be followed:


Highest Final Authority — Contract Change Orders

Second Level of Final Authority — Contract Specifications

Third Level of Final Authority — Contract Agreement

Fourth Level of Final Authority — Contractor Proposal





 









 








IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first above written.



	 	 	 	 	 	 	 	 	 
	ACCEPTED BY:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Dunnley Mattke	 	 	 	/s/ Steve Kelly	 	 
	 	 	 	 	 	 	 
	Dunnley Mattke

	 	 	 	Title: General Manager	 	 
	President

	 	 	 	One Earth Energy 12-26-2007	 	 
	Hogenson Construction Company
	 	 	 	 	 	 	 	 






 









 






SPECIFICATIONS




AUGER CAST PILE SYSTEM TO SUPPORT

CORN AND DDGS SILOS

C0730




     1. PROJECT




     1-1 GENERAL





It is understood that where the word “Owner” appears, it shall mean the company known in
these Specifications as ONE EARTH ENERGY, GIBSON CITY, IL being the party of the second
part in the Contract and where the word “Contractor” appears, it shall mean HOGENSON
CONSTRUCTION COMPANY being the party of the first part of the Contract.




The plans and specifications are intended to conform to each other. Errors, omissions, or
transposition of figures and descriptions in either the plans or specifications shall not
relieve the Contractor from any part of this Contract obligation or entitle him to claim
for extra compensation. The Contractor, presumed to be sufficiently experienced and
familiar with Auger Cast Pile Systems, shall observe and correct any discrepancies in the
figures and descriptions on either the plans or specifications.




In all cases, the figures on the scale drawings shall govern in preference to either scale,
dimensions, or figures in the Specifications.




The Contractor shall establish the plot lines and indicate the desired location of the piles.




The Contractor shall set a datum point for heights.




The building will be located as per the Contractor’s plot plan and approved by the Owner
before any construction activity on the site begins. If a surveyor is required to locate
the position of the building, the Contractor will coordinate this survey, but the location
will remain the responsibility of the Owner as if he had contracted the surveyor directly.



     1-2 SCOPE OF WORK




This Specification covers the design, fabrication, furnishing, and construction of a complete auger
cast pile system to support the concrete grain storage and the concrete DDG storage. These
Specifications are not intended to specify all details of the design requirements and construction.
The Project is also subject to all the attachments of this Specification.




The Contractor shall accept full responsibility for his work and for the work of his
subcontractors, including performance qualifications, specifications,



 









 







documentation, fabrication, testing, examination, inspection, cleaning, and compliance with
this Specification.




The Contractor shall provide all labor, materials, equipment, incidentals, tools,
insurance, services, and skills in such quantities as may be necessary to complete the
Project within the intent of these Specifications.




The Contractor has excluded daily inspection by an independent testing laboratory.




The Contractor has not included any sales and / or use taxes. If the tax exemption
certificate cannot be made available, a change order reflecting the costs will be added to
the owners account.




The auger cast pile system will include (361) 16” diameter piles placed at a depth of
62’-0” below grade for the corn silo and (118) 16” diameter piles placed at a depth of
62’-0” for the DDG silo. All engineering and testing will be provided by Contractor as
well as material and labor to dewater and remove the spoils from the piling area.




We have not included any costs associated with concealed conditions. Prices are given
going down to refusal, which is defined as a rate of penetration of 3’-0” per minute or
less. Adding piles because of obstructions will be charged at the unit prices given below.




Add: $17.00 / LF for pile lengths in excess of base bid quantities.




Deduct: $5.00 / LF for pile lengths less than base bid quantities.




Add: $25,000 for each additional static load test required. (One included in base bid)




Add: $950 / HR for lost time caused by natural or man-made obstructions, rock, boulders or
for delay time caused by others.



     1-3 PERMITS





The Owner shall furnish at his own expense, all necessary permits required by city, county,
state, federal, and railroad authorities. The Contractor shall assist the Owner in
obtaining all necessary permits.



     1-4 RESPONSIBILITY





The Contractor shall comply with all local, state, and federal laws and ordinances
governing this class of work, including OSHA.




The Contractor shall confine its operations to the building site and shall not unreasonably
encumber the Owner’s premises or plant operations.




The Contractor shall keep the building site reasonably clean and free from waste material
and rubbish. Upon final completion, the Contractor shall remove all



 









 






temporary buildings; all owned and rented equipment, and all unused materials from the
building site.



     1-5 CONTRACTOR’S INSURANCE AND INDEMNITY





The Contractor shall carry public liability and property damage insurance, same to be paid
for by the Contractor. The Contractor agrees to protect, defend, hold harmless, and
indemnify the Owner, his agents, and employees from all such bodily injury or property
damage claims for which the Owner may be or may be claimed to be liable, and legal fees and
disbursements paid or incurred as a result of work done during the duration of the Project.
The Contractor further agrees to obtain, maintain, and pay for such general liability
insurance coverage as will insure the provision of this paragraph. The Contractor shall
also carry workmen’s compensation insurance, and submit contributions as required by law
for social security benefits and unemployment compensation, same to be paid for by the
Contractor.



     1-6 ACCESS TO THE PROJECT





The Owner or his authorized representative shall have access to the Project at all times
for the inspection of the whole Project or any part thereof. The Owner or his authorized
representative shall conform to all safety regulations required by OSHA and the Contractor.



     1-7 BUILDING INSURANCE





During the construction of the Project, the Owner shall carry builder’s risk insurance
covering the buildings and all materials and equipment used or about to be used in the
construction, which insurance shall be increased or renewed as required to cover the value
of the Project. Coverage shall include all formwork and the Contractor’s equipment. Loss
shall be payable to the Owner and the Contractor as their respective interests shall appear
at the time of the loss.




Railroad protective liability insurance (if required) is an addition to this Contract.



     1-8 ALTERATIONS AND/OR ADDITIONS





If the Owner desires to make any changes or additions, he may do so and in no way
invalidate the Contract, except that sufficient time shall be given to the Contractor in
which to perform the work. For construction related changes or additions, the Contractor
shall be reimbursed for all material, equipment, and labor costs plus 10% for overhead
expenses and 10% commission. Additional work shall be agreed to by both parties with the
scope of work and estimated costs thereof, if desired, documented in writing. One
representative of the Owner, STEVEN KELLY, and one representative of the Contractor, JOE
FINK, shall be authorized to sign additional work authorization forms.



     1-9 CHARACTER OF WORKMEN





The Contractor shall employ only competent and skillful men in the different



 









 






trades to do the work. Men who are unfaithful, incompetent, or disorderly shall be
discharged from the Project and not again employed upon it.



     1-10 EARTHWORK





Excavation from and backfilling to the existing grade in the immediate building area will
be by the Contractor.




Any and all underground obstructions or overhead obstructions shall be moved at the Owner’s
expense (telephone lines, electrical power lines, old foundations, tile, gas lines, water
lines, sewer lines, pump stations, etc.). Specific underground obstructions or overhead
obstructions to be moved by the Contractor are listed in Section 2.




All temporary and finished roadwork, if required, shall remain the responsibility of the
Owner.



     1-11 SOIL DATA





The Owner shall coordinate the soil test. The contents of the soils report will remain the
responsibility of the Owner and all associated costs will be for the Owner’s account. The
Contract will be based on the soil test. The Contractor shall not be responsible for any
deviations, errors, or omissions in the soil test or soils report, which affect the
structure during or after construction. This includes, but is not limited to, high water
table, excessive vertical or differential settlement, and pockets of untested material.
The removal of soils disturbed by rainfall shall be for the Owner’s account.




The Contractor will provide a standard de-watering pump. Any specialized excavating or
de-watering equipment, if required, will be an addition to the Contract (draglines, well
points, shoring, coffer dams, soil solidification, etc.).



     1-12 SURFACE DRAINAGE





The Contractor will be responsible for surface drainage grading within the building
construction lines. The Owner will be responsible for all grading outside the building
construction lines and all associated expenses will be for the Owner’s account. All future
maintenance of grades within the building construction lines or outside shall be the
responsibility of the Owner.



     1-13 SUBCONTRACTS





No subcontract entered into by the Contractor, as part of the Contractor’s direct Scope of
Work, shall under any circumstances relieve the Contractor from his liabilities and
obligations under this Contract.



     1-14 GUARANTEE OF WORK





The Contractor guarantees that the plans and specifications are adequate and proper for the
construction of a auger cast pile system on the Owner’s site. The



 









 






Contractor agrees that for a period of one year from the date of completion or first use by
the Owner, whichever occurs first, it will be responsible for any failure in the structural
components of the auger cast pile system, either partial or complete, caused by faulty
design.



     1-15 GUARANTEE AND WARRANTY WORK





If defects occur which fall within the guarantee or warranty period, the Contractor shall
be notified and shall be given sufficient time to make corrections.



     1-16 ARBITRATION





All claims, disputes, and other matters in question between the Owner and the Contractor
relating to the Contract Documents (except for claims which have been waived by the making
or acceptance of final payment as provided by the Contract) shall be decided by arbitration
in accordance with the Construction Industry Arbitration Rules of the American Arbitration
Association. This agreement to arbitrate and any other agreement or consent to arbitrate
will be specifically enforceable under the prevailing arbitration law of any court having
jurisdiction.




Notice of the demand for arbitration shall be filed in writing with the other party to the
Agreement and with the American Arbitration Association. The demand for arbitration shall
be made within a reasonable time after the claim, dispute, or other matter in question has
arisen, and in no event shall any such demand be made after institution of legal or
equitable proceedings based on such claim, dispute, or other matter in question would be
barred by the applicable statute of limitations.



     1-17 DESIGN RESPONSIBILITY





The Contractor shall be responsible for all design associated with this Contract’s direct
Scope of Work for the Project, including, but not limited to structures and material
handling systems.



     1-18 CHANGES IN CODES





The Contractor is not responsible for costs that may result from code changes occurring
after the Contract date. This specifically includes, but is not limited to, the OSHA
Standards for Grain Facilities. Resulting changes in the Project due to code changes shall
be considered as an alteration and/or addition as noted in these Specifications.



     1-19 STRUCTURAL DESIGN CODES:





	 	1.	 	American Concrete Institute (ACI).






	 	•	 	Building Code Requirements for Reinforced Concrete (ACI 318-91).






	 	2.	 	OSHA Safety and Health Standards.




 









 











     1-20 REINFORCING STEEL





     All reinforcing steel shall be new, deformed ASTM A615 — Grade 60 (Fy-60,000 psi) bars. All
reinforcing steel shall be designed to conform to standards prescribed by the American Concrete
Institute (ACI 318-91). All reinforcing steel shall be placed as shown on the final design
drawings. Reinforcing steel shall be inspected prior to major pours, including but not limited to,
auger cast piles.



     1-21 CONCRETE





The concrete mix design used by the supplier shall be approved by the Contractor.

Cold weather protection shall be used when the mean daily temperature falls below 40
degrees F. Heating of materials, protection temperature, curing methods, etc., shall
comply with ACI Standard, “Recommended Practice of Cold Weather Concreting”, (ACI 306).
Detailed specifications will be made if required. Costs associated with cold weather
protection are included in this Contract.




Hot weather concrete production, delivery, placement, and protection shall comply with the
American Concrete Institute standard, “Recommended Practice of Hot Weather Concreting”,
(ACI 305). Detailed specifications will be made if required. Costs associated with hot
weather production are not included in this Contract.



     1-22 CONCRETE MIXING AND PLACEMENT




Concrete will be mixed and placed by the standards for installation of auger cast pile systems.



     1-23 CONCRETE TESTING





The Contractor will prepare test cylinders in sets of three for each 100 cubic yards in the
mat pour, or day’s pour for subsequent concreting. Slump tests are to be made at the time
the cylinders are cast. Care in preparation, storage, labeling, and subsequent
transportation of the test cylinders is required.



 









 





	 	 	 	 	 	 	 	 	 
	ACCEPTED BY:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Dunnley Mattke	 	 	 	/s/ Steve Kelly	 	 
	 	 	 	 	 	 	 
	Dunnley Mattke

	 	 	 	Title: General Manager	 	 
	President

	 	 	 	One Earth Energy	 	 
	Hogenson Construction Company
	 	 	 	 	 	 	 	 
	 
	 	 	 	Date of Acceptance:  December 26, 2007