**Exhibit10.20**

*Portions omittedpursuant to a request for confidential treatment and filed separately with theSecurities and Exchange Commission.

LUMP SUM DESIGN-BUILD EXPANSION AGREEMENT

BETWEEN

LITTLE SIOUX CORN PROCESSORS, LP (“**OWNER**”)

AND

FAGEN, INC. (“**DESIGN-BUILDER**”)

September 20, 2006

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**TABLE OF CONTENTS**
|                                                                     | ** ** | ** **                                                                                                                  | ** ** | ** ** | **Page** | ** ** | ** ** |
|---------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------|------------|------------|----------|------------|------------|
| **Article 1 Definitions; Rules of  Interpertation**                 | ** ** | ** **                                                                                                                  | ** ** |
| ** **                                                          | ** ** | ** **                                                                                                                  | ** ** |
| 1.1                                                                 |       | Rules of Construction                                                                                                       |       |       |     |
| 1.2                                                                 |       | Defined Terms                                                                                                               |       |       |     |
|                                                                |       |                                                                                                                        |       |       |     |
| **Article 2 TheExpansion Project**                                  |       |                                                                                                                        |       |
| ** **                                                          |       |                                                                                                                        |       |
| 2.1                                                                 |       | Services to be  Performed                                                                                                   |       |       |     |
| 2.2                                                                 |       | Extent of Agreement                                                                                                         |       |       |     |
| 2.3                                                                 |       | Conflicting Provisions                                                                                                      |       |       |     |
|                                                                |       |                                                                                                                        |       |       |     |
| **Article 3 Design-Builder  Responsibilities**                      |       |                                                                                                                        |       |
| ** **                                                          |       |                                                                                                                        |       |
| 3.1                                                                 |       | Design-Builder’s  Services in General                                                                                  |       |       |     |
| 3.2                                                                 |       | Design Development and  Services                                                                                            |       |       |     |
| 3.3                                                                 |       | Standard of Care                                                                                                            |       |       |     |
| 3.4                                                                 |       | Government Approvals  and Permits                                                                                           |       |       |     |
| 3.5                                                                 |       | Subcontractors                                                                                                              |       |       |     |
| 3.6                                                                 |       | Maintenance of Site                                                                                                         |       |       |     |
| 3.7                                                                 |       | Project Safety                                                                                                              |       |       |     |
| 3.8                                                                 |       | Submission of Reports                                                                                                       |       |       |     |
| 3.9                                                                 |       | Training                                                                                                                    |       |       |     |
| 3.10                                                                |       | Integration of  Expansion Plant into LSCP Plant                                                                             |       |       |     |
|                                                                |       |                                                                                                                        |       |       |     |
| **Article 4 Owner’s  Responsibilities**                        |       |                                                                                                                        |       |
| ** **                                                          |       |                                                                                                                        |       |
| 4.1                                                                 |       | Duty to Cooperate                                                                                                           |       |       |     |
| 4.2                                                                 |       | Furnishing of Services  and Information                                                                                     |       |       |     |
| 4.3                                                                 |       | Financial Information;  Cooperation with lenders; Failure to Obtain Financial Closing                                       |       |       |     |
| 4.4                                                                 |       | Owner’s Representative                                                                                                 |       |       |     |
| 4.5                                                                 |       | Government Approvals  and Permits                                                                                           |       |       |     |
| 4.6                                                                 |       | Owner’s Separate Contractors                                                                                           |       |       |     |
| 4.7                                                                 |       | Security                                                                                                                    |       |       |     |
|                                                                |       |                                                                                                                        |       |       |     |
| **Article 5 Ownership of Work  Product; Risk of Loss**              |       |                                                                                                                        |       |
| ** **                                                          |       |                                                                                                                        |       |
| 5.1                                                                 |       | Work Product                                                                                                                |       |       |     |
| 5.2                                                                 |       | Owner’s Limited License  Upon Payment in Full                                                                          |       |       |     |
| 5.3                                                                 |       | Owner’s  Limited License Upon Owner’s Termination for Convenience or Design-Builder’s  Election to Terminate |       |       |     |
| 5.4                                                                 |       | Owner’s Limited License  Upon Design-Builder’s Default                                                            |       |       |     |
| 5.5                                                                 |       | Owner’s Indemnification  for Use of Work Product                                                                       |       |       |     |
| 5.6                                                                 |       | Risk of Loss                                                                                                                |       |       |     |
|                                                                |       |                                                                                                                        |       |       |     |
| **Article 6 Commencement and  Completion of the Expansion Project** |       |                                                                                                                        |       |
| ** **                                                          |       |                                                                                                                        |       |
| 6.1                                                                 |       | [Reserved]                                                                                                                  |       |       |     |
| 6.2                                                                 |       | Notice to Proceed;  Commencement                                                                                            |       |       |     |
| 6.3                                                                 |       | Expansion Project  Start-Up and Testing                                                                                     |       |       |     |
| 6.4                                                                 |       | Substantial Completion                                                                                                      |       |       |     |
| 6.5                                                                 |       | Final Completion                                                                                                            |       |       |     |
| 6.6                                                                 |       | Post Completion Support                                                                                                     |       |       |     |

 

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| **Article 7 Performance Testing and Liquidated Damages**                     |   |                                                          |   |
|------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
| ** **                                                                   |   |                                                          |   |
| 7.1                                                                          |   | Performance Guarantee                                         |   |   |   |
| 7.2                                                                          |   | Performance Testing                                           |   |   |   |
| 7.3                                                                          |   | Liquidated Damages                                            |   |   |   |
| 7.4                                                                          |   | Bonds and Other  Performance Security                         |   |   |   |
|                                                                         |   |                                                          |   |   |   |
| **Article 8 Warranties**                                                     |   |                                                          |   |
| ** **                                                                   |   |                                                          |   |
| 8.1                                                                          |   | Design-Builder Warranty                                       |   |   |   |
| 8.2                                                                          |   | Correction of Defective  Work                                 |   |   |   |
| 8.3                                                                          |   | Warranty Period Not  Limitation to Owner’s Rights        |   |   |   |
|                                                                         |   |                                                          |   |   |   |
| **Article 9 Contract Price**                                                 |   |                                                          |   |
| ** **                                                                   |   |                                                          |   |
| 9.1                                                                          |   | Contract Price                                                |   |   |   |
| 9.2                                                                          |   | Effect of Construction  Cost Index Increase on Contract Price |   |   |   |
|                                                                         |   |                                                          |   |   |   |
| **Article 10 Payment Procedures**                                            |   |                                                          |   |
| ** **                                                                   |   |                                                          |   |
| 10.1                                                                         |   | Payment of Financial  Closing                                 |   |   |   |
| 10.2                                                                         |   | Progress Payments                                             |   |   |   |
| 10.3                                                                         |   | Final Payment                                                 |   |   |   |
| 10.4                                                                         |   | Failure to Pay Amounts  Due                                   |   |   |   |
| 10.5                                                                         |   | Design-Builder’s  Payment Obligations                    |   |   |   |
| 10.6                                                                         |   | Record Keeping and  Finance Controls                          |   |   |   |
|                                                                         |   |                                                          |   |   |   |
| **Article 11 Hazardous Conditions  and Differing Site Conditions**           |   |                                                          |   |
| ** **                                                                   |   |                                                          |   |
| 11.1                                                                         |   | Hazardous Conditions                                          |   |   |   |
| 11.2                                                                         |   | Differing Site  Conditions; Inspection                        |   |   |   |
|                                                                         |   |                                                          |   |   |   |
| **Article 12 Force Majeure;  Change in Legal Requirements**                  |   |                                                          |   |
| ** **                                                                   |   |                                                          |   |
| 12.1                                                                         |   | Force Majeure Event                                           |   |   |   |
| 12.22.2006                                                                   |   | Effect of Force Majeure  Event                                |   |   |   |
| 12.3                                                                         |   | Change in Legal  Requirements                                 |   |   |   |
| 12.4                                                                         |   | Time Impact and  Availability                                 |   |   |   |
|                                                                         |   |                                                          |   |   |   |
| **Article 13 Changes to the  Contract Price and Scheduled Completion Dates** |   |                                                          |   |
| ** **                                                                   |   |                                                          |   |
| 13.1                                                                         |   | Change Orders                                                 |   |   |   |
| 13.2                                                                         |   | Contract Price  Adjustments                                   |   |   |   |
| 13.3                                                                         |   | Emergencies                                                   |   |   |   |
| 13.4                                                                         |   | Contract Time  Adjustment                                     |   |   |   |
| 13.5                                                                         |   | Failure to Complete  Owner’s Milestones                  |   |   |   |
|                                                                         |   |                                                          |   |   |   |
| **Article 14 Indemnity**                                                     |   |                                                          |   |
| ** **                                                                   |   |                                                          |   |
| 14.1                                                                         |   | Tax Claim  Indemnification                                    |   |   |   |
| 14.2                                                                         |   | Payment Claim  Indemnification                                |   |   |   |
| 14.3                                                                         |   | Design-Builder’s  General Indemnification                |   |   |   |
| 14.4                                                                         |   | Owner’s General  Indemnification                         |   |   |   |
| 14.5                                                                         |   | Patent and Copyright  Infringement                            |   |   |   |

 

ii

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| **Article 15 Stop Work; Termination for Cause**       |   |                                                     |   |
|-------------------------------------------------------|--------|----------------------------------------------------------|--------|
| ** **                                            |   |                                                     |   |
| 15.1                                                  |   | Owner’s Right to Stop  Work                         |   |   |   |
| 15.2                                                  |   | Owner’s Right to  Perform and Terminate for Cause   |   |   |   |
| 15.3                                                  |   | Owner’s Right to  Terminate for Convenience         |   |   |   |
| 15.4                                                  |   | Design-Builder’s Right  to Stop Work                |   |   |   |
| 15.5                                                  |   | Design-Builder’s Right  to Terminate for Cause      |   |   |   |
| 15.6                                                  |   | Bankruptcy of Owner or  Design-Builder                   |   |   |   |
| 15.7                                                  |   | Lenders’ Right to Cure                              |   |   |   |
|                                                  |   |                                                     |   |   |   |
| **Article 16 Representatives of  the Parties**        |   |                                                     |   |
| ** **                                            |   |                                                     |   |
| 16.1                                                  |   | Designation of Owner’s  Representatives             |   |   |   |
| 16.2                                                  |   | Designation of  Design-Builder’s Representatives    |   |   |   |
|                                                  |   |                                                     |   |   |   |
| **Article 17 Insurance**                              |   |                                                     |   |
| ** **                                            |   |                                                     |   |
| 17.1                                                  |   | Insurance                                                |   |   |   |
| 17.2                                                  |   | Design-Builder’s  Insurance Requirements            |   |   |   |
| 17.3                                                  |   | Owner’s Liability  Insurance                        |   |   |   |
| 17.4                                                  |   | Owner’s Property  Insurance                         |   |   |   |
|                                                  |   |                                                     |   |   |   |
| **Article 18 Representations and  Warranties**        |   |                                                     |   |
| ** **                                            |   |                                                     |   |
| 18.1                                                  |   | Design-Builder and  owner Representations and Warranties |   |   |   |
| 18.2                                                  |   | Design-Builder  Representations and Warranties           |   |   |   |
|                                                  |   |                                                     |   |   |   |
| **Article 19 Dispute Resolution**                     |   |                                                     |   |
| ** **                                            |   |                                                     |   |
| 19.1                                                  |   | Dispute Avoidance and  Mediation                         |   |   |   |
| 19.2                                                  |   | Arbitration                                              |   |   |   |
| 19.3                                                  |   | Duty to Continue  Performance                            |   |   |   |
| 19.4                                                  |   | No Consequential  Damages                                |   |   |   |
| 19.5                                                  |   | Limitation of Liability                                  |   |   |   |
|                                                  |   |                                                     |   |   |   |
| **Article 20 Confidentiality of Shared  Information** |   |                                                     |   |
| ** **                                            |   |                                                     |   |
| 20.1                                                  |   | Non-Disclosure  Obligation                               |   |   |   |
| 20.2                                                  |   | Publicity and  Advertising                               |   |   |   |
| 20.3                                                  |   | Term of Obligation                                       |   |   |   |
|                                                  |   |                                                     |   |   |   |
| **Article 21 Miscellaneous**                          |   |                                                     |   |
| ** **                                            |   |                                                     |   |
| 21.1                                                  |   | Assignment                                               |   |   |   |
| 21.2                                                  |   | Successors                                               |   |   |   |
| 21.3                                                  |   | Governing Law                                            |   |   |   |
| 21.4                                                  |   | Severability                                             |   |   |   |
| 21.5                                                  |   | No Waiver                                                |   |   |   |
| 21.6                                                  |   | Hearings                                                 |   |   |   |
| 21.7                                                  |   | Notice                                                   |   |   |   |
| 21.8                                                  |   | No Privity with Design  Consultant/Subcontractors        |   |   |   |
| 21.9                                                  |   | Amendments                                               |   |   |   |
| 21.10                                                 |   | Entire Agreement                                         |   |   |   |
| 21.11                                                 |   | Third-Party  Beneficiaries                               |   |   |   |
| 21.12                                                 |   | Counterparts                                             |   |   |   |
| 21.13                                                 |   | Survival                                                 |   |   |   |

 

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| **EXHIBIT A Performance Guarantee Criteria**       |   |   |   |
|----------------------------------------------------|--------|--------|--------|
| ** **                                         |   |   |   |
| **EXHIBIT B Project Scope**                        |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT C Owner’s  Responsibilities**       |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT D ICM License Agreement**                |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT E Schedule of Values**                   |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT F Form of Informational  Report**        |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT G Required Permits**                     |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT H Form of Performance  Bond**            |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT I Form of Payment Bond**                 |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT J Draw (Payment)  Schedule**             |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT K Air Emissions  Application or Permit** |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT L [Reserved]**                           |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT M Form of Application  for Payment**     |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT N Form of Lien Waiver**                  |   |   |   |
| ** **                                         |   |   |   |
| **EXHIBIT O Form of Consent to Assignment**        |   |   |   |

 

 

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**LUMP SUM DESIGN-BUILD CONTRACT**

This LUMP SUM DESIGN-BUILD CONTRACT (the “Agreement”)is made as of September 20, 2006, (the “EffectiveDate”) by and between Little Sioux Corn Processors, LP, an Iowa limitedpartnership (the “Owner”) and Fagen, Inc., a Minnesota corporation (the “Design-Builder”)(each a “Party” and collectively, the “Parties”).

**RECITALS**

A.             The Design-Builder originallyconstructed a fifty-two (52) million gallons per year (“MGY”) dry grindethanol production facility near Marcus, Iowa (the “LSCP Plant”), under a Design-Build Agreement dated December26, 2001;

B.              The Owner desires to develop, construct, ownand operate a forty (40) MGY expansion (the “ExpansionPlant”) of the LSCP Plant, which would bring the total nameplate capacityof the LSCP Plant to ninety-two (92) MGY; and

C.              Design-Builder desiresto provide design, engineering, procurement and construction services for theExpansion Plant.

NOW, THEREFORE, in consideration of the mutualcovenants and obligations contained hereinand for other good and valuable consideration, Owner and Design-Builder agreeas follows.

**AGREEMENT**

**Article 1Definitions; Rules of Interpretation**

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

(a)                                       The masculine shall include the feminine andneuter.

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

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

5

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

*AAA*is defined in Section 19.1.

*Agreement* is defined in the Preamble.

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

*Applicable Law*means

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

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

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

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

*Application for Payment*is defined in Section 10.2.1.

*As Built Plans*is defined in Section 5.2.

*Bankrupt Party*is defined in Section 15.6.1.

*Baseline Index*is defined in Section 9.2.1.

*CCI*is defined in Section 9.2.

*Change Order*is defined in Section 13.1.1.

*Certificate of Substantial Completion*is defined in Section6.4.

*Confidential Information*is defined in Section 20.1.

6

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*Construction Documents*is defined in Section3.2.1.

*Contract Documents*is defined in Section 2.2.

*Contract Price*is defined in Section 9.1.

*Contract Time(s**)*means scheduled dates provided for in theContract Documents including Scheduled Substantial Completion Date and FinalCompletion Date.

*Damages*is defined in Section 14.3.1.

*Day*or *Days* shall mean calendar daysunless otherwise specifically noted in the Contract Documents.

*Design-Builder*is defined in the Preamble.

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

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

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

*Differing Site Conditions*is defined in Section 11.2.1.

*Early Completion Bonus* is defined in Section 6.4.4.

*Effective Date* is defined in the Preamble.

*Expansion Plant* is defined in the Recitals.

*Expansion Project* is defined in Section 2.1.

*Expansion Project Scope* is defined in Exhibit B.

*Final Application for Payment* is defined in Section 10.3.

*Final Completion* is defined in Section 6.5.2.

*Final Completion Date* is defined in Section 6.5.1.

*Final Payment* is defined in Section 10.3

FinancialClosing means the execution of the Financing Documents by all the partiesthereto.

7

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*Financing Documents* means the final loan documents with theLender or Lenders providing financing for the construction or term financing ofthe Expansion Plant and any and all agreements necessary to demonstrate thebinding commitment of Owner or Lenders to fund the construction of the ExpansionPlant.

*Force Majeure Event* is defined in Section 12.1.

*LSCP Plant* is defined in the Recitals.

*Governmental Approvals* are any material authorizations orpermissions issued or granted by any Governmental Authority to the ExpansionProject, its Owner, the Design-Builder, Subcontractors and their affiliates inconnection with any activity related to the Expansion Project.

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

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

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

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

*Indemnified Parties* is defined in Section 5.2.

*Independent Engineer* means Owner’s and Lenders’ independentengineer.

*Industry-Wide Disruption* is defined in Section 12.4.

*Informational Report* is defined in Section 3.8.

*Legal Requirements* or *Laws*are all applicable federal, state and local statutes, laws, codes, ordinances,rules, regulations, judicial decisions, orders, decrees plans, injunctions,permits, tariffs, governmental agreements and governmental restrictions,whether now or hereafter in effect, of any government or quasi-governmententity having jurisdiction over the Expansion Project or Site, the practicesinvolved in the Expansion Project or Site, or any Work, including any consensusstandards for materials, products, systems, and services established by ASTMInternational, any successor organization thereto, or any GovernmentalAuthority.

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

8

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

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

*MGY*is defined in the Recitals.

*Notice to Proceed* is defined in Section 6.2.

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

*Owner*is defined in the Preamble.

*Owner Indemnified Parties* is defined in Section 14.3.1.

*Owner’s Milestones* is defined in Section 13.5.

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

*Owner’s Senior Representative* is defined in Section 16.1.

*Party* or *Parties* is defined inthe Preamble.

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

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

*Payment Bond* is defined in Section 7.4.2.

*Performance Bond* is defined in Section 7.4.1.

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

*PerformanceTests* is defined inSection 7.2.1.

*Punch List* is defined in Section 6.4.3.

9

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

*Safety Representative* is defined in Section 3.7.1.

*Schedule of Values* is defined in Section 10.2.5.

*ScheduledSubstantial Completion Date* is defined in Section 6.4.1.

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

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

*SubstantialCompletion* is definedin Section 6.4.2.

*Work* is defined in Section 3.1.

*Work Product* is defined in Section 5.1.

**Article 2****The Expansion Project**

**2.1          Services tobe Performed.**Pursuantto this Agreement, Design-Builder shall perform all work and services inconnection with the engineering, design, procurement, construction startup,testing and training for the operation and maintenance of the Expansion Plant,and provide all material, equipment, tools and labor necessary to complete theExpansion Plant in accordance with the terms of this Agreement. The ExpansionPlant, together with all equipment, labor, services and materials furnishedhereunder is defined as the “Expansion Project.”

**2.2          Extentof Agreement.**ThisAgreement consists of the following documents, and all exhibits, schedules,appendices and attachments hereto and thereto (collectively, the “ContractDocuments”):

**2.2.1** All written modifications,amendments and change orders to this Agreement.

**2.2.2** This Agreement,including all exhibits and attachments, executed by Owner and Design-Builder,including those below:

**List ofExhibits**

| Exhibit A | Performance Guarantee Criteria |
|-----------|--------------------------------|
| Exhibit B | Project Scope                  |

 

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| Exhibit C | Owner’s Responsibilities       |
|-----------|-------------------------------------|
| Exhibit D | ICM License Agreement               |
| Exhibit E | Schedule of Values                  |
| Exhibit F | Form of Informational Report        |
| Exhibit G | Required Permits                    |
| Exhibit H | Form of Performance Bond            |
| Exhibit I | Form of Payment Bond                |
| Exhibit J | Draw (Payment) Schedule             |
| Exhibit K | Air Emissions Application or Permit |
| Exhibit L | [Reserved]                          |
| Exhibit M | Form of Application for Payment     |
| Exhibit N | Form of Lien Waiver                 |
| Exhibit 0 | Form of Consent to Assignment       |

 

**2.2.3**       Construction Documents to be prepared byDesign-Builder pursuant to Section 3.2.1 shall be incorporated in thisAgreement.

**2.3****         Conflicting Provisions.**In the event of any conflict or inconsistencybetween the body of this Agreement and any Exhibit or Schedule hereto, theterms and provisions of this Agreement, as amended from time to time, shallprevail and be given priority. Subject to the foregoing, the several documentsand instruments forming part of this Agreement are to be taken as mutuallyexplanatory of one another and in the case of ambiguities or discrepancieswithin or between such parts the same shall be explained and interpreted, ifpossible, in a manner which gives effect to each part and which avoids orminimizes conflicts among such parts. No oral representations or otheragreements have been made by the Parties except as specifically stated in theContract Documents.

**Article 3Design-Builder Responsibilities**

 **3.1         Design-Builder’s Services in General.**Exceptfor services and information to be provided by Owner and specifically set forthin Article 4 and Exhibit C, Design-Builder shall perform or cause to beperformed all design, engineering, procurement, construction services, supervision,labor, inspection, testing, start-up, material, equipment, machinery, temporaryutilities and other temporary facilities to complete construction of theExpansion Project consistent with the Contract Documents (the “Work”). Alldesign and engineering and construction services and other Work of theDesign-Builder shall be performed in accordance with, and upon completion thePlant shall comply with, (i) the Expansion Project Scope as set forth inExhibit B, (ii) the Construction Documents, (iii) all Legal Requirements, and(iv) generally accepted construction and design-build standards of the fuelethanol industry in the Midwest United States during the relevant time period.Any design and engineering or other professional service to be performed pursuantto this Agreement, which under Applicable Law must be performed by licensedpersonnel, shall be performed by licensed personnel as required by Law. Theenumeration of specific duties and obligations to be performed by theDesign-Builder under the Contract Documents shall not be construed to limit inany way the general undertakings of the Design-Builder as set forth herein.Design-Builder’s Representative shall be reasonably available to Owner andshall have the necessary expertise and experience required to 

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supervise the Work. Design-Builder’s Representativeshall communicate regularly with Owner and shall be vested with the authorityto act on behalf of Design-Builder.

**3.2          Design Development andServices.**

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

**3.2.2**Construction of theExpansion Plant shall be consistent with the Construction Documents.

**3.2.3** Design-Builder shall maintain a current,complete set of drawings and specifications at the Site. Owner shall have theright to review such drawings and specifications. Owner and IndependentEngineer may not make copies of the available drawings and specificationswithout Design-Builder’s written permission, and, granted such permission, mayonly do so to the extent such drawings and specifications directly pertain tothe Expansion Plant; provided however that, pursuant to Section 5.1 of thisAgreement, Design-Builder retains ownership of and property interests in anydrawing or specifications made available and/or copied.

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

**3.3 Standard ofCare.**All servicesperformed by the Design-Builder and its Subcontractors pursuant to theConstruction Documents shall be performed in accordance with the standard ofcare and skill generally accepted in the fuel ethanol industry in the MidwestUnited States during the relevant time period or in accordance with any of thepractices, methods and acts that in the exercise of reasonable judgment inlight of the facts known at the time the decision was made, could have beenexpected to accomplish the desired result at a reasonable cost consistent withgood business practices, safety and expedition. This standard of care is notintended to be limited to the optimum practice, method or act to the exclusionof all others, but rather to be acceptable practices, methods or acts generallyaccepted in the construction and design-build standards of the fuel ethanolindustry in the Midwest United States. Design-Builder 

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and its Subcontractors shall perform all construction activitiesefficiently and with the requisite expertise, skill, competence, resources andcare to satisfy the requirements of the Contract Documents and all applicableLegal Requirements. Design-Builder shall at all times exercise complete andexclusive control over the means, methods, sequences and techniques ofconstruction.

**3.4          GovernmentApprovals and Permits****.**Except as identified in Exhibit C and, with respect to items identifiedas Owner’s responsibility, in Exhibit G (which items shall be obtained by Ownerpursuant to Section 4.5), Design-Builder shall obtain and pay for all necessarypermits, approvals, licenses, government charges and inspection fees requiredfor the prosecution of the Work by any government or quasi-government entityhaving jurisdiction over the Expansion Project. Design-Builder shall providereasonable assistance to Owner in obtaining those permits, approvals andlicenses that are Owner’s responsibility.

**3.5          Subcontractors.**

** 3.5.1**Design-Builder may subcontract portions ofthe Work in accordance with the terms hereof Any subcontractor employed byDesign-Builder shall be licensed and qualified to perform the Work consistentwith the Contract Documents.

**3.5.2**Design-Builder assumesresponsibility to Owner for the proper performance of the Work ofSubcontractors and any acts and omissions in connection with such performance.Nothing in the Contract Documents is intended or deemed to create any legal orcontractual relationship between Owner and any Subcontractor, including but notlimited to any third-party beneficiary rights.

**3.5.3**Design-Builder shall coordinate theactivities of all of Design-Builder’s Subcontractors. If Owner performs otherwork on the Expansion Project or at the Site with separate contractors underOwner’s control, Design-Builder agrees to reasonably cooperate and coordinateits activities with those separate contractors so that the Expansion Projectcan be completed in an orderly and coordinated manner without unreasonabledisruption.

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

**3.6          Maintenanceof Site.**Design-Buildershall keep the Site reasonably free from debris, trash and construction wastesto permit Design-Builder to perform its construction services efficiently,safely and without interfering with the use of adjacent land areas. UponSubstantial Completion of the Work Design-Builder shall remove all debris,trash, construction wastes, materials, equipment, machinery and tools arisingfrom the Work to permit Owner to occupy the Expansion Project for its intendeduse.

**3.7          Project Safety.**

**3.7.1**Design-Builder recognizes the importance ofperforming the Work in a safe 

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manner so as to prevent damage, injury or loss to (i) any individualsat the Site, whether working or visiting, (ii) the Work, including materialsand equipment incorporated into the Work or stored on-Site or off-Site, and(iii) any other property at the Site or adjacent thereto. Design-Builderassumes responsibility for implementing and monitoring all safety precautionsand programs related to the performance of the Work. Design-Builder shall,prior to commencing construction, designate a representative (the “SafetyRepresentative”) with the necessary qualifications and experience tosupervise the implementation and monitoring of all safety precautions andprograms related to the Work. Unless otherwise required by the ContractDocuments, Design-Builder’s Safety Representative shall be an individualstationed at the Site who may have responsibilities on the Expansion Project inaddition to safety. The Safety Representative shall make routine dailyinspections of the Site and shall hold weekly safety meetings withDesign-Builder’s personnel, Subcontractors and others as applicable.

**3.7.2**Design-Builder andSubcontractors shall comply with all Legal Requirements relating to safety, aswell as any Owner-specific safety requirements set forth in the ContractDocuments; provided, that such Owner-specific requirements do not violate anyapplicable Legal Requirement. As promptly as practicable, Design-Builder willreport in writing any safety-related injury, loss, damage or accident arisingfrom the Work to Owner’s Representative and, to the extent mandated by LegalRequirements, to all government or quasi-government authorities havingjurisdiction over safety-related matters involving the Expansion Project or theWork.

**3.7.3**Design-Builder’s responsibility for safetyunder this Section 3.7 is not intended in any way to relieve Subcontractors oftheir own contractual and legal obligations and responsibility for (i)complying with all Legal Requirements, including those related to health andsafety matters, and (ii) taking all necessary measures to implement and monitorall safety precautions and programs to guard against injury, losses, damages oraccidents resulting from their performance of the Work.

**3.8          Submission of Reports.**Design-Builder shall provide Owner with amonthly informational report substantially in the form of Exhibit F attachedhereto (“Informational Report”).

**3.9          Training****.**At a mutually agreed time prior to start-up,Design-Builder shall provide any necessary training at the LSCP Plant (or otherlocation) for all of Owner’s employees required for the operation andmaintenance of the Expansion Plant in accordance with all design specificationstherefor contained in the Contract Documents and necessary in order to maintainthe Performance Guarantee Criteria, including operators, laboratory personnel,general, plant and maintenance managers. Other personnel of Owner may receivesuch on-Site training by separate arrangement between Owner and Design-Builderand as time is available. All training personnel and costs associated with suchtraining personnel, including labor and all training materials will be providedto Owner within the Contract Price at no additional cost. Owner will beresponsible for all travel and expenses of their employees and the Owner willpay all wages and all other expenses for their personnel during the training.The training services will include training on computers, laboratoryprocedures, field operating procedures, and overall plant section performanceexpectations. Prior to the start-up training, Design-Builder shall provideOwner training manuals and operating manuals and other documents reasonablynecessary for the start-up process.

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**3.10 Integration of Expansion Plantinto LSCP Plant**.Design-Builder shall coordinate with Owner the timely and full integration ofinstallation and start-up of the Expansion Plant into the LSCP Plant so as tocoincide as much as possible with the periods of non-operation (whetherscheduled or otherwise) of, and to reasonably minimize disruption to, the LSCPPlant. Design-Builder shall perform all services reasonably necessary to fullyintegrate the Expansion Plant into the LSCP Plant so that the Expansion Plantoperates in accordance with the Contract Documents and maintains thePerformance Guarantee Criteria. However, Design-Builder makes no guarantees as to,and shall not be held liable for, any effect the design, construction, andintegration of the Expansion Plant shall have on the performance of the Plantduring Design-Builder’s performance of the services provided pursuant to thisAgreement.

**Article 4Owner’s Responsibilities**

**4.1          Duty to Cooperate.**

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

**4.1.2** Owner shall pay all reasonable costsincurred by Design-Builder for frost removal so that winter construction canproceed. Such costs may include but are not limited to, equipment costs,equipment rental costs, sheltering costs, special material costs, fuel costsand associated labor costs. Owner acknowledges and agrees that such costs arein addition to, and not included in, the Contract Price, and that the paymentof such costs, which shall be billed on a weekly basis, shall not require theissuance of a Change Order or the obtaining of any Owner approval prior to theissuance of invoices for such costs.

**4.2          Furnishing of Services andInformation.**

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

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

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

(c)                                  temporary and permanent easements, zoning andother requirements and encumbrances affecting land use, or necessary to permitthe proper design and construction of the Expansion Project and enableDesign-Builder to perform the Work;

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(d)                                 A legal description of the Site;

(e)                                  to the extent available, as-built and recorddrawings of any existing structures at the Site, including modifications sincethe original construction of the LSCP Plant; and

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

**4.2.2**Owner shall provide to Design-Builder allOwner’s deliverables under Exhibit C pursuant to Owner’s Milestones. Suchdeliverables shall be provided, at Owner’s own cost and expense, forDesign-Builder’s information and use. Design-Builder is entitled to rely uponsuch deliverables in performing the Work.

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

**4.3          Financial Information; Cooperation withLenders; Failure to Obtain Financial Closing**. Design-Builder acknowledges that Owner isseeking financing for the Expansion Project. Design-Builder agrees to cooperatewith Owner in good faith in order to satisfy the reasonable requirements ofOwners’ financing arrangements, including, where appropriate and reasonable,the execution and delivery of documents or instruments necessary to accommodatethe Financial Closing. Owner agrees to pay all documented costs incurred byDesign-Builder incurred prior to and at Financial Closing, and thereafterduring the term of this Agreement, in connection with satisfying therequirements of Owners’ financing arrangements including all documentedattorney’s fees. Design-Builder and Owner also acknowledge that the Lenders, asa condition to providing financing for the Expansion Plant, shall require Ownerto provide the Independent Engineer with certain reasonable participation andreview rights with respect to Design-Builder’s performance of the Work.Design-Builder acknowledges and agrees that such reasonable participation andreview rights shall consist of the right to (i) enter the Site and inspect theWork upon reasonable notice to Design-Builder; (ii) attend all start-up andtesting procedures; and (iii) review and approve such other items for whichOwner is required by Lenders to obtain the concurrence, opinion or acertificate of the Independent Engineer or the Lenders pursuant to theFinancing Documents which items do not alter the rights or impose additional obligationson Design-Builder. Nothing in this Section 4.3 shall be deemed to requireDesign-Builder to agree to any amendments to this Agreement that wouldadversely affect Design-Builder’s risks, rights or obligations under thisAgreement. Upon Financial Closing, Owner shall promptly provide toDesign-Builder an officer’s certificate certifying that Financial Closing hasoccurred and such Owner’s officer’s certificate shall constitute evidencesatisfactory to Design-Builder that Owner has adequate funds available andcommitted to fulfill its obligations under the Contract Documents for allpurposes hereunder. Owner must provide such officer’s certificate no later thansixty (60) days after the issuance of Notice to Proceed.

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

**4.5          Government Approvals and Permits**. Owner shall obtain and pay for allnecessary Governmental Approvals required by Law, including permits, approvals,licenses, government charges and inspection fees set forth in Exhibit C and, tothe extent identified as Owner’s responsibility, Exhibit G. Owner shall providereasonable assistance to Design-Builder in obtaining those permits, approvalsand licenses that are Design-Builder’s responsibility pursuant to Exhibit G andSection 3.4.

**4.6          Owner’s Separate Contractors**. Owner is responsible for all work,including such work listed on Exhibit C, performed on the Expansion Project orat the Site by separate contractors under Owner’s control. Owner shallcontractually require its separate contractors to cooperate with, andcoordinate their activities so as not to interfere with, Design-Builder inorder to enable Design-Builder to timely complete the Work consistent with theContract Documents.

4**.7           Security**.Owner shall be responsible for Site security (including fencing, alarm systems,security guarding services and the like) at all times during the term of thisAgreement to prevent vandalism, theft and danger to the Expansion Plant, theSite, and personnel. Owner shall coordinate and supervise ingress and egressfrom the Site so as to minimize disruption to the Work.

**Article 5Ownership of Work Product; Risk of Loss**

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

**5.2          Owner’s Limited License Upon Payment inFull**. Upon Owner’spayment in full for all Work performed under the Contract Documents,Design-Builder shall grant Owner a limited license to use the Work Product inconnection with Owner’s occupancy, operation, maintenance and repair of theExpansion Plant. Design-Builder acknowledges and agrees that the limitedlicense to use the Work Product granted hereby shall provide Owner sufficientrights in and to the Work Product as shall be necessary for Owner to operateand maintain the Expansion Plant and shall include any Pass Through Warrantiesin connection therewith.  Design-Buildershall provide Owner with a copy of the plans of the Expansion Plant, as built,(the “As Built Plans”) conditioned on Owner’s express understanding that itsuse of the Work Product and its 

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acceptance of the As Built Plans is at Owner’s sole risk and withoutliability or legal exposure to Design-Builder or anyone working by or throughDesign-Builder, including Design Consultants of any tier (collectively the “IndemnifiedParties”); provided, however, that any performance guarantees, andwarranties (of equipment or otherwise) shall remain in effect according to theterms of this Agreement.

**5.2.1** Design-Builder is utilizing certainproprietary property and information of ICM in the design and construction ofthe Expansion Project, and Design-Builder may incorporate proprietary propertyand information of ICM into the Work Product. Owner’s use of the proprietaryproperty and information of ICM shall be governed by the terms and provisionsof the ICM License Agreement, to be executed by Owner and ICM in connectionwith the execution of this Agreement. Owner shall be entitled to use the WorkProduct solely for purposes relating to the Expansion Plant, but shall not beentitled to use the Work Product for any other purposes whatsoever, includingwithout limitation, expansion of the Expansion Plant. Notwithstanding theforegoing sentence, Owner shall be entitled to use the Work Product for theoperation, maintenance and repair of the Expansion Plant including theinterconnection of, but not the design of, any future expansions to theExpansion Plant. The limited license granted to Owner under Sections 5.2, 5.3or 5.4 to use the Work Product shall be limited by and construed according tothe same terms contained in the ICM License Agreement attached hereto asExhibit D and incorporated herein by reference thereto, except (i) referencesin such ICM License Agreement to ICM and Proprietary Property shall refer toDesign-Builder and Work Product, respectively, (ii) the Laws of the State ofMinnesota shall govern such limited license, and (iii) the dispute resolutionprovisions contained in Article 19 hereof shall apply to any breach orthreatened breach of Owner’s duties or obligations under such limited license,except that Design-Builder shall have the right to seek injunctive relief in acourt of competent jurisdiction against Owner or its Representatives for anysuch breach or threatened breach. This paragraph also applies to Sections 5.3and 5.4 below.

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

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

(b)                            If the termination for convenience is byOwner in accordance with Section 15.3 hereof, or if Design-Builder elects toterminate this Agreement in accordance with Section 15.5, then Owner agrees topay Design-Builder the additional sum of One Million Two Hundred Fifty ThousandDollars ($1,250,000.00) as compensation for the limited right to use the WorkProduct completed “as is” on the date of termination in accordance with thisArticle 5.

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**5.4          Owner’sLimited License Upon Design-Builder’s Default**. If this Agreement is terminated due toDesign-Builder’s default pursuant to Section 15.2 and (i) it is adjudged thatDesign-Builder was in default, and (ii) Owner has fully satisfied all of its obligationsunder the Contract Documents through the time of Design-Builder’s default, thenDesign-Builder shall grant Owner a limited license to use the Work Product inconnection with Owner’s completion, operation, maintenance, occupancy andrepair of the Expansion Plant. This limited license is conditioned on Owner’sexpress agreement that its use of the Work Product is at Owner’s sole riskwithout liability or legal exposure to any Indemnified Party; provided,however, that any Pass Through Warranties regarding equipment or expresswarranties regarding equipment provided by this Agreement shall remain ineffect according to their terms. This limited license grants Owner the abilityto repair the Expansion Plant at Owner’s discretion.

**5.5          Owner’sIndemnification for Use of Work Product**. If Owner uses the Work Product or ExpansionPlant under any of the circumstances identified in this Article 5, to thefullest extent allowed by Law, Owner shall defend, indemnify and hold harmlessthe Indemnified Parties from and against any and all claims, damages,liabilities, losses and expenses, including attorneys’ fees, arising out of orresulting from the use of the Work Product and Expansion Plant; provided,however, that any Pass Through Warranties regarding equipment or expresswarranties regarding equipment provided by this Agreement shall remain ineffect according to their terms.

**5.6          Riskof Loss**.Design-Builder shall have no liability for a physical loss of or damage to theWork unless such loss or damage is caused by the willful misconduct or thenegligence of Design-Builder or someone acting under its direction or control.Design-Builder shall not be liable for physical loss of or damage to the Workwhere such loss or damage is caused by the willful misconduct or the negligenceof Owner’s employees or third parties who are not Subcontractors.Design-Builder shall have no liability for a physical loss of or damage to theWork occurring after Final Completion. Design-Builder shall have no liabilityfor losses or damages for which insurance coverage under this Agreement isavailable to Owner; in such circumstances, any liability for losses and damagesas described in this Section 5.6 shall be limited to losses or damages whichexceed insurance coverage available to the Owner without the application of anyreductions from such coverages due to deductible, retention or retrospectivepremiums.

**Article 6Commencement and Completion of the Expansion Project**

**6.1          [Reserved].**

**6.2          Notice to Proceed; Commencement**. The Work shall commence within five (5)Days of Design-Builder’s receipt of Owner’s written valid notice to proceed (“Noticeto Proceed”) unless the Parties mutually agree otherwise in writing. TheParties agree that a valid Owner’s Notice to Proceed cannot be given until: (1)Owner has title to the real estate on which the Expansion Project will beconstructed; (2) the Phase I Site work required of Owner and a sufficientportion of the Phase II Site work required of Owner, each as described inExhibits C and L, have been completed, at Design-Builder’s reasonabledetermination, so as to permit 

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Design-Builder to commence construction, and allrelevant redline drawings for such completed Phase I and Phase II Site workhave been provided by Owner and deemed adequate by Design-Builder; (3) the airpermit(s) and/or other applicable local, state or federal permits necessary sothat construction can begin, as listed on Exhibit G, have been obtained; (4)Owner demonstrates it has the financial resources to construct the project andit appears reasonable that Financial Closing and the issuance of an officer’scertificate pursuant to Section 4.3 will occur within sixty (60) days of theissuance of Notice to Proceed; (5) if applicable, Owner has executed a salestax exemption certificate and provided the same to Design-Builder; (6) Ownerhas provided the name of its property/all-risk insurance carrier and thespecific requirements for fire protection; (7) Owner has provided an insurancecertificate or copy of insurance policy demonstrating that Owner has obtainedbuilder’s risk insurance pursuant to Section 17.4.3 hereof; and (8)Design-Builder provides Owner written notification of its acceptance of theNotice to Proceed. Owner and Design-Builder mutually agree that time is of theessence with respect to the dates and times set forth in the ContractDocuments. Design-Builder must receive a valid Owner’s Notice to Proceed withinone hundred and eighty (180) Days of the Effective Date; otherwise, thisAgreement may be terminated at Design-Builder’s sole option. If Design-Builderchooses to terminate this Agreement pursuant to its right under the immediatelypreceding sentence, then Design-Builder shall have no further obligationshereunder.

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

Fagen,Inc.

501W. Highway 212 P. 0. Box 159

Granite Falls, MN 56241 Attention: Becky Dahl Fax: (320) 564-5190

Within five (5) Days of receipt by Design-Builder ofthe Notice to Proceed, Design-Builder shall deliver to Owner notice of eitheracceptance or denial of the Notice to Proceed including the reasons forrejection, if applicable.

**6.3          Expansion Project Start-Up and Testing**. Owner shall provide, at Owner’s cost,equipment, tools, instruments and materials necessary for Owner to comply withits obligations under Exhibit C, raw materials, consumables and personnel,necessary for start-up and testing of the Expansion Plant, and Design-Buildershall provide supervision, standard and special test instruments, tools,equipment and materials required to perform component and equipment checkoutand testing, initial start-up, operations supervision and correctivemaintenance of all permanent Expansion Plant equipment within the scope of theWork. Notwithstanding the foregoing sentence, Design-Builder shall beresponsible for raw materials and consumables to the extent such amountsprovided by Owner are destroyed or damaged (as opposed to consumed in theordinary course of start-up and testing) by Design-Builder or its personnelduring start-up and testing. Design-Builder shall supervise and direct Owner’spersonnel who shall participate in the start-up activities with Design-Builder’spersonnel to become familiar with all aspects of the Expansion Plant. Owner andthe Independent Engineer may witness start-up and testing activities.Performance testing will be conducted in accordance with the provisions ofSection 7.2 hereof

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**6.4          Substantial Completion.**

**6.4.1**Substantial Completion of the entire Workshall be achieved no later than Five Hundred and Forty-five (545) Days afterthe date of the Notice to Proceed, subject to adjustment in accordance with theContract Documents hereof (the “Scheduled Substantial Completion Date”).

**6.4.2** “Substantial Completion” shall bedeemed to occur on the date on which the Work is sufficiently complete so thatOwner can occupy and use the Expansion Plant for its intended purposes.Substantial Completion shall be attained at the point in time when theExpansion Plant is ready to grind the first batch of corn and begin operationfor its intended use. No production is guaranteed on the date of SubstantialCompletion.

**6.4.3 Procedures**. Design-Builder shall notify Owner in writingwhen it believes Substantial Completion has been achieved with respect to theWork. Within five (5) Days of Owner’s receipt of Design-Builder’s notice, Ownerand Design-Builder will jointly inspect such Work to verify that it issubstantially complete in accordance with the requirements of the ContractDocuments. If such Work is deemed substantially complete, Design-Builder shallprepare and issue a “Certificate of Substantial Completion” for the Work thatwill set forth (i) the date of Substantial Completion, (ii) the remaining itemsof Work that have to be completed before Final Payment (“Punch List”), (iii)provisions (to the extent not already provided in this Agreement) establishingOwner’s and Design-Builder’s responsibility for the Expansion Project’ssecurity, maintenance, utilities and insurance pending Final Payment, and (iv)an acknowledgment that warranties with respect to the Work commence on the dateof Substantial Completion, except as may otherwise be noted in the Certificateof Substantial Completion. Upon Substantial Completion of the entire Work andsatisfaction of the Performance Guarantee Criteria listed in Exhibit A, Ownershall release to Design-Builder all retained amounts less an amount equal toone hundred and fifty percent (150%) of the reasonable value of all remainingor incomplete items of Work as noted in the Certificate of SubstantialCompletion, and less an amount equal to the value of any Subcontractor lienwaivers not yet obtained.

**6.4.4 Early Completion Bonus**. If Substantial Completion is attainedwithin Five Hundred Forty-five (545) Days after the date of the Notice toProceed, Owner shall pay Design-Builder at the time of Final Payment underSection 10.3 hereof an early completion bonus (“Early Completion Bonus”)of Eight Thousand Dollars ($8,000.00) per Day for each Day that SubstantialCompletion occurred in advance of said Five Hundred Forty-five (545) Days.

**6.4.5** In all events, payment of said bonus, ifapplicable, at the time of Final Payment is subject to release of funds bysenior lender. If senior lender does not allow release of funds at the time ofFinal Payment to pay said early completion bonus in full, any unpaid balanceshall be converted to an unsecured promissory note payable by Owner toDesign-Builder, accruing interest at ten percent (10%) per annum. On eachanniversary of the note, any unpaid accrued interest shall be converted toprincipal and shall accrue interest as principal thereafter. Owner shall paysaid promissory note as soon as allowed by senior lender; in any event, thenote, plus accrued interest, shall be paid in full before Owner pays or makesany distributions to or for 

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the benefit of its owners (shareholders, members,partners, etc.). All payments shall be applied first to accrued interest andthen to principal.

**6.5****          FinalCompletion.**

**6.5.1**Final Completion of the Work shall beachieved within Ninety (90) Days after the date of Substantial Completion (the “FinalCompletion Date”).

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

(a)                                  Substantial Completion has been achieved;

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

(c)                                  the items identified on the Punch List havebeen completed by Design-Builder; clean-up of the Site has been completed;

(d)                                 all permits required to have been obtained byDesign-Builder have been obtained; the information in Section 6.5.4 has beenprovided to Owner;

(e)                                  release and waiver of all claims and liens fromDesign-Builder and Subcontractors have been provided; and

(f)                                    the Performance Tests have been successfullycompleted.

**6.5.3** After receipt of a Final Application forPayment from Design-Builder, Owner shall make Final Payment in accordance withSection 10.3, less an amount equal to the value of any Subcontractor lienwaivers not yet obtained.

**6.5.4** At the time of submission of its Final Application for Payment,Design-Builder shall provide the following information:

(a)             an affidavit that there are no claims,obligations or liens outstanding or unsatisfied for labor, services, material,equipment, taxes or other items performed, furnished or incurred for or inconnection with the Work which will in any way affect Owner’s interests;

(b)               a general release executed by Design-Builderwaiving, upon receipt of final payment by Design-Builder, all claims forpayment, additional compensation, or damages for delay, except those previouslymade to Owner in writing and remaining unsettled at the time of Final Payment providedsuch general release shall not waive defenses to claims that may be asserted byOwner after payment or claims arising after payment;

(c)                                  consent of Design-Builder’s surety, if any,to Final Payment; and

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(d)                                 a hard copy of the As Built Plans; provided,however, that such plans will remain the Work Product of the Design-Builder andsubject in all respects to Article 5.

**6.5.5** Upon making Final Payment, Owner waives allclaims against Design-Builder except claims relating to (i) Design-Builder’sfailure to satisfy its payment obligations, (ii) Design-Builder’s failure tocomplete the Work consistent with the Contract Documents, including defectsappearing within one (1) year after Substantial Completion, and (iii) the termsof any warranties required by the Contract Documents.

**6.6       PostCompletion Support.**Adequatepersonnel to complete all Work within the Contract Time(s) will be maintainedon-Site by Design-Builder or a Subcontractor until Final Completion has beenachieved. In addition to prosecuting the Work until Final Completion has beenachieved, Design-Builder or its Subcontractor will provide one (1) month ofon-Site operational support for Owner’s personnel after successful completionof the Performance Tests and, from the date of Substantial Completion, willprovide six (6) months of off-Site technical and operating procedure support bytelephone and other electronic data transmission and communication.

**Article**7**Performance Testing and Liquidated Damages**

**7.1          Performance Guarantee**. The Design-Builder guarantees that theExpansion Plant will meet the performance criteria listed in Exhibit A (the “PerformanceGuarantee Criteria”) during a performance test conducted and concludedpursuant to the terms hereof not later than Ninety (90) Days after the date ofSubstantial Completion. If there is a performance shortfall, Design-Builderwill pay all design and construction costs associated with making the necessarycorrections. Design-Builder retains the right to use its sole discretion indetermining the method (which shall be in accordance with generally acceptedconstruction and design-build standards of the fuel ethanol industry in theMidwest United States) to remedy any performance related issues.

**7.2          PerformanceTesting**.

**7.2.1** The Design-Builder shall direct andsupervise the tests and, if necessary, the retests of the Expansion Plant usingDesign-Builder’s supervisory personnel and the Air Emissions Tester shallconduct the air emissions test, in each case, in accordance with the testingprocedures set forth in Exhibit A (the “Performance Tests”), todemonstrate, at a minimum, compliance with the Performance Guarantee Criteria.Owner is responsible for obtaining Air Emissions Tester and for ensuring AirEmissions Tester’s timely performance. Design-Builder shall cooperate with theAir Emissions Tester to facilitate performance of all air emissions tests.Design-Builder shall not be held responsible for the actions of Owner’semployees and third parties involved in the Performance Testing, including butnot limited to Air Emissions Tester.

**7.2.2** No later than thirty (30) Days prior to theearlier of the Scheduled Substantial Completion Date or Substantial Completion,Design-Builder shall provide to Owner for review a detailed testing plan forthe Performance Tests (other than for air emissions). Owner 

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and Design-Builder shall agree upon a testing planthat shall be consistent with the Performance Test Protocol contained inExhibit A hereto. After such agreement has been reached, Design-Builder shall notifythe Owner five (5) business days prior to the date Design-Builder intends tocommence the Performance Tests and shall notify the Owner upon commencement ofthe Performance Tests. Owner and Independent Engineer each have the right towitness all testing, including the Performance Tests and any equipment testing,whether at the Site or at the Subcontractor’s or equipment supplier’s premisesduring the course of this Agreement. Notwithstanding the foregoing sentence,Owner shall bear the costs of providing a witness to any such testing and allsuch witnesses shall comply at all times with Design-Builder’s, Subcontractor’sor equipment supplier’s safety and security procedures and other reasonablerequirements, and otherwise conduct themselves in a manner that does notinterfere with Design-Builder’s, Subcontractor’s or equipment supplier’sactivities or operations.

**7.2.3** Design-Builder shall provide to Owner aPerformance Test report (excluding results from air emissions testing),including all applicable test data, calculations and certificates indicatingthe results of the Performance Tests and, within five (5) business days ofOwner’s receipt of such results, Owner and Design-Builder will jointly inspectsuch Work and review the results of the Performance Tests to verify that thePerformance Guarantee Criteria have been met. If Owner reasonably determinesthat the Performance Guarantee Criteria have not been met, Owner shall notifyDesign-Builder the reasons why Owner determined that the Performance GuaranteeCriteria have not been met and Design-Builder shall promptly take such actionor perform such additional work as will achieve the Performance GuaranteeCriteria and shall issue to the Owner another notice in accordance with Section7.2.2; provided however that if the notice relates to a retest, the notice maybe provided no less than two (2) business days prior to the Performance Tests.Such procedure shall be repeated as necessary until Owner verifies that thePerformance Guarantee Criteria have been met.

**7.2.4** If Owner, for whatever reason, includingwithout limitation, Owner’s failure to perform maintenance or provide suppliesnecessary for start-up, testing, and demonstration of the Performance GuaranteeCriteria for the Expansion Plant, prevents Design-Builder from demonstratingthe Performance Guarantee Criteria within thirty (30) Days of Design-Builder’snotice that the Expansion Plant is ready for Performance Testing, thenDesign-Builder shall be excused from demonstrating compliance with the PerformanceGuarantee Criteria during such period of time that Design-Builder is preventedfrom demonstrating Little Sioux Corn Processors, LP compliance with thePerformance Guarantee Criteria; provided however that Design-Builder will bedeemed to have fulfilled all of its obligations to demonstrate that theExpansion Plant meets the Performance Guarantee Criteria should such period oftime during which Design-Builder is prevented from demonstrating thePerformance Criteria exceed thirty (30) Days or extend ninety (90) days beyondSubstantial Completion.

**7.3          Liquidated Damages**. Design-Builder understands that if FinalCompletion is not attained by the Final Completion Date, Owner will sufferdamages which are difficult to determine and accurately specify. Design-Builderagrees that if Final Completion is not attained by the end of the FinalCompletion Date, Design-Builder shall pay Owner Eight Thousand Dollars($8,000.00) as liquidated damages, and not as a penalty, for each Day thatFinal Completion extends beyond the Final Completion Date. Owner, at itsdiscretion, may elect to offset any such liquidated damages from any retainage.Liquidated damages shall be paid by 

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Design-Builder by the fifteenth (15th) Day of the month following the month in which the liquidated damageswere incurred. The liquidated damages provided herein shall be in lieu of allliability for any and all extra costs, losses, loss of profits, expenses,claims, penalties and any other damages, whether special or consequential, andof whatsoever nature incurred by Owner which are occasioned solely by any delayin achieving Final Completion.

**7.3.1 Maximum Liquidated Damages**. Design-Builder’s liability for liquidateddamages under Section 7.3.1 shall be capped at and shall not exceed One MillionDollars ($1,000,000.00).

**7.3.2** Design-Builder shall not be liable forliquidated damages during any period of time for which an extension of theScheduled Substantial Completion Date and/or Final Completion Date is availablepursuant to Article 12.

**7.4          Bonds andOther Performance Security**.

**7.4.1** On or prior to the date of FinancialClosing, if requested by Owner, the Design-Builder shall deliver to Owner abond substantially in the form attached as Exhibit H (the “Performance Bond”)in an initial amount equivalent to the Contract Price. Owner shall pay on thedate of Financial Closing all costs of obtaining such bond, plus payDesign-Builder a fee of seven and one half percent (7.5%) for obtaining suchbond, such fee to be calculated by multiplying seven and one half percent(7.5%) times the cost of the Performance Bond. Any amounts payable to thesurety due to Design-Builder’s default under this Agreement or the PerformanceBond shall be for the account of Design-Builder.

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

(b)                                 The Performance Bond shall secure theDesign-Builder’s obligations to completethe Work in accordance with this Agreement.

7.4.2 On or prior to the date of Financial Closing,if requested by Owner, the Design-Builder shall deliver to Owner a bondsubstantially in the form attached as Exhibit I (the “Payment Bond”) in aninitial amount equivalent to the Contract Price. Owner shall pay on the date ofFinancial Closing all costs of obtaining such bond, plus pay Design-Builder afee of seven and one half percent (7.5%) for obtaining such bond, such fee tobe calculated by multiplying seven and one half percent (7.5%) times the costof the Payment Bond but any amounts payable to the surety due to Design-Builder’sdefault under this Agreement or the Payment Bond shall be for the account ofDesign-Builder.

(a)                                  Design-Builder shall post additional bonds orsecurity (which must be in form and substance reasonably satisfactory to Ownerand the Lenders) or shall increase the 

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amount of the Payment Bond by the amount of any increase to theContract Price.

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

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

**Article 8Warranties**

**8.1          Design-Builder Warranty**. Design-Builder warrants to Owner that theconstruction, including all materials and equipment furnished as part of theconstruction, shall be new, of good quality, in conformance with the ContractDocuments and all Legal Requirements, free of defects in materials andworkmanship. Design-Builder’s warranty obligation excludes defects caused byabuse, alterations, or failure to maintain the Work by persons other thanDesign-Builder or anyone for whose acts Design-Builder may be liable. Nothingin this warranty is intended to limit any Manufacturer’s Warranty whichprovides Owner with greater warranty rights than set forth in this Section 8.1or the Contract Documents. Design-Builder will provide to Owner allmanufacturers’ and Subcontractors’ warranties upon the earlier of SubstantialCompletion or termination of this Agreement. Owner’s failure to comply with allOperating Procedures shall void those guarantees, representations andwarranties, whether expressed or implied, that were given by Design-Builder toOwner, concerning the performance of the Expansion Plant that are reasonablydetermined by Design-Builder to be affected by such failure. If Design-Builderreasonably determines that all damage caused by such failure can be repairedand Owner makes all repairs needed to correct such damage, as reasonablydetermined by Design-Builder, all guarantees, representations and warrantiesshall be reinstated for the remaining term thereof, if any, from the date ofthe repair.

**8.2          Correction of Defective Work**.

**8.2.1** Design-Builder agrees to correct any Workthat is found to not be in conformance with the Contract Documents, includingthat part of the Work subject to Section 8.1, within a period of one (1) yearfrom the date of Substantial Completion of the Work; provided that Owner mustreport such non-conformance within seven (7) days of the date that Ownerbecomes aware of such failure or non-conformance or the date Owner should havebecome aware of such failure or non-conformance, whichever is earlier, and thatsuch one (1)-year period shall be extended one (1) Day for any part of the Workthat is found to be not in conformance with the Contract Documents for each Daythat such part of the Work is not operating in conformity with the ContractDocuments, including any time during which any part of the Work is repaired orreplaced pursuant to this Article 8.

**8.2.2** Design-Builder shall, within seven (7) Daysof receipt of written notice from Owner that the Work is not in conformancewith the Contract Documents, take meaningful steps to commence correction ofsuch nonconforming Work, including the correction, removal or replacement ofthe nonconforming Work and correction or replacement of any Work damaged 

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by such nonconforming Work. If Design-Builder failsto commence the necessary steps within such seven (7) Day period or fails tocontinue to perform such steps through completion, Owner, in addition to anyother remedies provided under the Contract Documents, may provideDesign-Builder with written notice that Owner will commence or assumecorrection of such nonconforming Work and repair of such damaged Work with itsown resources. If, following such written notice, Owner performs suchcorrective and repair Work, Design-Builder shall be responsible for allreasonable costs incurred by Owner in performing the correction. If the non­conformingWork creates an emergency requiring an immediate response, the seven (7) Dayperiods identified herein shall be inapplicable and Design-Builder shallimmediately correct, remove, or replace the non-conforming Work.

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

**Article 9Contract Price**

**9.1          Contract Price**. As full consideration to Design-Builder forfull and complete performance of the Work and all costs incurred in connectiontherewith, Owner shall pay Design-Builder in accordance with the terms ofArticle 10, the sum of Forty-seven Million Eight Hundred Sixty Thousand Dollars($47,860,000.00) (“Contract Price”), subject to adjustments made inaccordance with Articles 12.4 and 13. The Contract Price does not include thewater-pretreatment system and the fire protection system which shall beprovided by Fagen pursuant to a separate side-letter agreement executed byOwner and Design-Builder at Design-Builder’s standard time plus material ratesduring the relevant time period and at the relevant locale. Owner acknowledgesthat it has taken no action which would impose a union labor or prevailing wagerequirement on Design-Builder, Owner or the Expansion Project. The Partiesacknowledge and agree that if after the date hereof, action by Owner, a changein Applicable Law or a Governmental Authority acting pursuant to a change inApplicable Law shall require Design-Builder to employ union labor or compensatelabor at prevailing wages, the Contract Price shall be adjusted upwards toinclude any increased costs associated with such labor or wages. Suchadjustments shall include, but not be limited to, increased labor,subcontractor, and material and equipment costs resulting from any union orprevailing wage requirement; provided, however, that if an option is madeavailable to either employ union labor, or to compensate labor at prevailingwages, such option shall be at Design-Builder’s sole discretion and that ifsuch option is executed by Owner without Design-Builder’s agreement,Design-Builder shall have the right to terminate this agreement and shall beentitled to compensation pursuant to Section 15.3.1 hereof.

**9.2          Effect of Construction Cost IndexIncrease on Contract Price**. If between the Effective Date and the date on which a Notice toProceed is given to Design-Builder the Construction Cost Index published byEngineering News-Record Magazine (“CCI”) increases over the BaselineIndex established in Section 9.2.1, Design-Builder shall notify Owner inwriting that it is adjusting the Contract Price.

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**9.2.1      **TheBaseline Index for this Agreement shall be 7722.66 (August 2006)(“Baseline Index”).

**9.2.2** In the event that the CCI as of the date onwhich the Notice to Proceed is given increases over the Baseline Index, theContract Price shall be increased by a percentage amount equal to thepercentage increase in CCI.

**Article 10Payment Procedures**

**10.1        Payment at Financial Closing**. As part of the Contract Price, Owner shallpay Design-Builder Two Million Five Hundred Thousand Dollars ($2,500,000.00),as a mobilization fee, as soon as allowed by its organizational documents andany other agreements or Laws and at the latest, at the earlier to occurFinancial Closing or the issuance of a Notice to Proceed. Said Two Million FiveHundred Thousand Dollars ($2,500,000.00) mobilization fee payment shall besubject to retainage as provided by Section 10.2.7.

**10.2        Progress Payments**.

**10.2.1 Application for Payment**. Following the issuance of Notice to Proceedpursuant to Section 6.2, Design Builder shall submit to Owner, on or before thetwenty-fifth (25th) Day of each month, its request for payment for all Workperformed and not paid for during the previous Pay Period (the “Applicationfor Payment”). The Application for Payment shall be substantially in theform attached hereto as Exhibit M. Design-Builder shall submit to Owner, alongwith each Application for Payment, signed lien waivers, substantially in theform attached hereto as Exhibit N, from Design-Builder, Subcontractors andsuppliers for the Work included in the Application for Payment submitted forthe immediately preceding Pay Period and for which payment has been received.

**10.2.2**The Application for Payment shall constituteDesign-Builder’s representation that the Work has been performed consistentwith the Contract Documents and has progressed to the point indicated in theApplication for Payment. The Parties agree that the work completed at the Site,the comparison of the Application for Payment against the work schedule, andthe Schedule of Values shall provide sufficient substantiation of the accuracyof the Application for Payment and that no additional documentation will beprovided to Owner in support of an Application for Payment. Title to the Work,including Work reflected in an Application for Payment which is in process, isin transit, is in storage, or has been incorporated into the Site, shall passto Owner free and clear of all claims, liens, encumbrances, and securityinterests upon Design-Builder’s receipt of payment therefor.

**10.2.3** Within fifteen (15) Days after Owner’sreceipt of each Application for Payment, Owner shall pay Design-Builder allamounts properly due, but in each case less the total of payments previouslymade, and less amounts properly withheld under this Agreement.

**10.2.4** The Application for Payment may requestpayment for equipment and materials not yet incorporated into the ExpansionProject; provided that (i) Owner is satisfied that the equipment and materialsare suitably stored at either the Site or another acceptable 

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location, (ii) the equipment and materials areprotected by suitable insurance, and (iii) upon payment, Owner will receive theequipment and materials free and clear of all liens and encumbrances except forliens of the Lenders and other liens and encumbrances permitted under theFinancing Documents.

**10.2.5 Schedule of Values**. The schedule of values attached hereto asExhibit E (the “Schedule of Values”) (i) subdivides the Work into itsrespective parts, (ii) includes values for all items comprising the Work, and(iii) serves as the basis for monthly progress payments made to Design-Builderthroughout the Work.

**10.2.6 Withholding of Payments**. On or before the date set forth in Section10.2.3, Owner shall pay Design-Builder all amounts properly due. If Ownerdetermines that Design-Builder is not entitled to all or part of an Applicationfor Payment, it will notify Design-Builder in writing at least ten (10) Daysprior to the date payment is due. The notice shall indicate the specificamounts Owner intends to withhold, the reasons and contractual basis for thewithholding, and the specific measures Design-Builder must take to rectifyOwner’s concerns. Design-Builder and Owner will attempt to resolve Owner’sconcerns prior to the date payment is due. If the Parties cannot resolve suchconcerns, Design-Builder may pursue its rights under the Contract Documents,including those under Article 19. Notwithstanding anything to the contrary inthe Contract Documents, Owner shall pay Design-Builder all undisputed amountsin an Application for Payment within the times required by the Agreement.

**10.2.7 Retainage on ProgressPayments**. Owner willretain five percent (5%) of each payment. Notwithstanding the foregoing, themaximum retainage set forth herein shall increase if the Contract Price isincreased pursuant to Section 9.2 of this Agreement such that the maximumretainage will equal five percent (5%) of the Contract Price as adjusted. Ownerwill also reasonably consider reducing retainage for Subcontractors completingtheir work early in the Expansion Project. Upon Substantial Completion of theWork pursuant to Section 6.4, Owner shall release to Design-Builder allretained amounts less an amount equal to one hundred and fifty percent (150%)of the reasonable value of all remaining or incomplete items of Work and lessan amount equal to the value of any Subcontractor lien waivers not yetobtained, as noted in the Certificate of Substantial Completion, provided thatsuch payment shall only be made if Design-Builder has met the PerformanceGuarantee Criteria listed in Exhibit A.

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

**10.4        Failure to Pay Amounts Due**.

**10.4.1 Interest**. Payments which are due and unpaid by Ownerto Design-Builder, whether progress payments or Final Payment, shall bearinterest commencing on the date payment is due at the rate of Eighteen Percent(18%) per annum, or the maximum rate allowed by Law.

**10.4.2 Right to Suspend Work**. If Owner fails to pay Design-Builder any 

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undisputed amount that becomes due, Design-Builder,in addition to all other remedies provided in the Contract Documents, may stopWork pursuant to Section 15.4 hereof. All payments properly due and unpaidshall bear interest at the rate set forth in Section 10.4.1.

**10.4.3 Failure to Make FinalPayment**. Owner’sfailure to make Final Payment pursuant to section 10.3 hereof shall void anyand all warranties, whether express or implied, provided by Design-Builderpursuant to this Agreement.

**10.5        Design-Builder’s Payment Obligations**. Design-Builder will pay Design Consultantsand Subcontractors, in accordance with its contractual obligations to suchparties, all the amounts Design-Builder has received from Owner on account oftheir work. Design-Builder will impose similar requirements on DesignConsultants and Subcontractors to pay those parties with whom they havecontracted. Design-Builder will indemnify and defend Owner against any claimsfor payment and mechanic’s liens as set forth in Section 14.2 hereof.

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

**Article 11Hazardous Conditions and Differing Site Conditions**

**11.1        Hazardous Conditions.**

**11.1.1** Unless otherwise expressly provided in theContract Documents to be part of the Work, Design-Builder is not responsiblefor any Hazardous Conditions encountered at the Site. Upon encountering anyHazardous Conditions, Design-Builder will stop Work immediately in the affectedarea and as promptly as practicable notify Owner and, if Design-Builder isspecifically required to do so by Legal Requirements, all GovernmentalAuthorities having jurisdiction over the Expansion Project or Site.Design-Builder shall not remove, remediate or handle in any way (except in caseof emergency) any Hazardous Conditions encountered at the Site without priorwritten approval of Owner.

**11.1.2** Upon receiving notice of the presence ofsuspected Hazardous Conditions, Owner shall take the necessary measuresrequired to ensure that the Hazardous Conditions are remediated or renderedharmless. Such necessary measures shall include Owner retaining QualifiedIndependent Experts to (i) ascertain whether Hazardous Conditions have actuallybeen encountered, and, if they have been encountered, (ii) prescribe theremedial measures that Owner is required under applicable Legal Requirements totake with respect to such Hazardous 

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Conditions in order for the Work to proceed. Owner’schoice of such Qualified Independent Experts shall be subject to the priorapproval of Design-Builder, which approval shall not be unreasonably withheldor delayed.

**11.1.3** Design-Builder shall be obligated to resumeWork at the affected area of the Expansion Project only after Owner’s QualifiedIndependent Expert provides it with written certification that (i) theHazardous Conditions have been removed or rendered harmless, and (ii) allnecessary approvals have been obtained from all government entities havingjurisdiction over the Expansion Project or Site and a remediation plan has beenundertaken permitting the Work to proceed.

**11.1.4** Design-Builder will be entitled, inaccordance with this Article 11, to an adjustment in its Contract Price and/orContract Time(s) to the extent Design-Builder’s cost and/or time of performancehave been adversely impacted by the presence of Hazardous Conditions, providedthat such Hazardous Materials were not introduced to the Site byDesign-Builder, Subcontractors or anyone for whose acts they may be liable.

**11.1.5** To the fullest extent permitted by Law,Owner shall indemnify, defend and hold harmless Design-Builder, DesignConsultants, Subcontractors, anyone employed directly or indirectly for any ofthem, and their officers, directors, employees and agents, from and against anyand all claims, losses, damages, liabilities and expenses, including attorneys’fees and expenses, arising out of or resulting from the presence, removal orremediation of Hazardous Conditions at the Site.

**11.1.6** Notwithstanding the preceding provisions ofthis Section 11.1, Owner is not responsible for Hazardous Conditions introducedto the Site by Design-Builder, Subcontractors or anyone for whose acts they maybe liable. Design-Builder shall indemnify, Defend and hold harmless Owner andOwner’s officers, directors, employees and agents from and against all claims,losses, damages, liabilities and expenses, including attorneys’ fees andexpenses, arising out of or resulting from those Hazardous Conditionsintroduced to the Site by Design-Builder, Subcontractors or anyone for whoseacts they may be liable.

**11.2        Differing Site Conditions; Inspection.**

**11.2.1** Concealed or latent physical conditions orsubsurface conditions at the Site that (i) differ from the conditions indicatedin the Contract Documents, or (ii) are of an unusual nature, differing from theconditions ordinarily encountered and generally recognized as inherent in theWork are collectively referred to herein as “Differing Site Conditions.”If Design-Builder encounters a Differing Site Condition, Design-Builder will beentitled to an adjustment in the Contract Price and/or Contract Time(s) to theextent Design-Builder’s cost and/or time of performance are adversely impactedby the Differing Site Condition.

**11.2.2** Upon encountering a Differing SiteCondition, Design-Builder shall provide prompt written notice to Owner of suchcondition, which notice shall not be later than fourteen (14) business daysafter such condition has been encountered. Design-Builder shall, to the extentreasonably possible, provide such notice before the Differing Site Conditionhas been substantially disturbed or altered.

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**Article 12Force Majeure; Change in Legal Requirements**

**12.1        Force Majeure Event**. A force majeure event shall mean a cause orevent beyond the reasonable control of, and without the fault or negligence ofa Party claiming Force Majeure, including, without limitation, an emergency,floods, earthquakes, hurricanes, tornadoes, adverse weather conditions notreasonably anticipated or acts of God; sabotage; vandalism beyond that whichcould reasonably be prevented by a Party claiming Force Majeure; terrorism;war; riots; fire; explosion; blockades; insurrection; strike; slow down orlabor disruptions (even if such difficulties could be resolved by conceding tothe demands of a labor group); economic hardship or delay in the delivery ofmaterials or equipment that is beyond the control of a Party claiming ForceMajeure, and action or failure to take action by any Governmental Authorityafter the Effective Date (including the adoption or change in any rule orregulation or environmental constraints lawfully imposed by such GovernmentalAuthority), but only if such requirements, actions, or failures to act preventor delay performance; and inability, despite due diligence, to obtain anylicenses, permits, or approvals required by any Governmental Authority (anysuch event, a “Force Majeure Event”).

**12.2        Effect of Force Majeure Event**. Neither Party shall be considered indefault in the performance of any of the obligations contained in the ContractDocuments, except for the Owners or the Design-Builder’s obligations to paymoney (including but not limited to, Progress Payments and payments ofliquidated damages which become due and payable with respect to the periodprior to the occurrence of the Force Majeure Event), when and to the extent thefailure of performance shall be caused by a Force Majeure Event. If eitherParty is rendered wholly or partly unable to perform its obligations under theContract Documents because of a Force Majeure Event, such Party will be excusedfrom performance affected by the Force Majeure Event to the extent and for theperiod of time so affected; provided that:

(a)                                  the nonperforming Party, within forty-eight(48) hours after the nonperforming Party actually becomes aware of theoccurrence and impact of the Force Majeure Event, gives the other Party writtennotice describing the event or circumstance in detail, including an estimationof its expected duration and probable impact on the performance of the affectedParty’s obligations hereunder, and continues to furnish timely regular reportswith respect thereto during the continuation of and upon the termination of theForce Majeure Event;

(b)                                 the suspension of performance is of nogreater scope and of no longer duration than is reasonably required by theForce Majeure Event;

(c)                                  the obligations of either Party that arosebefore the occurrence causing the suspension of performance and the performancethat is not prevented by the occurrence, shall not be excused as a result ofsuch occurrence;

(d)                                 the nonperforming Party uses its best effortsto remedy its inability to perform and mitigate the effect of such event andresumes its performance at the earliest 

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practical time after cessation of such occurrence or until such timethat performance is practicable;

(e)                                  when the nonperforming Party is able toresume performance of its obligations under the Contract Documents, that Partyshall give the other Party written notice to that effect; and

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

**12.3        Change in Legal Requirements**. The Contract Price and/or the ContractTime(s) shall be adjusted to compensate Design-Builder for the effects of anychanges to the Legal Requirements that occur after the date of this Agreementand as a result of such change, the performance of the Work is adverselyaffected. Such effects may include, without limitation, revisionsDesign-Builder is required to make to the Construction Documents because ofchanges in Legal Requirements.

**12.4        Time Impact And Availability**. If the Design-Builder is delayed at anytime in the commencement or progress of the Work due to a delay in the deliveryof, or unavailability of, essential materials or labor to the Project as aresult of a significant industry-wide economic fluctuation or disruption beyondthe control of and without the fault of the Design-Builder or itsSubcontractors which is experienced or expected to be experienced by certainmarkets providing essential materials and equipment to the Project during theperformance of the Work and such economic fluctuation or disruption adverselyimpacts the price, availability, and delivery timeframes of essentialmaterials, equipment, or labor (such event an “Industry-Wide  Disruption”), the Design-Builder shall beentitled to an equitable extension of the Contract Time(s) on a day-for-daybasis equal to such delay. The Owner and Design-Builder shall undertakereasonable steps to mitigate the effect of such delays. Notwithstanding anyother provision to the contrary, the Design-Builder shall not be liable to theOwner for any expenses, losses or damages arising from a delay, orunavailability of essential materials or labor to the Project as a result of anIndustry-Wide Disruption.

**Article 13Changes to the Contract Price and Scheduled Completion Dates**

**13.1        Change Orders**.

**13.1.1**A change order (“Change Order”) is awritten instrument issued after execution of this Agreement signed by Owner andDesign-Builder, stating their agreement upon all of the following:

(a)                                  the scope of the change in the Work;

(b)                                 the amount of the adjustment to the ContractPrice; and

(c)                                  the extent of the adjustment to the ContractTime(s).

 

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**13.1.2** All changes in the Work authorized by anapplicable Change Order shall be performed under the applicable conditions ofthe Contract Documents. Owner and Design-Builder shall negotiate in good faithand as expeditiously as possible the appropriate adjustments for such changes.Prior to incurring any costs with respect to estimating services, designservices and any other services involved in the preparation of the proposedrevisions to the Contract Documents, Design-Builder must obtain the written approvalof Owner for such costs.

**13.1.3** If Owner requests a proposal for a change inthe Work from Design-Builder and subsequently elects not to proceed with thechange, a Change Order shall be issued to reimburse Design-Builder forreasonable costs incurred for estimating services, design services and anyother services involved in the preparation of proposed revisions to theContract Documents; provided that such costs were previously approved by Ownerpursuant to Section 13.1.2.

**13.2        Contract Price Adjustments**.

**13.2.1** The increase or decrease in Contract Priceresulting from a change in the Work shall be a mutually accepted lump sum,properly itemized and supported by sufficient substantiating data to permitevaluation by Owner.

**13.2.2** If Owner and Design-Builder disagree uponwhether Design-Builder is entitled to be paid for any services required byOwner, or if there are any other disagreements over the scope of Work orproposed changes to the Work, Owner and Design-Builder shall resolve thedisagreement pursuant to Article 19 hereof. As part of the negotiation process,Design-Builder shall furnish Owner with a good faith estimate of the costs toperform the disputed services in accordance with Owner’s interpretations. Ifthe Parties are unable to agree and Owner expects Design-Builder to perform theservices in accordance with Owner’s interpretations, Design-Builder shallproceed to perform the disputed services, conditioned upon Owner issuing awritten order to Design-Builder (i) directing Design-Builder to proceed, and(ii) specifying Owner’s interpretation of the services that are to beperformed. If this occurs, Design-Builder shall be entitled to submit in itsApplications for Payment an amount equal to fifty percent (50%) of itsreasonable estimated direct cost to perform the services, and Owner agrees topay such amounts, with the express understanding that (x) such payment by Ownerdoes not prejudice Owner’s right to argue that it has no responsibility to payfor such services, and (y) receipt of such payment by Design-Builder does notprejudice Design-Builder’s right to seek full payment of the disputed servicesif Owner’s order is deemed to be a change to the Work.

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

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**13.4        Contract Time Adjustment**. Design-Builder shall be entitled to anextension of the Contract Time(s) to the extent the LSCP Plant is unable tooperate as expected not due to any act or omission of the Design-Builder.

**13.5        Failure to Complete Owner’s Milestones**. The dates when Owner’s obligations arerequired to be completed to enable Design-Builder to achieve the contracttime(s) are identified in Table 2 in Exhibit C (“Owner’s Milestones”).The Contract Time(s) shall be revised to provide a Day-for-Day extension of theContract Time(s) for completion of the Work for each full Day during whichOwner fails to timely complete its obligations pursuant to the Owner’sMilestones. In the event of Owner’s failure to timely complete its obligationspursuant to Owner’s Milestones results in the extension of the ContractTime(s), the Contract Price shall be adjusted to compensate Design-Builder forthe effects, if any, of such change.

**Article 14Indemnity**

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

**14.2        Payment Claim Indemnification**. To the extent Design-Builder has receivedpayment for the Work, Design-Builder shall indemnify, defend and hold harmlessOwner Indemnified Parties from any claims or mechanic’s liens brought againstOwner Indemnified Parties or against the Expansion Project as a result of thefailure of Design-Builder, or those for whose acts it is responsible, to payfor any services, materials, labor, equipment, taxes or other items orobligations furnished or incurred for or in connection with the Work. Withinthree (3) business days of receiving written notice from Owner that such aclaim or mechanic’s lien has been filed, Design-Builder shall commence to takethe steps necessary to discharge such claim or lien.

**14.3        Design-Builder’s General Indemnification.**

**14.3.1** Design-Builder, to the fullest extentpermitted by Law, shall indemnify, hold harmless and defend Owner, Lenders,Lenders’ Agent, and their successors, assigns, officers, directors, employeesand agents (“Owner Indemnified Parties”) from and against any and alllosses, costs, damages, injuries, liabilities, claims, demands, penalties,interest and causes of action, including without limitation attorney’s fees(collectively, the “Damages”) for bodily injury, sickness or death, andproperty damage or destruction (other than to the Work itself) to the extentresulting from the negligent or intentionally wrongful acts or omissions ofDesign-Builder, Design Consultants, Subcontractors, anyone employed directly orindirectly by any of them or anyone for whose acts any of them may be liable.

**14.3.2** If an employee of Design-Builder, DesignConsultants, Subcontractors, 

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anyone employed directly or indirectly by any of them or anyone forwhose acts any of them may be liable has a claim against Owner IndemnifiedParties, Design-Builder’s indemnity obligation set forth in Section 14.3.1above shall not be limited by any limitation on the amount of damages,compensation or benefits payable by or for Design-Builder, Design Consultants,Subcontractors, or other entity under any employee benefit acts, includingworkers’ compensation or disability acts.

**14.3.3** Without limiting the generality of Section14.3.1 hereof, Design-Builder shall fully indemnify, save harmless and defendthe Owner Indemnified Parties from and against any and all Damages in favor ofany Governmental Authority or other third party to the extent caused by (a)failure of Design-Builder or any Subcontractor to comply with LegalRequirements as required by this Agreement, or (b) failure of Design-Builder orany Subcontractor to properly administer and pay any taxes or fees required tobe paid by Design-Builder under this Agreement.

14.3.4 Nothing in the Design-Builder’s GeneralIndemnification contained in this Section 14.3 shall be read to limit in anyway any entitlement Design-Builder shall have to insurance coverage under anyinsurance policy, including any insurance policy required by either Party underthis Agreement.

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

**14.4.1** Without limiting the generality of Section14.4 hereof, Owner shall fully indemnify, save harmless and defend theDesign-Builder and any of Design-Builder’s officers, directors, employees, oragents from and against any and all Damages in favor of any GovernmentalAuthority or other third party to the extent caused by (a) failure of Owner orany of Owner’s agents to comply with Legal Requirements as required by thisAgreement, or (b) failure of Owner or Owner’s agents to properly administer andpay any taxes or fees required to be paid by Owner under this Agreement.

**14.4.2** Nothing in the Owner’s GeneralIndemnification contained in this Section 14.4 shall be read to limit in anyway any entitlement Owner shall have to insurance coverage under any insurancepolicy, including any insurance policy required by either Party under this Agreement

**14.5        Patent and Copyright Infringement.**

**14.5.1**Design-Builder shall indemnify, hold harmlessand defend Owner Indemnified Parties from and against any and all Damages basedon any claim that the Work, the Work Product, or any part thereof, or the operationor use of the Work or any part thereof, constitutes infringement of any UnitedStates or foreign patent, copyright or other intellectual 

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property, now or hereafter issued. Owner shall give prompt writtennotice to Design-Builder of any such action or proceeding and will reasonablyprovide authority, information and assistance in the defense of same.Design-Builder shall indemnify and hold harmless Owner Indemnified Parties fromand against all damages and costs, including but not limited to, attorneys’fees and expenses awarded against Owner or Design-Builder in any such action orproceeding.

**14.5.2** If Owner is enjoined from the operation oruse of the Work, Work Product, the Project, or any part thereof, as the resultof any patent or copyright suit, claim, or proceeding, Design-Builder shall atits sole expense take reasonable steps to procure the right to operate or usethe Work, Work Product or the Project. If Design-Builder cannot so procure suchright within a reasonable time, Design-Builder shall promptly, atDesign-Builder’s option and at Design-Builder’s expense, (i) modify the Work orWork Product so as to avoid infringement of any such patent or copyright or(ii) replace the Work or Work Product with Work or Work Product that does notinfringe or violate any such patent, copyright, trade secret, proprietaryright, confidential information or intellectual property right.

**14.5.3** Sections 14.5.1 and 14.5.2 above shall notbe applicable to any suit, claim or proceeding based on infringement orviolation of a patent or copyright (i) relating solely to a particular processor product of a particular manufacturer specified by Owner and not offered orrecommended by Design-Builder to Owner, or (ii) arising from modifications tothe Work by Owner or its agents after acceptance of the Work, or (iii) relatingto the operation or use of the Work by the Owner in a manner not permitted bythis Agreement or the ICM License Agreement. If the suit, claim or proceedingis based upon events set forth in the preceding sentence, Owner shall defend,indemnify and hold harmless Design-Builder to the same extent Design-Builder isobligated to defend, indemnify and hold harmless Owner in Section 14.5.1 above.

**Article 15Stop Work; Termination for Cause**

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

**15.2          Owner’s Right to Perform and Terminate for Cause**.

**15.2.1** If Design-Builder persistently fails to: (i)provide a sufficient number of skilled workers; (ii) supply the materialsrequired by the Contract Documents; (iii) comply with applicable LegalRequirements; (iv) timely pay, without cause, Design Consultants orSubcontractors; (v) perform the Work with promptness and diligence to ensurethat the Work is completed by the Contract Time(s), as such times may beadjusted in accordance with this Agreement; or (vi) perform materialobligations under the Contract Documents; then Owner, in addition to any otherrights and remedies provided in the Contract Documents or by law or equity,shall have the rights set forth in Sections 15.2.2 and 15.2.3 below.

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**15.2.2**Upon the occurrence of an event set forth inSection 15.2.1 above, Owner may provide written notice to Design-Builder thatit intends to terminate the Agreement unless the problem cited is cured, orcommenced to be cured within seven (7) Days of Design-Builder’s receipt of suchnotice. If Design-Builder fails to cure, or reasonably commence to cure suchproblem and thereafter diligently pursue such cure to completion, then Ownermay give a second written notice to Design-Builder of its intent to terminatefollowing an additional seven (7) Day period. If Design-Builder, within suchsecond seven (7) Day period, fails to cure, or reasonably commence to cure suchproblem and thereafter diligently pursue such cure to completion, then Ownermay declare the Agreement terminated for default by providing written notice toDesign-Builder of such declaration. If (i) the insurance coverage required byDesign-Builder pursuant Article 17 hereof is suspended or cancelled withoutDesign-Builder providing immediate replacement coverage (and, in any case,within fourteen (14) Days of the occurrence thereof) meeting the requirementsspecified in Article 17 hereof; (ii) if applicable, a default occurs under thePerformance Bond or the Payment Bond, or the Performance Bond or Payment Bondis revoked or terminated and such Performance Bond or the Payment Bond is notimmediately replaced (and, in any case, within fourteen (14) Days of theoccurrence thereof) by Design-Builder with a Performance Bond or a Payment Bondproviding at least the same level of coverage in a form and from a suretyacceptable to Owner and Lenders, or the surety under the Performance Bond orPayment Bond institutes or has instituted against it a case under the UnitedStates Bankruptcy Code; (iii) Design-Builder purports to make an assignment ofthis Agreement in breach of the provisions of Section 21.1 hereof; (iv)Design-Builder fails to achieve Final Completion within seven hundred andtwenty-five (725) Days after the date of Notice to Proceed; or (v) anyrepresentation or warranty made by Design-Builder under Section 18.1 hereof wasfalse or materially misleading when made, then Owner may terminate thisAgreement upon written notice to Design-Builder.

**15.2.3**Upon declaring the Agreement terminatedpursuant to Section 15.2.2 above, Owner may enter upon the premises and takepossession, for the purpose of completing the Work, of all materials,equipment, scaffolds, tools, appliances and other items thereon, which havebeen purchased for the performance of the Work, all of which Design-Builderhereby transfers, assigns and sets over to Owner for such purpose, and toemploy any person or persons to complete the Work and provide all of therequired labor, services, materials, equipment and other items. In the event ofsuch termination, Design-Builder shall not be entitled to receive any furtherpayments under the Contract Documents until the Work shall be finally completedin accordance with the Contract Documents. At such time, if the unpaid balanceof the Contract Price exceeds the cost and expense incurred by Owner incompleting the Work, Design-Builder will be paid promptly by Owner for Workperformed prior to its default. If Owner’s cost and expense of completing theWork exceeds the unpaid balance of the Contract Price, then Design-Buildershall be obligated to promptly pay the difference to Owner. Such costs andexpense shall include not only the cost of completing the Work, but alsolosses, damages, costs and expenses, including attorneys’ fees and expenses,incurred by Owner in connection with the re-procurement and defense of claimsarising from Design-Builder’s default, subject to the waiver of consequentialdamages set forth in Section 19.4 and the limitation of liability set forth inSection 19.5 hereof.

**15.2.4**If Owner improperly terminates the Agreementfor cause, the termination 

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for cause will be converted to a termination for convenience inaccordance with the provisions of Section 15.3.

**15.3        Owner’sRight to Terminate for Convenience.**

**15.3.1**Upon ten (10) Days’ written notice toDesign-Builder, Owner may, for its convenience and without cause, elect toterminate this Agreement. In such event, Owner shall pay Design-Builder for thefollowing:

(a)                                  to the extent not already paid, all Workexecuted, and for proven loss, cost or expense in connection with the Work;

(b)                                 the reasonable costs and expensesattributable to such termination, including demobilization costs;

(c)                                  amounts due in settlement of terminatedcontracts with Subcontractors and Design Consultants;

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

(e)                                  all retainage withheld by Owner on account ofWork that has been completed inaccordance with the Contract Documents.

**15.3.2**If Owner terminates this Agreement pursuantto this Section 15.3 and proceeds to design and construct the Expansion Projectthrough its employees, agents or third parties, Owner’s rights to use the WorkProduct shall be as set forth in Section 5.3.

**15.4        Design-Builder’sRight to Stop Work.**

**15.4.1**Design-Builder may, in addition to any otherrights afforded under the Contract Documents or at Law, stop work for Owner’sfailure to pay amounts properly due under Design-Builder’s Application forPayment.

**15.4.2**If any of the events set forth in Section15.4.1 above occur, Design-Builder has the right to stop work by providingwritten notice to Owner that Design-Builder will stop work unless such event iscured within seven (7) Days from Owner’s receipt of Design-Builder’s notice. IfOwner fails to cure or reasonably commence to cure such problem and thereafterdiligently pursue such cure to completion, then Design-Builder may give asecond written notice to Owner of its intent to stop work within an additionalseven (7) Day period. If Owner, within such second seven (7) Day period, failsto cure, or reasonably commence to cure such problem and thereafter diligentlypursue such cure to completion, then Design-Builder may stop work. In suchcase, Design-Builder shall be entitled to make a claim for adjustment to theContract Price and Contract Time(s) to the extent it has been adverselyimpacted by such stoppage.

**15.5        Design-Builder’sRight to Terminate for Cause.**

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**15.5.1**Design-Builder, in addition to any otherrights and remedies provided in the Contract Documents or by Law, may terminatethe Agreement for cause for the following reasons:

(a)                                  The Work has been stopped for sixty (60)consecutive Days, or more than ninety (90) Days during the duration of theExpansion Project, because of court order, any Governmental Authority havingjurisdiction over the Work, or orders by Owner under Section 15.1 hereof,provided that such stoppages are not due to the acts or omissions ofDesign-Builder, Design Consultant and their respective officers, agents,employees, Subcontractors or any other person for whose acts the Design-Buildermay be liable under Law.

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

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

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

**15.5.2**Upon the occurrence of an event set forth inSection 15.5.1 above, Design-Builder may elect to terminate this Agreement byproviding written notice to Owner that it intends to terminate the Agreementunless the problem cited is cured within seven (7) Days of Owner’s receipt ofsuch notice. If Owner fails to cure, or reasonably commence to cure, suchproblem, then Design-Builder may give a second written notice to Owner of itsintent to terminate within an additional seven (7) Day period. If Owner, withinsuch second seven (7) Day period, fails to cure such problem, thenDesign-Builder may declare the Agreement terminated for default by providingwritten notice to Owner of such declaration. In such case, Design-Builder shallbe entitled to recover in the same manner as if Owner had terminated theAgreement for its convenience under Section 15.3.

**15.6        Bankruptcyof Owner or Design-Builder.**

**15.6.1**If either Owner or Design-Builder institutesor has instituted against it a case under the United States Bankruptcy Code(such Party being referred to as the “Bankrupt Party”), such event mayimpair or frustrate the Bankrupt Party’s ability to perform its obligationsunder the Contract Documents. Accordingly, should such event occur:

(a)                                       The Bankrupt Party, its trustee or other successor,shall furnish, upon request of 

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thenon-Bankrupt Party, adequate assurance of the ability of the Bankrupt Party toperform all future obligations under the Contract Documents, which assurancesshall be provided within ten (10) Days after receiving notice of the request;and

(b)                                      The Bankrupt Party shall file an appropriateaction within the bankruptcy court to seek assumption or rejection of theAgreement within sixty (60) Days of the institution of the bankruptcy filingand shall diligently prosecute such action.

**15.6.2**If the Bankrupt Party fails to comply withits foregoing obligations, the non-Bankrupt Party shall be entitled to requestthe bankruptcy court to reject the Agreement, declare the Agreement terminatedand pursue any other recourse available to the non-Bankrupt Party under thisArticle 15.

**15.6.3**The rights and remedies under this Section15.6 shall not be deemed to limit the ability of the non-Bankrupt Party to seekany other rights and remedies provided by the Contract Documents or by Law,including its ability to seek relief from any automatic stays under the UnitedStates Bankruptcy Code or the right of Design-Builder to stop Work under anyapplicable provision of this Agreement.

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

**Article 16Representatives of the Parties**

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

**Steve Roe**

**GeneralManager**

**4808 FAvenue**

**Marcus, IA51035**

**Telephone:(712) 376-2800**

**Facsimile: (712) 376-2815**

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

**Steve Roe**

**GeneralManager**

**4808 FAvenue**

**Marcus, IA51035**

**Telephone:(712) 376-2800**

**Facsimile: (712) 376-2815**

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**16.2        Designation of Design-Builder’s Representatives**. Design-Builder designates the individuallisted below as its senior representative (“Design-Builder’s SeniorRepresentative”), which individual has the authority and responsibility foravoiding and resolving disputes under Article 19:

**Roland “Ron”Fagen**

**CEO andPresident**

**501 W.Highway 212**

**P.O. Box159**

**GraniteFalls, MN 56241 Telephone: (320) 564-3324 Facsimile: (320) 564-3278**

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

**Aaron Fagen**

**ChiefOperating Officer**

**501 W.Highway 212**

**P.O. Box159**

**GraniteFalls, MN 56241 Telephone: (320) 564-3324 Facsimile (320) 564-3278**

**Article 17Insurance**

**17.1        Insurance**. Design-Builder shall procure and maintain in force through the FinalCompletion Date the following insurance coverages with the policy limitsindicated, and otherwise in compliance with the provisions of this Agreement:
| Commercial General  Liability: |   |   |      |
|--------------------------------|--------|--------|-----------|
|                           |   |   |      |
| General Aggregate              |   |   |      |
| Products-Comp/Op AGG           |   | $      | 2,000,000 |   |
| Personal & Adv Injury      |   | $      | 1,000,000 |   |
| Each Occurrence                |   | $      | 1,000,000 |   |
| Fire Damage (Any one fire)     |   | $      | 50,000    |   |
| Med Exp (Any one person)       |   | $      | 5,000     |   |
|                           |   |   |      |
| Automobile Liability:          |   |   |      |
|                           |   |   |      |
| Combined Single Limit          |   |   |      |
| Each Occurrence                |   | $      | 1,000,000 |   |

 

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| Excess Liability — Umbrella  Form:                                    |   |   |       |
|----------------------------------------------------------------------------|--------|--------|------------|
|                                                                       |   |   |       |
| Each Occurrence                                                            |   | $      | 20,000,000 |   |
| Aggregate                                                                  |   | $      | 20,000,000 |   |
|                                                                       |   |   |       |
| Workers’  Compensation                                                |   |   |       |
| Statutory limits as required by the state in which  the Work is performed. |   |   |       |
|                                                                       |   |   |       |
| Employers’  Liability:                                                |   |   |       |
|                                                                       |   |   |       |
| Each Accident                                                              |   | $      | 1,000,000  |   |
| Disease — Policy Limit                                                |   | $      | 1,000,000  |   |
| Disease — Each Employee                                               |   | $      | 1,000,000  |   |
|                                                                       |   |   |       |
| Professional  Errors and Omissions                                         |   |   |       |
| Per Claim                                                                  |   | $      | 5,000,000  |   |
| Annual                                                                     |   | $      | 5,000,000  |   |

 

**17.2        Design-Builder’s Insurance Requirements.**

**17.2.1** Design-Builder is responsible for procuringand maintaining from insurance companies authorized to do business in the statein which the Expansion Project is located, the following insurance coveragesfor certain claims which may arise from or out of the performance of the Workand obligations under the Contract Documents:

(a)                                  coverage for claims arising under workers’compensation, disability and other similar employee benefit Laws applicable tothe Work;

(b)                                 coverage for claims by Design-Builder’semployees for bodily injury, sickness, disease, or death;

(c)                                  coverage for claims by any person other thanDesign-Builder’s employees for bodily injury, sickness, disease, or death;

(d)                                 coverage for usual personal injury liabilityclaims for damages sustained by a person as a direct or indirect result ofDesign-Builder’s employment of the person, or sustained by any other person;

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

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

(g)                                 coverage for contractual liability claimsarising out of Design-Builder’s obligations under Section 14.2.

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**17.2.2** Design-Builder’s liability insurancerequired by this Section 17.2 shall be written for the coverage amounts set forthin Section 17.1 and shall include completed operations insurance for the periodof time set forth in the Agreement.

**17.2.3** Design-Builder’s liability insurance setforth in Sections 17.2.1 (a) through (g) above shall specifically delete anydesign-build or similar exclusions that could compromise coverages because ofthe design-build delivery of the Expansion Project.

**17.2.4** To the extent Owner requires Design-Builderor any Design Consultant to provide professional liability insurance for claimsarising from the negligent performance of design services by Design-Builder orthe Design Consultant, the coverage limits, duration and other specifics ofsuch insurance shall be as set forth in the Agreement. Any professionalliability shall specifically delete any design-build or similar exclusions thatcould compromise coverages because of the design-build delivery of theExpansion Project. Such policies shall be provided prior to the commencement ofany design services hereunder.

**17.2.5** Prior to commencing any constructionservices hereunder, Design-Builder shall provide Owner with certificatesevidencing that (i) all insurance obligations required by the ContractDocuments are in full force and in effect and will remain in effect for theduration required by the Contract Documents and (ii) no insurance coveragerequired hereunder will be canceled, renewal refused, or changed unless atleast thirty (30) Days prior written notice is given to Owner.

**17.3        Owner’s Liability Insurance.**Owner shall procure and maintain frominsurance companies authorized to do business in the state in which theExpansion Project is located such liability insurance to protect Owner fromclaims which may arise from the performance of Owner’s obligations under theContract Documents or Owner’s conduct during the course of the ExpansionProject. The general and professional liability insurance obtained by Ownershall name Design-Builder, the Lenders and Lenders’ Agent as additionalinsureds, and shall include the interests of such parties and of DesignConsultants and Subcontractors without application of deductible, retention orretrospective premiums as to the additional insureds, Design Consultants, andSubcontractors.

**17.4        Owner’s Property Insurance.**

**17.4.1**Unless otherwise provided in the ContractDocuments, Owner shall procure from insurance companies authorized to dobusiness in the state in which the Expansion Project is located, and maintainthrough Final Completion, property insurance upon the entire Expansion Projectin a minimum amount equal to the full insurable value of the Expansion Project,including professional fees, overtime premiums and all other expenses incurredto replace or repair the insured property. The property insurance obtained byOwner shall include as additional insureds the interests of Owner,Design-Builder, the Lenders and Lenders’ Agent, shall include the interests ofsuch additional insureds and Design Consultants and Subcontractors, and shallinsure against the perils of fire and extended coverage, theft, vandalism,malicious mischief, collapse, flood, earthquake, debris removal and otherperils or causes of loss as called for in the Contract Documents and withoutapplication of any deductible, retention or retrospective premium with respectto such additional insureds, Design Consultants, and Subcontractors. Ownershall maintain coverage equal to or in excess of the value of each ofDesign-Builder’s, Design Consultants’, and 

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Subcontractors’ property on the Site. The property insurance shallinclude physical loss or damage to the Work, including materials and equipmentin transit, at the Site or at another location as may be indicated inDesign-Builder’s Application for Payment and approved by Owner.

**17.4.2**Unless the Contract Documents provideotherwise, Owner shall procure and maintain boiler and machinery insurance thatwill include as additional insureds the Owner, Design-Builder, DesignConsultants, and Subcontractors, in an amount not less than the Contract Priceand without application of any deductible, retention or retrospective premiumas to the additional insureds. Owner shall maintain coverage equal to or inexcess of the value of each of Design-Builder’s, Design Consultants’, andSubcontractors’ interest or investment in boiler or machinery equipment on theSite.

**17.4.3**Prior to Design-Builder commencing any Work,Owner shall obtain a builder’s risk insurance policy naming Owner as theinsured, with Design-Builder, Design Consultants and Subcontractors asadditional insureds, in an amount not less than the Contract Price and withoutapplication of deductible, retention or retrospective premium as to theadditional insureds.

**17.4.4** Owner shall also obtain, prior toDesign-Builder commencing any Work, terrorism coverage as described by theTerrorism Risk Insurance Act of 2002, Pub. L. No. 107­297, 116 Stat. 2322(2002), as extended by the Terrorism Risk Insurance Extension Act of 2005, Pub.L. No. 109-144 (2005), or any successor act or renewing act for the periodduring which the Terrorism Risk Insurance Act or any successor act or renewingact is in effect.

**17.4.5** Prior to Design-Builder commencing any Work,Owner shall provide Design-Builder with copies of the insurance certificatesreflecting coverages required under this Section 17.4 evidencing that (i) allOwner’s insurance obligations required by the Contract Documents are in fullforce and in effect and will remain in effect until Design-Builder hascompleted all of the Work and has received Final Payment from Owner, and (ii)no insurance coverage will be canceled, renewal refused, or changed unless atleast thirty (30) Days prior written notice is given to Design-Builder. Owner’sproperty insurance shall not lapse or be cancelled during the term of thisAgreement. Promptly after Owner’s receipt thereof, Owner shall be required toprovide Design-Builder with copies of all insurance policies to whichDesign-Builder, Design Consultants, and Subcontractors are named as additionalinsureds. In the event Owner replaces insurance providers for any policyrequired under this Section, revises policy coverages, or otherwise modifiesany applicable insurance policy in any way, Owner shall provide Design-Builder,for its review or possession as provided under this Section 17.4.5, thecertificate of insurance and a copy of such new, revised or modified policywhen available.

**17.4.6**Any loss covered under Owner’s propertyinsurance shall be adjusted with Owner and Design-Builder and made payable toboth of them as trustees for the insureds as their interests may appear,subject to any applicable mortgage clause. All insurance proceeds received as aresult of any loss will be placed in a separate account and distributed inaccordance with such agreement as the interested parties may reach. Anydisagreement concerning the distribution of any proceeds will be resolved inaccordance with Article 19 hereof.

 

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**17.4.7** Owner and Design-Builder waive against eachother and Owner’s separate contracts, Design Consultants, Subcontractors,agents and employees of each and all of them all damages covered by propertyinsurance provided herein, except such rights as they may have to the proceedsof such insurance. Design-Builder and Owner shall, where appropriate, requiresimilar waivers of subrogation from Owner’s separate contractors, DesignConsultants Subcontractors, and insurance providers and shall require each ofthem to include similar waivers in their contracts or policies.

**Article 18Representations and Warranties**

**18.1        Design-Builder and Owner Representations and Warranties**. Each of Design-Builder and Owner representsthat:

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

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

(c)                the execution, delivery and performance ofthis Agreement and the consummation of the transactions contemplated hereby donot and will not conflict with or violate (a) the certificate of incorporationor bylaws or equivalent organizational documents of such Party, or (b) any Lawapplicable to such Party and other than the permits listed on Exhibit G, suchexecution, delivery and performance of this Agreement does not require anyGovernmental Approval; and

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

**18.2        Design-Builder Representations and Warranties**. Design-Builder further represents that ithas the necessary financial resources to fulfill its obligations under thisAgreement.

**Article 19Dispute Resolution**

**19.1 DisputeAvoidance and Mediation.**The Parties are fully committed to working with each other throughoutthe Expansion Project and agree to communicate regularly with each other at alltimes so as to avoid or minimize disputes or disagreements. If disputes or 

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disagreements do arise, Design-Builder and Owner each commit toresolving such disputes or disagreements in an amicable, professional andexpeditious manner so as to avoid unnecessary losses, delays and disruptions tothe Work.

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

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

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

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

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

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

The prevailing Party in any arbitration, or any other final, bindingdispute proceeding upon which the Parties may agree, shall be entitled torecover from the other Party reasonable attorneys’ fees and expenses incurredby the prevailing Party.

**19.3        Duty to Continue Performance.**Unless provided to the contrary in theContract 

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Documents, Design-Builder shall continue to perform the Work and Ownershall continue to satisfy its payment obligations to Design-Builder, pendingthe final resolution of any dispute or disagreement between Design-Builder andOwner.

**19.4        No Consequential Damages.**

**19.4.1**Notwithstanding anything herein to thecontrary (except as set forth in Section 19.4.2 below), neither Design-Buildernor Owner shall be liable to the other for any consequential losses or damages,whether arising in contract, warranty, tort (including negligence), strictliability or otherwise, including but not limited to, losses of use, profits,business, reputation or financing, except that Design-Builder does not waiveany such damages resulting from or arising out of any breach of Owner’s dutiesand obligations under the limited license granted by Design-Builder to Ownerpursuant to Article 5.

**19.4.2**The consequential damages limitation setforth in Section 19.4.1 above is not intended to affect the payment ofliquidated damages, if any, set forth in Section 7.3 of the Agreement, whichboth Parties recognize has been established, in part, to reimburse Owner forsome damages that might otherwise be deemed to be consequential.

**19.5        Limitation of Liability.**Notwithstanding anything else in thisAgreement to the contrary, the aggregate liability of Design-Builder, itsSubcontractors, vendors, suppliers, agents and employees, to Owner (or anysuccessor thereto or assignee thereof) for any and all claims and/orliabilities arising out of or relating in any manner to the Work or toDesign-Builder’s performance or non-performance of its obligations hereunder,whether based in contract, tort (including negligence), strict liability, orotherwise, shall not exceed, in the aggregate, the Contract Price and shall bereduced, upon the issuance of each Application for Payment, by the total valueof such Application for Payment; provided, however, that upon the earlier ofSubstantial Completion or such point in time requests for payment pursuant toArticle 10 have been made for ninety percent (90%) of the Contract Price,Design-Builder’s aggregate liability shall be limited to the greater of (1) TenPercent (10%) of the Contract Price or (2) the amount of insurance coverageavailable to respond to the claim or liability under any policy of insuranceprovided by Design-Builder under this Agreement. The aggregate liability ofDesign-Builder shall not include increased costs of purchasing equipment,materials, supplies, or services, except to the extent Owner has terminated theAgreement pursuant to Section 15.2 and such equipment, materials, supplies, andservices are required to complete the Work or to the extent that any of suchequipment, materials, supplies, and services may be included in the payment ofliquidated damages pursuant to Section 7.3 hereof. Notwithstanding theforegoing, the maximum aggregate liability of Design-Builder for failure toachieve the Contract Time(s) shall be as set forth in Section 7.3.

**Article 20Confidentiality of Shared Information**

**20.1        Non-Disclosure Obligation.**Except as required by court order, subpoena,or Applicable Law, the Parties will hold in confidence, and will use only forthe purposes of completing the Project, any and all Confidential Informationdisclosed to each other. Neither Party shall disclose to third parties anyConfidential Information without the express written 

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consent of the other Party, which consent shall not be unreasonablywithheld. The Parties shall at all times use their respective reasonableefforts to keep all Confidential Information and information regarding theterms and conditions of this Agreement confidential. However, the Parties maydisclose Confidential Information to their respective lenders, lenders’ agents,advisors and/or consultants only as reasonably necessary in connection with thefinancing of the Plant or to enable them to advise the Parties with regard tothe Contract Documents and the Project, provided that prior to such disclosureany party to whom Confidential Information is disclosed is informed by thedisclosing Party of the existence of this confidentiality obligation and agreesto be obligated to maintain the confidentiality of any information received.The term “Confidential Information” will mean (i) confidential orproprietary information regarding the other Party’s business affairs, finances,technology, processes, plans or installations, product information, know-how,or other information that is received from the other Party pursuant to thisAgreement or the Parties’ relationship prior thereto or is developed pursuantto this Agreement, (ii) any and all information concerning the ContractDocuments, the Agreement, or the terms thereof, and (iii) all information whichone Party, directly or indirectly, may acquire from another Party; however,Confidential Information will not include information falling into any of the followingcategories:

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

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

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

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

(e)                                  information that is available throughdiscovery by independent research without use of or access to the ConfidentialInformation acquired from the other Party; and

(f)                                    photographs and descriptive informationregarding the Project, including Plant capacity, Owner’s name, and Projectlocation, as used by Fagen for purposes of marketing and promotion.

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

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documents or a portion thereof.

**20.2        Publicity and Advertising**. Owner shall not make or permit any of itssubcontractors, agents, or vendors to make any external announcement orpublication, release any photographs or information concerning the ExpansionProject or any part thereof, or make any other type of communication to anymember of the public, press, business entity, or any official body which namesFagen unless prior written consent is obtained from Fagen, which consent shallnot be unreasonably withheld.

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

**Article 21Miscellaneous**

**21.1        Assignment.**This Agreement shall be binding upon, shallinure to the benefit of, and may be performed by, the successors and permittedassigns of the Parties, except that neither Design-Builder nor Owner shall,without the written consent of the other, assign or transfer this Agreement orany of the Contract Documents. Design-Builder’s subcontracting portions of theWork in accordance with this Agreement shall not be deemed to be an assignmentof this Agreement. Owner may assign all of its rights and obligations under theContract Documents to its Lenders or Lenders’ Agent as collateral security inconnection with Owner obtaining or arranging any financing for the ExpansionProject; provided, however, Owner shall deliver, at least ten (10) Days priorto any such assignment, to Design-Builder (i) written notice of such assignmentand (ii) a copy of the instrument of assignment in form and substancereasonably acceptable to Design-Builder, whose approval shall not beunreasonably withheld. The Lenders or Lenders’ Agent may assign the ContractDocuments or their rights under the Contract Documents, including withoutlimitation in connection with any foreclosure or other enforcement of theirsecurity interest. Design-Builder shall execute, if requested, a consent toassignment for the benefit of the Lenders and/or the Lenders’ Agent in form andsubstance reasonably acceptable to Design-Builder, which form is attachedhereto as Exhibit 0, provided that with respect to any such assignments suchassignee demonstrates to Design-Builder’s satisfaction that it has the capabilityto fulfill Owner’s obligations under this Agreement.

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

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

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

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the unenforceable provision or part were deleted.

**21.5        No Waiver.**The failure of either Design-Builder or Ownerto insist, in any one (1) or more instances, on the performance of any of theobligations required by the other under the Contract Documents shall not beconstrued as a waiver or relinquishment of such obligation or right withrespect to future performance.

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

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

If to Design-Builder, to:

Fagen,Inc.

501W. Highway 212 P. O. Box 159

Granite Falls, MN 56241 Attention: Aaron Fagen Fax: (320) 564-3278

with a copy to:

Fagen,Inc.

501W. Highway 212 P. O. Box 159

GraniteFalls, MN 56241 Attention: Jennifer Johnson

Fax: (320) 564-3278

and a copy to:

Fagen,Inc.

501W. Highway 212 P. O. Box 159

GraniteFalls, MN 56241 Attention: Wayne Mitchell

Fax: (320) 564-5190

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If to Owner, to:

LittleSioux Corn Processors, LP

4808F Avenue

Marcus, IA 51035 Attention: Steve Roe Fax: (712) 376-2815

and

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

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

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

**21.10   Entire Agreement.**This Agreement consists of the terms andconditions set forth herein, as well as the Exhibits hereto, which areincorporated by reference herein and made a part hereof. This Agreement setsforth the full and complete understanding of the Parties as of the EffectiveDate with respect to the subject matter hereof.

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

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

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

[The next page is the signature page.]

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**IN WITNESSWHEREOF,**the Partieshereto have caused their names to be hereunto subscribed by their officersthereunto duly authorized, intending thereby that this Agreement shall beeffective as of the Effective Date.
| **OWNER:**                         | ** ** | **DESIGN-BUILDER:**          |
|------------------------------------|------------|------------------------------|
| ** **                         | ** ** | ** **                   |
| Little Sioux  Corn Processors, LP  |       |                         |
| By it general  partner             |       |                         |
| Little Sioux  Corn Processors, LLC |       | Fagen, Inc.                  |
| (Name of Owner)                    |       | (Name of Design-Builder)     |
|                               |       |                         |
| /s/ Stephen Roe                    |       | /s/ Ron Fagen                |
| (Signature)                        |       | (Signature)                  |
|                               |       |                         |
| Stephen Roe                        |       | Roland “Ron” Fagen |
| (Printed Name)                     |       | (Printed Name)               |
|                               |       |                         |
| CEO/President                      |       | CEO and President            |
| (Title)                            |       | (Title)                      |
|                               |       |                         |
| Date:                              | 9/26/06    |                         | Date: | 9/26/06 |
|                                    |            |                              |  |  |

 

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**EXHIBIT A**

**Performance Guarantee Criteria**

 
| Criteria                                                | ** ** | **Specification**                                                                                                                                                                                         | ** ** | **Testing Statement**                                                            | ** ** | **Documentation**                                           |
|---------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|-------------------------------------------------------------|
| Expansion Plant Capacity — fuel grade ethanol      |       | Operate at a rate of 92 million gallons per year of  denatured fuel grade ethanol meeting the specifications of ASTM 4806 based on  353 days of operation per calendar year and 4.76% denaturant.         |       | Seven contiguous day performance test                                            |       | Production records and written report by  Design-Builder.   |
|                                                    |       |                                                                                                                                                                                                      |       |                                                                             |       |                                                        |
| *Corn to Ethanol Conversion ratio; Corn must be #2 [*]* |       | Not be less than 2.80 denatured gallons of ethanol  per bushel (56#) of corn                                                                                                                              |       | As determined by meter readings during a seven  contiguous day performance test. |       | Production records and written analysis by  Design-Builder. |
| * *                                                |       |                                                                                                                                                                                                      |       |                                                                             |       |                                                        |
| Electrical Energy                                       |       | 0.75 kWh per denatured gallon of fuel grade ethanol  [*]                                                                                                                                                  |       | As determined by meter readings during a seven  contiguous day performance test. |       | Production records and written analysis by  Design-Builder. |
|                                                    |       |                                                                                                                                                                                                      |       |                                                                             |       |                                                        |
| Natural Gas                                             |       | Shall not exceed 34,000 Btu per denatured gallon of  fuel grade ethanol. (This Performance Criteria relates to production of  ethanol and excludes any natural gas usage that may occur for drying corn.) |       | As determined by meter readings during a seven  contiguous day performance test. |       | Production records and written analysis by  Design-Builder. |

*Portions omittedpursuant to a request for confidential treatment and filed separately with theSecurities and Exchange Commission.

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| Process Water Discharge (not including cooling  tower and boiler blowdown and water pre-treatment (RO) discharge) |   | Zero gallons under normal operations.                                                                                                                |   | Process discharge meter.                                                                       |   | Control System reports.                             |
|-------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| Air Emissions                                                                                                     |   | Must meet the requirements prescribed as of the date  hereof by the State of Indiana Department of Environmental Management, Office  of Air Quality. |   | Must meet the requirements as prescribed in the Air  Permit Application attached as Exhibit K. |   | Written report by Owner’s Air Emission Tester. |

 

As part of the PerformanceGuarantee Criteria the Expansion Plant shall operate in accordance with allLegal Requirements.

**DISCLAIMER:**

Owner’s failure tomaterially comply with the operating procedures issued by ICM, Inc./Fagen, Inc.shall void all performance guaranties and warranties set forth in thisDesign-Build Agreement.

Owner understands that thestartup of the Expansion Plant requires resources and cooperation of the Owner,vendors and other suppliers to the Expansion Project. Design-Builder disclaimsany liability and Owner indemnifies Design-Builder for non-attainment of thePerformance Guarantee Criteria directly or indirectly caused by materialnon-performance or negligence of third parties not retained by Design-Builder.

 

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**EXHIBIT B**

**Project Scope**

 

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**EXHIBIT C**

**Owner’s Responsibilities**

The Owner shall operate the LSCP Plant inaccordance with good fuel ethanol production industry practices and shallprovide Design-Builder access to the LSCP Plant to the extent necessary to complete the Work in accordancewith the Agreement.

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

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

Otheritems to be provided by the Owner include, but are not limited to, thefollowing: site survey (boundary and topographic) as required by theDesign-Builder, layout of the propertycorners including two construction benchmarks, Soil Borings and subsequent Geotechnical Report describing recommendation forRoads, foundations and if required, soilstabilization/remediation, land disturbance permit, erosion control permit,site grading as described above with minimum soil standards, placementof erosion control measures, plant access road from a county, state or federalroad designed to meet local county roadstandards, plant storm and sanitary sewers, fire water system with hydrants and plant water main branches taken from the systemto be within five feet of the designated building locations, all tanks,motors and other equipment associated with or necessaryto operate the fire water loop and associated systems, plant roads as specifiedand designed for the permanent elevations and effective depth, spillcontainment and drainage systems fromboth rail and truck loading spots into the tank farm or other location, “construction” grading plan as drawn(including site retention pond), plant water well and associatedpermit(s). Owner shall also provide the final grading, seeding and mulching,and site fencing at the site.

Owner isencouraged to obtain preliminary designs/information and estimates of the cost of performing all Owner required permits andservices as stated in this Exhibit C. Specifically,the cost of the fire water systems (including associated fire water pumps,required tank, building (if required), sprinklers, and all other equipment andmaterials associated with the firewater delivery systems) is estimated being in excess of $800,000. Therequirements of each state and the decisions of each Owner will increase ordecrease the actual cost. Additionally, thecost of the required soil stabilization in Table 1 can be in the rangeof, or may exceed, $2.5MM which cost is not included in the Contract Price. Thespecific soil stabilization requirements for the grain and DDGS areas will be 

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developedin coordination with the gain/DDGS area subcontractor. Owner shall prepare site according to Design-Builder’sengineering plans provided for the site work.

**2)****                               ****Permits**— Owner shall obtain all Operating Permitsincluding, but not limited to, air quality permits, in a timely manner to allowconstruction and start-up of the plant as designed by Design-Builder. Ownershall obtain all testing, including air emissions tests, and site inspectionsrequired to secure the necessary operating permits.

**3)****                                    ****StormWater Runoff Permit**— Ownershall obtain the construction storm — water runoff permit, permanentstorm-water runoff permit, and the erosion control/land disturbance permit.

**4)****                               ****IowaPollutant Elimination Discharge Permit**— Owner shall obtain a permit to discharge cooling tower water andreverse osmosis (“R.O.”) reject water and any other waste water directly to adesignated waterway or other location. Owner shall supply the discharge pipingto transport to the designated waterway or other location.

**5)****                               ****Natural Gas Supply andService Agreement**— Ownershall procure and supply a continuous supply of natural gas to supply theincremental increase in gas requirements related to the expanded operations.Owner shall provide all gas piping to the use points and supply meters andregulators to provide burner tip pressures as specified by Design-Builder.Owner shall also supply a digital flowmeter on-site with appropriate output formonitoring by the plant’s computer control system.

**6)****                               ****TemporaryElectrical Service**— Ownershall secure electrical service to supply a minimum 750 KW of 3-phase, 480/277volt electrical power during construction. Owner shall procure, install, andmaintain temporary service to up to three 3-phase, 480/277 volt temporaryservice transformers located throughout the site. The transformer sizing,locations, and underground electrical feed routing layout are to be determinedjointly by the Owner, the Design-Builder and the energy supplier. Design-Buildershall pay energy demand and usage charges up to Substantial Completion.

**7)****                                PermanentElectrical Service —** (1) The Owner is responsible to secure continuousservice from an energy supplier to serve the facility. The service from theenergy supplier shall be of sufficient size to supply the requirements of theexpanded operations. (2) The Owner is responsible for procurement, installationand maintenance of the site distribution system, including, but not limited to,the required substation and all associated distribution lines, switchgear,sectional cabinets, distribution transformers, transformer pads, etc. Anon-site primary digital meter is also to be supplied for monitoring ofelectrical usage and demand. This meter must have the capability to be monitoredvia a telephone line or other electrical signal. (3) The responsibility of theDesign-Builder starts at the secondary electrical terminals of the sitedistribution system transformers that have been installed by Owner. (4)Modifications to the existing site distribution system, layout, and meters areto be determined jointly by the Owner, the Design-Builder and the energysupplier.

Design-Builder will be providing soft startmotor controllers for all motors greater than 

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150 horsepower and wheredemanded by process requirements. Owner is encouraged to discuss with itselectrical service supplier whether additional soft start motor controllers areadvisable for this facility and such can be added, with any increased costbeing an Owner’s cost.

**8)****                               ****WaterSupply, Service Agreement, and Pre-Treatment System**— Owner shall supply on-site process wells orother water source capable of providing the incremental quantity of water,which includes process water, R.O. feed water, cooling tower make-up water andboiler feed water, of a quality which will allow discharges to comply withNPDES limits and stable operation of the plant. Owner should consider providinga redundant supply source.

Owner shall pay for a waterpre-treatment system to be designed and constructed by Design-Builder and to beintegrated into the Expansion Plant. Owner shall provide an updated watersample of current process water for analysis to aid in design of the waterpre-treatment system. The pre-treatment system will be designed to provide theExpansion Plant with the quantity and quality of raw and treated water neededto supply the Expansion Plant’s process needs. The water pre-treatment systemdesign will also consider and recommend to Owner equipment required to meet thedischarge requirements under the Expansion Plant’s wastewater discharge permit.Owner is to execute side-letter agreements as necessary for the design andconstruction of such water pre-treatment system. Design-Builder shall recovercosts for the design and construction of such system from the Owner atDesign-Builder’s standard time plus material rates during the relevant timeperiod and at the relevant locale. A side-letter agreement between Owner andDesign-Builder shall be executed by Owner and Design-Builder to compensateDesign-Builder, at Design-Builder’s standard time plus materials rates duringthe relevant time period and at the relevant locale, for any costs and expensesrelated to such water pre-treatment system.

**9)****                               ****Wastewater Discharge System,Permits and/or Service Agreement**— Owner shall provide for any additions or improvements to thedischarge piping, septic tank and drainfield system or connections to municipalsystem as required for the sanitary sewer requirements of the Expansion Plant.These provisions shall comply with all federal, state, and local regulations,including any permitting issues.

**10)****                        ****Roadsand Utilities**— Owner shallprovide and maintain any additions required to the ditches and permanent roads,including the gravel, pavement or concrete, with the roads passing standardcompaction tests. Design-Builder shall repair any damage directly caused byDesign-Builder activities, specifically excluding any damages causes by normalwear and tear.

Except as otherwisespecifically stated herein, the Owner shall install all utilities so that theyare within five (5) feet of the designated building/structure locations.

**11)****          ****Maintenanceand Power Equipment**— Themaintenance, spare parts, and power equipment as required by the ExpansionPlant or desired by Owner shall be the sole and 

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absolute cost andresponsibility of Owner and Design-Builder shall have no responsibility inregards thereto.

**12)****          ****Railroads**— Owner is responsible forany costs associated with expansion of the railroads, including, but not limitedto, all rail design and engineering and construction and Design-Builder shallhave no responsibility in regards thereto.

**13)****          ****Drawings**— Owner shall supplydrawings to Design-Builder detailing any changes madeto the plant since completion of the initial plant.

**14)****                    ****Fire Protection System**— Fire Protection System requirements vary bygovernmental requirements per location and by insurance carrier requirements.Owner is responsible to provide the required fire protection system for thePlant. This may include storage tanks, pumps, underground fire water mains,fire hydrants, foam or water monitor valves, sprinkler systems, smoke and heatdetection, deluge systems, or other provisions as required by governmentalcodes or Owner’s insurance carrier’s fire protection criteria.

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

**Table 1 Minimum Soil Bearing Pressure — Responsibility ofOwner**

 

| Description        | ** ** | **Required Allowable Soil Bearing  Pressure (pounds per square foot)** | ** ** |
|--------------------|------------|-----------------------------------------------------------------------------------------------------------|------------|
| Slurry Tank        |       | 4,000                                                                                                     |       |
| Liquefaction  Tank |       | 3,500                                                                                                     |       |
| Fermentation  Tank |       | 4,500                                                                                                     |       |
| All Other Areas    |       | 3,000                                                                                                     |       |

 

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**Table 2 Owner’s Milestones**

 
| **Owner’s Responsibilities  Notice to Proceed**  | ** ** | **Number Of Days To Be   Completed After Notice To  Proceed** | ** ** |
|----------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------|------------|
| Notice to  Proceed                                                   |       |   0                                                                                         |       |
| Storm Water  Permits Complete                                        |       | 60                                                                                                    |       |
| Natural  Gas/Propane Supply Agreements Complete                      |       | 90                                                                                                    |       |
| Water Supply and  Service Agreements Complete                        |       | 90                                                                                                    |       |
| Risk Insurance  Provider Selected/Fire Protection Requirements Known |       | 90                                                                                                    |       |
| NPDES Discharge  Point Selected                                      |       | 90                                                                                                    |       |
| Electrical  Service                                                  |       | 90                                                                                                    |       |
| Water  Pre-Treatment System Design Complete                          |       | 170                                                                                                   |       |
| Wastewater  Discharge System Complete                                |       | 180                                                                                                   |       |
| Operating  Permits Complete                                          |       | 200                                                                                                   |       |
| Discharge  Permits Complete                                          |       | 200                                                                                                   |       |
| Pumphouse/Water  Pre-treatment System Complete                       |       | 305                                                                                                   |       |
| Fire Protection  System Complete                                     |       | 305                                                                                                   |       |
| Administrative  Building Complete                                    |       | 90  days prior to SC                                                                                  |       |
| Paving  (Expansion Plant Roads) Complete                             |       | 90  days prior to SC                                                                                  |       |
| Rail Spur  Complete                                                  |       | 90  days prior to SC                                                                                  |       |
| Employees Hired  and Ready for Training                              |       | 60  days prior to SC                                                                                  |       |
| Natural Gas Pipeline  Complete                                       |       | 60 days prior to SC                                                                                   |       |

 

 

C-5

----

 

**EXHIBIT D**

**ICM License Agreement**

**THIS LICENSE AGREEMENT**(this “License Agreement”) is entered into andmade effective as of September 20, 2006 (“Effective Date”) by and betweenLittle Sioux Corn Processors, LP, an Iowa limited partnership (“OWNER”), and ICM,Inc., a Kansas corporation (“ICM”).

WHEREAS, OWNER has entered into that certainDesign-Build Lump Sum Contract dated September 20, 2006 (the “Contract”) withFagen, Inc., a Minnesota corporation (“Fagen”), under which Fagen is to designand construct a forty (40) million gallon per year expansion ethanol plant forOWNER, which would bring the total nameplate capacity to ninety-two (92)million gallons per year, to be located in or near Marcus, Iowa (the “Plant”);

WHEREAS, ICM has granted Fagen the right to usecertain proprietary technology and information of ICM in the design andconstruction of the Plant; and

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

NOW, THEREFORE, the parties, in consideration of theforegoing premises and the mutual promises contained herein and for other goodand valuable consideration, receipt of which is hereby acknowledged, agree asfollows:

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

2.  The “Proprietary Property” means, withoutlimitation, documents, Operating Procedures (hereinafter defined), materialsand other information that are furnished by ICM to OWNER in connection with thePurpose, whether orally, visually, in writing, or by any other means, whethertangible or intangible, directly or indirectly (including, without limitation,through Fagen) and in whatever form or medium including, without limitation,the design, arrangement, configuration, and specifications of (i) thecombinations of distillation, evaporation, and alcohol dehydration equipment(including, but not limited to, pumps, vessels, tanks, heat exchangers, piping,valves and associated electronic control equipment) and all documentssupporting those combinations; (ii) the combination of the distillers graindrying (DGD), and heat recovery steam generation (HRSG) equipment (including,but not limited to, pumps, vessels, tanks, heat exchangers, piping andassociated electronic control equipment) and all documents supporting thosecombinations; and (iii) the computer system, known as the distributed controlsystem (DCS and/or PLC) (including, but not limited to, the 

D-1

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softwareconfiguration, programming, parameters, set points, alarm points, ranges,graphical interface, and system hardware connections) and all documentssupporting that system. The “Operating Procedures” means, without limitation,the process equipment and specifications manuals, standards of quality, serviceprotocols, data collection methods, construction specifications, trainingmethods, engineering standards and any other information prescribed by ICM fromtime to time concerning the Purpose. Proprietary Property shall not include anyinformation or materials that OWNER can demonstrate by clear and convincing writtenevidence: (i) was lawfully in the possession of OWNER prior to disclosure byICM or Fagen; (ii) was in the public domain prior to disclosure by ICM orFagen; (iii) was disclosed to OWNER by a third party other than Fagen havingthe legal right to possess and disclose such information or materials; or (iv)after disclosure by ICM or Fagen comes into the public domain through no faultof OWNER or its members, directors, officers, employees, agents, contractors,consultants or other representatives (hereinafter collectively referred to as “Representatives”).Information and materials shall not be deemed to be in the public domain merelybecause such information is embraced by more general disclosures in the publicdomain, and any combination of features shall not be deemed to be within theforegoing exceptions merely because individual features are in the publicdomain if the combination itself and its principles of operation are not in thepublic domain.

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

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

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

6.           ICM has the exclusive right and interest inand to the Proprietary Property and the goodwill associated therewith. OWNERwill not, directly or indirectly, contest ICM’ s ownership of the ProprietaryProperty. OWNER’ s use of the Proprietary Property does not give OWNER anyownership interest or other interest in or to the Proprietary Property exceptfor the limited license granted to OWNER herein.

D-2

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7.           OWNER shall pay no license fee or royalty toICM for OWNER’s use of the Proprietary Property pursuant to this LicenseAgreement, the consideration for the limited license granted herein is certainpayments by Fagen to ICM, which is funded by and included in the amountspayable by OWNER to Fagen for the construction of the Plant under the Contract.

8.           OWNER may not assign the limited licensegranted herein, in whole or in part, without the prior written consent of ICM,which will not be unreasonably withheld or delayed. Prior to any assignment,OWNER shall obtain from such assignee a written instrument, in form andsubstance reasonably acceptable to ICM, agreeing to be bound by all the termsand provisions of this License Agreement. Any assignment of this LicenseAgreement shall not release OWNER from (i) its duties and obligations hereunderconcerning the disclosure and use of the Proprietary Property by OWNER or itsRepresentatives, or (ii) damages to ICM resulting from, or arising out of, abreach of such duties or obligations by OWNER or its Representatives. ICM mayassign its right, title and interest in the Proprietary Property, in whole orpart, subject to the limited license granted herein.

9.           The Proprietary Property is confidential andproprietary. OWNER shall keep the Proprietary Property confidential and shalluse all reasonable efforts to maintain the Proprietary Property as secret andconfidential for the sole use of OWNER and its Representatives for the Purpose.OWNER shall retain all Proprietary Property at its principal place of businessand/or the Plant. OWNER shall not at any time without ICM’s prior writtenconsent, copy, duplicate, record, or otherwise reproduce the ProprietaryProperty, in whole or in part, or otherwise make the same available to anyunauthorized person provided, OWNER shall be permitted to copy, duplicate orotherwise reproduce the Proprietary Property in whole or in part in connectionwith, and to the extent it is necessary and essential for, the Purpose so longas all such copies, duplicates or reproductions are kept at its principal placeof business and/or the Plant and are treated the same as any other ProprietaryProperty. OWNER shall not disclose the Proprietary Property except to itsRepresentatives who are directly involved with the Purpose, and even then onlyto such extent as is necessary and essential for such Representative’sinvolvement. OWNER shall inform such Representatives of the confidential andproprietary nature of such information and, if requested by ICM, OWNER shallobtain from such Representative a written instrument, in form and substancereasonably acceptable to ICM, agreeing to be bound by all of the terms andprovisions of this License Agreement to the same extent as OWNER. OWNER shallmake all reasonable efforts to safeguard the Proprietary Property fromdisclosure by its Representatives to anyone other than permitted hereby. OWNERshall notify ICM immediately upon discovery of any unauthorized use ordisclosure of the Proprietary Property, or any other breach of this LicenseAgreement by OWNER or its Representatives, and shall cooperate with ICM inevery reasonable way to help ICM regain possession of the Proprietary Propertyand prevent its further unauthorized use or disclosure. In the event that OWNERor its Representatives are required by law to disclose the Proprietary Property,OWNER shall provide ICM with prompt written notice of same so that ICM may seeka protective order or other appropriate remedy. In the event that suchprotective order or other appropriate remedy is not obtained, OWNER or itsRepresentatives will furnish only that portion of the Proprietary Propertywhich in the reasonable opinion of its or their legal counsel is legallyrequired and will exercise its 

D-3

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reasonableefforts to obtain reliable assurance that the Proprietary Property so disclosedwill be accorded confidential treatment.

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

11. The duties andobligations of OWNER under this License Agreement, and all provisions relatingto the enforcement of such duties and obligations shall survive and remain infull force and effect notwithstanding any termination or expiration of theContract or this License Agreement.

12.     ICM may terminate this License Agreement upon written notice toOWNER if OWNER willfully or wantonly (a) uses the Proprietary Property for anypurpose, or (b) discloses the Proprietary Property to anyone, in each caseother than permitted herein. Upon termination of this License Agreement, OWNERshall cease using the Proprietary Property for any purpose (including thePurpose) and, upon request by ICM, shall promptly return to ICM all documentsor other materials in OWNER’s or its Representatives’ possession that containProprietary Property in whatever format, whether written or electronic,including any and all copies or reproductions of the Proprietary Property.OWNER shall permanently delete all such Proprietary Property from its computerhard drives and any other electronic storage medium (including any backup orarchive system). OWNER shall deliver to ICM a written certificate whichcertifies that all electronic copies or reproductions of the ProprietaryProperty have been permanently deleted.

13.     The laws of the State of Kansas, United States of America (orUS), shall govern the validity of the provisions contained herein, theconstruction of such provisions, and the interpretation of the rights andduties of the parties. Any legal action brought to enforce or construe theprovisions of this License Agreement shall be brought in the federal or statecourts located in Wichita, Kansas, and the parties agree to and hereby submitto the exclusive jurisdiction of such courts and agree that they will notinvoke the doctrine of forum non conveniens or other similar defenses in anysuch action brought in such courts. Notwithstanding the foregoing, nothing inthis License Agreement will affect any right ICM may otherwise have to bringany action or proceeding relating to this License Agreement against OWNER orits properties in the courts of any jurisdiction. In the event the Plant islocated in, or OWNER is organized under the laws of, a country other than theUS, OWNER hereby specifically agrees that any injunctive or other equitablerelief granted by a court 

D-4

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located in the State ofKansas, US, or any award by a court located in the State of Kansas, shall bespecifically enforceable as a foreign judgment in the country in which thePlant is located, OWNER is organized or both, as the case may be, and agreesnot to contest the validity of such relief or award in such foreignjurisdiction, regardless of whether the laws of such foreign jurisdiction wouldotherwise authorize such injunctive or other equitable relief, or award.

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

15.     The terms and conditions of this License Agreement constitutethe entire agreement between the parties with respect to the subject matterhereof and supersede any prior understandings, agreements or representations byor between the parties, written or oral. Any rule of construction to the effectthat any ambiguity is to be resolved against the drafting party shall not beapplicable in the interpretation of this License Agreement. This LicenseAgreement may not be modified or amended at any time without the writtenconsent of the parties.

16.         All notices, requests, demands, reports,statements or other communications (herein referred to collectively as “Notices”)required to be given hereunder or relating to this License Agreement shall bein writing and shall be deemed to have been duly given if transmitted bypersonal delivery or mailed by certified mail, return receipt requested,postage prepaid, to the address of the party as set forth below. Any suchNotice shall be deemed to be delivered and received as of the date sodelivered, if delivered personally, or as of the third business day followingthe day sent, if sent by certified mail. Any party may, at any time, designatea different address to which Notices shall be directed by providing writtennotice in the manner set forth in this paragraph.

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

D-5

----

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

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

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

IN WITNESS WHEREOF, the parties hereto haveexecuted this License Agreement, the Effective Date of which is indicated onpage 1 of this License Agreement.

 
| OWNER:                                                                                                            | ICM:                                                  |
|-------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------|
|  

**Little Sioux Corn  Processors, LP**

 

By its general partner

Little Sioux Corn  Processors, LLC |  

ICM,  Inc.                                    |
|  

By:  /s/ Stephen Roe                                                                                 |  

By:  /s/ David  Vander Griend            |
|  

Title:   CEO/President                                                                               | ** **

Title:   CEO/President               |
|  

Date Signed: 9/21/06                                                                                      |  

Date Signed: 9/27/06                          |
|  

Address for giving notices:                                                                               |  

Address for giving notices:                   |
|  

4808  F Avenue

Marcus,  IA 51035

                                                                  |  

301  N First Street

Colwich,  KS  67030 |

 

 

D-6

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# **EXHIBIT E****Schedule of Values**

| **LITTLE SIOUX CORN PROCESSORS  ETHANOL PLANT**

**EXPANSION**

**MARCUS, IOWA**

** ** |
|----------------------------------------------------------------------------------------------|
| **PAY REQUEST BREAKDOWN**                                                                    |
| ** **                                                                                   | **DESCRIPTION** |   |
| ** **                                                                                   | ** ** |   |
| **  1**                                                                            | **MOBILIZATION** | ** $   2,500,000** |
| **  2**                                                                            | **ENGINEERING** | ***** |
| **  3**                                                                            | **GENERAL CONDITIONS (16 MONTHS)** | ***** |
| **  4**                                                                            | **SITEWORK** | ***** |
| **  5**                                                                            | **CONCRETE** | ***** |
| **  6**                                                                            | **MASONRY** | ***** |
| **  7**                                                                            | **STRUCTURAL STEEL & MISC. METALS** | ***** |
| **  8**                                                                            | **LUMBER, CARPENTRY & FINISHES** | ***** |
| **  9**                                                                            | **GIRTS, SIDING & ROOF DECK** | ***** |
| **10**                                                                                       | **DOORS & WINDOWS** | ***** |
| **11**                                                                                       | **PAINT** | ***** |
| **12**                                                                                       | **DRYER SYSTEM** | ***** |
| **13**                                                                                       | **FIELD ERECTED TANKS** | ***** |
| **14**                                                                                       | **PROCESS TANKS & VESSELS** | ***** |
| **15**                                                                                       | **THERMAL OXIDIZER** | ***** |
| **16**                                                                                       | **MIXERS** | ***** |
| **17**                                                                                       | **PUMPS** | ***** |
| **18**                                                                                       | **HEAT EXCHANGERS** | ***** |
| **19**                                                                                       | **SIEVE BOTTLES & BEADS** | ***** |
| **20**                                                                                       | **CHILLER** | ***** |
| **21**                                                                                       | **CENTRIFUGES** | ***** |
| **22**                                                                                       | **AIR COMPRESSORS** | ***** |
| **23**                                                                                       | **METHANATOR** | ***** |
| **24**                                                                                       | **COOLING TOWER** | ***** |
| **25**                                                                                       | **ETHANOL LOADOUT** | ***** |
| **26**                                                                                       | **VAPOR FLARE SYSTEM** | ***** |
| **27**                                                                                       | **PROCESS PIPING & VALVES** | ***** |
| **28**                                                                                       | **INSULATION** | ***** |
| **29**                                                                                       | **PLUMBING & HVAC** | ***** |
| **30**                                                                                       | **ELECTRICAL** | ***** |
| **31**                                                                                       | **START-UP** | ***** |
| **32**                                                                                       | **DEMOBILIZATION** | ***** |
|                                                                                         |   | ** ** |
|                                                                                         | **CONTRACT AMOUNT** | ** $ 47,860,000** |

 

*Portions omittedpursuant to a request for confidential treatment and filed separately with theSecurities and Exchange Commission.

 

E-1

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**EXHIBIT F**

# **Form ofInformational Report**

|  | **PROJECT  MEETING:******Two-Week  Look Ahead(s) |
|--|--------------------------------------------------|

 
| **JOBSITE:** |   | **MEETING  DATE:** |   |
|--------------|--------|--------------------|--------|

 
| **▼ MANPOWER** | ** ** | **TOTALS ▼** |
|----------------------|------------|--------------------|
| Fagen, Inc.          |       | 0                  |
| (sub)                |       | 0                  |
|                 |       | 0                  |
|                 |       | 0                  |
|                 |       | 0                  |
|                 |       | 0                  |
|                 |       | 0                  |
|                 |       | 0                  |
|                 |       | 0                  |
|                 |       | 0                  |
| **JOBSITE TOTAL**    |       | 0                  |

 
| **▼ SAFETY ISSUES** |   |   |
|---------------------------|--------|--------|
| 1.  text        |   |   |
| 2.  text        |   |   |

 
| **▼ WAREHOUSE ISSUES** |   |   |
|------------------------------|--------|--------|
| 1.  text           |   |   |
| 2.  text           |   |   |

 
| **▼ PROCUREMENT ISSUES** |   |   |
|--------------------------------|--------|--------|
| 1.  text             |   |   |
| 2.  text             |   |   |

 
| **▼ OPERATIONS ISSUES** |   |   |
|-------------------------------|--------|--------|
| 1.  text            |   |   |
| 2.  text            |   |   |

 
| **▼ CIVIL**  |   |   |
|--------------------|--------|--------|
| **Area**           |   |   |
| 1.  text |   |   |
| 2.  text |   |   |

 

F-1

----

 
| **▼ STRUCTURAL** |   |   |
|------------------------|--------|--------|
| **Area**               |   |   |
| 1.  text     |   |   |
| 2.  text     |   |   |

 

 
| **▼ SIDING / INSULATION** |   |   |
|---------------------------------|--------|--------|
| **Area**                        |   |   |
| 1.  text              |   |   |
| 2.                              |   |   |

 
| **▼ MILLWRIGHT** |   |   |
|------------------------|--------|--------|
| **Area**               |   |   |
| 1.  text     |   |   |
| 2.                     |   |   |

 
| **▼ PIPE**   |   |   |
|--------------------|--------|--------|
| **Area**           |   |   |
| 1.  text |   |   |
| 2.                 |   |   |

 
| **▼ ELECTRICAL** |   |   |
|------------------------|--------|--------|
| **Area**               |   |   |
| 1.  text     |   |   |
| 2.                     |   |   |

 
| **▼ DELIVERIES** |   |   |
|------------------------|--------|--------|
| **Area**               |   |   |
| 1.  text     |   |   |

 
| **▼ SUBCONTRACTOR** |   |   |
|---------------------------|--------|--------|
| **Subcontractor  Name**   |   |   |
| 1.  text        |   |   |

 

 

F-2

----

# **EXHIBIT GRequired Permits**

 
| No.    | ** ** | **Type of Application/Permit**       | ** ** | **Responsibility for Obtaining Permit** | ** ** | **Assistance in Preparation** | ** ** | **Notes**                                    |
|--------|------------|--------------------------------------|------------|-----------------------------------------|------------|-------------------------------|------------|----------------------------------------------|
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 1      |       | Underground Utility Locating Service |       | Design-Builder/Owner                    |       |                          |       | Notification service for underground work.   |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 2      |       | Septic Tank & Drain Field Permit |       | Owner                                   |       |                          |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 3      |       | Railroad Permit/Approval             |       | Owner                                   |       | Design-Builder                |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 4      |       | Archeological Survey                 |       | Owner                                   |       |                          |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 5      |       | Highway Access Permit                |       | Owner                                   |       |                          |       | State Department of Transportation or County |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 6      |       | Building Permits                     |       | Design-Builder                          |       |                          |       |                                         |
|   |       | Mechanical                           |       | Design-Builder                          |       |                          |       |                                         |
|   |       | Electrical                           |       | Design-Builder                          |       |                          |       |                                         |
|   |       | Structures                           |       | Design-Builder                          |       |                          |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 7      |       | Construction Air Permit              |       | Owner                                   |       | Design-Builder                |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 8      |       | Construction Permit                  |       | Owner                                   |       | Design-Builder                |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 9      |       | Operations Permit                    |       | Owner                                   |       | Design-Builder                |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 10     |       | Wastewater Permit                    |       | Owner                                   |       | Design-Builder                |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 11     |       | Water Appropriation Permit           |       | Owner                                   |       | Design-Builder                |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 12     |       | Fire Protection                      |       | Owner                                   |       | Design-Builder                |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 13     |       | Above Ground Storage Tank Permit     |       | Owner                                   |       |                          |       |                                         |
|   |       |                                 |       |                                    |       |                          |       |                                         |
| 14     |       | TTB                                  |       | Owner                                   |       |                          |       |                                         |

 

 

G-1

----

# **EXHIBIT H**

# **Form ofPerformance Bond**

PERFORMANCEBOND

TheAmerican Institute of Architects,

AIADocument No. A312 (December, 1984 Edition)

Anysingular reference to Contractor, Surety, Owner or other

party shall be considered plural where applicable.
| CONTRACTOR  (Name and Address): |   | Amount: [Amount]                      |
|---------------------------------|--------|---------------------------------------|
| Fagen, Inc.                     |   | Description (Name and Location):      |
| P. O. Box 159                   |   | [Expansion Project Name and Location] |
| Granite Falls, MN 56241         |   | OWNER (Name and Address):             |
| CONSTRUCTION CONTRACT           |   | [Owner Name/Address]                  |
| Date:                           |   | SURETY (Name and Principal Place of   |
|                            |   | Business): [Name/Place of Business]   |

 

BOND#

Date (Not earlier than Construction ContractDate):

Amount:

Modificationsto this Bond:               q   None               q    See Page 2

CONTRACTORAS PRINCIPAL                                                               SURETY

Company:                                 (CorporateSeal)                                         Company:                 (CorporateSeal)

Fagen,Inc.
| Signature:      |   |   | Signature:      |   |
|-----------------|--------|--------|-----------------|--------|
| Name and Title: |   |   | Name and Title: |   |
|                 |        |        |                 |        |  |  |

 

(Anyadditional signatures appear an page 2.)

*(FOR INFORMATION Only- Name, Address and Telephone)*

OWNER’SREPRESENTATIVE (Architect, Engineer or other party):

AGENTOR BROKER:

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

H-1

----

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

3.             Ifthere is no Owner Default, the Surety’s obligation under this Bond shall ariseafter:

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

3.2           TheOwner has declared a Contractor Default and formally terminated the Contractor’sright to complete the contract.  SuchContractor Default shall not be declared earlier than twenty days after theContractor and Surety have received notice as provided in Subparagraph 3.1; and

3.3           TheOwner has agreed to pay the Balance of the Contract Price to the Surety inaccordance with the terms of the Construction Contract or to a contractorselected to perform the Construction Contract in accordance with the terms ofthe contract with the Owner.

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

4.1           Arrangefor the Contractor with consent of the Owner, to perform and complete theConstruction Contract; or

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

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

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

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

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

5.             If the Surety does not proceed asprovided in Paragraph 4 with reasonable promptness, the Surety shall be deemedto be in default on this Bond fifteen days after receipt of an additionalwritten notice from the Owner to the Surety demanding that the Surety performits Obligations under this Bond, and the Owner shall be entitled to enforce anyremedy available to the Owner.  If theSurety proceeds as provided in Subparagraph 4.4, and the Owner refuses thepayment tendered or the Surety has denied liability, in whole or in part,without further notice the Owner shall be entitled to enforce any remedyavailable to the Owner.

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6.             Afterthe Owner has terminated the Contractor’s right to complete the ConstructionContract, and if the Surety elects to act under Subparagraph 4.1, 4.2, or 4.3above, then the responsibilities of the Surety to the Owner shall not be greaterthan those of the Contractor under the Construction Contract, and theresponsibilities of the Owner to the Surety shall not be greater than those ofthe Owner under the Construction Contract. To the limit of the amount of this Bond, but subject to commitment bythe Owner of the Balance of the Contract Price to mitigation of costs anddamages on the Construction Contract, the Surety is obligated withoutduplication for:

6.1           Theresponsibilities of the Contractor for correction of defective work and completionof the Construction Contract;

6.2           Additionallegal design professional and delay costs resulting from the Contractor’sDefault, and resulting from the actions or failure to act of the Surety underParagraph 4; and

6.3           Liquidateddamages, or if no liquidated damages are specified in the ConstructionContract, actual damages caused by delayed performance or non-performance ofthe Contractor.

7.             TheSurety shall not be liable to the Owner or others for obligations of theContractor that are unrelated to the Construction Contract and the Balance ofthe Contract Price shall not be reduced or set off on account of any suchunrelated obligations. No right of action shall accrue on this Bond to anyperson or entity other than the Owner or its heirs, executors, administratorsor successors.

8.             TheSurety hereby waives notice of any change, including changes of time, to theConstruction Contract or to related subcontracts, purchase orders and otherobligations.

9.             Anyproceeding, legal or equitable, under this Bond may be instituted in any courtof competent jurisdiction in the location in which the work or part of the workis located and shall be instituted within two years after Contractor Default orwithin two years after the Contractor ceased working or within two years afterthe Surety refuses or fails to perform its obligations under this Bond,whichever occurs first.  If theprovisions of this Paragraph are void or prohibited by law, the minimum periodof limitation available to sureties as a defense in the jurisdiction of thesuit shall be applicable.

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

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

12.           DEFINITIONS

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

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

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

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

**MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:**

Thisbond is subject to the attached Dual Obligee Rider dated

______________________________________________________

______________________________________________________

______________________________________________________

*(Space is provided below for additional signatures of addedparties other than those appearing on the cover page.)*
| CONTRACTOR AS PRINCIPAL |   | SURETY           |            |   |   |   |
|-------------------------|--------|------------------|-----------------|--------|--------|--------|
| (Corporate Seal)        |   | (Corporate Seal) |            |   |   |   |
|                    |   |             |            |   |   |   |
| Company:                |   |             | Company:        |   |
| Address:                |   |             | Address:        |   |
| Name and Title:         |   |             | Name and Title: |   |
| Signature:              |   |             | Signature:      |   |
|                    |   |             |            |   |   |   |
|                         |        |                  |                 |        |        |        |  |  |

** **

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**DUAL OBLIGEE RIDER**

**(TO BE ATTACHED TO BOND AT TIMEOF ISSUANCE)**

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

ITIS HEREBY UNDERSTOOD AND AGREED that the above described bond(s) are herebyamended to include the following paragraph:

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

ITIS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held tochange, alter or vary the terms of the above described bond(s) except ashereinbefore set forth.

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

 

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**EXHIBIT I**

**Form of Payment Bond**

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

CONTRACTOR (Name andAddress):                                                     SURETY(Name and Principal Place

Fagen, Inc.                                                                                                    Placeof Business):

P. O. Box 159

Granite Falls, MN  56241

OWNER (Name and Address):

[NAMEAND ADDRESS]

CONSTRUCTION CONTRACT

Date:

Amount:

Description(Name and Location):

BOND#

Date (Not earlier than Construction ContractDate):

Amount:

Modificationsto this Bond:                               q   None                               q    SeePage 2

CONTRACTORAS PRINCIPAL                                                               SURETY

Company:                                 (Corporate Seal)                                         Company:                      (CorporateSeal)

Fagen,Inc.
| Signature:      |   |   | Signature:      |   |
|-----------------|--------|--------|-----------------|--------|
| Name and Title: |   |   | Name and Title: |   |

 

(Anyadditional signatures appear an page 2.)

*(FOR INFORMATION Only- Name, Address and Telephone)*

OWNER’SREPRESENTATIVE (Architect, Engineer or other party):

AGENT or BROKER:

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

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

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

2.2           Defends,indemnifies and holds harmless the Owner from claims, demands, liens or suitsby any person or entity whose claim, demand, lien or suit is for the paymentfor labor, materials or equipment furnished for use in the performance of theConstruction Contract, provided the Owner has promptly notified the Contractorand the Surety (at the address described in Paragraph 12) of any claims;demands, liens or suits and tendered defense of such claims, demands, liens orsuits to the Contractor and the Surety, and provided there is no Owner Default.

3.             Withrespect to Claimants, this obligation shall be null and void if the Contractorpromptly makes payment, directly or Indirectly, for all sums due.

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

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

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

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

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

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

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

6.             Whenthe Claimant has satisfied the conditions of Paragraph 4, the Surety shall 

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promptly and at the Surety’s expense take the following actions:

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

6.2           Payor arrange for payment of any undisputed amounts.

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

8.             Amountsowed by the Owner to the Contractor under the Construction Contract shall beused for the performance of the Construction Contract and to satisfy claims, ifany, under any Construction Performance Bond. By the Contractor furnishing and the Owner accepting this Bond, they agreethat all funds earned by the Contractor in the performance of the ConstructionContract are dedicated to satisfy obligations of the Contractor and the Suretyunder this Bond, subject to the Owner’s priority to use the funds for thecompletion of the work.

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

10.           TheSurety hereby waives notice of any change, including changes of time, to theConstruction Contract or to related subcontracts, purchase orders and otherobligations.

11.           Nosuit or action shall be commenced by a Claimant under this Bond other than in acourt of competent jurisdiction in the location in which the work or part ofthe work is located or after the expiration of one year from the date (1) onwhich the Claimant gave the notice required by Subparagraph 4.1 or Clause4.2.3, or (2) on which the last labor or service was performed by anyone or thelast materials or equipment were furnished by anyone under the ConstructionContract, whichever of (1) or (2) first occurs. If the provisions of thisParagraph are void or prohibited by law, the minimum period of limitationavailable to sureties as a defense in the jurisdiction of the suit shall be applicable.

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

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

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

15.           DEFINITIONS

15.1         Claimant:An individual or entity having a direct contract with the Contractor or with asubcontractor of the Contractor to furnish labor, materials or equipment foruse in the performance of the Contract. The intent of this Bond shall be toinclude without limitation in the terms “labor, materials or equipment” thatpart of water, gas, power, light, heat, oil, gasoline, telephone service orrental equipment used in the Construction Contract, architectural andengineering services required for performance of the work of the Contractor andthe Contractor’s subcontractors, and all other items for which a mechanic’slien may be asserted in the jurisdiction where the labor, materials orequipment were furnished.

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

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

MODIFICATIONSTO THIS BOND ARE AS FOLLOWS:

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

______________________________________________________

______________________________________________________

______________________________________________________

(Spaceis provided below for additional signatures of added parties other than thoseappearing on the cover page.)
| CONTRACTOR AS PRINCIPAL |   | SURETY           |
|-------------------------|--------|------------------|
| (Corporate Seal)        |   | (Corporate Seal) |
|                    |   |             |
| Company:                |   |             | Company: |   |
| Address:                |   |             | Address: |   |
| Name and Title:         |   |             | Name and Title: |   |
| Signature:              |   |             | Signature: |   |

 

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**DUAL OBLIGEE RIDER**

(TOBE ATTACHED TO BOND AT TIME OF ISSUANCE)

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

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

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

IT IS FURTHER UNDERSTOOD AND AGREED that nothing hereincontained shall be held to change, alter or vary the terms of the above describedbond(s) except as hereinbefore set forth. SIGNED, SEALED AND DATED this        day of               ,200_.
|            | **Fagen, Inc.**                                                                                                                                                          |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | * *                                                                                                                                                                 |
|            | *(Contractor)*                                                                                                                                                           |
| ** ** | * *                                                                                                                                                                 |
| ** ** | By:                                                                                                                                                                      | * * |
| ** ** |                                                                                                                                                                     |   |
| ** ** | **[                           ]** |
|       | ** **                                                                                                                                                               |
| * *   | *(Surety)*                                                                                                                                                               |
| * *   |                                                                                                                                                                     |
| * *   | By:                                                                                                                                                                      |   |

 

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**EXHIBIT J**

**Draw (Payment) Schedule**

Little Sioux Corn Processors, LP

Marcus, IA

MonthlyDraw Schedule - 18 Month Expansion Project

 
| MONTH  | ** ** | **BILLING** | ** ** | **TOTAL BILLING** | ** ** | ** ** | ** ** |
|--------|------------|-------------|------------|------------------------|------------|------------|------------|
| 1      |       | *           |       | *                      |       | *          |       |
| 2      |       | *           |       | *                      |       | *          |       |
| 3      |       | *           |       | *                      |       | *          |       |
| 4      |       | *           |       | *                      |       | *          |       |
| 5      |       | *           |       | *                      |       | *          |       |
| 6      |       | *           |       | *                      |       | *          |       |
| 7      |       | *           |       | *                      |       | *          |       |
| 8      |       | *           |       | *                      |       | *          |       |
| 9      |       | *           |       | *                      |       | *          |       |
| 10     |       | *           |       | *                      |       | *          |       |
| 11     |       | *           |       | *                      |       | *          |       |
| 12     |       | *           |       | *                      |       | *          |       |
| 13     |       | *           |       | *                      |       | *          |       |
| 14     |       | *           |       | *                      |       | *          |       |
| 15     |       | *           |       | *                      |       | *          |       |
|   |       | $           | 47,860,000 |                   |       |       |       |   |
|        |            |             |            |                        |            |            |            |  |

 

*Portions omittedpursuant to a request for confidential treatment and filed separately with theSecurities and Exchange Commission.

 

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**EXHIBIT K**

**Air EmissionsApplication or Permit**

**See Draft Air Permit Attached**

 

K-1

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**EXHIBIT L**

**[Reserved]**

 

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**EXHIBIT M**

**Form ofApplication for Payment**

**See attached Form of Application for Payment**

 

M-1

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**EXHIBIT N**

**Form of Lien Waiver**

GENERAL CONTRACTOR’S PARTIAL WAIVER OF MECHANIC’S LIENRIGHTS AND AFFIDAVIT OF DEBTS AND CLAIMSCONDITIONAL LIEN WAIVER

STATE:  (  INSERT STATE   )                                                                                          FAGEN,INC.

COUNTY:  (  INSERT COUNTY   )

The undersigned is the General Contractor (akaDesign-Builder) regarding labor and materials for construction and maintenancework performed for (   INSERTOWNER/PLANT NAME   ), at the Facilitylocated at or near (   INSERT PLANTCITY & STATE   ) under the termsof a contract.

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

TRACT1:  (  INSERT LEGAL DESCRIPTION   )

TRACT2:  (  INSERT LEGAL DESCRIPTION   )

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Theundersigned further certifies that all obligations of General Contractorentered into between suppliers/subcontractors and General Contractor regardingthis Facility are current as of this date, including all obligations of GeneralContractor for all work, labor and services performed; materials and equipmentfurnished; and all known indebtedness and claims against General Contractor fordamages arising in any manner in connection with General Contractor’sperformance of the contract mentioned above for which General Contractor orproperty of General Contractor might in any way be held responsible.

Datedthis ______ day of ___________________, 200__
|        | GENERAL CONTRACTOR: |
|--------|---------------------|
|   | FAGEN, INC.         |
|   | By (Print):         |   |
|   | Title:              |   |
|   | (Signature):        |   |
|   | Witness (Print):    |   |
|   | (Signature):        |   |

 
| In the alternative (or if requested):  |   |          |     |
|----------------------------------------|--------|---------------|----------|
| Subscribed and sworn to before me this |   |          |     |
|                                   | day of |          | , 200__. |   |   |   |
|                                   |   |          |     |   |   |   |
|                                   |   |          |     |   |
|                                   |   | Notary Public |     |   |   |   |
| My Commission Expires:                 |   |          |     |

 

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**EXHIBIT O**

**Form of Consent toAssignment**

**FAGEN CONSENT TO ASSIGNMENT**

THIS CONSENT TO ASSIGNMENT (this “Consent”), dated as of                                  ,2006,is made among FAGEN, INC., a Minnesota corporation (the “Obligor”), LittleSioux Corn Processors,LP, an Iowa limited partnership (“Assignor”), and the financialinstitution party to this Agreement, not in its individual capacity, but actingsolely in the capacity of collateral agent on behalf of the below defined Lenders (suchfinancial institution in such capacity, or such other financial institution acting in suchcapacity, the “Collateral Agent”).

The Assignor seeks toconstruct and operate a forty (40) million gallon per year expansion to a fifty-two (52) million gallons per year dry grind ethanolproduction facility near Marcus, Iowa (the“Project”). The Obligor and the Assignor have entered into the Lump-SumDesign-Build Agreement dated as ofSeptember 20, 2006 (as amended, modified, supplemented and in effect from time to time, the “Assigned Agreement”). TheAssignor and certain other financial institutions(the “Lenders”) intend to finance certain costs of the Assignor for thedevelopment, construction andoperation of the Project pursuant to various financing arrangements (the “FinancingArrangements”). The Assignor and the Collateral Agent (on behalf of theLenders) intend to enter into certainsecurity arrangements (the “Security Documents”), pursuant to which theAssignor will pledge and assign to the Collateral Agent a lien on and a securityinterest in all of the Assignor’s right, title and interest in, amongother things, the Assigned Agreement.

SECTION 1. CONSENT TOASSIGNMENTS; LIABILITY; CURE RIGHTS; ETC.

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

1.2   Limitation onAssumption of Obligations.   TheCollateral Agent shall not be liablefor the performance or observance of any of the obligations or duties of theAssignor under the AssignedAgreement, nor shall the Security Documents give rise to any duties orobligations whatsoever, except that,insofar as the Collateral Agent exercises any of Assignor’s rights under the Assigned Agreement and/or makes any claims withrespect to any payments, deliveries or otherobligations under the Assigned Agreement, the satisfaction of the terms

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and conditions of theAssigned Agreement applicable to such exercise of rights or such claims shallbe a condition precedent to the Obligor’s obligations with respectthereto. Upon any transfer to a third party of the rights of the Collateral Agent under the Assigned Agreement pursuantto its exercise of its remedies under the Security Documents asdescribed in *Section 1.4*below which transferof the Assigned Agreement shall be subject in all respects to the terms andconditions of the Assigned Agreement,including Section 21.1 thereof (i) the transferee shall succeed to all right,title and interest of the Assignor andthe Collateral Agent and (ii) the Collateral Agent shall have no furtherliabilities, duties or obligations to the Assignor under the AssignedAgreement.

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

 1.4   Substitute Owner.   TheObligor acknowledges that upon an event of default by the Assignor under the Financing Arrangements and anexercise of remedies by the Collateral Agent under the Security Documents, the Collateral Agent may (but shall not beobligated to) assume, or cause any purchaser at any foreclosure sale orany assignee or transferee under any instrument of assignment or transfer in lieu of foreclosure to assume, all of theinterests, rights and obligations ofthe Assignor thereafter arising under the Assigned Agreement. Each assuming party shall agree in writing to be bound by, and toassume the terms and conditions of, the Assigned Agreement pursuant toan assignment agreement in form and substance satisfactory to the Obligor pursuant to Section 21.1 of theAssigned Agreement, and the Obligor shall continue to perform its obligations under the AssignedAgreement in favor of the assuming party as if such party had been anoriginal party to the Assigned Agreement; provided, that the assumingparty shall cure any defaults, whether monetary or otherwise, then existingunder the Assigned Agreement in such assuming party’s capacity as “Owner” underthe Assigned Agreement (as defined in suchagreement) after giving effect to assignment of Assignor’s rights andobligations to such assuming party; but provided, further, thatthe liability of the Collateral Agent (or any entityacting on behalf of the Collateral Agent or any of the other Secured Parties)shall not exceed all of its right, title and interest in and to theProject.

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

SECTION 2.            NOTICES.   Thefirst paragraph of Section 21.7 of the Assigned Agreement is hereby incorporated in this Consent, as if setforth herein in its entirety. For purposes of Section 21.7 of the Assigned Agreement, the initial address for notice tothe Collateral Agent shall be as follows:
|        |   | [BANK]                         |
|--------|--------|--------------------------------|
|   |   | [ADDRESS]                      |
|   |   | Attn:   [NAME/TITLE] |
|   |   | Fax:   [FAX NUMBER]  |

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

SECTION3.   MISCELLANEOUS.

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

[THE NEXT PAGE IS THE SIGNATURE PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused thisConsent to be duly executed and delivered by their respective officersthereunto duly authorized as of the date first above written.
|                                 |                    | Consented and Agreed to:           |
|---------------------------------|-------------------------|------------------------------------|
|                            |                    |                               |
| FAGEN, INC.,                    |                    | LITTLE  SIOUX CORN PROCESSORS, LP  |
| as Obligor                      |                    | By its general partner             |
|                            |                    | Little Sioux Corn  Processors, LLC |
| By:                             |                    |                               |   | as Assignor |
| Name:                           |                    |                               |   |
| Title:                          |                    | By:                                |   |
|                            |                    | Name:                              |   |
| Address for Notices:            |                    | Title:                             |
|                            |                    |                               |
|                            | Fagen, Inc.             |                               |   |
|                            | 501 W. Highway 212      |                               |   |
|                            | P.O. Box 159            |                               |   | Little  Sioux Corn Processors, LP |
|                            | Granite Falls, MN 56241 |                               |   | 4808 F Avenue |
|                            | Attn: Aaron Fagen       |                               |   | Marcus, IA 51035 |
|                            | Fax: (320) 564-3278     |                               |   | Attention: Steve Roe |
|                            |                    |                               |   | Fax: (712) 376-2815 |
|                            |                    |                               |   |   |
| With a copy to                  |                    |                               |   |
|                            |                    |                               |   |   |
|                            | Fagen, Inc.             |                               |   |   |
|                            | 501 W. Highway 212      |                               |   |   |
|                            | P.O. Box 159            |                               |   |   |
|                            | Granite Falls, MN 56241 |                               |   |   |
|                            | Attn: Bruce Langseth    |                               |   |   |
|                            | Fax: (320) 564-3278     |                               |   |   |
| :                               |                    |                               |   |
| [BANK NAME]                     |                    |                               |
| not in its individual capacity, |                    |                               |
| but solely as Collateral Agent  |                    |                               |
| By:                             |                    |                               |   |
| Name:                           |                    |                               |   |
| Title:                          |                    |                               |
|                            |                    |                               |
| Address for Notices:            |                    |                               |
|                            |                    |                               |
| [BANK]                          |                    |                               |
| [ADDRESS]                       |                    |                               |
| Attn:                           | [NAME/TITLE]            |                               |   |
| Fax:                            | [FAX NUMBER]            |                               |   |
|                            |                    |                               |
|                                 |                         |                                    |  |  |  |  |  |

 

O-6

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