**Exhibit10.3**

 

**AGREEMENT BETWEEN**

 

**OWNER AND DESIGN BUILDER**

 

**THIS AGREEMENT**

madeas of this 20th day of November in the year of 2001.

 

**BETWEEN**theOwner:

 

Great Plains Ethanol, LLC

P.O. Box 172

Lennox, SD 57039

 

And the Design Builder:

 

Broin and Associates Inc.

2209 East 57 Street North

Sioux Falls, SD 57104

 

For the following Project:

 

Great Plains Ethanol, LLC located nearChancellor, SD.  The construction of a40 MMGPY dry mill fuel ethanol processing plant

 

The Owner and Design Builder, inconsideration of the mutual covenants hereinafter set forth, agree as follows:

 

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**ARTICLE 1 –GENERAL PROVISIONS**

 

**1.1          BASIC DEFINITIONS**

 

1.1.1        The Contract Documents consist of this Agreement, the DesignBuilder’s Exhibits and written addenda identified in Article 14, theConstruction Documents approved by the Owner and Modifications issued afterexecution of this Agreement.  AModification is a Change Order or a written amendment to this Agreement signedby both parties, or a Construction Change Directive issued by the Owner inaccordance with Paragraph 8.3.

 

1.1.2        The term “Work” means the construction and services providedby the Design Builder to fulfill the Design Builder’s obligations.

 

**1.2          EXECUTIONS, CORRELATION AND INTENT**

 

1.2.1        It is the intent of the Owner and Design Builder that theContract Documents include all items necessary for proper execution andcompletion of the Work.  The ContractDocuments are complementary, and what is required by one shall be as binding asif required by all; performance by the Design Builder shall be required only tothe extent consisted with and reasonably inferable from the Contract Documentsas being necessary to produce the intended results.  Words that have well-known technical or construction industrymeanings are used in the Contract Documents in accordance with such recognizedmeanings.

 

1.2.2        If the Design Builder believes or is advised by anotherdesign professional retained by the Design Builder to provide services on theProject that implementation of any instruction received from the Owner wouldcause a violation of any applicable law, the Design Builder shall notify theOwner in writing.  Neither the DesignBuilder nor another design professional retained by the Design Builder shall beobligated to perform any act which either believes will violate any applicablelaw.

 

1.2.3        Nothing contained in this Agreementshall create a contractual relationship between the Owner and any person orentity other than the Design Builder.

 

**1.3          OWNERSHIP AND USE OF DOCUMENTS**

 

1.3.1        Drawings, specifications, and otherdocuments and electronic date furnished by the DesignBuilder and other design professional retained by the Design Builder, areinstruments of service.  The DesignBuilder and other providers of professional services shall retain all commonlaw, statutory and other reserved rights, including copyright in thoseinstruments of service furnished by them. Drawings, specifications, and other documents and electronic data arefurnished for use solely with respect to this Agreement.  The Owner shall be permitted to retaincopies, including reproducible copies, of the drawings, specifications, andother documents and electronic data furnished by the Design Builder forinformation and reference in connection with the Project except as provided inSubparagraphs 1.3.2 and 1.3.3.

 

1.3.2        Drawings, specifications, and other documents and electronicdata furnished by the Design Builder shall not be used by the Owner or otherson other projects, for additions to 

 

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this Project or for completionof this Project by others, except by agreement in writing and with appropriatecompensation to the Design Builder.

 

1.3.3        Submission or distribution of the Design Builder’s documentsto meet official regulatory requirements or for similar purposes in connectionwith the Project is not to be construed as publication in derogation of therights reserved in Subparagraph 1.3.1.

 

**ARTICLE 2 –OWNER**

 

**2.1**                               The Ownershall designate a representative authorized to act on the Owner’s behalf withrespect to the Project.  The Owner orsuch authorized representative shall examine documents submitted by the DesignBuilder and shall render decisions in a timely manner and in accordance withthe schedule accepted by the Owner.  TheOwner may obtain independent review of the Contract Documents by a separatearchitect, engineer, contractor, or cost estimator under contract to or employedby the Owner.  Such independent reviewshall be undertaken at the Owner’s expense in a timely manner and shall notdelay the orderly progress of the Work.

 

**2.2**                               TheOwner shall cooperate with the Design Builder in securing building and otherpermits, licenses and inspections.  TheOwner shall not be required to pay the fees for such permits, licenses andinspections unless the cost of such fees is excluded from the Design Builder’sScope of Services.

 

**2.3**                               TheOwner shall furnish services of land surveyors, geotechnical engineers, andother consultants for subsoil, air and water conditions, when such services aredeemed necessary by the Design Builder to properly carry out the designservices required by this Agreement.

 

**2.4**                               TheOwner shall disclose, to the extent known to the Owner, the results and reportsof prior tests, inspections or investigations conducted for the Projectinvolving: structural or mechanical systems; chemical; air and water pollution;hazardous materials; or other environmental and subsurface conditions.  The Owner shall disclose all informationknown to the Owner regarding the presence of pollutants at the Project’s site.

 

**2.5**                               TheOwner shall furnish all legal, accounting and insurance counseling services asmay be necessary at any time for the Project, including such auditing servicesas the Owner may require to verify the Design Builder’s Applications forPayment.

 

**2.6****                              **Thoseservices, information, surveys and reports required by Paragraphs 2.3 through2.5 which are within the Owner’s control shall be furnished at the Owner’sexpense.  The Design Builder shall beentitled to rely upon the accuracy and completeness thereof, except to theextent the Owner advises the Design Builder to the contrary in writing.

 

**2.7**                               If theOwner requires the Design Builder to maintain any special insurance coverage,policy, amendment, or rider, the Owner shall pay the additional cost thereof,except as otherwise stipulated in this Agreement.

 

**2.8**                               If theOwner observes or otherwise becomes aware of a fault of defect in the Work ornonconformity with the Design Builder’s Scope of Services or the ConstructionDocuments, the Owner shall give prompt written notice thereof to the DesignBuilder.

 

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**2.9**                               TheOwner shall promptly upon the request of the Design Builder, furnish to theDesign Builder reasonable evidence that financial arrangements have been madeto fulfill the Owner’s obligations under the Contract.

 

**2.10**                        TheOwner shall communicate with persons or entities employed or retained by theDesign Builder through the Design Builder, unless otherwise directed by theDesign Builder.

** **

**ARTICLE 3 –DESIGN BUILDER**

 

**3.1          SERVICES AND RESPONSIBILITIES**

 

3.1.1        Standard of Care: Design Builder shall perform or furnishDesign Professional Services and related services in all phases of theproject.  The standard of care for allsuch services performed or furnished under this Agreement will be the care andskill ordinarily used by members of the engineering profession practicing undersimilar conditions at the same time and locality.

 

3.1.2        The Design Builder shall be responsible to the Owner for actsand omissions of the Design Builder’s employees, subcontractors and theiragents and employees, and other persons, including other design professionals,performing any portion of the Design Builder’s obligations under thisAgreement.

 

**3.2          BASIC SERVICES**

 

3.2.1        The Design Builder’s Basic Services are described below andin Article 14.

 

3.2.2        The Design Builder shall designate a representativeauthorized to act on the Design Builder’s behalf with respect to the Project.

 

3.2.3        The Design Builder, with the assistance of the Owner, shallfile documents required to obtain necessary approvals of governmentalauthorities having jurisdiction over the Project.

 

3.2.4        Unless otherwise provided in the Contract Documents, theDesign Builder shall provide or cause to be provided and shall pay for designservices, labor, materials, equipment, tools, construction equipment andmachinery, water, heat, utilities, transportation and other facilities andservices necessary for proper execution and completion of the Work, whethertemporary or permanent and whether or not incorporated or to be incorporated inthe Work.

 

3.2.5        Design Builder shall supervise, inspect and direct theConstruction competently and efficiently, devoting such attention thereto andapplying such skills and expertise as may be necessary to provide theConstruction in accordance with the Contract Documents.  Design Builder shall be solely responsiblefor the means, methods, techniques, sequences and procedures employed for theprovision of Construction.  DesignBuilder shall be responsible to see that the complete Construction compliesaccurately with the Contract Documents and shall keep Owner advised as to thequality and progress of the Construction.

 

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3.2.6        The Design Builder shall keep the Owner informed of theprogress and quality of the Work.

 

3.2.7        The Design Builder shall be responsible for correcting Workwhich does not conform to the Contract Documents.

 

3.2.8        The Design Builder warrants to the Owner that materials andequipment furnished under the Contract will be of good quality and new unlessotherwise required or permitted by the Contract Documents, that the constructionwill be free from faults and defects, and that the construction will conformwith the requirements of the Contract Documents.  Construction not conforming to these requirements, includingsubstitutions not properly approved by the Owner, shall be corrected inaccordance with Article 9.

 

3.2.9        The Design Builder shall pay all state sales, consumer, useand similar taxes which had been legally enacted prior to the date of thisAgreement, and shall secure and pay for building and other permits and governmentalfees, licenses and inspections necessary for the proper execution andcompletion of the Work which are either customarily secured after execution ofa contract for construction or are legally required prior to the date of thisAgreement.

 

3.2.10      Laws and Regulations

 

1.           Design Builder shall give all noticesand comply with all Laws and Regulations of the place of the Project which areapplicable to furnishing and performance of the Work.  Except where otherwise expressly required by applicable Laws andRegulations, Owner shall not be responsible for monitoring Design Builder’scompliance with any Laws or Regulations.

 

2.           If****DesignBuilder performs any Work knowing or having reason to know that it is contraryto Laws or Regulations, Design Builder shall bear all costs arising therefrom.

 

3.           Changes in Laws and Regulations notknown or foreseeable on the date of receipt of Proposals having an effect onthe cost or time of performance may be the subject of a claim under Article 8.

 

3.2.11      Design Builder shall pay all license fees and royalties andassume all costs incident to the use in the performance of the Work or theincorporation in the Work of any invention, design, process, product or devicewhich is subject of patent rights or copyrights held by others.  If a particular invention, design, process,product or device is specified in the Conceptual Documents for use in theperformance of the Construction and if to the actual knowledge of Owner its useis subject to patent rights or copyrights calling for the payment of anylicense fee or royalty to others, the existence of such rights shall bedisclosed by Owner in the Conceptual Documents.  To the fullest extent permitted by Laws and Regulations, DesignBuilder shall indemnify and hold harmless Owner, from and against all claims,costs, losses and damages (including but not limited to all fees and charges ofengineers, architects, attorneys and other professionals and all court orarbitration or other dispute resolution costs) arising out of or resulting fromany infringement of patent rights or copyrights incident to the use in theperformance of the Work or resulting from the 

 

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incorporation in the Work of anyinvention, design, process, product or device not specified in the ConceptualDocuments.

 

3.2.12      Use of Site and Other Areas

 

1.           Design Builder shall confineconstruction equipment, the storage of materials  and equipment and the operations of construction workers to thoselands and areas permitted by the Owner and other land and areas permitted byLaws and Regulations, rights-of-way, permits and easements, and shall notunreasonably encumber the premises with construction equipment or othermaterials or equipment.  Design Buildershall assume full responsibility for any damage to any such land or area, or tothe owner or occupant thereof or of any adjacent land or areas, resulting fromthe performance of the Construction. Should any claim be made by any such owner or occupant because of theperformance of the Construction, Design Builder shall promptly settle with suchother party by negotiation or otherwise resolve the claim by arbitration orother dispute resolution proceeding or at law. Design Builder shall, to the fullest extent permitted by Laws andRegulations, indemnify and hold harmless Owner, Owner’s Consultants and anyonedirectly or indirectly employed by any of them from and against all claims,costs, losses and damages (including, but not limited to, fees of engineers,architects, attorneys and other professionals and court and arbitration orother dispute resolution costs) arising out of or resulting from any claim oraction, legal or equitable, brought by any such owner or occupant againstOwner, or any other party indemnified hereunder to the extent caused by orbased upon Design Builder’s performance of the Construction.

 

2.           During the performance of theConstruction, Design Builder shall keep the premises free from accumulations ofwaste materials, rubbish and other debris resulting from the Construction.  At the completion of the Construction DesignBuilder shall remove all waste materials, rubbish and debris from and about thepremises as well as all tools, appliances, construction equipment, temporaryconstruction and machinery and surplus materials.  Design Builder shall leave the Site clean and ready for occupancyby Owner at Substantial Completion. Design Builder shall restore to original condition all property notdesignated for alteration by the Contract Documents.

 

3.           Design Builder shall not load norpermit any part of any structure to be loaded in any manner that will endangerthe structure, nor shall Design Builder subject any part of the Work oradjacent property to stresses or pressures that will endanger it.

 

3.2.13      The Design Builder shall notify the Owner when the DesignBuilder believes that the Work or an agreed upon portion thereof issubstantially completed.  If the Ownerconcurs, the Design Builder shall issue a Certificate of Substantial Completionwhich shall establish the Date of Substantial Completion, shall state theresponsibility of each party for security, maintenance, heat, utilities, damageto the Work and insurance, shall include a list of items to be completed orcorrected and shall fix the time within which the Design Builder shall completeitems listed therein.  Disputes betweenthe Owner and Design Builder regarding the Certificate of SubstantialCompletion shall be resolved in accordance with provisions of Article 10.

 

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3.2.14      The Design Builder shall maintain at the site for the Owner onerecord copy of the drawings, specifications, product data, samples, shopdrawings, Change Orders and other modifications, in good order and regularlyupdated to record the completed construction. These shall be delivered to the Owner upon completion of constructionand prior to final payment.

 

3.2.15      Unless otherwise provided in the Contract Documents, DesignBuilder shall directly or through one or more Subcontractors obtain and pay forall permits and licenses necessary for construction.  Owner shall assist Design Builder, when necessary, in obtainingsuch permits and licenses.  DesignBuilder shall pay all governmental charges and inspection fees necessary forthe prosecution of the Construction, which are applicable on the date of thisAgreement.  The Owner is responsible forpaying any and all utility company connection charges and/or capital costsrelated thereto.

 

3.2.16      Design Builder’s General Warranty and Guarantee

 

1.           Design Builder warrants andguarantees to Owner that all Construction will be in accordance with theContract Documents and will not be defective. This warranty shall be effective for a period of twelve months from thedate of substantial completion and will cover all labor and materials tocorrect any deficiencies.  DesignBuilder’s warranty and guarantee hereunder excludes defects or damage causedby:

 

a.             Abuse, modification or improper maintenance or operationby persons other than Design/Builder, Subcontractors or Suppliers; or

 

b.             Normal wear and tear under normal usage.

 

2.           Design Builder’s obligation toperform and complete the Work in accordance with the Contract Documents shallbe absolute.  None of the following willconstitute an acceptance of Work that is not in accordance with the ContractDocuments or a release of Design Builder’s obligation to perform the Work inaccordance with the Contract Documents:

 

a.             Observations by Owner;

 

b.             The making of any progress or final payment;

 

c.             The issuance of a certificate of Substantial Completion;

 

d.             Use or occupancy of the Work or any part thereof byOwner;

 

e.             Any acceptance by Owner or any failure to do so;

 

f.              Any review and approval of a Submittal;

 

g.             Any inspection, test or approval by others; or

 

h.             Any correction of defective Construction by Owner.

 

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3.2.17      Operational Phase: During the Operations Phase, Design Buildershall:

 

1.           Provide assistance in connection withthe start-up, testing, refining and adjusting of any equipment or system.

 

2.           Assist Owner in training staff tooperate and maintain the Project.

 

3.           Assist Owner in developing systemsand procedures for control of the operation and maintenance of and record keepingfor the Project.

 

**3.3          ADDITIONAL SERVICES**

 

3.3.1        The services described in this Paragraph 3.3 are not includedin Basic Services unless so identified in Article 14, and they shall be paidfor by the Owner as provided in this Agreement, in addition to the compensationfor Basic Services.  The servicesdescribed in this Paragraph 3.3 shall be provided only if authorized orconfirmed in writing by the Owner.

 

3.3.2        Making revisions in drawings, specifications, and otherdocuments or electronic data when such revisions are required by the enactmentor revision of codes, laws or regulations subsequent to the preparation of suchdocuments or electronic data.

 

3.3.3        Providing consultation concerning replacement of Work damagedby fire or other cause during construction, and furnishing services required inconnection with the replacement of such Work.

 

3.3.4        Providing services in connection with a public hearing,arbitration proceeding or legal proceeding, except where the Design Builder isa party thereto.

 

3.3.5        Providing coordination of construction performed by theOwner’s own forces or separate contractors employed by the Owner, andcoordination of services required in connection with construction performed andequipment supplied by Owner.

 

3.3.6        Submitting Construction Documents for review and approval bythe Owner.  Construction Documents mayinclude drawings, specifications, and other documents and electronic datasetting forth in detail the requirements for construction of the Work.

 

3.3.7        Preparing a set of reproducible record documents orelectronic data showing significant changes in the Work made duringconstruction.

 

3.3.8        Providing additional assistance for training personnel,preparing manuals or consulting during operation outside of the Scope of BasicServices.

 

**ARTICLE 4 –TIME**

 

**4.1**                               Unlessotherwise indicated, the Owner and the Design Builder shall perform theirrespective obligations as expeditiously as is consistent with reasonable skilland care and the orderly progress of the Project.

 

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**4.2**                               Timelimits stated in the Contract Documents are of the essence.  The Work to be performed under thisAgreement shall commence upon receipt of a Notice To Proceed unless otherwiseagreed and, subject to authorized Modifications, Substantial Completion shallbe achieved on or before the date established in Article 14.

 

**4.3**                               SubstantialCompletion is the stage in the progress of the Work when the Work or designatedportion thereof is sufficiently complete in accordance with the ContractDocuments so the Owner can occupy or utilize the Work for its intended use.

 

**4.4**                               Based onthe Design Builder’s Scope of Services, a construction schedule shall beprovided consistent with Paragraph 4.2 above.

 

**4.5**                               If theDesign Builder is delayed at any time in the progress of the Work by an act orneglect of the Owner, Owner’s employees, or separate contractors employed bythe Owner, or by changes ordered in the Work, or by labor disputes, fire,unusual delay in deliveries, adverse weather conditions not reasonablyanticipatable, unavoidable casualties or other causes beyond the DesignBuilder’s control, or by delay authorized by the Owner pending arbitration, orby other causes which the Owner and Design Builder agree may justify delay,then Contract Time shall be reasonably extended by Change Order.

 

**ARTICLE 5 –PAYMENTS**

 

**5.1          PROGRESS PAYMENTS**

 

5.1.1        The Design Builder shall deliver to the Owner itemizedApplications for Payment in such detail as indicated in Article 14.

 

5.1.1.1     Application shall be made on AIA forms 6702 and 6703 or similardocuments.  Two percent retainage shallbe held by the owner on up to fifty percent value of the completed work afterwhich no retainage will be held.

 

5.1.2        Within ten (10) days of the Owner’s receipt of a properlysubmitted and correct Application for Payment, the Owner shall make payment tothe Design Builder.

 

5.1.3        The Application for Payment shall constitute a representationby the Design Builder to the Owner that the design and construction haveprogressed to the point indicated; the quality of Work covered by theapplication is in accordance with the Contract Documents; and the DesignBuilder is entitled to payment in the amount requested.

 

5.1.4        Upon receipt of payment from the Owner, the Design Buildershall promptly pay the other design professionals and each contractor theamount to which each is entitled in accordance with the terms of theirrespective contracts.

 

5.1.5        The Owner shall have no obligation under this Agreement to payor to be responsible in any way for payment to another design professional, ora contractor performing portions of the Work.

 

5.1.6        Neither progress payment nor partial or entire use oroccupancy of the Project by the Owner shall constitute acceptance of Work notin accordance with the Contract Documents.

 

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5.1.7        The Design Builder warrants that title to all constructioncovered by an Application for Payment will pass to the Owner no later than thetime of payment.  The Design Builderfurther warrants that upon submittal of an Application for Payment allconstruction for which payments have been received from the Owner shall be freeand clear of liens, claims, security interests or encumbrances in favor of theDesign Builder or any other person or entity performing construction at thesite or furnishing materials or equipment relating to the construction.

 

5.1.8        Upon compliance with the Process Guarantee, the Owner shallpay the Design Builder the retainage, if any, less the reasonable cost tocorrect or complete incorrect or incomplete Work.  Final payment of such withheld sum shall be made upon correctionor completion of such Work.

 

**5.2.         FINAL PAYMENT**

 

5.2.1 When the Work has beencompleted and the contract fully performed, the Design Builder shall submit afinal application for payment to the Owner, who shall make final payment withinten (10) days of receipt.

 

5.2.2        The making of final payment shall constitute a waiver ofclaims by the Owner except those arising from:

 

5.2.2.1              liens, claims, security interestsor encumbrances arising out of the Contract and unsettled;

 

5.2.2.2              failure of the Work to comply withthe requirements of the Contract Documents; or

 

5.2.2.3              terms of special warrantiesrequired by the Contract Documents.

 

5.2.3        Acceptance of final payment shall constitute a waiver of allclaims by the Design Builder except those previously made in writing andidentified by the Design Builder as unsettled at the time of final Applicationfor Payment.

 

**5.3          INTEREST PAYMENTS**

 

5.3.1        Payments due to the Design Builder under this Agreement whichare not paid when due shall bear interest from the date due at the ratespecified in Article 13, or in the absence of a specified rate, at the legalrate prevailing where the Project is located.

 

**ARTICLE 6 –PROTECTION OF PERSONS AND PROPERTY**

 

**6.1**                               TheDesign Builder shall be responsible for initiating, maintaining and providingsupervision of safety precautions and programs in connection with theperformance of this Agreement.

 

**6.2**                               TheDesign Builder shall take reasonable precautions for the safety of, and shallprovide reasonable protection to prevent damage, injury or loss to: (1)employees on the Work and other persons who may be affected thereby; (2) the Workand materials and equipment to be incorporate therein, whether in storage on oroff the site, under care, custody, or control 

 

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of the Design Builder or theDesign Builder’s contractors; and (3) other property at or adjacent thereto,such as trees, shrubs, lawns, walks, pavements, roadways, structures andutilities not designated for removal relocation, or replacement in the courseof construction.

 

**6.3**                               TheDesign Builder shall give notices and comply with applicable laws, ordinances,rules, regulations and lawful orders of public authorities bearing on thesafety of persons or property or their protection from damage, injury or loss.

 

**6.4**                               TheDesign Builder shall promptly remedy damage and loss (other than damage or lossinsured under property insurance provided or required by the ContractDocuments) to property at the site caused in whole or in part by the DesignBuilder, a contractor of the Design Builder or anyone directly or indirectlyemployed by any of them, or by anyone for whose acts they may be liable.

 

**ARTICLE 7 –INSURANCE AND BONDS**

 

**7.1          PERFORMANCE, PAYMENT AND OTHER BONDS**

 

                                                7.1.1        If it is required by the Primary Lender,Design Builder shall furnish performance and payment Bonds, each in an amountat least equal to the Contract Price as security for the faithful performanceand payment of all Design Builder’s obligations to furnish, provide and pay forConstruction and related materials under the Contract Documents.  These Bonds shall remain in effect at leastuntil one year after the date when final payment becomes due, except asprovided otherwise by Laws or Regulations or by the Contract Documents.  Design Builder shall also furnish such otherBonds as are required by Article 14. All Bonds shall be in the form prescribedby the Contract Documents except as provided otherwise by Laws or Regulations,and shall be executed by such sureties as are named in the current list of“Companies Holding Certificates of Authority as Acceptable Surety Companies” aspublished in Circular 570 (amended) by the Audit Staff, Bureau of GovernmentFinancial Operations, U.S. Treasury Department.  All Bonds signed by an agent must be accompanied by a certifiedcopy of such agent’s authority to act. The cost of the performance and payment bonds shall be paid by theOwner.

 

7.1.2        If the surety on any Bond furnished by Design Builder isdeclared bankrupt or becomes insolvent or its right to do business isterminated in any state where any part of the Project is located or it ceasesto meet the requirements of paragraph 7.1.1, Design Builder shall within thirtydays thereafter substitute another Bond and surety meeting the requirements ofparagraphs 7.1.1 and 7.9.

 

**7.2          DESIGN/BUILDER’S LIABILITY INSURANCE**

 

7.2.1        The Design Builder shall purchase from and maintain, in acompany or companies lawfully authorized to do business in the jurisdiction inwhich the Project is located, such insurance as will protect the Owner andDesign Builder from claims set forth below which may arise out of or resultfrom operations under this Agreement by the Design Builder.

 

7.2.1.1             Claims under workers’compensation, disability benefits and other similar employee benefit acts;

 

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7.2.1.2             Claims for damages because ofbodily injury, occupational sickness or disease, or death of Design Builder’semployees;

 

7.2.1.3             Claims for damages because ofbodily injury, sickness or disease, or death of any person other than DesignBuilder’s employees;

 

7.2.1.4             Claims for damages insured bycustomary personal injury liability coverage which are sustained (i) by anyperson as a result of an offense directly or indirectly related to theemployment of such person by Design Builder, or (ii) by any other person forany other reason;

 

7.2.1.5             Claims for damages, otherthan to the Work itself, because of injury to or destruction of tangibleproperty wherever located, including loss of use resulting therefrom; and

 

7.2.1.6             Claims for damages because ofbodily injury or death of any person or property damage arising out of theownership, maintenance or use of any motor vehicle.

 

7.2.2        The policies of insurance required by paragraph 7.2.1 shall:

 

7.2.2.1             With respect to insurancerequired by paragraphs 7.2.1.3 through 7.2.1.6 inclusive, include as additionalinsureds Owner and any other persons or entities indicated in Article 14, allof whom shall be listed as additional insureds, and include coverage for therespective officers and employees of all such additional insureds;

 

7.2.2.2             Include at least the specificcoverages and be written for not less than the limits of liability provided in7.2.2.2.a through 7.2.2.2.c or required by Laws or Regulations, whichever isgreater;

 
| a. |   | Worker’s Compensation under  Paragraph 7.2.1.1 of the General Conditions: |
|----|--------|--------------------------------------------------------------------------------|

 
| 1. |   | State:     Statutory |      |   |
|----|--------|-----------------------------------------------|-----------|--------|
| 2. |   | Applicable Federal:                           | Statutory |   |
| 3. |   | Employer’s Liability:                    | $500,000  |   |

 

 
| b.  | Design Builder’s General  Liability (under paragraphs 7.2.1.2 through 7.2.1.6) which shall include  completed operations and product liability coverages |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
| 1.     |   | General Aggregate:(Except Products – Completed Operations)                                                   |       |       |   |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|------------|------------|--------|
|   |   |                                                                                                              | $2,000,000 |       |
| 2.     |   | Products - Completed  Operations Aggregate                                                                        |       | $2,000,000 |   |
| 3.     |   | Personal and Advertising  Injury(Per Person/Organization)                                                         |       | $1,000,000 |   |
|   |   |                                                                                                              |       |
| 4.     |   | Each Occurrence(Bodily Injury and Property Damages)                                                               |       | $1,000,000 |   |
|   |   |                                                                                                              |       |
| 5.     |   | Property Damage liability  insurance willprovide Explosion, Collapse and Underground  coverages where applicable. |       |       |   |
|   |   |                                                                                                              |       |       |
|   |   |                                                                                                              |       |       |
| 6.     |   | Excess Liability                                                                                                  |       |       |   |
|   |   |                                                                                                              |       |       |   |
|   |   | General Aggregate                                                                                                 |       | $5,000,000 |   |
|   |   | Each Occurrence                                                                                                   |       | $5,000,000 |   |
|   |   |                                                                                                              |       |       |   |
| c.     |   | Automobile Liability:                                                                                             |       |       |   |
|   |   | Combine Single                                                                                                    |       |       |   |
|   |   | Limit (Bodily Injury and  Property Damage)                                                                        |       | $1,000,000 |   |

 

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7.2.2.3             Include completed operationsinsurance;

 

7.2.2.4             Include contractual liabilityinsurance covering Design Builder’s indemnity obligations under paragraphs3.2.11, 3.2.12 and 11.4;

 

7.2.2.5             Contain a provision orendorsement that the coverage afforded will not be cancelled, materiallychanged or renewal refused until at least 30 days prior written notice has beengiven to Owner and each other additional insured indicated in Article 14 towhom a certificate of insurance has been issued (and the certificates ofinsurance furnished by the Design Builder pursuant to paragraph 7.9.2 will soprovide);

 

7.2.2.6.            Remain in effect at leastuntil final payment and at all times thereafter when Design Builder may becorrecting, removing or replacing defective Construction in accordance withArticle 9; and

 

7.2.2.7             With respect to completedoperations insurance, and any other insurance coverage written on a claims-madebasis, this insurance shall remain in effect for at least one year after finalpayment.

 

**7.3          OWNER’S LIABILITY INSURANCE**

 

7.3.1        The Owner shall be responsible for purchasing and maintainingthe Owner’s General, Auto and Workmen’s Compensation liability insurance.  Optionally, the Owner may purchase andmaintain other insurance for self-protection against claims which may arisefrom operations under this Agreement. The Design Builder shall not be responsible for purchasing andmaintaining this optional Owner’s liability insurance unless specificallyrequired by the Contract Documents.

 

**7.4          PROPERTY INSURANCE**

 

7.4.1        Unless otherwise provided in Article 14, Owner shall purchaseand maintain property insurance upon the Construction at the Site in the amountof the full replacement cost thereof (subject to deductible amounts notexceeding $5000 per occurrence). This insurance will:

 

7.4.1.1     Include the interests of Owner, Design/Builder, Subcontractors,and any other persons or entities indicated in the Supplementary Conditions,each of whom 

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is deemed to have an insurableinterest and shall be listed as an insured or additional insured;

 

 

7.4.1.2     Be written on a Builder’s Risk “all-risk” or open peril orspecial causes of loss policy form that shall at least include insurance forphysical loss and damage to the Construction, temporary buildings, falseworkand all materials and equipment in transit, and shall insure against at leastthe following perils or causes of loss: fire, lightning, extended coverage,theft, vandalism and malicious mischief, collapse, debris removal, demolitionoccasioned by enforcement of Laws and Regulations, and such other perils orcauses of loss as may be specifically required by the Supplementary Conditions;

 

7.4.1.3     Include expenses incurred in the repair or replacement of anyinsured property (including but not limited to fees and charges of engineersand design professionals);

 

7.4.1.4     Be maintained in effect until final payment is made unlessotherwise agreed to in writing by Owner and Design/Builder with thirty dayswritten notice to each other additional insured to whom a certificate ofinsurance has been issued; and

 

7.4.1.5     Allow partial utilization in accordancewith paragraph 7.8.

 

7.4.2        BOILER AND PRESSURE VESSEL INSURANCE

 

7.4.2.1     At the appropriate time during the construction period, theOwner shall purchase and maintain Broad Coverage Insurance for equipment suchas boilers, other pressure vessels, hot water boilers, fired storage waterheaters, fired coil water heaters, unfired pressure vessels, machinery, andsimilar equipment or objects, which are provided under the Contract for thisWork and which may not be covered under other insurances.  The insurance shall be in accordance withState Laws.  Such coverage shall, as aminimum, insure against loss or damages, including death or bodily injury, fromexplosion, rupture, or bursting of the equipment piping and normally coveredappurtenances or other similar hazards peculiar to the particular equipment orobject.

 

7.4.2.2     The policy shall name the Owner, the Design/Builder, allSubcontractors and lower tier Sub-subcontractors as joint insured.

 

7.4.2.3     The insurance shall be placed into effect prior to the testing,use or start up of any equipment of object provided under the Contract.  The Design/Builder shall notify the Owner orinsurance agent in ample time prior to testing or startup of the object topermit any required inspections.

 

7.4.2.4     The policy, shall cover, as a minimum, (1) loss to property ofthe insured, including extra costs of temporary repair (2) death or bodilyinjury liability, including defense, settlement and supplementary payments, and(3) property damage liability including defense, settlement and supplementarypayments.  The minimum limits shall be$1,000,000 per occurrence.

 

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7.4.2.5     After acceptance of the Work, or upon occupancy by the Owner,the Owner will provide pressure vessel insurance.  Owner will purchase and maintain boiler, machinery and otherproperty insurance as indicated in paragraph 7.4.

 

7.4.2.6     Entities deemed to have an insurable interest shall be listed asan insured or additional insured.

 

7.4.3        All the policies of insurance (and the certificates or otherevidence thereof) required to be purchased and maintained by Owner in accordancewith paragraph 7.4 will contain a provision or endorsement that the coverageafforded will not be cancelled or materially changed or renewal refused untilat least 30 days’ prior written notice has been given to Design Builder and toeach other additional insured to whom a certificate of insurance has beenissued and will contain waiver provisions in accordance with paragraph 7.5.1.

 

7.4.4.       Owner shall not be responsible for purchasing and maintainingany property insurance to protect the interests of Design Builder,Subcontractors, Supplies, Engineers or others in the Work to the extent of anydeductible amounts.  The risk of losswithin such identified deductible amount, will be borne by Design Builder,Subcontractor or others suffering any such loss and if any of them wishesproperty insurance coverage within the limits of such amounts, each maypurchase and maintain it at the purchaser’s own expense.

 

**7.5          WAIVER OF RIGHTS**

 

7.5.1        Owner and Design Builder intend that all policies purchasedin accordance with paragraph 7.4 will protect Owner, Design Builder, Engineers,Subcontractors, and all other individuals or entities indicated in Article 14to be listed as insured or additional insureds in such policies and willprovide primary coverage for all losses and damages caused by the perils orcauses of loss covered thereby.  Allsuch policies shall contain provisions to the effect that in the event ofpayment of any loss or damage the insurers will have no rights of recoveryagainst any of the insureds or additional insureds thereunder.  Owner and Design Builder waive all rightsagainst each other and their respective officers, directors, employees andagents for all losses and damages caused by, arising out of or resulting fromany of the perils or causes of loss covered by such policies and any otherproperty insurance applicable to the Work; and, in addition, waive all suchrights against Subcontractors, Suppliers, Engineers and all other individualsor entities indicated in the Supplementary Conditions to be listed as insuredsor additional insureds under such policies for losses and damages socaused.  None of the above waivers   shall extend to the rights that any partymaking such waiver may have to the proceeds of insurance held by Owner astrustee or otherwise payable under any policy so issued.  In addition, Owner waives all rights againstDesign Builder, Subcontractors, Engineers and Suppliers and the officers,directors, employees and agents of any of them for business interruption, lossof use of Owner’s property and any other consequential damages caused by,arising out of or resulting from any of such insured perils or causes of lossor any other peril or cause of loss whether or not insured.

 

**7.6          RECEIPT AND APPLICATION OF PROCEEDS**

 

7.6.1        Any insured loss under the policies of insurance required byparagraph 7.4 will be adjusted with Owner and made payable to Owner asfiduciary for the insureds, as their  

 

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interests may appear, subject tothe requirements of any applicable mortgage clause and of paragraph 7.6.3.

 

 

7.6.2.       Owner shall deposit in a separate account any money soreceived, and shall distribute it in accordance with such agreement as theparties in interest may reach.  If noother special agreement is reached the damaged Work shall be repaired orreplaced, the moneys so received applied on account thereof and the Work andthe cost thereof covered by an appropriate Change Order or Written Amendment.

 

7.6.3.       Owner as fiduciary shall have power to adjust and settle anyloss with the insurers unless one of the parties in interest shall object inwriting within fifteen days after the occurrence of loss to Owner’s exercise ofthis power.  If such objection be made,Owner as fiduciary shall make settlement with the insurers in accordance withsuch agreement as the parties in interest may reach.  If no such agreement among the parties in interest is reached,Owner as fiduciary shall adjust and settle the loss with the insurers and, ifrequired in writing by any party in interest, Owner as fiduciary shall givebond for the proper performance of such duties.

 

**7.7          ACCEPTANCE OF BONDS AND INSURANCE;OPTION TO REPLACE**

 

7.7.1        If either party has any objection to the coverage afforded byor other provisions of the Bonds or insurance required to be purchased andmaintained by the other party in accordance with Article 7 on the basis oftheir not complying with the Contract Documents, the objecting party shall sonotify the other party in writing within ten days after receipt of thecertificates.  Owner and Design Buildershall each provide to the other such additional information in respect ofinsurance provided as the other may reasonably request.  If either party does not purchase ormaintain all of the Bonds and insurance required of such party by the ContractDocuments, such party shall notify the other party in writing of such failureto purchase prior to the start of the Work, or of such failure to maintainprior to any change in the required coverage. Without prejudice to any other right or remedy, the other party mayelect to obtain equivalent Bonds or insurance to protect such other party’sinterests at the expense of the party who was supposed to provide suchcoverage, and a Change Order or Written Amendment shall be issued to adjust theContract Price accordingly.

 

**7.8          PARTIAL UTILIZATION - PROPERTYINSURANCE**

 

7.8.1        If Owner finds it necessary to occupy or use a portion orportions of the Work prior to Substantial Completion of all the construction,such use or occupancy may be accomplished; provided that no such use oroccupancy shall commence before the insurers providing the property insurancehave acknowledged notice thereof and in writing effected any changes incoverage necessitated thereby.  Theinsurers providing the property insurance shall consent by endorsement on thepolicy or policies, but the property insurance shall not be cancelled orpermitted to lapse on account of any such partial use or occupancy.

 

**7.9          LICENSED SURETIES AND INSURERS;CERTIFICATES OF INSURANCE**

 

7.9.1        All Bonds and insurance required by the Contract Documents tobe purchased and maintained by Owner or Design Builder shall be obtained fromsurety or insurance companies that are duly licensed or authorized in the jurisdictionin which the Project is 

 

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located to issue Bonds orinsurance policies for the limits and coverage’s so required.  Such surety and insurance companies shallalso meet such additional requirements and qualifications as may be provided inArticle 14.

 

7.9.2        Design Builder shall deliver to Owner, with copies to eachadditional insured indicated in Article 14, certificates of insurance (andother evidence of insurance requested by Owner or any other additional insured)which Design/Builder is required to purchase and maintain in accordance withparagraph 7.2.1. Owner shall deliver to Design Builder, with copies to eachadditional insured indicated in Article 14, certificates of insurance (andother evidence of insurance requested by Design Builder or any other additionalinsured) which Owner is required to purchase and maintain in accordance withparagraphs 7.4.1 and 7.4.2.

 

**ARTICLE 8 –CHANGES IN THE WORK**

 

**8.1          CHANGES**

 

8.1.1        Changes in the Work may be accomplished after execution ofthis Agreement, without invalidating this Agreement, by Change Order,Construction Change Directive, or order for a minor change in the Work, subjectto the limitations stated in the Contract Documents.

 

8.1.2        A Change Order shall be based upon agreement between theOwner and the Design Builder; a Construction Change Directive may be issued bythe Owner without the agreement of the Design Builder; an order for a minorchange in the Work may be issued by the Design Builder alone.

 

8.1.3        Changes in the Work shall be performed under applicableprovisions of the Contract Documents, and the Design Builder shall proceedpromptly, unless otherwise provided in the Change Order, Construction ChangeDirective, or order for a minor change in the Work.

 

8.1.4        If unit prices are stated in the Contract Documents orsubsequently agreed upon, and if quantities originally contemplated are sochanged in a proposed Change Order or Construction Change Directive thatapplication of such unit prices to quantities of Work proposed will causesubstantial inequity to the Owner or the Design Builder, the applicable unitprices shall be equitably adjusted.

 

**8.2          CHANGE ORDERS**

 

8.2.1        A Change Order is a written instrument prepared by the DesignBuilder and signed by the Owner and the Design Builder, stating their agreementupon all of the following:

 

1.             a change in the Work’

2.             the amount of the adjustment, ifany, in the Contract Sum; and

3.             the extent of the adjustment, ifany, in the Contract Time.

 

8.2.2        If the Owner requests a proposal for a change in the Workfrom the Design Builder and subsequently elects not to proceed with the change,a Change Order shall be issued 

 

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to reimburse the Design Builderfor any costs incurred for estimating services, design services or preparationof proposed revisions to the Contract Documents.

 

**8.3          CONSTRUCTION CHANGE DIRECTIVES**

 

8.3.1        A Construction Change Directive is a written order preparedand signed by the Owner, directing a change in the Work prior to agreement onadjustment, if any, in the Contract Sum or Contract Time, or both.

 

8.3.2        Except as otherwise agreed by the Owner and the DesignBuilder, the adjustment to the Contract Sum shall be determined on the basis ofreasonable expenditures and savings of those performing the Work attributableto the change, including the expenditures for design services and revisions tothe Contract Documents.  In such case,the Design Builder shall keep and present an itemized accounting together withappropriate supporting data for inclusion in a Change Order.  Unless otherwise provided in the ContractDocuments, costs for these purposes shall be limited to the following:

 

1.             costs of labor, including social security, old age andunemployment insurance, fringe benefits required by agreement or custom, andworkers’ compensation insurance;

 

2.             costs of materials, supplies and equipment, includingcost of transportation, whether incorporated or consumed;

 

3.             rental costs of machinery and equipment exclusive ofhand tools, whether rented from the Design Builder or others;

 

4.             costs of premiums for all bonds and insurance permitfees, and sales, use or similar taxes;

 

5.             additional costs of supervision and field officepersonnel directly attributable to the change; and fees paid to other designprofessionals.

 

8.3.3        Pending final determination of cost to the Owner, amounts notin dispute may be included in Applications for Payment.  The amount of credit to be allowed by theDesign Builder to the Owner for deletion or change which results in a netdecrease in the Contract Sum and Contract Time, such agreement shall beeffective immediately and shall be recorded by preparation and execution of anappropriate Change Order.

 

**8.4          MINOR CHANGES IN THE WORK**

 

8.4.1        The Design Builder shall have authority to make minor changesin the Construction Documents and construction consistent with the intent ofthe Contract Documents when such minor changes do not involve adjustment in theContract Sum or extension of the Contract Time.  The Design Builder shall promptly inform the Owner, in writing,of minor changes in the Construction Documents and construction.

 

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**8.5          CONCEALED CONDITIONS**

 

8.5.1        If conditions are encountered at the site which are (1)subsurface or otherwise concealed physical conditions which differ materiallyfrom those indicated in the Contract Documents, or (2) unknown physicalconditions of an unusual nature which differ materially from those ordinarilyfound to exist and generally recognized as inherent in construction activitiesof the character provided for in the Contract Documents, then notice by theobserving party shall be given to the other party promptly before conditionsare disturbed and in no event later than 21 days after first observance of theconditions.  The Contract Sum shall beequitably adjusted for such concealed or unknown conditions by Change Orderupon claim by either party made within 21 days after the claimant becomes awareof the conditions.

 

**8.6          REGULATORY CHANGES**

 

8.6.1        The Design Builder shall be compensated for changes in theconstruction necessitated by the enactment or revisions of codes, laws orregulations subsequent to the submission of the Design Builder’s Proposal.

 

**ARTICLE 9 –CORRECTION OF WORK**

 

9.1           The Design Builder shall promptly correct Work rejected bythe Owner or known by the Design Builder to be defective or failing to conformto the requirements of the Contract Documents, whether observed before or afterSubstantial Completion and whether or not fabricated, installed orcompleted.  The Design Builder shallbear costs of correcting such rejected Work, including additional testing andinspections.

 

9.2           If, within one (1) year after the date of SubstantialCompletion of the Work or, after the date for commencement of warrantiesestablished in a written agreement between the Owner and the Design Builder, orby terms of an applicable special warranty required by the Contract Documents,any of the Work is found to be not in accordance with the requirements of theContract Documents, the Design Builder shall correct it promptly after receiptof a written notice from the Owner to do so unless the Owner has previouslygiven the Design Builder a written acceptance of such condition.

 

9.3           Nothing contained in this Article 9 shall be construed toestablish a period of limitation with respect to other obligations which theDesign/Builder might have under the Contract Documents.  Establishment of the time period of one (1)year as described in Subparagraph 9.2 relates only to the specific obligationof the Design Builder to correct the Work, and has no relationship to the timewithin which proceedings may be commenced to establish the Design Builder’s liabilitywith respect to the Design Builder’s obligations other than specifically tocorrect the Work.

 

9.4           If the Design Builder fails to correct nonconforming Workas required or fails to carry out Work in accordance with the ContractDocuments, the Owner, by written order signed personally or by an Agentspecifically so empowered by the Owner in writing, may order the Design Builderto stop the Work, or any portion thereof, until the cause for such order hasbeen eliminated; however, the Owner’s right to stop the Work shall not giverise to a duty on the part of the Owner to exercise the right for benefit ofthe Design Builder or other persons or entities.

 

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9.5           If the Design Builder defaults or neglects to carry outthe Work in accordance with the Contract Documents and fails within fourteen(14) days after receipt of written notice from the Owner to commence andcontinue correction of such default or neglect with diligence and promptness,the Owner may give a second written notice to the Design Builder and, fourteen(14) days following receipt by the Design Builder of that second written noticeand without prejudice to other remedies the Owner may have, correct suchdeficiencies.  In such case an appropriateChange Order shall be issued deducting from payments then or thereafter due theDesign Builder, the costs of correcting such deficiencies.  If the payments then or thereafter due theDesign Builder are not sufficient to cover the amount of the deduction, theDesign Builder shall pay the difference to the Owner.  Such action by the Owner shall be subject to dispute resolutionprocedures as provided in Article 10.

 

**ARTICLE 10 –DISPUTE RESOLUTION - MEDIATION AND ARBITRATION**

 

10.1         Claims, disputes or other matters in question between theparties to this Agreement arising out of or relating to this Agreement orbreach thereof shall be subject to and decided by mediation orarbitration.  Such mediation orarbitration shall be conducted in accordance with the Construction IndustryMediation or Arbitration Rules of the American Arbitration Associationcurrently in effect.

 

10.2         In addition to and prior to arbitration, the parties shallendeavor to settle disputes by mediation. Demand for mediation shall be filed in writing with the other party tothis Agreement and with the American Arbitration Association.  A demand for mediation shall be made withina reasonable time after the claim, dispute, or other matter in question hasarisen.  In no event shall the demandfor mediation be made after the date when institution of legal or equitableproceedings based on such claim, dispute or other matter in question would bebarred by the applicable statutes or repose or limitations.

 

10.3         Demand for arbitration shall be filed in writing with theother party to this Agreement and with the American ArbitrationAssociation.  A demand for arbitrationshall be made within a reasonable time after the claim, dispute or other matterin question has arisen.  In no eventshall the demand for arbitration be made after the date when institution oflegal or equitable proceedings based on such claim, dispute or other matter inquestion would be barred by the applicable statutes of repose or limitations.

 

10.4         An arbitration pursuant to this Article may be joined withan arbitration involving common issues of law or fact between the DesignBuilder and any person or entity with whom the Design Builder has a contractualobligation to arbitrate disputes.  Noother arbitration arising out of or relating to this Agreement shall include,by consolidation, joinder or in any other matter, an additional person orentity not a party to this Agreement or not a party to an agreement with theDesign Builder, except by written consent containing a specific reference tothis Agreement signed by the Owner, the Design Builder and any other person orentities sought to be joined.  Consentto arbitration involving an additional person or entity shall not constituteconsent to arbitration of any claim, dispute or other matter in question notdescribed in the written consent or with a person or entity not named ordescribed therein.  The foregoingagreement to arbitrate and other agreements to arbitrate with and additional personor entity duly consented to by the parties to this Agreement shall bespecifically enforceable in accordance with applicable law in any court havingjurisdiction thereof.

 

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10.5         The award rendered by the arbitrator or arbitrators shall befinal, and judgment may be entered upon it in accordance with applicable law inany court having jurisdiction thereof. Any and all arbitration or mediation hearings shall be held in SiouxFalls, SD.

 

**ARTICLE 11 –MISCELLANEOUS PROVISIONS**

 

**11.1**                        Unlessotherwise provided, this Agreement shall be governed by the law of the placewhere the Project is located.

 

**11.2        RELATED CONSTRUCTION OF SITE**

 

11.2.1      Owner may perform other Work related to the Project at the Siteby Owner’s own forces, or let other direct contracts therefore or have otherwork performed by utility owners.  Ifthe fact that such other work is to be performed was not noted in theConceptual Documents then (i) written notice thereof will be given to DesignBuilder prior to starting any such other work and (ii) Design Builder may makea claim therefore as provided in Article 8 if Design Builder believes that suchperformance will involve additional expense to Design Builder or requiresadditional time and the parties are unable to agree as to the amount or extentthereof.

 

11.2.2      Design Builder shall afford each other contractor who is a partyto such a direct contract and each utility owner (and Owner, if Owner isperforming the additional work with Owner’s employees) proper and safe accessto the Site and a reasonable opportunity for the introduction and storage ofmaterials and equipment and the execution of such other work and shall properlyconnect and coordinate the Construction with theirs.  Unless otherwise provided in the Contract Documents, DesignBuilder shall do all cutting, fitting and patching of the Work that may berequired to make its several parts come together properly and integrate withsuch other work.  Design Builder shallnot endanger any work of others by cutting, excavating or otherwise alteringtheir work with the written consent of Owner and the others whose work will beaffected.  The duties andresponsibilities of Design Builder under this paragraph are for the benefit ofsuch utility owners and other contractors to the extent that there arecomparable provisions for the benefit of Design Builder in said directcontracts between Owner and such utility owners and other contractors.

 

11.2.3      If the proper execution or results of any part of DesignBuilder’s Work depends upon work performed or services provided by others underthis paragraph 11.2, Design Builder shall inspect such other work andappropriate instruments of service and promptly report to Owner in writing anydelays, defects of deficiencies in such other work or services that render itunavailable or unsuitable for the proper execution and results of DesignBuilder’s Work.  Design Builder’sfailure so to report will constitute an acceptance of such other work as fitand proper for integration with Design Builder’s Work except for latent ornonapparent defects and deficiencies in such other work.

 

11.2.4      Coordination

 

11.2.4.1           If Owner contracts with others forthe performance of other work on the Project at the Site, the following will beset forth in Article 14:

 

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a.        The individual or entity who will haveauthority and responsibility for coordination of the activities among thevarious prime contractors will be identified;

 

b.        The specific matters to be covered bysuch authority and responsibility will be itemized; and

 

c.        The extent of such authority andresponsibilities will be provided.

 

11.2.4.2           Unless otherwise provided in Article14, Owner shall have sole authority and responsibility in respect of such coordination.

 

**11.3        CLAIMS FOR DAMAGES**

 

11.3.1      If either party to this Agreement suffers injury or damage toperson or property because of an act or omission of the other party, of any ofthe other party’s employees or agents, or of others for whose acts such partyis legally liable, written notice of such injury or damage, whether or notinsured, shall be given to the other party within a reasonable time notexceeding 21 days after first observance. The notice shall provide sufficient detail to enable the other party toinvestigate the matter.  If a claim ofadditional cost or time related to this claim is to be asserted, it shall befiled in writing.

 

**11.4        INDEMNIFICATION**

 

11.4.1      To the fullest extent permitted by law, the Design Builder shallindemnify and hold harmless the Owner’s, the Board of Managers, Officers,Owner’s consultants, and agents and employees of any of them from and againstclaims, damages, losses and expenses, including but not limited to attorney’sfees, arising out of or resulting from performance of the Work, provided thatsuch claim, damage, loss or expense is attributable to bodily injury, sickness,disease or death, or to injury to or destruction of tangible property (otherthan the Work itself) including loss of use resulting therefrom, but only tothe extent caused in whole or in part by negligent acts or omissions of theDesign Builder, anyone directly or indirectly employed by the Design Builder oranyone for whose acts the Design Builder may be liable.  Such obligation shall not be construed tonegate, abridge, or reduce other rights or obligations of indemnity which wouldotherwise exist as to a party or person described in this Paragraph 11.4.

 

11.4.2      To the fullest extent permitted by law, the Owner shallindemnify and hold harmless the Design Builder, Broin’s Board of Directors andOfficers, Design Builder’s consultants, and agents and employees of any of themfrom and against claims, damages, losses and expenses, including but notlimited to attorney’s fees, arising out of or resulting from performance of theWork, provided that such claim, damage, loss or expense is attributable tobodily injury, sickness, disease or death, or to injury to or destruction oftangible property (other than the Work itself) including loss of use resultingtherefrom, but only to the extent caused in whole or in part by negligent actsor omissions of the Owner, anyone directly or indirectly employed by the Owneror anyone for whose acts the Owner may be liable.  Such obligation shall not be construed to negate, abridge, orreduce other rights or obligations of indemnity which would otherwise exist asto a party or person described in this Paragraph 11.4.

 

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11.4.3      In claims against any person or entity indemnified under thisParagraph 11.4 by an employee of the Design Builder, anyone directly orindirectly employed by the Design Builder or anyone for whose acts the DesignBuilder may be liable, the indemnification obligation under this Paragraph 11.4shall not be limited by a limitation on amount or type of damages, compensationor benefits payable by or for the Design Builder under worker’s compensationacts, disability benefit acts or other employee benefit acts.

 

**11.5        SUCCESSORS AND ASSIGNS**

 

11.5.1      The Owner and Design Builder, respectively, bind themselves,their partners, successors, assigns and legal representatives to the otherparty to this Agreement and to the partners, successors and assigns of suchother party with respect to all covenants of this Agreement.  Neither the Owner nor the Design Buildershall assign this Agreement without the written consent of the other.  The Owner may assign this Agreement to any institutionallender providing construction financing, and the Design Builder agrees toexecute all consents reasonably required to facilitate such an assignment.  If either party makes such an assignment,that party shall nevertheless remain legally responsible for all obligationsunder this Agreement, unless otherwise agreed by the other party.

 

**11.6        EXTENT OF AGREEMENT**

 

11.6.1      This Agreement represents the entire agreement between the Ownerand the Design Builder and supersedes prior negotiations, representations oragreements, either written or oral. This Agreement may be amended only by written instrument and signed byboth the Owner and the Design Builder.

 

**ARTICLE 12 –TERMINATION OF THE AGREEMENT**

 

**12.1        TERMINATION BY THE OWNER**

 

12.1.1      This Agreement may be terminated by the Owner upon 14 days’written notice to the Design Builder in the event that the Project isabandoned.  If such termination occurs,the Owner shall pay the Design Builder for Work completed and for proven losssustained upon materials, equipment, tools, and construction equipmentmachinery, including reasonable profit and applicable damages.

 

12.1.2      If the Design Builder defaults or persistently fails or neglectsto carry out the Work in accordance with the Contract Documents or fails toperform the provisions of this Agreement, the Owner may give written noticethat the Owner intends to terminate this Agreement.  If the Design Builder fails to correct the defaults, failure orneglect within fourteen (14) days after being given notice, the Owner may thengive a second written notice and, after an additional fourteen (14) days theOwner may without prejudice to any other remedy terminate the employment of theDesign Builder and take possession of the site and of all materials, equipmentand finish the Work by whatever method the Owner may deem expedient.  If the unpaid balance of the Contract Sumexceeds the expense of finishing the Work and all damages incurred by theOwner, such excess shall be paid to the Design Builder.  If the expense of completing the Work andall damages incurred by the Owner exceeds the unpaid balance, the DesignBuilder shall pay the difference to the Owner. This obligation for payment shall survive termination of this Agreement.

 

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**12.2        TERMINATION BY THE DESIGN/BUILDER**

 

12.2.1      If the Owner fails to make payment when due, the Design Buildermay give written notice of the Design Builder’s intention to terminate thisAgreement.  If the Design Builder failsto receive payment within fourteen (14) days after receipt of such notice bythe Owner, the Design Builder may give a second written notice and, fourteen(14) days after receipt of such second written notice by the Owner, mayterminate this Agreement and recover from the Owner payment for Work executedand for proven losses sustained upon materials, equipment, tools, andconstruction equipment and machinery, including reasonable profit andapplicable damages.

 

**ARTICLE 13 –BASIS OF COMPENSATION**

 

The Owner shall compensate the Design Builderin accordance with Article 5, Payments, and the other provisions of thisAgreement as described below.

 

**13.1        COMPENSATION**

 

13.1.1      For the Design Builder’s performance of the Work, as describedin Paragraph 3.2 and including any other services listed in Article 14 as partof Basic Services, the Owner shall pay the Design Builder in current funds theContract Sum as follows:

 

**Forty Seven Million Five Hundred Thirty ThreeThousand Four Hundred and Forty One Dollars ($47,533,441.00)**. Thisprice includes sales and excise tax and will remain valid as long as constructionis started by June 15, 2002. A Start date after that time will cause the priceto be reviewed and adjusted accordingly.

 

13.1.2      For Additional Services, as described in Paragraph 3.3 andincluding any other services listed in Article 14 as Additional Services,compensation shall be at a negotiated price.

 

**13.2        REIMBURSABLE EXPENSES**

 

13.2.1      Reimbursable Expenses are in addition to the compensation forBasic and Additional Services, and include actual expenditures made by theDesign Builder and the Design/Builder’s employees and contractors in theinterest of the Project.

 

13.2.2      FOR REIMBURSABLE EXPENSES, compensation shall be a multiple of(1 .1) times the amounts expended.

 

**13.3        INTEREST PAYMENTS**

 

13.3.1      The rate of interest for past due payments shall be as follows.-

 

(1.5%)one and one half percent per month.

 

**ARTICLE 14 –OTHER CONDITIONS AND SERVICES**

 

14.1                           TheBasic Services to be performed shall be commenced on issuance of Notice toProceed and, subject to authorized adjustments and to delays not caused by theDesign Builder,

 

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Substantial Completion shall beachieved in fourteen (14) months following the start of concrete work.

 

14.2         TheBasic Services beyond those described in Article 3 are as follows:

 

None

 

14.3         AdditionalServices beyond those described in Article 3 are as follows:

 

None

 

14.4                           TheDesign Builder shall submit an Application for Payment on or about the Twelfth(12) day of each month.

 

14.5         TheDesign Builders Exhibits include the following documents:

 
| **Title**         |   | **Date**                                            |
|-------------------|--------|-----------------------------------------------------|
| Exhibit 1 –  |   | Schedule of Contract Values  consisting of 2 pages  |   | 9/7/2001 |
| Exhibit 2 –  |   | Licensing Agreement for  Ethanol Production Process |   |   |
| Exhibit 2A–  |   | Licensor’s Technology                          |   |   |
| Exhibit 213– |   | Confidentiality and  Nondisclosure Agreement        |   |   |
| Exhibit 3 –  |   | Process Guarantee consisting  of 1 page             |   |   |
| Exhibit 4 –  |   | Notice to Proceed consisting  of 1 page             |   |   |
| Exhibit 5 –  |   | Detailed Cost Breakout                              |   |   |

 

**14.6        OTHER CONDITIONS**

 

14.6.1      A payment of three hundred thousand dollars ($300,000.00) willbe due and payable for Preliminary Engineering for the Project within 15 daysupon signing of this document.

 

14.6.2      A payment of seventy five thousand dollars ($75,000.00) forpermitting and initial design will be due and payable for the Project within 15days upon signing of this document.

 

14.6.3      Owner will apply for and receive any applicable state sales orexcise tax refunds.  Design Builder willassist the Owner in compiling necessary documentation.

 

14.6.4      The Process guarantee attached as Exhibit 3, shall be metwithin 90 days following the date of substantial completion.

 

*NO OTHERCONDITIONS ARE NEITHER EXPRESSED NOR IMPLIED OTHER THAN THOSE STATED ABOVE.*

 

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IN WITNESS WHEREOF, OWNER and DESIGN BUILDERhave signed this Agreement in duplicate. One counterpart each has been delivered to OWNER and DESIGNBUILDER.  All portions of the ContractDocuments have been signed, initialed or identified by OWNER and DESIGNBUILDER.

 

This Owner - Design Builder Agreement will beeffective on the day and year first written above.

 
| OWNER:                      |  *Great Plains Ethanol, LLC* |                        | DESIGN BUILDER: | BROIN AND ASSOCIATES,INC. |   |
|-----------------------------|-----------------------------------|-----------------------------|-----------------|---------------------------|--------|
|                        |                              |                        |
| By:                         | /s/  Darrin Ihnen                 |                        | By:             | /s/  Robert Broin         |   |
| Name:                       | Darrin Ihnen                      |                        | Name:           | Rob Broin                 |   |
| Title:                      | Chairman of the Board             |                        | Title:          | President                 |   |
|                        |                              |                        |
|                        |                              |                        |            |
|                        |                              |                        |            |
| [CORPORATE  SEAL]           |                              | [CORPORATE  SEAL]           |            |
|                        |                              |                        |
|                        |                              |                        |
|                        |                              |                        |
| Attest:                     |                              |                        | Attest:         | /s/ Wendy S. John         |   |
|                        |                              |                        |
| Address for giving notices: |                              | Address for giving notices: |
|                        |                              |                        |
| Great Plains Ethanol. LLC   |                              | Broin and Associates Inc    |
| P.O. Box 172                |                              | 2209 East 57 Street North   |
| Lennox, SD  57039      | Sioux Falls, SD  57104       |
|                             |                                   |                             |                 |                           |        |  |  |  |  |  |  |

 

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