Document:

<PAGE>

July 24, 2000

US Bancorp Piper Jaffray
2780 Skypark Drive, Suite 400
Torrance, CA  90505

Fagen, Inc.
501 West Highway 212
Granite Falls, MN  56241

ICM, Inc.
310 N. First Street
Colwich, KS  67030

RE:      CONFIDENTIAL LETTER OF INTENT

Gentlemen:

         This Letter of Intent is intended to summarize the principal terms
upon which Badger State Ethanol, LLC (the "Company") would retain US Bancorp
Piper Jaffray ("USBPJ"), Fagen, Inc. ("Fagen") and ICM, Inc. ("ICM") to provide
a variety of services related to the financing, design and construction of a
facility to process corn into ethanol to be located in Monroe, Wisconsin (the
"Facility"). (USBPJ, Fagen and ICM are sometimes collectively referred to in
this letter as the "Development Services Team".) USBPJ is to provide a variety
of services related to the financing of the Facility, while Fagen and ICM will
each provide services related to the design and construction of the Facility.
The terms upon which each of the members of the Development Services Team will
provide their respective services will be included in a "Retainer Agreement"
between the Company and USBPJ and a "Design/Build Agreement" between and among
the Company, Fagen and ICM.

         The completion of such agreements, which are sometimes referred to as
the "definitive agreements," is subject to and contingent upon the Company and
USBPJ, Fagen and ICM (and their respective legal counsels) reaching agreement
on the form of such documents and the terms and conditions set forth therein.

         The Company, USBPJ, Fagen and ICM expressly state their intention that
this letter as a whole, and Sections 1 through 5 in particular, do not and
shall not constitute a legal and binding obligation, contract or agreement
between and among the parties to this Letter of Intent. Instead, the parties
hereby agree that they will enter into good faith negotiations for the
preparation of definitive agreements containing substantially the provisions
described below. However, the Company, USBPJ, Fagen and ICM may each
unilaterally withdraw from negotiation toward the foregoing agreements or
dealing with the other parties at any time, in such withdrawing party's sole
discretion. The parties do, however, expressly intend that the provisions of
Section 6 of this letter, governing

<PAGE>

confidentiality, shall constitute a legal and binding agreement of the parties
upon execution of this letter by each party.

         The principal terms of the proposed agreements are as follows:

SECTION 1. SCOPE OF SERVICES.

         A. USBPJ SERVICES. The Scope of Services to be provided to the Company
by USBPJ shall include, but not be limited to, advice and assistance in the
following areas:

a)       Development and implementation of a financing strategy for the capital
         needs of the Company.
b)       Evaluate financial options, including associated costs and technical
         aspects.
c)       Assist in credit and rating analyses, submissions, presentations, etc.
d)       Assist and advise the Company in project structure for necessary
         guarantees for design and construction.
e)       Assist in developing a Pre Financial Close Budget (Exhibit A) and
         Schedule (Exhibit B).
f)       Preparation of a Development Business Plan (Exhibit C - Index).
g)       Assist in negotiations of key contracts including insurance, marketing
         and/or sales contracts.
h)       Other items agreed to between the Company and USBPJ.

         B. FAGEN/ICM SERVICES The Scope of Services to be provided to the
Company by Fagen and ICM shall include, but shall not be limited to,
performance of services in the following areas:

a)       Providing a Preliminary Schedule and Guaranteed Maximum Price ("GMP")
         and Design-Build contract for the design and construction of the
         Facility.
b)       Assist the Company in the process of site evaluation and selection.
c)       Assist the Company in all phases of the permitting process including
         taking a lead role in obtaining all required permits for the
         construction and operation of the Facility.
d)       Design and build the Facility in accordance with a Design Build
         Contract, based upon the Design-Build Institute of America form
         contract attached as Exhibit D, for a total price not to exceed $45
         million.
e)       Management services on terms mutually agreeable including management
         fees not to exceed $150,000 annually.
f)       Other items agreed to between the Company and Fagen/ICM.

It is understood that the Development Services Team will not limit its
assistance to the services specifically enumerated above, but will extend their
services and assistance as reasonably required and requested by the Company to
provide for the successful implementation of the plan of financing and the
design and construction of the Facility.

<PAGE>

SECTION 2. COMPENSATION.

         A. USBPJ COMPENSATION. Compensation for the Services to be provided by
USBPJ pursuant to its definitive agreement shall be based on the following
provisions.

The Company shall advance a non-refundable retainer of $50,000 US to the
attention of the undersigned of US Bancorp Piper Jaffray after execution of
this letter of intent between and among the Company and the members of the
Development Services Team, and subject to the Company raising approximately
$360,000 in seed capital. The retainer shall be used to pay USBPJ for, among
other things, its monthly expense reimbursements as described and enumerated
below. Once received, the Department Services Team shall not receive any
additional compensation until successful completion of the financing.

For the raising of funds for the project, US Bancorp Piper Jaffray will be
responsible for the best efforts placement of equity, subordinated debt and
senior debt as required by the Company. In conjunction with such effort the
schedule below will represent the fees associated with each class of security:

Advisory Fees (Based on all capital structured and raised)                  1%

Senior Debt Fundraising                                                     1%

Subordinated Debt Fundraising                                               4%

Equity Fundraising                                                          6%

Investment of Financing Proceeds                                         0.10%
                                                        (with credit for time)

The definitive agreement between the Company and USBPJ shall provide that USBPJ
shall not be entitled to receive fees or commissions based on the foregoing
schedule with respect to any equity investment or sub-debt (which includes
subordinated debt, grants, guarantees and the like) financing arranged by the
Company or its officers and directors. However, the definitive agreement shall
also provide that, to the extent that the Company commences efforts to obtain
equity investment or sub-debt financing but requires the assistance of USBPJ to
complete such efforts, the Company and USBPJ will enter into good faith
negotiations for the payment by the Company of mutually agreeable compensation
designed to appropriately compensate USBPJ for its assistance in obtaining the
applicable equity investment or sub-debt financing.

Any lender commitment fees described on Exhibit A hereto for any of the
components of the funding shall be paid directly by the Company and shall not
be considered to be a part of the scheduled fees to be paid to USBPJ. The
Company believes these fees should be payable out of the proceeds of the equity
offering and not out of seed capital funds; however, this should not delay the
commencement of negotiations for project financing.

<PAGE>

         B. FAGEN/ICM COMPENSATION. The definitive agreements between and among
the Company, Fagen and ICM shall provide that, for their respective efforts in
designing and constructing the Facility, Fagen and ICM shall receive the
following compensation:

The Facility is estimated to cost $45 million which does not include the carbon
dioxide facility.

In no case will the Development Services Team share or split the fees
delineated in the prior paragraphs with any other party currently assisting the
Company in other endeavors. However, the Development Services Team may, at its
sole discretion, choose to engage other companies in order to effect the
necessary transactions and may choose to share a portion of its fees for said
services.

The Development Team reserves the right to invest seed money in the Company,
but only with the mutual agreement of the Company and only during such time
periods as the Company may, in its discretion, be seeking seed money financing
to commence its organizational activities.

SECTION 3. EXPENSES. The Company will be responsible for all of the Development
Services Team's out-of-pocket expenses, including travel, communication, cost
of financial analysis and reports prepared in fulfilling its duties outlined
herein. If travel is required, the Development Services Team would expect to be
reimbursed for those expenses, all of which would be pre-approved by the
Company. The Company will be responsible for the payment of all fees and
expenses commonly known as "Costs of Issuance," including but not limited to:
publication expenses, legal counsel, bond counsel, ratings, credit enhancement,
travel associated with securing any rating or credit enhancement, printing of
bonds, printing and distribution of required disclosure documents, trustee
fees, paying agent fees, CUSIP registration, and the like. In the event a
financing does not occur, the Company may be responsible for paying a portion
or all of the aforementioned to the extent of the then remaining seed capital
funds, provided, however, that prior to incurring any such expenses, the
members of the Development Services Team shall inform the Company of the nature
and estimated amount of such expenses, as well as the Company's obligation, if
any, with respect to such expenses in the event a financing is not completed.

SECTION 4. TERM OF AGREEMENT. The term of the various definitive agreements
shall begin on the date of execution of such definitive agreements between and
among the Company, USBPJ, Fagen and ICM, respectively, and shall continue until
such time as the Facility has begun "commercial scale production". For the
purposes of the definitive agreements "commercial scale production" shall mean
the commercial operation of the Facility (after initial startup and testing is
complete) to produce ethanol and related by-products for sale to the Company's
customers on a commercial scale as per the required specifications set forth in
the Design/Build Agreement and/or other contracts relating to the construction
and operation of the Facility.

<PAGE>

Company agrees that Fagen/ICM may bid on future projects but Company reserves
the right to determine in its discretion the winning bids.

The parties to this letter of intent specifically agree that the definitive
agreements between and among the Company and USBPJ, Fagen and ICM will contain
provisions allowing each party to terminate the applicable definitive agreement
in the event that the other party to any such agreement has failed to
adequately perform its obligations under such definitive agreement and has not
cured such failure within a period specified in such definitive agreement.
Cancellation of the definitive agreements by the Company prior to the
expiration of the contracts for any reason other than (i) failure to perform by
the other party, (ii) for reasons that are out of the control of Company and
within the control of the Development Services Team, and (iii) for reasons due
to disputes between members of the Development Services Team resulting in a
member terminating its involvement with the Development Services Team followed
by a successful transaction with another party will result in a termination fee
payable to USBPJ equal to all fees that would have otherwise been earned by
USBPJ during the term of the definitive agreements.

SECTION 5. INDEPENDENT CONTRACTOR. The members of the Development Services Team
are independent contractors and nothing herein contained shall constitute or
designate the members of the Development Services Team or any of their
employees or agents as employees or agents of the Company.

SECTION 6. CONFIDENTIALITY. During the period beginning on the date hereof and
ending 12 months after termination of each of the definitive agreements, the
members of the Development Services Team agree not to use or disclose any
information regarding the Company or the Facility not previously available to
the public. During the period beginning on the date hereof and ending 12 months
after termination of each of the definitive agreements (other than any
management contract with Fagen and/or ICM), the Company agrees not to use or
disclose any proprietary information or technology exclusively owned by Fagen
or ICM not previously disclosed to the public. Notwithstanding the foregoing,
the members of the Development Services Team may disclose information as
required in the performance of the definitive agreements or by law, or as
otherwise authorized by the Company.

SECTION 7.  LEGAL ADVICE.  None of the Services contemplated in this Agreement
shall be construed as or a substitute for legal services.

SECTION 8. EXCLUSIVITY. Upon execution of this letter of intent and except as
provided above with respect to financing obtained by the Company, the Company
agrees that USBPJ, Fagen and ICM will be the exclusive parties to provide the
respective services for the Company in connection with the financing, design
and construction of the Facility.

SECTION 9. NOTICES. Any written notice or communications required or permitted
by this letter of intent, the definitive agreements or by law to be served,
given to, or delivered when personally delivered to the party to whom it is
addressed or in lieu of such personal

<PAGE>

services, when deposited in the United States' mail, first-class postage
prepaid, addressed to the Company at:

                  Badger State Ethanol, LLC
                  Attn: Gary Kramer
                  12139 Howardsville Road
                  Lena, IL  61048

or to the members of the Development Services Team at:

                  Mark E. Fisler
                  Managing Director
                  US Bancorp Piper Jaffray
                  2780 Skypark Drive, Suite 400
                  Torrance, CA  90505

                  Daryl Gillund                            Jeff Roskam
                  President                                Senior Vice President
                  Fagen, Inc.                              ICM, Inc.
                  501 West Highway 212                     310 N. First Street
                  Granite Falls, MN 56241                  Colwich, KS 67030

SECTION 11. CONTROLLING LAW.  This letter of intent and the definitive
agreements will be governed by the laws of the State of Wisconsin.

If the above letter correctly sets forth our understanding with respect to the
proposed delivery of services by the various members of the Development
Services Team, please sign and return four copies of this letter. Following
receipt, the Company will work with each of you to begin preparation of the
appropriate definitive agreements.

Badger State Ethanol, LLC

By: /s/ Gary Kramer                     By: /s/ John Malchine
    -----------------------                 ----------------------------------
    Gary Kramer, President                  John Malchine, Secretary-Treasurer

<PAGE>

Duly executed and agreed to (as to the binding provisions of Section 6) this
24th day of July, 2000

US Bancorp Piper Jaffray                             Fagen Inc.

By: /s/ Mark Fisler                                  By: /s/ Daryl Gillund
    ----------------------                               ----------------------

Its:  Managing Director                              Its:  President

ICM, Inc.

By: /s/ Jeff Roskam
    ----------------------

Its:  Senior Vice President

<PAGE>

<TABLE>
<CAPTION>

$53,500,000                                                                                 EXHIBIT A
BADGER STATE ETHANOL
PROJECT FINANCING

DEVELOPMENT COST BUDGET

ITEM                                                                                             COST
-----------------------------------------------------------------------------------------------------
<S>                                                                            <C>
PRE-EQUITY DEVELOPMENT COSTS:
Estimated Expenses of Design Build Construction Team(1)                                    $50,000(a)
Retainer and Expenses of Investment Banker(2)                                                 $50,000
Promoters Expenses                                                                            $50,000
Legal Costs of Project and Corporate Counsel                                                  $10,000
-----------------------------------------------------------------------------------------------------
Sub-Total                                                                                 $160,000(b)

EQUITY FINANCING COSTS:
Legal Costs (Registered Multi-State Offering)                                             $140,000(b)
Investment Banking Advisory fee (1% on $21 mll. less retainer)                               $160,000
Investment Banking Placement Fees(3)                                                    $0 - $420,000
Printing and Distribution                                                                  $25,000(b)
-----------------------------------------------------------------------------------------------------
Sub-Total                                                                         $325,000 - $745,000(4)

PROJECT FINANCING PRE-CLOSING COSTS:
Engineering and Design Work                                                                  $500,000(5)
Permitting                                                                                    $75,000
Travel and Expense of Investment Banker                                                       $20,000
Consultant/Feasibility Study Expense (if required)                                       $0 - $75,000
Legal Costs(6)                                                                               $100,000
-----------------------------------------------------------------------------------------------------
Sub-Total                                                                         $695,000 - $770,000

<PAGE>

DEVELOPMENT COST BUDGET
JUNE 20, 2000
PAGE TWO

ITEM                                                                                             COST
-----------------------------------------------------------------------------------------------------
PROJECT FINANCE CLOSING COSTS:
Project Legal Counsel (6)                                                                    $150,000
Investment Banking Advisory Fees and Expenses                                                $320,000
Investment Banking Debt Placement Fees                                                       $320,000
USDA Guarantee Fee                                                                           $200,000
Lender's Commitment Fees (7)                                                                 $320,000
Lender's Counsel Fees                                                                        $100,000
CONTINGENCY                                                                                  $150,000
-----------------------------------------------------------------------------------------------------
Sub-Total                                                                                  $1,560,000

=====================================================================================================
GRAND TOTAL                                                                   $2,740,000 - $3,235,000

</TABLE>

(a)  Includes initial expenses (such as application fees and retainers/down
     payments) related to permitting and feasibility studies and consultants.

(b)  Costs and fees to be paid from seed capital funds.

----------------
(1)      This is an estimated amount and will be billed monthly for actual cost.

(2)      This amount of retainer is to cover travel and expenses, support time
         etc. This is non-refundable but is deductible from the amount of fees
         and expenses paid from the equity financing.

(3)      This amount assumes assistance on the private placement of all equity
         through participation in the road shows with the potential to provide
         some contacts to the project. If we do not participate this fee would
         be $0.

(4)      Paid from the proceeds raised from the equity offering.

(5)      This is part of the guaranteed maximum price contract to be paid from
         the contract prior to or at financial close. The owner should recognize
         that to the extent these costs are not paid as incurred, this is risk
         investment on the part of the design build team.

(6)      Estimated, subject to negotiation with Lindquist and Vennum.

(7)      This amount varies widely depending on lender. The amount estimated is
         on the high side.

<PAGE>

<TABLE>
<CAPTION>

$53,500,000                                                                                      EXHIBIT B
BADGER STATE ETHANOL
PROJECT FINANCING

TIMETABLE

------------------ ------------------------------------------------------------------------ -----------------
   Completion                                                                                 Responsible
      Date         Description of Activity                                                       Party
------------------ ------------------------------------------------------------------------ -----------------
<S>                <C>                                                                      <C>
6/23/2000          Retention of Design/Build/Finance/Construction team of consultants       BSE

------------------ ------------------------------------------------------------------------ -----------------
6/23/2000          Retention of Lindquist and Vennum for the provision of legal services    BSE, FI, ICM,
                                                                                            USBPJ

------------------ ------------------------------------------------------------------------ -----------------
6/23/2000          Retention of US Energy for the provision of consulting services          BSE, FI, ICM,
                                                                                            USBPJ

------------------ ------------------------------------------------------------------------ -----------------
6/30/2000          Seed capital raised by the Company for initial project costs             BSE

------------------ ------------------------------------------------------------------------ -----------------
6/30/2000          Vierbicher Associates completes TIF analysis for the property            BSE, Vierbicher
                   in Monroe

------------------ ------------------------------------------------------------------------ -----------------
7/5/2000           First Draft of business plan including cost estimates,                   BSE, USBPJ, FI,
                   pro-forma financial projections and marketing                            ICM
                   plan description

------------------ ------------------------------------------------------------------------ -----------------
7/21/2000          First draft S-1 Registration statement to be reviewed by the project     L&V
                   team

------------------ ------------------------------------------------------------------------ -----------------
7/21/2000          First draft equity document for multi-state registered offering of LLC   BSE, USBPJ, L&V
                   units

------------------ ------------------------------------------------------------------------ -----------------
7/31/2000          City documents the provision of land to the project through              BSE, City of
                   exercise of the option, procurement of the land and                     Monroe, USBPJ
                   improvement of the land before transfer to Badger State
                   Ethanol

------------------ ------------------------------------------------------------------------ -----------------
8/15/2000          City lets bid packages on preliminary site work on the property          BSE, City of
                   located in Monroe                                                        Monroe, Green
                                                                                            County,
                                                                                            Vierbicher

------------------ ------------------------------------------------------------------------ -----------------
<PAGE>

TIMETABLE
JUNE 20, 2000
PAGE TWO

------------------ ------------------------------------------------------------------------ -----------------
8/21/2000          Finalize S-1 Registration statement and file with the Securities and     BSE, USBPJ, L&V
                   Exchange Commission

------------------ ------------------------------------------------------------------------ -----------------
8/23/2000          Write and submit the air permit to the State of Wisconsin DNR            FI, ICM

------------------ ------------------------------------------------------------------------ -----------------
9/15/2000          Completion of marketing plan inclusive of the following:                 BSE, USBPJ, FI,
                                                                                            ICM

                   * Grain Procurement and Hedging Strategy documented
                   * Ethanol Marketing/Off-take arrangements
                   * DDGS/DWG Marketing/Off-take arrangements
                   * CO2 Marketing/Off-take arranged.

------------------ ------------------------------------------------------------------------ -----------------
9/23/2000          Receive SEC comments on form S-1 and begin preparation of amendments     L&V, USBPJ BSE
                   and responses

------------------ ------------------------------------------------------------------------ -----------------
10/1/2000 -        City of Monroe begins site work on property to bring energy              BSE, City of
11/1/2000          utilities and upgrade roads, railroad and water utilities                Monroe, Green
                                                                                            County,
                                                                                            Vierbicher

------------------ ------------------------------------------------------------------------ -----------------
10/23/2000         Equity Offering Document Finalized simultaneous with the end             BSE, USBPJ
                   of quiet period and commencement of road show for equity
                   raising

------------------ ------------------------------------------------------------------------ -----------------
10/23/2000         Completion of private placement memorandum/lender                        BSE, USBPJ
                   presentation folder for dissemination to potential
                   providers of senior and subordinated debt.

------------------ ------------------------------------------------------------------------ -----------------
10/23/2000         Road show to potential banks and insurance companies interested          BSE, USBPJ
    to             in purchase of debt
11/15/2000

------------------ ------------------------------------------------------------------------ -----------------
11/23/2000         Air Permit received from the State of Wisconsin after full
                   statutory review and comment periods have elapsed

------------------ ------------------------------------------------------------------------ -----------------
11/30/2000         Receipt of term sheets backed by credit approval from                    USBPJ
                   prospective banks and insurance companies interested in
                   funding the debt for the project.

------------------ ------------------------------------------------------------------------ -----------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

TIMETABLE
JUNE 20, 2000
PAGE THREE

------------------ ------------------------------------------------------------------------ -----------------
<S>                <C>                                                                      <C>
12/15/2000         End of equity offering period with a closing into escrow,                BSE, USBPJ
                   exclusive of financing fees, of the amount of dollars
                   raised

------------------ ------------------------------------------------------------------------ -----------------
12/15/2000         Negotiate final price and term associated with debt and commence         BSE, USBPJ
                   documentation of the loans

------------------ ------------------------------------------------------------------------ -----------------
2/15/2001          Complete documentation of loans                                          USBPJ, L&V

------------------ ------------------------------------------------------------------------ -----------------
3/1/2001           Pre-Closing Activity                                                     All

------------------ ------------------------------------------------------------------------ -----------------
3/15/2001          Financial Close                                                          All

------------------ ------------------------------------------------------------------------ -----------------
5/15/2002          Plant reaches mechanical completion and start up occurs with the         BSE, FI, ICM,
   to              successful passage of operational tests                                  USBPJ
7/15/2002

------------------ ------------------------------------------------------------------------ -----------------
</TABLE>

----------------
BSE:              Badger State Ethanol
FI:               Fagen Inc.
ICM:              ICM
USBPJ:            US Bancorp Piper Jaffray
L&V:              Lindquist & Vennum

<PAGE>

BADGER STATE ETHANOL, LLC.                                            EXHIBIT C
PROJECT FINANCING

TABLE OF CONTENTS

I.       Executive Summary
         -  Objective
         -  Conclusion

II.      Key Project Finance Features
         (A)  Project Description
         (B)  Summary Financial Structure
              -  Senior Debt
              -  Subordinated Debt
              -  USDA Guarantee
              -  Equity - A Shares
                          B Shares

         (C)  Description of Project Team
              -  Badger State Ethanol
              -  Fagen, Inc. and Fagen Engineering
              -  ICM
              -  U.S. Bancorp Piper Jaffray

         (D)  Long Term Procurement and Take and Pay Arrangements
              -  Input Procurement
                 1.  Grain procurement
                 2.  Energy procurement/power purchase agreement
              -  Products Marketing
                 1.  Ethanol
                 2.  Livestock Feed Products
                 3.  CO2
         (E)  Key Products Markets
         (F)  Investment Risk
              -  Start-up Risk
              -  Price Risk and Availability of Feed Stock
              -  Political Risk Associated with Government Subsidy
              -  Dependence on Management
              -  Financial Projections
              -  Government Regulation
              -  Power Purchase Agreement
              -  Product Commodity Risk

              06/14/00

<PAGE>

III.     Additional Project Features
         (A)  Available State Economic Development Incentives (WI Programs)
              -
              -
              -
              -
              -
              -
              -
              -

         (B)  Minimal Environmental Impact of the Project
         (C)  Positive Economic Impact
         (D)  Growth Potential
              -  Production levels that Exceed nameplate Capacity
              -  Higher Sales prices
              -  New Products
              -  Summary

IV.      Description of Facilities
         (A)  Project Location, Proximity to Markets
         (B)  Site Description Including Existing Infrastructure
         (C)  Badger State's Process Technology
         (D)  Construction of the Project
         (E)  Timetable for Completion of the Project
         (F)  Permit Requirements

V.       Raw Material Supply
         (A)  Nature of Relationship with ______________
         (B)  ______________ Experience
         (C)  Transportation
              -  Cost Related to Grain Procurement
              -  Cost of Getting Products to Market

VI.      Plan of Finance
         -  Senior Debt
         -  Subordinate Debt
         -  USDA Guarantee
         -  Class A Units
         -  Class B Units

06/14/00

<PAGE>

VII.     Management Team/Key Advisors

VIII.    Key Product Market Commentary

IX.      Ethanol Subsidy Commentary

X.       Financial Models

XI.      Off Take Contracts

<PAGE>

FORM OF DESIGN-BUILD CONTRACT                                         EXHIBIT D<PAGE>

                                    DBIA
                                   [LOGO]
                                Design-Build
                            Institute of America

                  STANDARD FORM OF GENERAL CONDITIONS
             OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER

      THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH
  AN ATTORNEY IS RECOMMENDED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.

===============================================================================

                                TABLE OF CONTENTS

<TABLE>
<S>          <C>                                                             <C>
Article 1:   General...........................................................2

Article 2:   Design-Builder's Services and Responsibilities....................2

Article 3:   Owner's Services and Responsibilities.............................6

Article 4:   Hazardous Conditions and Differing Site Conditions................7

Article 5:   Insurance and Bonds...............................................8

Article 6:   Payment..........................................................10

Article 7:   Indemnification..................................................12

Article 8:   Time.............................................................13

Article 9:   Changes to the Contract Price and Time...........................14

Article 10:  Contract Adjustments and Disputes................................15

Article 11:  Stop Work and Termination for Cause..............................17

Article 12:  Miscellaneous....................................................19
</TABLE>

--------------------------------------------------------------------------------
DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS
OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
1998 Design-Build Institute of America

<PAGE>

                                    ARTICLE 1

                                     GENERAL

1.1      MUTUAL OBLIGATIONS

1.1.1    Owner and Design-Builder commit at all times to cooperate fully with
each other, and proceed on the basis of trust and good faith, to permit each
party to realize the benefits afforded under the Contract Documents.

1.2      BASIC DEFINITIONS

1.2.1    AGREEMENT refers to the executed contract between Owner and
Design-Builder under either DBIA Document No. 525, STANDARD FORM OF AGREEMENT
BETWEEN OWNER AND DESIGN-BUILDER -- LUMP SUM (1998 Edition) or DBIA Document
No. 530, STANDARD FORM OF AGREEMENT BETWEEN OWNER AND DESIGN-BUILDER -- COST
PLUS FEE WITH AN OPTION FOR A GUARANTEED MAXIMUM PRICE (1998 Edition).

1.2.2    DAY or DAYS shall mean calendar days unless otherwise specifically
noted in the Contract Documents.

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

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

1.2.5    GENERAL CONDITIONS OF CONTRACT refer to this DBIA Document No. 535,
STANDARD FORM OF GENERAL CONDITIONS OF CONTRACT BETWEEN OWNER AND
DESIGN-BUILDER (1998 Edition).

1.2.6    LEGAL REQUIREMENTS are all applicable federal, state and local laws,
codes, ordinances, rules, regulations, orders and decrees of any government
or quasi-government entity having jurisdiction over the Project or Site, the
practices involved in the Project or Site, or any Work.

1.2.7    OWNER'S PROJECT CRITERIA are developed by or for Owner to describe
Owner's program requirements and objectives for the Project, including use,
space, price, time, site and expandability requirements, as well as submittal
requirements and other requirements governing Design-Builder's performance of
the Work. Owner's Project Criteria may include conceptual documents, design
criteria, performance requirements and other Project-specific technical
materials and requirements.

1.2.8    SITE is the land or premises on which the Project is located.

1.2.9    SUBCONTRACTOR is any person or entity retained by Design-Builder as
an independent contractor to perform a portion of the Work and shall include
materialmen and suppliers.

1.2.10   SUB-SUBCONTRACTOR is any person or entity retained by a
Subcontractor as an independent contractor to perform any portion of a
Subcontractor's Work and shall include materialmen and suppliers.

1.2.11   SUBSTANTIAL COMPLETION is the date on which the Work, or an agreed
upon portion of the Work, is sufficiently complete so that Owner can occupy
and use the Project or a portion thereof for its intended purposes.

1.2.12   WORK is comprised of all Design-Builder's design, construction and
other services required by the Contract Documents, including procuring and
furnishing all materials, equipment, services and labor reasonably inferable
from the Contract Documents.

                                    ARTICLE 2

                 DESIGN-BUILDER'S SERVICES AND RESPONSIBILITIES

2.1      GENERAL SERVICES

2.1.1    Design-Builder's Representative shall be reasonably available to
Owner and shall have the necessary expertise and experience required to
supervise the Work. Design-Builder's Representative shall communicate
regularly with Owner and shall be vested with the authority to act on behalf
of Design-Builder. Design-Builder's

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Representative may be replaced only with the mutual agreement of Owner and
Design-Builder.

2.1.2    Design-Builder shall provide Owner with a monthly status report
detailing the progress of the Work, including whether (i) the Work is
proceeding according to schedule, (ii) discrepancies, conflicts, or
ambiguities exist in the Contract Documents that require resolution, (iii)
health and safety issues exist in connection with the Work, and (iv) other
items require resolution so as not to jeopardize Design-Builder's ability to
complete the Work for the Contract Price and within the Contract Time(s).

2.1.3    Design-Builder shall prepare and submit, at least three (3) days
prior to the meeting contemplated by Section 2.1.4 hereof, a schedule for the
execution of the Work for Owner's review and response. The schedule shall
indicate the dates for the start and completion of the various stages of
Work, including the dates when Owner information and approvals are required
to enable Design-Builder to achieve the Contract Time(s). The schedule shall
be revised as required by conditions and progress of the Work, but such
revisions shall not relieve Design-Builder of its obligations to complete the
Work within the Contract Time(s), as such dates may be adjusted in accordance
with the Contract Documents. Owner's review of and response to the schedule
shall not be construed as relieving Design-Builder of its complete and
exclusive control over the means, methods, sequences and techniques for
executing the Work.

2.1.4    The parties will meet within seven (7) days after execution of the
Agreement to discuss issues affecting the administration of the Work and to
implement the necessary procedures, including those relating to submittals
and payment, to facilitate the ability of the parties to perform their
obligations under the Contract Documents.

2.2      DESIGN PROFESSIONAL SERVICES

2.2.1    Design-Builder shall, consistent with applicable state licensing
laws, provide through qualified, licensed design professionals employed by
Design-Builder, or procured from qualified, independent licensed Design
Consultants, the necessary design services, including architectural,
engineering and other design professional services, for the preparation of
the required drawings, specifications and other design submittals to permit
Design-Builder to complete the Work consistent with the Contract Documents.
Nothing in the Contract Documents is intended or deemed to create any legal
or contractual relationship between Owner and any Design Consultant.

2.3      STANDARD OF CARE FOR DESIGN PROFESSIONAL SERVICES

2.3.1    The standard of care for all design professional services performed
to execute the Work shall be the care and skill ordinarily used by members of
the design profession practicing under similar conditions at the same time
and locality of the Project. Notwithstanding the preceding sentence, if the
parties agree upon specific performance standards for any aspect of the Work,
which standards are to be set forth in an exhibit to the Agreement entitled
"Performance Standard Requirements," the design professional services shall
be performed to achieve such standards.

2.4      DESIGN DEVELOPMENT SERVICES

2.4.1    Design-Builder and Owner shall, consistent with any applicable
provision of the Contract Documents, agree upon any interim design
submissions that Owner may wish to review, which interim design submissions
may include design criteria, drawings, diagrams and specifications setting
forth the Project requirements. On or about the time of the scheduled
submissions, Design-Builder and Owner shall meet and confer about the
submissions, with Design-Builder identifying during such meetings, among
other things, the evolution of the design and any significant changes or
deviations from the Contract Documents, or, if applicable, previously
submitted design submissions. Minutes of the meetings will be maintained by
Design-Builder and provided to all attendees for review. Following the design
review meeting, Owner shall review and approve the interim design submissions
in a time that is consistent with the turnaround times set forth in
Design-Builder's schedule.

2.4.2    Design-Builder shall submit to Owner Construction Documents setting
forth in detail drawings and specifications describing the requirements for
construction of the Work. The Construction Documents shall be consistent with
the latest set of interim design submissions, as such

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submissions may have been modified in a design review meeting. The parties
shall have a design review meeting to discuss, and Owner shall review and
approve, the Construction Documents in accordance with the procedures set
forth Section 2.4.1 above. Design-Builder shall proceed with construction in
accordance with the approved Construction Documents and shall submit one set
of approved Construction Documents to Owner prior to commencement of
construction.

2.4.3    Owner's review and approval of interim design submissions and the
Construction Documents is for the purpose of mutually establishing a
conformed set of Contract Documents compatible with the requirements of the
Work. Neither Owner's review nor approval of any interim design submissions
and Construction Documents shall be deemed to transfer any design liability
from Design-Builder to Owner.

2.4.4    To the extent not prohibited by the Contract Documents or Legal
Requirements, Design-Builder may prepare interim design submissions and
Construction Documents for a portion of the Work to permit construction to
proceed on that portion of the Work prior to completion of the Construction
Documents for the entire Work.

2.5      LEGAL REQUIREMENTS

2.5.1    Design-Builder shall perform the Work in accordance with all Legal
Requirements and shall provide all notices applicable to the Work as required
by the Legal Requirements.

2.5.2    The Contract Price and/or Contract Time(s) shall be adjusted to
compensate Design-Builder for the effects of any changes in the Legal
Requirements enacted after the date of the Agreement affecting the
performance of the Work, or if a Guaranteed Maximum Price is established
after the date of the Agreement, the date the parties agree upon the
Guaranteed Maximum Price. Such effects may include, without limitation,
revisions Design-Builder is required to make to the Construction Documents
because of changes in Legal Requirements.

2.6      GOVERNMENT APPROVALS AND PERMITS

2.6.1    Except as identified in an Owner's Permit List attached as an
exhibit to the Agreement, Design-Builder shall obtain and pay for all
necessary permits, approvals, licenses, government charges and inspection
fees required for the prosecution of the Work by any government or
quasi-government entity having jurisdiction over the Project.

2.6.2    Design-Builder shall provide reasonable assistance to Owner in
obtaining those permits, approvals and licenses that are Owner's
responsibility.

2.7      DESIGN-BUILDER'S CONSTRUCTION PHASE SERVICES

2.7.1    Unless otherwise provided in the Contract Documents to be the
responsibility of Owner or a separate contractor, Design-Builder shall
provide through itself or Subcontractors the necessary supervision, labor,
inspection, testing, start-up, material, equipment, machinery, temporary
utilities and other temporary facilities to permit Design-Builder to complete
construction of the Project consistent with the Contract Documents.

2.7.2    Design-Builder shall perform all construction activities efficiently
and with the requisite expertise, skill and competence to satisfy the
requirements of the Contract Documents. Design-Builder shall at all times
exercise complete and exclusive control over the means, methods, sequences
and techniques of construction.

2.7.3    Design-Builder shall employ only Subcontractors who are duly
licensed and qualified to perform the Work consistent with the Contract
Documents. Owner may reasonably object to Design-Builder's selection of any
Subcontractor, provided that the Contract Price and/or Contract Time(s) shall
be adjusted to the extent that Owner's decision impacts Design-Builder's cost
and/or time of performance.

2.7.4    Design-Builder assumes responsibility to Owner for the proper
performance of the Work of Subcontractors and any acts and omissions in
connection with such performance. Nothing in the Contract Documents is
intended or deemed to create any legal or contractual relationship between
Owner and any Subcontractor or Sub-Subcontractor, including but not limited
to any third-party beneficiary rights.

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2.7.5    Design-Builder shall coordinate the activities of all
Subcontractors. If Owner performs other work on the Project or at the Site
with separate contractors under Owner's control, Design-Builder agrees to
reasonably cooperate and coordinate its activities with those of such
separate contractors so that the Project can be completed in an orderly and
coordinated manner without unreasonable disruption.

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

2.8      DESIGN-BUILDER'S RESPONSIBILITY FOR PROJECT SAFETY

2.8.1    Design-Builder recognizes the importance of performing the Work in a
safe manner so as to prevent damage, injury or loss to (i) all individuals at
the Site, whether working or visiting, (ii) the Work, including materials and
equipment incorporated into the Work or stored on-Site or off-Site, and (iii)
all other property at the Site or adjacent thereto. Design-Builder assumes
responsibility for implementing and monitoring all safety precautions and
programs related to the performance of the Work. Design-Builder shall, prior
to commencing construction, designate a Safety Representative with the
necessary qualifications and experience to supervise the implementation and
monitoring of all safety precautions and programs related to the Work. Unless
otherwise required by the Contract Documents, Design-Builder's Safety
Representative shall be an individual stationed at the Site who may have
responsibilities on the Project in addition to safety. The Safety
Representative shall make routine daily inspections of the Site and shall
hold weekly safety meetings with Design-Builder's personnel, Subcontractors
and others as applicable.

2.8.2    Design-Builder and Subcontractors shall comply with all Legal
Requirements relating to safety, as well as any Owner-specific safety
requirements set forth in the Contract Documents, provided that such
Owner-specific requirements do not violate any applicable Legal Requirement.
Design-Builder will immediately report in writing any safety-related injury,
loss, damage or accident arising from the Work to Owner's Representative and,
to the extent mandated by Legal Requirements, to all government or
quasi-government authorities having jurisdiction over safety-related matters
involving the Project or the Work.

2.8.3    Design-Builder's responsibility for safety under this Section 2.8 is
not intended in any way to relieve Subcontractors and Sub-Subcontractors of
their own contractual and legal obligations and responsibility for (i)
complying with all Legal Requirements, including those related to health and
safety matters, and (ii) taking all necessary measures to implement and
monitor all safety precautions and programs to guard against injury, losses,
damages or accidents resulting from their performance of the Work.

2.9      DESIGN-BUILDER'S WARRANTY

2.9.1    Design-Builder warrants to Owner that the construction, including
all materials and equipment furnished as part of the construction, shall be
new unless otherwise specified in the Contract Documents, of good quality, in
conformance with the Contract Documents and free of defects in materials and
workmanship. Design-Builder's warranty obligation excludes defects caused by
abuse, alterations, or failure to maintain the Work by persons other than
Design-Builder or anyone for whose acts Design-Builder may be liable. Nothing
in this warranty is intended to limit any manufacturer's warranty which
provides Owner with greater warranty rights than set forth in this Section
2.9 or the Contract Documents. Design-Builder will provide Owner with all
manufacturers' warranties upon Substantial Completion.

2.10     CORRECTION OF DEFECTIVE WORK

2.10.1   Design-Builder agrees to correct any Work that is found to not be in
conformance with the Contract Documents, including that part of the Work
subject to Section 2.9 hereof, within a period of one year from the date of
Substantial Completion of the Work or any portion of the Work, or within such

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longer period to the extent required by the Contract Documents.

2.10.2   Design-Builder shall, within seven (7) days of receipt of written
notice from Owner that the Work is not in conformance with the Contract
Documents, take meaningful steps to commence correction of such nonconforming
Work, including the correction, removal or replacement of the nonconforming
Work and any damage caused to other parts of the Work affected by the
nonconforming Work. If Design-Builder fails to commence the necessary steps
within such seven (7) day period, Owner, in addition to any other remedies
provided under the Contract Documents, may provide Design-Builder with
written notice that Owner will commence correction of such nonconforming Work
with its own forces. If Owner does perform such corrective Work,
Design-Builder shall be responsible for all reasonable costs incurred by
Owner in performing such correction. If the nonconforming Work creates an
emergency requiring an immediate response, the seven (7) day periods
identified herein shall be deemed inapplicable.

2.10.3   The one year period referenced in Section 2.10.1 above applies only
to Design-Builder's obligation to correct nonconforming Work and is not
intended to constitute a period of limitations for any other rights or
remedies Owner may have regarding Design-Builder's other obligations under
the Contract Documents.

                                    ARTICLE 3

                      OWNER'S SERVICES AND RESPONSIBILITIES

3.1      DUTY TO COOPERATE

3.1.1    Owner shall, throughout the performance of the Work, cooperate with
Design-Builder and perform its responsibilities, obligations and services in
a timely manner to facilitate Design-Builder's timely and efficient
performance of the Work and so as not to delay or interfere with
Design-Builder's performance of its obligations under the Contract Documents.

3.1.2    Owner shall provide timely reviews and approvals of interim design
submissions and Construction Documents consistent with the turnaround times
set forth in Design-Builder's schedule.

3.2      FURNISHING OF SERVICES AND INFORMATION

3.2.1    Unless expressly stated to the contrary in the Contract Documents,
Owner shall provide, at its own cost and expense, for Design-Builder's
information and use the following, all of which Design-Builder is entitled to
rely upon in performing the Work:

         .1   Surveys describing the property, boundaries, topography and
              reference points for use during construction, including existing
              service and utility lines;

         .2   Geotechnical studies describing subsurface conditions, and other
              surveys describing other latent or concealed physical conditions
              at the Site;

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

         .4   A legal description of the Site;

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

         .6   To the extent available, environmental studies, reports and impact
              statements describing the environmental conditions, including
              Hazardous Conditions, in existence at the Site.

3.2.2    Owner is responsible for securing and executing all necessary
agreements with adjacent land or property owners that are necessary to enable
Design-Builder to perform the Work. Owner is further responsible for all
costs, including attorneys' fees, incurred in securing these necessary
agreements.

3.3      FINANCIAL INFORMATION

3.3.1    At Design-Builder's request, Owner shall promptly furnish reasonable
evidence satisfactory to

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Design-Builder that Owner has adequate funds available and committed to
fulfill all of Owner's contractual obligations under the Contract Documents.
If Owner fails to furnish such financial information in a timely manner,
Design-Builder may stop Work under Section 11.3 hereof or exercise any other
right permitted under the Contract Documents.

3.3.2    Design-Builder shall cooperate with the reasonable requirements of
Owner's lenders or other financial sources. Notwithstanding the preceding
sentence, after execution of the Agreement Design-Builder shall have no
obligation to execute for Owner or Owner's lenders or other financial sources
any documents or agreements that require Design-Builder to assume obligations
or responsibilities greater than those existing obligations Design-Builder
has under the Contract Documents.

3.4      OWNER'S REPRESENTATIVE

3.4.1    Owner's Representative shall be responsible for providing
Owner-supplied information and approvals in a timely manner to permit
Design-Builder to fulfill its obligations under the Contract Documents.
Owner's Representative shall also provide Design-Builder with prompt notice
if it observes any failure on the part of Design-Builder to fulfill its
contractual obligations, including any errors, omissions or defects in the
performance of the Work.

3.5      GOVERNMENT APPROVALS AND PERMITS

3.5.1    Owner shall obtain and pay for all necessary permits, approvals,
licenses, government charges and inspection fees set forth in the Owner's
Permit List attached as an exhibit to the Agreement.

3.5.2    Owner shall provide reasonable assistance to Design-Builder in
obtaining those permits, approvals and licenses that are Design-Builder's
responsibility.

3.6      OWNER'S SEPARATE CONTRACTORS

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

                                    ARTICLE 4

               HAZARDOUS CONDITIONS AND DIFFERING SITE CONDITIONS

4.1      HAZARDOUS CONDITIONS

4.1.1    Unless otherwise expressly provided in the Contract Documents to be
part of the Work, Design-Builder is not responsible for any Hazardous
Conditions encountered at the Site. Upon encountering any Hazardous
Conditions, Design-Builder will stop Work immediately in the affected area
and duly notify Owner and, if required by Legal Requirements, all government
or quasi-government entities with jurisdiction over the Project or Site.

4.1.2    Upon receiving notice of the presence of suspected Hazardous
Conditions, Owner shall take the necessary measures required to ensure that
the Hazardous Conditions are remediated or rendered harmless. Such necessary
measures shall include Owner retaining qualified independent experts to (i)
ascertain whether Hazardous Conditions have actually been encountered, and,
if they have been encountered, (ii) prescribe the remedial measures that
Owner must take either to remove the Hazardous Conditions or render the
Hazardous Conditions harmless.

4.1.3    Design-Builder shall be obligated to resume Work at the affected
area of the Project only after Owner's expert provides it with written
certification that (i) the Hazardous Conditions have been removed or rendered
harmless and (ii) all necessary approvals have been obtained from all
government and quasi-government entities having jurisdiction over the Project
or Site.

4.1.4    Design-Builder will be entitled, in accordance with these General
Conditions of Contract, to an adjustment in its Contract Price and/or
Contract Time(s) to the extent Design-Builder's cost and/or time of
performance have been

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adversely impacted by the presence of Hazardous Conditions.

4.1.5    To the fullest extent permitted by law, Owner shall indemnify,
defend and hold harmless Design-Builder, Design Consultants, Subcontractors,
anyone employed directly or indirectly for any of them, and their officers,
directors, employees and agents, from and against any and all claims, losses,
damages, liabilities and expenses, including attorneys' fees and expenses,
arising out of or resulting from the presence, removal or remediation of
Hazardous Conditions at the Site.

4.1.6    Notwithstanding the preceding provisions of this Section 4.1, Owner
is not responsible for Hazardous Conditions introduced to the Site by
Design-Builder, Subcontractors or anyone for whose acts they may be liable.
Design-Builder shall indemnify, defend and hold harmless Owner and Owner's
officers, directors, employees and agents from and against all claims,
losses, damages, liabilities and expenses, including attorneys' fees and
expenses, arising out of or resulting from those Hazardous Conditions
introduced to the Site by Design-Builder, Subcontractors or anyone for whose
acts they may be liable.

4.2      DIFFERING SITE CONDITIONS

4.2.1    Concealed or latent physical conditions or subsurface conditions at
the Site that (i) materially differ from the conditions indicated in the
Contract Documents or (ii) are of an unusual nature, differing materially
from the conditions ordinarily encountered and generally recognized as
inherent in the Work are collectively referred to herein as "Differing Site
Conditions." If Design-Builder encounters a Differing Site Condition,
Design-Builder will be entitled to an adjustment in the Contract Price and/or
Contract Time(s) to the extent Design-Builder's cost and/or time of
performance are adversely impacted by the Differing Site Condition.

4.2.2    Upon encountering a Differing Site Condition, Design-Builder shall
provide prompt written notice to Owner of such condition, which notice shall
not be later than fourteen (14) days after such condition has been
encountered. Design-Builder shall, to the extent reasonably possible, provide
such notice before the Differing Site Condition has been substantially
disturbed or altered.

                                    ARTICLE 5

                               INSURANCE AND BONDS

5.1      DESIGN-BUILDER'S INSURANCE REQUIREMENTS

5.1.1    Design-Builder is responsible for procuring and maintaining from
insurance companies authorized to do business in the state in which the
Project is located, and with a minimum rating set forth in the Agreement, the
following insurance coverages for certain claims which may arise from or out
of the performance of the Work and obligations under the Contract Documents:

         .1   Coverage for claims arising under workers' compensation,
              disability and other similar employee benefit laws applicable to
              the Work;

         .2   Coverage for claims by Design-Builder's employees for bodily
              injury, sickness, disease, or death;

         .3   Coverage for claims by any person other than Design-Builder's
              employees for bodily injury, sickness, disease, or death;

         .4   Coverage for usual personal injury liability claims for damages
              sustained by a person as a direct or indirect result of
              Design-Builder's employment of the person, or sustained by any
              other person;

         .5   Coverage for claims for damages (other than to the Work) because
              of injury to or destruction of tangible property, including loss
              of use;

         .6   Coverage for claims of damages because of personal injury or
              death, or

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              property damage resulting from ownership, use and maintenance of
              any motor vehicle; and

         .7   Coverage for contractual liability claims arising out of
              Design-Builder's obligations under Section 7.4.1 hereof.

5.1.2    Design-Builder's liability insurance required by Section 5.1.1 above
shall be written for the coverage amounts set forth in the Agreement and
shall include completed operations insurance for the period of time set forth
in the Agreement.

5.1.3    Design-Builder's liability insurance set forth in Sections 5.1.1.1
through 5.1.1.7 above shall specifically delete any design-build or similar
exclusions that could compromise coverages because of the design-build
delivery of the Project.

5.1.4    To the extent Owner requires Design-Builder or any Design Consultant
to provide professional liability insurance for claims arising from the
negligent performance of design services by Design-Builder or the Design
Consultant, the coverage limits, duration and other specifics of such
insurance shall be as set forth in the Agreement. Any professional liability
shall specifically delete any design-build or similar exclusions that could
compromise coverages because of the design-build delivery of the Project.
Such policies shall be provided prior to the commencement of any design
services hereunder.

5.1.5    Prior to commencing any construction services hereunder,
Design-Builder shall provide Owner with certificates evidencing that (i) all
insurance obligations required by the Contract Documents are in full force
and in effect and will remain in effect for the duration required by the
Contract Documents and (ii) no insurance coverage will be canceled, renewal
refused, or materially changed unless at least thirty (30) days prior written
notice is given to Owner.

5.2      OWNER'S LIABILITY INSURANCE

5.2.1    Owner shall procure and maintain from insurance companies authorized
to do business in the state in which the Project is located such liability
insurance to protect Owner from claims which may arise from the performance
of Owner's obligations under the Contract Documents or Owner's conduct during
the course of the Project.

5.3      OWNER'S PROPERTY INSURANCE

5.3.1    Unless otherwise provided in the Contract Documents, Owner shall
procure and maintain from insurance companies authorized to do business in
the state in which the Project is located property insurance upon the entire
Project to the full insurable value of the Project, including professional
fees, overtime premiums and all other expenses incurred to replace or repair
the insured property. The property insurance obtained by Owner shall include
as additional insureds the interests of Owner, Design-Builder, Design
Consultants, Subcontractors and Sub-Subcontractors, and shall insure against
the perils of fire and extended coverage, theft, vandalism, malicious
mischief, collapse, flood, earthquake, debris removal and other perils or
causes of loss as called for in the Contract Documents. The property
insurance shall include physical loss or damage to the Work, including
materials and equipment in transit, at the Site or at another location as may
be indicated in Design-Builder's Application for Payment and approved by
Owner.

5.3.2    Unless the Contract Documents provide otherwise, Owner shall procure
and maintain boiler and machinery insurance that will include the interests
of Owner, Design-Builder, Design Consultants, Subcontractors and
Sub-Subcontractors.

5.3.3    Prior to Design-Builder commencing any Work, Owner shall provide
Design-Builder with certificates evidencing that (i) all Owner's insurance
obligations required by the Contract Documents are in full force and in
effect and will remain in effect until Design-Builder has completed all of
the Work and has received final payment from Owner and (ii) no insurance
coverage will be canceled, renewal refused, or materially changed unless at
least thirty (30) days prior written notice is given to Design-Builder.
Owner's property insurance shall not lapse or be canceled if Owner occupies a
portion of the Work pursuant to Section 6.6.3 hereof. Owner shall

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provide Design-Builder with the necessary endorsements from the insurance
company prior to occupying a portion of the Work.

5.3.4    Any loss covered under Owner's property insurance shall be adjusted
with Owner and Design-Builder and made payable to both of them as trustees
for the insureds as their interests may appear, subject to any applicable
mortgage clause. All insurance proceeds received as a result of any loss will
be placed in a separate account and distributed in accordance with such
agreement as the interested parties may reach. Any disagreement concerning
the distribution of any proceeds will be resolved in accordance with Article
10 hereof.

5.3.5    Owner and Design-Builder waive against each other and Owner's
separate contractors, Design Consultants, Subcontractors, agents and
employees of each and all of them, all damages covered by property insurance
provided herein, except such rights as they may have to the proceeds of such
insurance. Design-Builder and Owner shall, where appropriate, require similar
waivers of subrogation from Owner's separate contractors, Design Consultants
and Subcontractors and shall require each of them to include similar waivers
in their contracts.

5.4      BONDS AND OTHER PERFORMANCE SECURITY

5.4.1    If Owner requires Design-Builder to obtain performance and labor and
material payment bonds, or other forms of performance security, the amount,
form and other conditions of such security shall be as set forth in the
Agreement.

                                    ARTICLE 6

                                     PAYMENT

6.1      SCHEDULE OF VALUES

6.1.1    Within ten (10) days of execution of the Agreement, Design-Builder
shall submit for Owner's review and approval a schedule of values for all of
the Work. The Schedule of Values will (i) subdivide the Work into its
respective parts, (ii) include values for all items comprising the Work and
(iii) serve as the basis for monthly progress payments made to Design-Builder
throughout the Work.

6.2      MONTHLY PROGRESS PAYMENTS

6.2.1    On or before the date established in the Agreement, Design-Builder
shall submit for Owner's review and approval its Application for Payment
requesting payment for all Work performed as of the date of the Application
for Payment. The Application for Payment shall be accompanied by all
supporting documentation required by the Contract Documents and/or
established at the meeting required by Section 2.1.4 hereof.

6.2.2    The Application for Payment may request payment for equipment and
materials not yet incorporated into the Project, provided that (i) Owner is
satisfied that the equipment and materials are suitably stored at either the
Site or another acceptable location, (ii) the equipment and materials are
protected by suitable insurance and (iii) upon payment, Owner will receive
the equipment and materials free and clear of all liens and encumbrances.

6.2.3    The Application for Payment shall constitute Design-Builder's
representation that the Work has been performed consistent with the Contract
Documents, has progressed to the point indicated in the Application for
Payment, and that title to all Work will pass to Owner free and clear of all
claims, liens, encumbrances, and security interests upon the incorporation of
the Work into the Project, or upon Design-Builder's receipt of payment,
whichever occurs earlier.

6.3      WITHHOLDING OF PAYMENTS

6.3.1    On or before the date established in the Agreement, Owner shall pay
Design-Builder all amounts properly due. If Owner determines that
Design-Builder is not entitled to all or part of an Application for Payment,
it will notify Design-Builder in writing at least five (5) days prior to the
date payment is due. The notice shall indicate the specific amounts Owner
intends to withhold, the reasons and contractual basis for the withholding,
and the specific measures Design-Builder must take to rectify Owner's
concerns. Design-Builder and Owner will attempt to resolve Owner's concerns
prior to the date payment is due. If the parties cannot resolve such
concerns, Design-Builder may pursue its rights under the Contract Documents,
including those under Article 10 hereof.

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6.3.2    Notwithstanding anything to the contrary in the Contract Documents,
Owner shall pay Design-Builder all undisputed amounts in an Application for
Payment within the times required by the Agreement.

6.4      RIGHT TO STOP WORK AND INTEREST

6.4.1    If Owner fails to pay Design-Builder any amount that becomes due,
Design-Builder, in addition to all other remedies provided in the Contract
Documents, may stop Work pursuant to Section 11.3 hereof. All payments due
and unpaid shall bear interest at the rate set forth in the Agreement.

6.5      DESIGN-BUILDER'S PAYMENT OBLIGATIONS

6.5.1    Design-Builder will pay Design Consultants and Subcontractors, in
accordance with its contractual obligations to such parties, all the amounts
Design-Builder has received from Owner on account of their work.
Design-Builder will impose similar requirements on Design Consultants and
Subcontractors to pay those parties with whom they have contracted.
Design-Builder will indemnify and defend Owner against any claims for payment
and mechanic's liens as set forth in Section 7.3 hereof.

6.6      SUBSTANTIAL COMPLETION

6.6.1    Design-Builder shall notify Owner when it believes the Work, or to
the extent permitted in the Contract Documents, a portion of the Work, is
substantially complete. Within five (5) days of Owner's receipt of
Design-Builder's notice, Owner and Design-Builder will jointly inspect such
Work to verify that it is substantially complete in accordance with the
requirements of the Contract Documents. If such Work is substantially
complete, Owner shall prepare and issue a Certificate of Substantial
Completion that will set forth (i) the date of Substantial Completion of the
Work or portion thereof, (ii) the remaining items of Work that have to be
completed before final payment, (iii) provisions (to the extent not already
provided in the Contract Documents) establishing Owner's and Design-Builder's
responsibility for the Project's security, maintenance, utilities and
insurance pending final payment and (iv) an acknowledgment that warranties
commence to run on the date of Substantial Completion, except as may
otherwise be noted in the Certificate of Substantial Completion.

6.6.2    Upon Substantial Completion of the entire Work or, if applicable,
any portion of the Work, Owner shall release to Design-Builder all retained
amounts relating, as applicable, to the entire Work or completed portion of
the Work, less an amount equal to the reasonable value of all remaining or
incomplete items of Work as noted in the Certificate of Substantial
Completion.

6.6.3    Owner, at its option, may use a portion of the Work which has been
determined to be substantially complete, provided, however, that (i) a
Certificate of Substantial Completion has been issued for the portion of Work
addressing the items set forth in Section 6.6.1 above, (ii) Design-Builder
and Owner have obtained the consent of their sureties and insurers, and to
the extent applicable, the appropriate government authorities having
jurisdiction over the Project, and (iii) Owner and Design-Builder agree that
Owner's use or occupancy will not interfere with Design-Builder's completion
of the remaining Work.

6.7      FINAL PAYMENT

6.7.1    After receipt of a Final Application for Payment from
Design-Builder, Owner shall make final payment by the time required in the
Agreement, provided that Design-Builder has completed all of the Work in
conformance with the Contract Documents.

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

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

         .2   a general release executed by Design-Builder waiving, upon receipt
              of final payment by Design-Builder, all claims, except those
              claims previously made

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              in writing to Owner and remaining unsettled
              at the time of final payment;

         .3   consent of Design-Builder's surety, if any, to final payment;

         .4   all operating manuals, warranties and other deliverables
              required by the Contract Documents; and

         .5   certificates of insurance confirming that required coverages will
              remain in effect consistent with the requirements of the Contract
              Documents.

6.7.3    Upon making final payment, Owner waives all claims against
Design-Builder except claims relating to (i) Design-Builder's failure to
satisfy its payment obligations, if such failure affects Owner's interests,
(ii) Design-Builder's failure to complete the Work consistent with the
Contract Documents, including defects appearing after Substantial Completion
and (iii) the terms of any special warranties required by the Contract
Documents.

                                    ARTICLE 7

                                 INDEMNIFICATION

7.1      PATENT AND COPYRIGHT INFRINGEMENT

7.1.1    Design-Builder shall defend any action or proceeding brought against
Owner based on any claim that the Work, or any part thereof, or the operation
or use of the Work or any part thereof, constitutes infringement of any
United States patent or copyright, now or hereafter issued. Owner shall give
prompt written notice to Design-Builder of any such action or proceeding and
will reasonably provide authority, information and assistance in the defense
of same. Design-Builder shall indemnify and hold harmless Owner from and
against all damages and costs, including but not limited to attorneys' fees
and expenses awarded against Owner or Design-Builder in any such action or
proceeding. Design-Builder agrees to keep Owner informed of all developments
in the defense of such actions.

7.1.2    If Owner is enjoined from the operation or use of the Work, or any
part thereof, as the result of any patent or copyright suit, claim, or
proceeding, Design-Builder shall at its sole expense take reasonable steps to
procure the right to operate or use the Work. If Design-Builder cannot so
procure such right within a reasonable time, Design-Builder shall promptly,
at Design-Builder's option and at Design-Builder's expense, (i) modify the
Work so as to avoid infringement of any such patent or copyright or (ii)
replace said Work with Work that does not infringe or violate any such patent
or copyright.

7.1.3    Sections 7.1.1 and 7.1.2 above shall not be applicable to any suit,
claim or proceeding based on infringement or violation of a patent or
copyright (i) relating solely to a particular process or product of a
particular manufacturer specified by Owner and not offered or recommended by
Design-Builder to Owner or (ii) arising from modifications to the Work by
Owner or its agents after acceptance of the Work. If the suit, claim or
proceeding is based upon events set forth in the preceding sentence, Owner
shall defend, indemnify and hold harmless Design-Builder to the same extent
Design-Builder is obligated to defend, indemnify and hold harmless Owner in
Section 7.1.1 above.

7.1.4    The obligations set forth in this Section 7.1 shall constitute the
sole agreement between the parties relating to liability for infringement of
violation of any patent or copyright.

7.2      TAX CLAIM INDEMNIFICATION

7.2.1    If, in accordance with Owner's direction, an exemption for all or
part of the Work is claimed for taxes, Owner shall indemnify, defend and hold
harmless Design-Builder from and against any liability, penalty, interest,
fine, tax assessment, attorneys' fees or other expenses or costs incurred by
Design-Builder as a result of any action taken by Design-Builder in
accordance with Owner's directive.

7.3      PAYMENT CLAIM INDEMNIFICATION

7.3.1    Providing that Owner is not in breach of its contractual obligation
         to make payments to Design-Builder for the Work, Design-Builder shall
         indemnify, defend and hold harmless Owner from any claims or
         mechanic's liens brought against Owner or against the Project as a
         result of the failure of Design-Builder, or those for whose acts it is
         responsible, to pay for any services, materials, labor, equipment,
         taxes or other

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         items or obligations furnished or incurred for or in connection with
         the Work. Within three (3) days of receiving written notice from Owner
         that such a claim or mechanic's lien has been filed, Design-Builder
         shall commence to take the steps necessary to discharge said claim or
         lien, including, if necessary, the furnishing of a mechanic's lien
         bond. If Design-Builder fails to do so, Owner will have the right to
         discharge the claim or lien and hold Design-Builder liable for costs
         and expenses incurred, including attorneys' fees.

7.4      DESIGN-BUILDER'S GENERAL INDEMNIFICATION

7.4.1    Design-Builder, to the fullest extent permitted by law, shall
indemnify, hold harmless and defend Owner, its officers, directors, employees
and agents from and against claims, losses, damages, liabilities, including
attorneys' fees and expenses, for bodily injury, sickness or death, and
property damage or destruction (other than to the Work itself) to the extent
resulting from the negligent acts or omissions of Design-Builder, Design
Consultants, Subcontractors, anyone employed directly or indirectly by any of
them or anyone for whose acts any of them may be liable.

7.4.2    If an employee of Design-Builder, Design Consultants,
Subcontractors, anyone employed directly or indirectly by any of them or
anyone for whose acts any of them may be liable has a claim against Owner,
its officers, directors, employees, or agents, Design-Builder's indemnity
obligation set forth in Section 7.4.1 above shall not be limited by any
limitation on the amount of damages, compensation or benefits payable by or
for Design-Builder, Design Consultants, Subcontractors, or other entity under
any employee benefit acts, including workers' compensation or disability acts.

7.5      OWNER'S GENERAL INDEMNIFICATION

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

                                    ARTICLE 8

                                      TIME

8.1      OBLIGATION TO ACHIEVE THE CONTRACT TIMES

8.1.1    Design-Builder agrees that it will commence performance of the Work
and achieve the Contract Time(s) in accordance with Article 5 of the
Agreement.

8.2      DELAYS TO THE WORK

8.2.1    If Design-Builder is delayed in the performance of the Work due to
acts, omissions, conditions, events, or circumstances beyond its control and
due to no fault of its own or those for whom Design-Builder is responsible,
the Contract Time(s) for performance shall be reasonably extended by Change
Order. By way of example, events that will entitle Design-Builder to an
extension of the Contract Time(s) include acts or omissions of Owner or
anyone under Owner's control (including separate contractors), changes in the
Work, Differing Site Conditions, Hazardous Conditions, wars, floods, labor
disputes, unusual delay in transportation, epidemics abroad, earthquakes,
adverse weather conditions not reasonably anticipated, and other acts of God.

8.2.2    In addition to Design-Builder's right to a time extension for those
events set forth in Section 8.2.1 above, Design-Builder shall also be
entitled to an appropriate adjustment of the Contract Price provided,
however, that the Contract Price shall not be adjusted for those events set
forth in Section 8.2.1 above that are beyond the control of both
Design-Builder and Owner, including the events of war, floods, labor
disputes, earthquakes, epidemics, adverse weather conditions not reasonably
anticipated, and other acts of God.

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                                    ARTICLE 9

                     CHANGES TO THE CONTRACT PRICE AND TIME

9.1      CHANGE ORDERS

9.1.1    A Change Order is a written instrument issued after execution of the
Agreement signed by Owner and Design-Builder, stating their agreement upon
all of the following:

         .1   The scope of the change in the Work;

         .2   The amount of the adjustment to the Contract Price; and

         .3   The extent of the adjustment to the Contract Time(s).

9.1.2    All changes in the Work authorized by applicable Change Order shall
be performed under the applicable conditions of the Contract Documents. Owner
and Design-Builder shall negotiate in good faith and as expeditiously as
possible the appropriate adjustments for such changes.

9.1.3    If Owner requests a proposal for a change in the Work from
Design-Builder and subsequently elects not to proceed with the change, a
Change Order shall be issued to reimburse Design-Builder for reasonable costs
incurred for estimating services, design services and services involved in
the preparation of proposed revisions to the Contract Documents.

9.2      WORK CHANGE DIRECTIVES

9.2.1    A Work Change Directive is a written order prepared and signed by
Owner, directing a change in the Work prior to agreement on an adjustment in
the Contract Price and/or the Contract Time(s).

9.2.2    Owner and Design-Builder shall negotiate in good faith and as
expeditiously as possible the appropriate adjustments for the Work Change
Directive. Upon reaching an agreement, the parties shall prepare and execute
an appropriate Change Order reflecting the terms of the agreement.

9.3      MINOR CHANGES IN THE WORK

9.3.1    Minor changes in the Work do not involve an adjustment in the
Contract Price and/or Contract Time(s) and do not materially and adversely
affect the Work, including the design, quality, performance and workmanship
required by the Contract Documents. Design-Builder may make minor changes in
the Work consistent with the intent of the Contract Documents, provided,
however that Design-Builder shall promptly inform Owner, in writing, of any
such changes and record such changes on the documents maintained by
Design-Builder.

9.4      CONTRACT PRICE ADJUSTMENTS

9.4.1    The increase or decrease in Contract Price resulting from a change
in the Work shall be determined by one or more of the following methods:

         .1   Unit prices set forth in the Agreement or as subsequently
              agreed to between the parties;

         .2   A mutually accepted, lump sum, properly itemized and supported by
              sufficient substantiating data to permit evaluation by Owner;

         .3   Costs, fees and any other markups set forth in the Agreement; and

         .4   If an increase or decrease cannot be agreed to as set forth in
              items .1 through .3 above and Owner issues a Work Change
              Directive, the cost of the change of the Work shall be determined
              by the reasonable expense and savings in the performance of the
              Work resulting from the change, including a reasonable overhead
              and profit, as may be set forth in the Agreement. If the net
              result of both additions and deletions to the Work is an increase
              in the Contract Price, overhead and profit shall be calculated on
              the basis of the net increase to the Contract Price. If the net
              result of both additions and deletions to the Work is a decrease
              in the Contract Price, there

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              shall be no overhead or profit adjustment to the Contract Price.
              Design-Builder shall maintain a documented, itemized accounting
              evidencing the expenses and savings associated with such changes.

9.4.2    If unit prices are set forth in the Contract Documents or are
subsequently agreed to by the parties, but application of such unit prices
will cause substantial inequity to Owner or Design-Builder because of
differences in the character or quantity of such unit items as originally
contemplated, such unit prices shall be equitably adjusted.

9.4.3    If Owner and Design-Builder disagree upon whether Design-Builder is
entitled to be paid for any services required by Owner, or if there are any
other disagreements over the scope of Work or proposed changes to the Work,
Owner and Design-Builder shall resolve the disagreement pursuant to Article
10 hereof. As part of the negotiation process, Design-Builder shall furnish
Owner with a good faith estimate of the costs to perform the disputed
services in accordance with Owner's interpretations. If the parties are
unable to agree and Owner expects Design-Builder to perform the services in
accordance with Owner's interpretations, Design-Builder shall proceed to
perform the disputed services, conditioned upon Owner issuing a written order
to Design-Builder (i) directing Design-Builder to proceed and (ii) specifying
Owner's interpretation of the services that are to be performed. If this
occurs, Design-Builder shall be entitled to submit in its Applications for
Payment an amount equal to fifty percent (50%) of its reasonable estimated
direct cost to perform the services, and Owner agrees to pay such amounts,
with the express understanding that (i) such payment by Owner does not
prejudice Owner's right to argue that it has no responsibility to pay for
such services and (ii) receipt of such payment by Design-Builder does not
prejudice Design-Builder's right to seek full payment of the disputed
services if Owner's order is deemed to be a change to the Work.

9.5      EMERGENCIES

9.5.1    In any emergency affecting the safety of persons and/or property,
Design-Builder shall act, at its discretion, to prevent threatened damage,
injury or loss. Any change in the Contract Price and/or Contract Time(s) on
account of emergency work shall be determined as provided in this Article 9.

                                   ARTICLE 10

                        CONTRACT ADJUSTMENTS AND DISPUTES

10.1     REQUESTS FOR CONTRACT ADJUSTMENTS AND RELIEF

10.1.1   If either Design-Builder or Owner believes that it is entitled to
relief against the other for any event arising out of or related to the Work
or Project, such party shall provide written notice to the other party of the
basis for its claim for relief. Such notice shall, if possible, be made prior
to incurring any cost or expense and in accordance with any specific notice
requirements contained in applicable sections of these General Conditions of
Contract. In the absence of any specific notice requirement, written notice
shall be given within a reasonable time, not to exceed twenty-one (21) days,
after the occurrence giving rise to the claim for relief or after the
claiming party reasonably should have recognized the event or condition
giving rise to the request, whichever is later. Such notice shall include
sufficient information to advise the other party of the circumstances giving
rise to the claim for relief, the specific contractual adjustment or relief
requested and the basis of such request.

10.2     DISPUTE AVOIDANCE AND RESOLUTION

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

10.2.2   Design-Builder and Owner will first attempt to resolve disputes or
disagreements at the field

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level through discussions between Design-Builder's Representative and Owner's
Representative.

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

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

10.3     ARBITRATION

10.3.1   Any claims, disputes or controversies between the parties arising
out of or relating to the Agreement, or the breach thereof, which have not
been resolved in accordance with the procedures set forth in Section 10.2
above shall be decided by arbitration in accordance with the Construction
Industry Arbitration Rules of the AAA then in effect, unless the parties
mutually agree otherwise.

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

10.3.3   Design-Builder and Owner expressly agree that any arbitration
pursuant to this Section 10.3 may be joined or consolidated with any
arbitration involving any other person or entity (i) necessary to resolve the
claim, dispute or controversy, or (ii) substantially involved in or affected
by such claim, dispute or controversy. Both Design-Builder and Owner will
include appropriate provisions in all contracts they execute with other
parties in connection with the Project to require such joinder or
consolidation.

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

10.4     DUTY TO CONTINUE PERFORMANCE

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

10.5     CONSEQUENTIAL DAMAGES

10.5.1   NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY (EXCEPT AS SET FORTH
IN SECTION 10.5.2 BELOW), NEITHER DESIGN-BUILDER NOR OWNER SHALL BE LIABLE TO
THE OTHER FOR ANY CONSEQUENTIAL LOSSES OR DAMAGES, WHETHER ARISING IN
CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
OTHERWISE, INCLUDING BUT NOT LIMITED TO LOSSES OF USE, PROFITS, BUSINESS,
REPUTATION OR FINANCING.

10.5.2   The consequential damages limitation set forth in Section 10.5.1
above is not intended to affect the payment of liquidated damages, if any,
set forth in Article 5 of the Agreement, which both parties recognize has
been established, in part, to reimburse Owner for some damages that might
otherwise be deemed to be consequential.

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                                   ARTICLE 11

                       STOP WORK AND TERMINATION FOR CAUSE

11.1     OWNER'S RIGHT TO STOP WORK

11.1.1   Owner may, without cause and for its convenience, order
Design-Builder in writing to stop and suspend the Work. Such suspension shall
not exceed sixty (60) consecutive days or aggregate more than ninety (90)
days during the duration of the Project.

11.1.2   Design-Builder is entitled to seek an adjustment of the Contract
Price and/or Contract Time(s) if its cost or time to perform the Work has
been adversely impacted by any suspension of stoppage of work by Owner.

11.2     OWNER'S RIGHT TO PERFORM AND TERMINATE FOR CAUSE

11.2.1   If Design-Builder persistently fails to (i) provide a sufficient
number of skilled workers, (ii) supply the materials required by the Contract
Documents, (iii) comply with applicable Legal Requirements, (iv) timely pay,
without cause, Design Consultants or Subcontractors, (v) prosecute the Work
with promptness and diligence to ensure that the Work is completed by the
Contract Time(s), as such times may be adjusted, or (vi) perform material
obligations under the Contract Documents, then Owner, in addition to any
other rights and remedies provided in the Contract Documents or by law, shall
have the rights set forth in Sections 11.2.2 and 11.2.3 below.

11.2.2   Upon the occurrence of an event set forth in Section 11.2.1 above,
Owner may provide written notice to Design-Builder that it intends to
terminate the Agreement unless the problem cited is cured, or commenced to be
cured, within seven (7) days of Design-Builder's receipt of such notice. If
Design-Builder fails to cure, or reasonably commence to cure, such problem,
then Owner may give a second written notice to Design-Builder of its intent
to terminate within an additional seven (7) day period. If Design-Builder,
within such second seven (7) day period, fails to cure, or reasonably
commence to cure, such problem, then Owner may declare the Agreement
terminated for default by providing written notice to Design-Builder of such
declaration.

11.2.3   Upon declaring the Agreement terminated pursuant to Section 11.2.2
above, Owner may enter upon the premises and take possession, for the purpose
of completing the Work, of all materials, equipment, scaffolds, tools,
appliances and other items thereon, which have been purchased or provided for
the performance of the Work, all of which Design-Builder hereby transfers,
assigns and sets over to Owner for such purpose, and to employ any person or
persons to complete the Work and provide all of the required labor, services,
materials, equipment and other items. In the event of such termination,
Design-Builder shall not be entitled to receive any further payments under
the Contract Documents until the Work shall be finally completed in
accordance with the Contract Documents. At such time, if the unpaid balance
of the Contract Price exceeds the cost and expense incurred by Owner in
completing the Work, such excess shall be paid by Owner to Design-Builder.
Notwithstanding the preceding sentence, if the Agreement establishes a
Guaranteed Maximum Price, Design-Builder will only be entitled to be paid for
Work performed prior to its default. If Owner's cost and expense of
completing the Work exceeds the unpaid balance of the Contract Price, then
Design-Builder shall be obligated to pay the difference to Owner. Such costs
and expense shall include not only the cost of completing the Work, but also
losses, damages, costs and expense, including attorneys' fees and expenses,
incurred by Owner in connection with the reprocurement and defense of claims
arising from Design-Builder's default, subject to the waiver of consequential
damages set forth in Section 10.5 hereof.

11.2.4   If Owner improperly terminates the Agreement for cause, the
termination for cause will be converted to a termination for convenience in
accordance with the provisions of Article 8 of the Agreement.

11.3     DESIGN-BUILDER'S RIGHT TO STOP WORK

11.3.1   Design-Builder may, in addition to any other rights afforded under
the Contract Documents or at law, stop work for the following reasons:

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         .1   Owner's failure to provide financial assurances as required
              under Section 3.3 hereof; or

         .2   Owner's failure to pay amounts properly due under
              Design-Builder's Application for Payment.

11.3.2   Should any of the events set forth in Section 11.3.1 above occur,
Design-Builder has the right to provide Owner with written notice that
Design-Builder will stop work unless said event is cured within seven (7)
days from Owner's receipt of Design-Builder's notice. If Owner does not cure
the problem within such seven (7) day period, Design-Builder may stop work.
In such case, Design-Builder shall be entitled to make a claim for adjustment
to the Contract Price and Contract Time(s) to the extent it has been
adversely impacted by such stoppage.

11.4     DESIGN-BUILDER'S RIGHT TO TERMINATE FOR CAUSE

11.4.1   Design-Builder, in addition to any other rights and remedies
provided in the Contract Documents or by law, may terminate the Agreement for
cause for the following reasons:

11.4.2 Upon the occurrence of an event set forth in Section 11.4.1 above,
Design-Builder may provide written notice to Owner that it intends to terminate
the Agreement unless the problem cited is cured, or commenced to be cured,
within seven (7) days of Owner's receipt of such notice. If Owner fails to cure,
or reasonably commence to cure, such problem, then Design-Builder may give a
second written notice to Owner of its intent to terminate within an additional
seven (7) day period. If Owner, within such second seven (7) day period, fails
to cure, or reasonably commence to cure, such problem, then Design-Builder may
declare the Agreement terminated for default by providing written notice to
Owner of such declaration. In such case, Design-Builder shall be entitled to
recover in the same manner as if Owner had terminated the Agreement for its
convenience under Article 8 of the Agreement.

11.5     BANKRUPTCY OF OWNER OR DESIGN-BUILDER

         .1   The Work has been stopped for sixty (60) consecutive days, or more
              than ninety (90) days during the duration of the Project, because
              of court order, any government authority having jurisdiction over
              the Work, or orders by Owner under Section 11.1.1 hereof, provided
              that such stoppages are not due to the acts or omissions of
              Design-Builder or anyone for whose acts Design-Builder may be
              responsible.

         .2   Owner's failure to provide Design-Builder with any information,
              permits or approvals that are Owner's responsibility under the
              Contract Documents which result in the Work being stopped for
              sixty (60) consecutive days, or more than ninety (90) days during
              the duration of the Project, even though Owner has not ordered
              Design-Builder in writing to stop and suspend the Work pursuant to
              Section 11.1.1 hereof.

         .3   Owner's failure to cure the problems set forth in Section 11.3.1
              above after Design-Builder has stopped the Work.

11.5.1   If either Owner or Design-Builder institutes or has instituted
against it a case under the United States Bankruptcy Code (such party being
referred to as the "Bankrupt Party"), such event may impair or frustrate the
Bankrupt Party's ability to perform its obligations under the Contract
Documents. Accordingly, should such event occur:

         .1   The Bankrupt Party, its trustee or other successor, shall furnish,
              upon request of the non-Bankrupt Party, adequate assurance of the
              ability of the Bankrupt Party to perform all future material
              obligations under the Contract Documents, which assurances shall
              be provided within ten (10) days after receiving notice of the
              request; and

         .2   The Bankrupt Party shall file an appropriate action within the
              bankruptcy court to seek assumption or rejection of the Agreement
              within sixty (60) days of the institution of the bankruptcy filing
              and shall diligently prosecute such action.

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If the Bankrupt Party fails to comply with its foregoing obligations, the
non-Bankrupt Party shall be entitled to request the bankruptcy court to reject
the Agreement, declare the Agreement terminated and pursue any other recourse
available to the non-Bankrupt Party under this Article 11.

11.5.2   The rights and remedies under Section 11.5.1 above shall not be
deemed to limit the ability of the non-Bankrupt Party to seek any other
rights and remedies provided by the Contract Documents or by law, including
its ability to seek relief from any automatic stays under the United States
Bankruptcy Code or the right of Design-Builder to stop Work under any
applicable provision of these General Conditions of Contract.

                                   ARTICLE 12

                                  MISCELLANEOUS

12.1     ASSIGNMENT

12.1.1   Neither Design-Builder nor Owner shall, without the written consent
of the other assign, transfer or sublet any portion or part of the Work or
the obligations required by the Contract Documents.

12.2     SUCCESSORSHIP

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

12.3     GOVERNING LAW

12.3.1   The Agreement and all Contract Documents shall be governed by the
laws of the place of the Project, without giving effect to its conflict of
law principles.

12.4     SEVERABILITY

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

12.5     NO WAIVER

12.5.1   The failure of either Design-Builder or Owner to insist, in any one
or more instances, on the performance of any of the obligations required by
the other under the Contract Documents shall not be construed as a waiver or
relinquishment of such obligation or right with respect to future performance.

12.6     HEADINGS

12.6.1   The headings used in these General Conditions of Contract, or any
other Contract Document, are for ease of reference only and shall not in any
way be construed to limit or alter the meaning of any provision.

12.7     NOTICE

12.7.1   Whenever the Contract Documents require that notice be provided to
the other party, notice will be deemed to have been validly given (i) if
delivered in person to the individual intended to receive such notice, (ii)
four (4) days after being sent by registered or certified mail, postage
prepaid to the address indicated in the Agreement or (iii) if transmitted by
facsimile, by the time stated in a machine generated confirmation that notice
was received at the facsimile number of the intended recipient.

12.8     AMENDMENTS

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

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DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS           Page 19
OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
1998 Design-Build Institute of America
<PAGE>

                                DBIA
                               [LOGO]
                             DESIGN-BUILD
                          INSTITUTE OF AMERICA

                STANDARD FORM OF AGREEMENT BETWEEN
                OWNER AND DESIGN-BUILDER - LUMP SUM

     THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH
  AN ATTORNEY IS RECOMMENDED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.

===============================================================================

This AGREEMENT is made as of the_________________day of_______________________
in the year of ___2000____ , by and between the following parties, for

services in connection with the Project identified below.

OWNER:
(NAME AND ADDRESS)

Badger State Ethanol, LLC
P.O. Box 317
Monroe, WI 53566

DESIGN-BUILDER:
(NAME AND ADDRESS)

Fagen, Inc.
501 W. Hwy. 212
P.O. Box 159
Granite Falls, MN 56241

PROJECT:
(INCLUDE PROJECT NAME AND LOCATION
AS IT WILL APPEAR IN THE CONTRACT
DOCUMENTS)

40 MGY Dry Mill Ethanol Plant

In consideration of the mutual covenants and obligations contained herein, Owner
and Design-Builder agree as set forth herein.

-------------------------------------------------------------------------------
DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS            Page 1
OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
1998 Design-Build Institute of America
<PAGE>

                                    ARTICLE 1

                                  SCOPE OF WORK

1.1      Design-Builder shall perform all design and construction services,
and provide all material, equipment, tools and labor, necessary to complete
the Work described in and reasonably inferable from the Contract Documents.

                                    ARTICLE 2

                               CONTRACT DOCUMENTS

2.1      The Contract Documents are comprised of the following:

         .1       All written modifications, amendments and change orders to
                  this Agreement issued in accordance with DBIA Document No.
                  535, STANDARD FORM OF GENERAL CONDITIONS OF CONTRACT BETWEEN
                  OWNER AND DESIGN-BUILDER (1998 Edition) ("General Conditions
                  of Contract");

         .2       This Agreement, including all exhibits and attachments,
                  executed by Owner and Design-Builder;

         .3       Written Supplementary Conditions, if any, to the General
                  Conditions of Contract;

         .4       The General Conditions of Contract;

         .5       Construction Documents prepared and approved in accordance
                  with Section 2.4 of the General Conditions of Contract;

         .6       Design-Builder's Deviation List, if any, contained in
                  Design-Builder's Proposal, which shall specifically identify
                  any and all deviations from Owner's Project Criteria;

         .7       Owner's Project Criteria;

         .8       Design-Builder's Proposal, except for the Deviation List,
                  submitted in response to Owner's Project Criteria; and

         .9       The following other documents, if any:

                  EXHIBIT A - PERFORMANCE GUARANTEE CRITERIA - (2) PAGES;
                  EXHIBIT B - GENERAL PROJECT SCOPE - (3) PAGES;
                  EXHIBIT C - BUILDINGS PROVIDED BY DESIGN-BUILDER - (1) PAGE;
                  EXHIBIT D - ALLOWANCES - (3) PAGES;
                  EXHIBIT E - OWNER'S REQUIRED PERMITS AND SERVICES LIST -
                              (2) PAGES;
                  EXHIBIT F - PRELIMINARY 14 MONTH SCHEDULE - (2) PAGES.

-------------------------------------------------------------------------------
Page 2            DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS
                                   OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
                                         1998 Design-Build Institute of America
<PAGE>

                                    ARTICLE 3

                            INTERPRETATION AND INTENT

3.1      The Contract Documents are intended to permit the parties to
complete the Work and all obligations required by the Contract Documents
within the Contract Time(s) for the Contract Price. The Contract Documents
are intended to be complementary and interpreted in harmony so as to avoid
conflict, with words and phrases interpreted in a manner consistent with
construction and design industry standards. In the event of any
inconsistency, conflict, or ambiguity between or among the Contract
Documents, the Contract Documents shall take precedence in the order in which
they are listed in Section 2.1 hereof.

3.2      Terms, words and phrases used in the Contract Documents, including
this Agreement, shall have the meanings given them in the General Conditions
of Contract.

3.3      The Contract Documents form the entire agreement between Owner and
Design-Builder and by incorporation herein are as fully binding on the
parties as if repeated herein. No oral representations or other agreements
have been made by the parties except as specifically stated in the Contract
Documents.

                                    ARTICLE 4

                            OWNERSHIP OF WORK PRODUCT

4.1      WORK PRODUCT. All drawings, specifications and other documents and
electronic data furnished by Design-Builder to Owner under this Agreement
("Work Product") are deemed to be instruments of service and Design-Builder
shall retain the ownership and property interests therein, including the
copyrights thereto.

4.2      OWNER'S LIMITED LICENSE UPON PAYMENT IN FULL. Upon Owner's payment
in full for all Work performed under the Contract Documents, Design-Builder
shall grant Owner a limited license to use the Work Product in connection
with Owner's occupancy of the Project, conditioned on Owner's express
understanding that its use of the Work Product is at Owner's sole risk and
without liability or legal exposure to Design-Builder or anyone working by or
through Design-Builder, including Design Consultants of any tier
(collectively the "Indemnified Parties").

4.3      OWNER'S LIMITED LICENSE UPON OWNER'S TERMINATION FOR CONVENIENCE OR
DESIGN-BUILDER'S ELECTION TO TERMINATE. If Owner terminates the Project for
its convenience as set forth in Article 8 hereof, or if Design-Builder elects
to terminate this Agreement in accordance with Section 11.4 of the General
Conditions of Contract, Design-Builder shall, upon Owner's payment in full of
the amounts due Design-Builder under the Contract Documents, grant Owner a
limited license to use the Work Product to complete the Project and
subsequently occupy the Project, conditioned on the following:

         .1       Use of the Work Product is at Owner's sole risk without
                  liability or legal exposure to any Indemnified Party; and

         .2       Owner agrees to pay Design-Builder the additional sum of
                  One Million Dollars ($1,000,000.00) as compensation for
                  the right to use the Work Product in accordance with this
                  Article 4 if Owner resumes the Project through its employees,
                  agents, or third parties.

4.4      OWNER'S LIMITED LICENSE UPON DESIGN-BUILDER'S DEFAULT. If this
Agreement is terminated due to Design-Builder's default pursuant to Section
11.2 of the General Conditions of Contract and (i) it is determined that
Design-Builder was in default and (ii) Owner has fully satisfied all of its
obligations under the Contract Documents, Design-Builder shall grant Owner a
limited license to use the Work Product in connection with

-------------------------------------------------------------------------------
DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS            Page 3
OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
1998 Design-Build Institute of America
<PAGE>

Owner's completion and occupancy of the Project. This limited license is
conditioned on Owner's express understanding that its use of the Work Product
is at Owner's sole risk and without liability or legal exposure to any
Indemnified Party.

4.5      OWNER'S INDEMNIFICATION FOR USE OF WORK PRODUCT. If Owner uses the
Work Product under any of the circumstances identified in this Article 4,
Owner shall defend, indemnify and hold harmless the Indemnified Parties from
and against any and all claims, damages, liabilities, losses and expenses,
including attorneys' fees, arising out of or resulting from the use of the
Work Product.

                                    ARTICLE 5

                                  CONTRACT TIME

5.1      DATE OF COMMENCEMENT. The Work shall commence within five (5) days
of Design-Builder's receipt of Owner's Notice to Proceed ("Date of
Commencement") unless the parties mutually agree otherwise in writing.

5.2      SUBSTANTIAL COMPLETION AND FINAL COMPLETION

5.2.1    Substantial Completion of the entire Work shall be achieved no later
than three hundred eighty (380) calendar days after the Date of Commencement
("Scheduled Substantial Completion Date").

5.2.2    Interim milestones and/or Substantial Completion of identified
portions of the Work shall be achieved as follows:  N/A

5.2.3    Final Completion of the Work or identified portions of the Work
shall be achieved as expeditiously as reasonably practicable.

5.2.4    All of the dates set forth in this Article 5 ("Contract Time(s)")
shall be subject to adjustment in accordance with the General Conditions of
Contract.

5.3      TIME IS OF THE ESSENCE. Owner and Design-Builder mutually agree that
time is of the essence with respect to the dates and times set forth in the
Contract Documents.

5.4      LIQUIDATED DAMAGES. Design-Builder understands that if Substantial
Completion is not attained by the Scheduled Substantial Completion Date, Owner
will suffer damages which are difficult to determine and accurately specify.
Design-Builder agrees that if Substantial Completion is not attained by
forty-five (45) days after the Scheduled Substantial Completion Date (the "LD
Date"), Designer-Builder shall pay Owner ten thousand Dollars ($10,000.00) as
liquidated damages for each day that Substantial Completion extends beyond the
LD Date. The liquidated damages provided herein shall be in lieu of all
liability for any and all extra costs, losses, expenses, claims, penalties and
any other damages, whether special or consequential, and of whatsoever nature
incurred by Owner which are occasioned by any delay in achieving Substantial
Completion.

5.5      EARLY COMPLETION BONUS. For every gallon of undenatured ethanol
produced prior to the LD Date, Owner shall pay Design-Builder at the time of
Final Payment under Section 7.3 hereof an early completion bonus of $.185 per
gallon.l

-------------------------------------------------------------------------------
Page  4           DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS
                                   OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
                                         1998 Design-Build Institute of America
<PAGE>

                                    ARTICLE 6

                                 CONTRACT PRICE

6.1      CONTRACT PRICE. Owner shall pay Design-Builder in accordance with
Article 6 of the General Conditions of Contract the sum of Forty-five Million
Dollars ($45,000,000.00) ("Contract Price"), subject to adjustments made in
accordance with the General Conditions of Contract. Unless otherwise provided
in the Contract Documents, the Contract Price is deemed to include all sales,
use, consumer and other taxes mandated by applicable Legal Requirements.

6.2      MARKUPS FOR CHANGES. If the Contract Price requires an adjustment
due to changes in the Work, and the cost of such changes is determined
under Sections 9.4.1.3 or 9.4.1.4 of the General Conditions of Contract,
the following markups shall be allowed on such changes:  N/A

                                    ARTICLE 7

                              PROCEDURE FOR PAYMENT

7.1      PROGRESS PAYMENTS

7.1.1    Design-Builder shall submit to Owner on the twenty-fifth day of each
month, beginning with the first month after the Date of Commencement,
Design-Builder's Application for Payment in accordance with Article 6 of the
General Conditions of Contract.

7.1.2    Owner shall make payment within ten (10) days after Owner's receipt
of each properly submitted and accurate Application for Payment in accordance
with Article 6 of the General Conditions of Contract, but in each case less
the total of payments previously made, and less amounts properly withheld
under Section 6.3 of the General Conditions of Contract.

7.2      RETAINAGE ON PROGRESS PAYMENTS

7.2.1    Owner will retain ten percent (10%) of each Application for
Payment provided, however, that when fifty percent (50%) of the Work has been
completed by Design-Builder, Owner will not retain any additional amounts
from Design-Builder's subsequent Applications for Payment. Owner will also
reasonably consider reducing retainage for Subcontractors completing their
work early in the Project.

7.2.2    Upon Substantial Completion of the entire Work or, if applicable,
any portion of the Work, pursuant to Section 6.6 of the General Conditions of
Contract, Owner shall release to Design-Builder all retained amounts
relating, as applicable, to the entire Work or completed portion of the Work,
less an amount equal to the reasonable value of all remaining or incomplete
items of Work as noted in the Certificate of Substantial Completion.

7.3 FINAL PAYMENT. Design-Builder shall submit its Final Application for Payment
to Owner in accordance with Section 6.7 of the General Conditions of Contract.
Owner shall make payment on Design-Builder's properly submitted and accurate
Final Application for Payment within thirty (30) days after Owner's receipt of
the Final Application for Payment, provided that Design-Builder has satisfied
the requirements for final payment set forth in Section 6.7.2 of the General
Conditions of Contract.

-------------------------------------------------------------------------------
DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS            Page 5
OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
1998 Design-Build Institute of America
<PAGE>

7.4      INTEREST. Payments due and unpaid by Owner to Design-Builder,
whether progress payments or final payment, shall bear interest commencing
five (5) days after payment is due at the rate of eighteen percent (18%).

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

                                    ARTICLE 8

                           TERMINATION FOR CONVENIENCE

8.1      Upon ten (10) days' written notice to Design-Builder, Owner may, for
its convenience and without cause, elect to terminate this Agreement. In such
event, Owner shall pay Design-Builder for the following:

         .1       All Work executed and for proven loss, cost or expense in
                  connection with the Work;

         .2       The reasonable costs and expenses attributable to such
                  termination, including demobilization costs and amounts due in
                  settlement of terminated contracts with Subcontractors and
                  Design Consultants; and

         .3       Overhead and profit in the amount of fifteen percent (15%)
                  on the sum of items .1 and .2 above.

8.2      In addition to the amounts set forth in Section 8.1 above,
Design-Builder shall be entitled to receive one of the following as
applicable:

         .1       If Owner terminates this Agreement prior to commencement of
                  construction, Design-Builder shall be paid ___N/A___ percent
                  (______%) of the remaining balance of the Contract Price.

         .2       If Owner terminates this Agreement after commencement of
                  construction, Design-Builder shall be paid ___N/A___ percent
                  (______%) of the remaining balance of the Contract Price.

8.3      If Owner terminates this Agreement pursuant to Section 8.1 above and
proceeds to design and construct the Project through its employees, agents or
third parties, Owner's rights to use the Work Product shall be as set forth
in Section 4.3 hereof.

-------------------------------------------------------------------------------
Page 6            DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS
                                   OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
                                         1998 Design-Build Institute of America
<PAGE>

                                    ARTICLE 9

                         REPRESENTATIVES OF THE PARTIES

9.1      OWNER'S REPRESENTATIVES

9.1.1    Owner designates the individual listed below as its Senior
Representative ("Owner's Senior Representative"), which individual has the
authority and responsibility for avoiding and resolving disputes under
Section 10.2.3 of the General Conditions of Contract: (IDENTIFY INDIVIDUAL'S
NAME, TITLE, ADDRESS AND TELEPHONE NUMBERS)

TBD

9.1.2    Owner designates the individual listed below as its Owner's
Representative, which individual has the authority and responsibility set
forth in Section 3.4 of the General Conditions of Contract: (IDENTIFY
INDIVIDUAL'S NAME, TITLE, ADDRESS AND TELEPHONE NUMBERS)

TBD

9.2      DESIGN-BUILDER'S REPRESENTATIVES

9.2.1    Design-Builder designates the individual listed below as its Senior
Representative ("Design-Builder's Senior Representative"), which individual
has the authority and responsibility for avoiding and resolving disputes
under Section 10.2.3 of the General Conditions of Contract: (IDENTIFY
INDIVIDUAL'S NAME, TITLE, ADDRESS AND TELEPHONE NUMBERS)

TBD

9.2.2    Design-Builder designates the individual listed below as its
Design-Builder's Representative, which individual has the authority and
responsibility set forth in Section 2.1.1 of the General Conditions of
Contract: (IDENTIFY INDIVIDUAL'S NAME, TITLE, ADDRESS AND TELEPHONE NUMBERS)

TBD

                                   ARTICLE 10

                               BONDS AND INSURANCE

10.1     INSURANCE. Design-Builder shall procure in accordance with Article 5
of the General Conditions of Contract the following insurance coverages: A
certificate of insurance will be provided.

10.2     BONDS AND OTHER PERFORMANCE SECURITY. Design-Builder shall provide
the following performance bond and labor and material payment bond or other
performance security:  N/A

-------------------------------------------------------------------------------
DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS            Page 7
OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
1998 Design-Build Institute of America
<PAGE>

                                   ARTICLE 11

                                OTHER PROVISIONS

11.1     Other provisions, if any, are as follows:

         -    Performance Guarantee: The Design-Builder guarantees the Criteria
              listed in Exhibit A. If there is a performance shortfall, in its
              sole discretion, Design-Builder will pay all design and
              construction costs associated with making the necessary
              corrections.

         -    Schedule Guarantee: The Design-Builder guarantees the 14 Month
              Schedule shown in Exhibit F, assuming the Owner's Notice to
              Proceed is received no later than April 1st, 2001 and the Project
              Site is construction ready.

         -    Price Guarantee: The Design-Builder guarantees the Contract Price
              for the Work delineated by the Contract Documents. Any and all
              price increases would require, in addition to Owner's approval,
              lender approval.

In executing this Agreement, Owner and Design-Builder each individually
represents that it has the necessary financial resources to fulfill its
obligations under this Agreement, and each has the necessary corporate approvals
to execute this Agreement, and perform the services described herein.

OWNER:                                          DESIGN-BUILDER:

-------------------------------                 -------------------------------
(NAME OF OWNER)                                 (NAME OF DESIGN-BUILDER)

-------------------------------                 -------------------------------
(SIGNATURE)                                     (SIGNATURE)

-------------------------------                 -------------------------------
(PRINTED NAME)                                  (PRINTED NAME)

-------------------------------                 -------------------------------
(TITLE)                                         (TITLE)

Date:                                           Date:
     --------------------------                      --------------------------

CAUTION: YOU SHOULD SIGN AN ORIGINAL DBIA DOCUMENT WHICH HAS THIS CAUTION
PRINTED IN BLUE. AN ORIGINAL ASSURES THAT CHANGES WILL NOT BE OBSCURED AS MAY
OCCUR WHEN DOCUMENTS ARE REPRODUCED.

-------------------------------------------------------------------------------
Page 8            DBIA Document No. 535  -  STANDARD FORM OF GENERAL CONDITIONS
                                   OF CONTRACT BETWEEN OWNER AND DESIGN-BUILDER
                                         1998 Design-Build Institute of America
<PAGE>

                              Design Build Contract
                            Badger State Ethanol, LLC
<TABLE>
<CAPTION>

EXHIBIT A

PERFORMANCE GUARANTEE CRITERIA

Table 1 Badger State Ethanol plant criteria
---------------------------- -------------------------- -------------------------- --------------------------
         CRITERIA                  SPECIFICATION            TESTING STATEMENT            DOCUMENTATION
---------------------------- -------------------------- -------------------------- --------------------------
<S>                          <C>                        <C>                        <C>
Plant Capacity - fuel        Operate of a rate of 40    Seven day performance      Production records and a
grade ethanol                million gallons per year   test                       written report from
                             of denatured fuel grade                               ICM/Fagen.
                             ethanol meeting the
                             specifications of ASTM
                             4806
---------------------------- -------------------------- -------------------------- --------------------------
Dried Distillers Grains      Operate at rate of         Determined by              Production records and a
with Solubles (DDGS)         128,571 tons per year of   calculation of mass flow   written analysis from
                             10% moisture DDGS          from centrifuge and        ICM/Fagen.
                                                        dryers in a seven day
                                                        performance test
---------------------------- -------------------------- -------------------------- --------------------------
Carbon Dioxide               120,285 tons per year of   Determined as a function   Mass flow calculation
                             CO2 gas.                   of fermented gallons in
                                                        a seven-day performance
                                                        test.
---------------------------- -------------------------- -------------------------- --------------------------
Corn to Ethanol Conversion   Not be less than 2.80      As determined by meter     Production records and
ratio; CORN MUST BE #2       denatured gallons of       readings during a seven    written analysis by
YELLOW OR BETTER 56#/BU.,    ethanol per bushel of      day performance test.      ICM/Fagen.
16% OR LESS MOISTURE,        ground corn
ZERO  AFLATOXIN TOLERANCE
---------------------------- -------------------------- -------------------------- --------------------------
Electrical Energy            0.75 kW per denatured      As determined by meter     Production records and
                             gallon of fuel grade       readings during a seven    written analysis by
                             ethanol.  Does not         day performance test.      ICM/Fagen.
                             include CO2 plant, CO2
                             gas system or grain bin
                             aeration.
---------------------------- -------------------------- -------------------------- --------------------------
Natural Gas                  Shall not exceed 37,000    As determined by meter     Production records and
                             Btu per denatured gallon   readings during a seven    written analysis by
                             of fuel grade ethanol.     day performance test.      ICM/Fagen.
---------------------------- -------------------------- -------------------------- --------------------------
Process Water Discharge      Zero gallons under         Process discharge meter    Control System reports
                             normal operations
---------------------------- -------------------------- -------------------------- --------------------------

<PAGE>

                              Design Build Contract
                            Badger State Ethanol, LLC

Table 1 (Continued)
<CAPTION>
---------------------------- -------------------------- -------------------------- --------------------------
         CRITERIA                  SPECIFICATION            TESTING STATEMENT            DOCUMENTATION
---------------------------- -------------------------- -------------------------- --------------------------
Cooling tower and boiler     Approximately 75 gallons   Per Wisconsin Department   Per Wisconsin Department
blowdown water discharges    per minute total           of Natural Resources or    of Natural Resources or
                                                        the City of Monroe         the City of Monroe
---------------------------- -------------------------- -------------------------- --------------------------
Labor                        Staffing shall not         Payroll records during     Payroll records during
                             exceed 31 people plus      seven-day performance      seven-day performance
                             those required to unload   test.                      test.
                             incoming corn rail cars
---------------------------- -------------------------- -------------------------- --------------------------
Annual Maintenance Time      Not to average more than   Notification of ICM by     Production records
per Year                     one (24 hour) day per      Badger State.
                             month
---------------------------- -------------------------- -------------------------- --------------------------
Atmospheric Emissions        As prescribed by the       As prescribed by the       As prescribed by the
                             approved and accepted      approved and accepted      approved and accepted
                             State of Wisconsin         State of Wisconsin         State of Wisconsin
                             Department of Natural      Department of Natural      Department of Natural
                             Resources Air Quality      Resources Air Quality      Resources Air Quality
                             Permit.                    Permit.                    Permit.

---------------------------- -------------------------- -------------------------- --------------------------
</TABLE>

<PAGE>

                         Design Build Contract
                       Badger State Ethanol, LLC

EXHIBIT B
---------

GENERAL PROJECT SCOPE

Construct a 40 million gallon per year (MGY) dry mill fuel ethanol plant in
Monroe, Wisconsin. The plant will grind approximately 14.3 million bushels per
year to produce approximately 40 MGY year of fuel grade ethanol denatured with
five percent gasoline. The plant will also produce approximately 128,000 tons
per year of 10% moisture dried distillers grains with solubles (DDGS) and
approximately 121,000 tons per year of raw carbon dioxide (CO2) gas.

The facility will be minimally designed to receive approximately 12,000,000
bushels by rail and 2,300,000 bushels of corn by semi-trailer truck. Arriving
corn will be dumped into one of two double dump pits in a receiving building.
Truck drivers will start the grain system, dump the grain and obtain a weight
ticket from the hopper scale system. Maximum truck dump time is ten minutes.
Two independent 10,000-bushel legs will lift the corn to a scalper to remove
rocks and debris before conveying the product to one of four 100,000-bushel
storage bins. A dust collection system will be installed on the grain receiving
system to limit particulate emissions as described in the Air Quality Permit
application.

Ground corn will be mixed in a 20,000-gallon slurry tank, routed through a
4,400-gallon pressure vessel and steam flashed of in a flash vessel. Cooked
mash will continue through two 54,000-gallon liquefaction tanks and into one of
three 730,000-gallon fermenters. Simultaneously, propagated yeast will be added
to the mash as the fermenter is filling. After batch fermentation is complete,
the beer will be pumped to the 985,000-gallon beer well and then to the eleven
foot diameter beer column to vaporize the alcohol from the mash.

Alcohol streams are dehydrated in the eleven-foot diameter rectifier column,
the five and one-half foot diameter side stripper and the molecular sieve
system. Two hundred proof alcohol is pumped to the tank farm shift tanks and
blended with five percent alcohol as the product is being pump into one of two
750,000 gallon final storage tanks. Loading facilities for truck and rail cars
will be provided. Tank farm tanks include: two 39,000 gallon for 190 proof
storage, two 180,000 gallon for 200 proof storage, one 60,000 gallon for
denaturant storage and two 750,000 gallon tank for denatured ethanol storage.
All tanks are covered carbon steel tanks with floating roofs as may be required
in the air quality permit.

Corn mash from the beer stripper is dewatered in one of four decanter type
centrifuges. Wet cake from the centrifuge is conveyed to the DDGS dryer system.
Water in the thin stillage is evaporated and recycled by the Bio-Methanation
system. Syrup is added to the wet cake entering the dryer. DDGS is
pneumatically conveyed to flat storage in the DDGS storage building. Shipping
is accomplished by scooping and pushing the product

<PAGE>

                         Design Build Contract
                       Badger State Ethanol, LLC

with a front-end loader into a in-floor conveyor system. DDGS is weighed via
hopper scales before dropping into a truck or rail car.

Fresh water for the boilers, cooking and other processes will be obtained from
the City of Monroe and from one process well that will supply the needs of the
cooling tower. Boiler water conditioned in regenerative softeners will be
pumped through a deaerator scrubber and into a deaerator tank. Appropriate
boiler chemicals will be added as preheated water is sent to the boiler.

Steam energy will be provided by one of three natural gas fired package boiler
systems utilizing a high percentage of condensate return to a condensate
receiver tank. The steam system will be inspected and approved by the
appropriate Wisconsin authorities. The process will be cooled by circulating
water through heat exchangers, a chiller and a cooling tower.

The design includes a compressed air system consisting of two 75 Hp
compressors, a receiver tank, pre-filter, coalescing filter, and double air
dryers.

The design also incorporates the use of a clean-in-place (CIP) system for
cleaning cook, fermentation, distillation, evaporation, centrifuges and other
systems. Fifty percent caustic soda is received by truck and stored in one
20,000-gallon tank. CIP makeup is accomplished in two 17,700-gallon makeup
tanks and is returned to one 17,700-gallon waste CIP tank after solids are
removed in the screener.

Under normal operating circumstances, the plant will not have any wastewater
discharges of water that has been in contact with corn, corn mash, cleaning
system or contact process water. An ICM/Phoenix Bio-Methanator will reduce the
organic acids in process water allowing complete reuse within the plant. The
plant will have blowdown discharges from the cooling tower and boiler.

Most plant processes are computer controlled by a Siemens/Moore APACS
distributed control system with graphical user interface and three
workstations. It is estimated that the system will consist of 200 discrete
inputs, 200 discreet outputs, 175 analog inputs and 120 analog outputs.
Additional programmable logic controllers (PLCs) will control certain process
equipment.

Other tanks and equipment include but are not limited to: One 146,000 gallon
thin stillage tank, four 5,150 gallon alpha and gluco amylase tanks, one 27,000
gallon yeast tank, four foot diameter reflux and regen tanks, one 4 foot
diameter 200 proof flash vessel, one 200 proof receiver tank, one 50,000 gallon
whole stillage tank and one syrup tank.

The cooking system requires the use of anhydrous ammonia and other systems
require the use of sulfuric acid. Therefore, a 10,000-gallon storage tank for
each will be on site to provide the quantities necessary. The ammonia storage
requires that plant management implements and enforces a Process Safety
Management (PSM) program.

<PAGE>

                         Design Build Contract
                       Badger State Ethanol, LLC

The plant design may require additional programs to ensure safety and to
satisfy regulatory authorities.

<PAGE>

                         Design Build Contract
                       Badger State Ethanol, LLC

EXHIBIT C
---------
TABLE 2 Buildings provided by DB contractor

<TABLE>
<CAPTION>
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
    BUILDING               TYPE             PRELIMINARY      ROLL UP DOORS IN    WALK DOORS       ADDITION INFO
                                            DIMENSIONS             FEET
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
<S>                <C>                   <C>                <C>                  <C>          <C>
Process            Structural steel or   50 x 210 x 35      Two 12 x 12,         Four         Includes laboratory,
                   pre engineered metal,                    electric operators                control room &
                   steel siding -                                                             offices, MCC Room
                   Insulated
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
Fermenter Walkway  Structural steel,     30 x 110 x 20      None                 As
                   steel siding -                                                required
                   Insulated                                                     by code
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
Dryer              Structural steel or   100 x 100 x 30     One 16 x 20,         As           Includes centrifuge
                   pre engineered                           electric operator    required     area
                   metal, steel siding -                                         by code
                   Insulated
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
DDG Storage        Structural steel or   75 x 125 x 25      Two 16 x 16,         As
                   pre engineered                           electric operators   required
                   metal, steel siding                                           by code
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
Evaporation        Structural steel or   50 x 45 x 35       None                 As
                   pre engineered                                                required
                   metal, steel siding -                                         by code
                   Insulated
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
Grain Receiving    Pre engineered        30 x 70 x 25       Two 14 x 16 and      As           Receiving control
& Shipping         metal - roof                             two 14 x 20,         required     room, 1st & 2nd
                   insulation only                          electric remote      by code      level mezzanine -
                                                            controlled                        MCC Room
                                                            operators
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
Mechanical         Pre engineered        65 x 100 x 25      One 14 x 14, one     As           Includes maintenance
                   metal - Insulated                        10 x 14,  electric   required     offices, spare parts
                                                            operators            by code      storage, welding shop
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
Admin.             Pre engineered        35 x 75 x 14       None                 As           Up to $200,000
                   metal or as                                                   required     allowance for
                   provided by local                                             by code      building, finishing
                   contractor                                                                 & landscaping
------------------ --------------------- ------------------ -------------------- ------------ ----------------------
</TABLE>
<PAGE>

                                Design Build Contract
                              Badger State Ethanol, LLC

EXHIBIT D
---------

ALLOWANCES

The GMP contract includes allowances for listed items in the estimated
amounts. The aggregate allowance for the Administration Building is $200,000,
for Maintenance and Power Equipment $500,000 and for Rail Spur and equipment
$750,000.

Fagen/ICM will provide assistance and recommendations for the purchase of
each item, however the owner or their representative has the ultimate
authority and responsibility for each purchase.

<PAGE>

                                Design Build Contract
                              Badger State Ethanol, LLC
<TABLE>
<CAPTION>

TABLE 3 ADMINISTRATION BUILDING - $200,000 ALLOWANCE
-------------------------- ---------------------------------------------------------------- -----------------
       DESCRIPTION         ADDITIONAL DESCRIPTION                                           EST. AMOUNT
-------------------------- ---------------------------------------------------------------- -----------------
<S>                        <C>                                                              <C>
Administration Building -  EXCAVATION - from rough grade; foundations and utility           $130,000
one story free standing    service connections
                           SITE - Finish grading and landscaping to 20 feet
                           around perimeter.
                           CONCRETE - Footings, floors and sidewalks.
                           STRUCTURAL - Steel or wood framed structure and interior
                           walls
                           WINDOWS - Double pane, gas filled sliding and fixed
                           DOORS - Vestibule entry with aluminum store type entry
                           doors, others- metal with view lights. Interior - solid
                           wood with view lights. Commercial grade hardware
                           INSULATION - To State energy specifications or better
                           FINISHES - Exterior, steel panels & trims. Interior - stud
                           walls, sheetrock and paint.
                           FLOORING - linoleum entry, restrooms & halls and medium
                           grade commercial carpet.
                           CABINETS - Prefabricated; restrooms sink & vanity,
                           refreshment center with sink.
                           MECHANICAl - Natural gas fired HVAC system, gas fired 50
                           gallon hot water heater, water cooler; medium grade
                           fixtures.
                           ELECTRICAL - 200 Amp service, fluorescent lighting, rough
                           in wiring, junction boxes and terminations for data (CAT 5e)
                           and telephone lines
-------------------------- ---------------------------------------------------------------- -----------------
Office Computer System     Microsoft Windows 2000 network server and five personal          $25,000
                           computers, one laser printer. Includes setup and labor.
-------------------------- ---------------------------------------------------------------- -----------------
Telephone System           Digital phone system with voice mail for office and plant.       $20,000
-------------------------- ---------------------------------------------------------------- -----------------
Office Copier & fax        Black & white with sheet feeder and collator.  Plain paper fax   $10,000
machine                    machine
-------------------------- ---------------------------------------------------------------- -----------------
Office Furniture           Office desks, chair & side chairs, conference room table &       $15,000
                           chairs, three four-drawer filing cabinets, 10 two-drawer
                           filing cabinets.
-------------------------- ---------------------------------------------------------------- -----------------
</TABLE>

<PAGE>

                                Design Build Contract
                              Badger State Ethanol, LLC
<TABLE>
<CAPTION>

TABLE 4 Maintenance and Power Equipment-$500,000 Allowance
-------------------------- ---------------------------------------------------------------- -----------------
       DESCRIPTION                             ADDITIONAL DESCRIPTION                         EST. AMOUNT
-------------------------- ---------------------------------------------------------------- -----------------
<S>                        <C>                                                              <C>
Spare Parts                Spare parts                                                      $300,000
                           Parts bins
                           Misc. materials, supplies and equipment
-------------------------- ---------------------------------------------------------------- -----------------
Shop supplies and          One shop welder                                                  $60,000
equipment                  One portable gas welder
                           One plasma torch
                           One acetylene torch
                           One set of power tools
                           Two sets of hand tools with tool boxes
                           Carts and dollies
                           Hoists (except centrifuge overhead crane)
                           Shop tables
                           Maintenance office furnishings & supplies
                           Fire Extinguishers
                           Reference books
                           Safety manuals
                           Safety cabinets & supplies, etc.
                           Safety showers as required
-------------------------- ---------------------------------------------------------------- -----------------
Rolling stock              Used 1 1/2yard front end loader                                  $140,000
                           New Skid loader
                           Used Fork lift
                           Used Scissors lift, 30 foot
                           Used Pickup truck
-------------------------- ---------------------------------------------------------------- -----------------
</TABLE>

<TABLE>
<CAPTION>

TABLE 5 RAILROADS - $750,000 ALLOWANCE
-------------------------- ---------------------------------------------------------------- -----------------
       DESCRIPTION                             ADDITIONAL DESCRIPTION                         EST. AMOUNT
-------------------------- ---------------------------------------------------------------- -----------------
<S>                        <C>                                                              <C>
Rail Spur                  5,000 feet of on-site rail spur:                                 $500,000
                           Sub ballast
                           Ballast
                           Track
                           Ties
-------------------------- ---------------------------------------------------------------- -----------------
Track Switches             Four #9 switches                                                 $120,000
-------------------------- ---------------------------------------------------------------- -----------------
Car mover                  Reconditioned car mover                                          $120,000
-------------------------- ---------------------------------------------------------------- -----------------
Misc. Items                Miscellaneous rail spur items                                    $10,000
-------------------------- ---------------------------------------------------------------- -----------------
</TABLE>

<PAGE>

EXHIBIT E
---------

OWNER'S REQUIRED PERMITS AND SERVICES LIST

The owner shall provide all of the permits, authorizations and services except
building permits, but including but not limited to:

    1)  LAND AND GRADING - Owner shall provide a site known as the Stauffer
        Farm near or in Monroe, Wisconsin. The site shall be rough graded to
        specifications of ICM, Inc.

    2)  ROADS - Owner shall provide or have provided, one access road of off
        Fourth Avenue of sufficient quality to withstand semi-truck traffic of
        30,000+ annual loads with weight of 80,000 lbs each.

    3)  AIR QUALITY PERMIT - A permit for construction shall be obtained from
        the proper authorities before a Notice to Proceed to be valid. Owner
        shall obtain an Operating Permit in timely manner to allow startup of
        the plant as scheduled by Fagen/ICM.

    4)  STORM WATER RUNOFF PERMIT - Owner shall obtain the permanent storm
        water runoff permit. The contractor shall obtain the construction storm
        water runoff permit.

    5)  WISCONSIN POLLUTANT ELIMINATION DISCHARGE PERMIT - If available and
        required, Owner shall obtain a permit to discharge cooling tower water
        directly to Honey Creek or agree to discharge to the City of Monroe
        sewage treatment facility.

    6)  NATURAL GAS SUPPLY AND SERVICE AGREEMENT - Continuous supply of natural
        gas of at least 1.5 billion cubic feet per year, at a minimum rate of
        200 MCF per hour and at a minimum pressure of 200 psig at the plant
        site. Owner or vendor shall provide supply meter and regulators to
        provide burner tip pressures as specified by ICM, Inc.

    7)  ELECTRICAL SERVICE - Continuous supply of 15,000 kVA, 12,400-volt
        electrical energy or more to a point immediately adjacent to the
        perimeter plant road. The capacity provides sufficient capacity for
        most CO2 operations. Owner shall supply a high voltage switch and if
        required, a substation. Owner or vendor shall supply meter as specified
        by the power company. Additional electrical capacity will be required
        for a significant plant expansion.

    8)  WATER SUPPLY AND SERVICE AGREEMENT - For process and sanitary purposes,
        fresh of at least 100 gallons per minute (GPM) from the City of Monroe
        with minimum quality standards of a) total conductivity of 600 umho or
        less, 340 mg/L or less total of hardness and 0.5 mg/L or less of iron.
        Owner will also supply one on-site process well capable of providing
        270 GPM of water meeting the same standards as listed above. ICM/Fagen
        has reviewed well water inorganic analyses of samples submitted by the
        City of Monroe to U.S. Filter Corp. laboratory on March 24, 1999 and
        find them to be acceptable. Fagen/ICM will not be responsible for water
        quality changes after that date.

<PAGE>

    9)  WASTEWATER DISCHARGE AND SERVICE AGREEMENT - For discharges of cooling
        tower and boiler blowdown under normal operating procedures. Process
        wastewater discharges during emergency failure of wastewater treatment
        plant to treat all process wastewater.

    10) RAILROAD - Owner shall provide track, ties and ballast to plant site at
        grades specified by ICM, Inc.

    11) CARBON DIOXIDE PLANT - Owner shall provide sufficient time for Fagen/ICM
        to integrate any potential CO2 plant engineering with detailed
        engineering on the ethanol plant. Additional engineering charges may
        apply should redesign or restocking of equipment or materials be
        required.

<PAGE>

EXHIBIT F

<TABLE>
<CAPTION>
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
ACTIVITY         ACTIVITY                           ORIG    EARLY     EARLY                         MONTHS
   ID          DESCRIPTION                          DATE    START     FINISH      -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
<S>                                                 <C>     <C>      <C>      <C>
General                                                                       Operations Permiting Complete
-------- ------------------------------------------ ------- -------- --------  Financial Closing
GN1020   Operations Permiting Complete                               23FEB01*   Mobilization
GN1000   Financial Closing                                  02APR01  02APR01  ------------------------------------------------------
GN1030   Mobilization                                    1  03APR01  17APR01
-------- ------------------------------------------ ------- -------- --------    Site Civil Engineering Phase 1 (LDP)
Civil/Site                                                                                   Procure Electrical Transformers
-------- ------------------------------------------ ------- -------- -------- Site Engineering Phase 2 (Detail Design)
CS9000   Site Civil Engineering Phase 1 (LDP)            2  02APR01  07MAY01     Land Disturbance Permit - Submit / Review
CS8000   Procure Electrical Transformers                13  03APR01  05OCT01       Clearing & Grubbing
CS9001   Site Engineering Phase 2 (Detail Design)        2  08MAY01  12JUN01  ------------------------------------------------------
CS9050   Land Disturbance Permit - Submit / Review       1  08MAY01  21MAY01     Install U/G Utilities & Fire Loop
CS2000   Clearing & Grubbing                             1  22MAY01  05JUN01       Install U/G Elect. Duct Banks
CS7001   Install U/G Utilities & Fire Loop               2  30MAY01  26JUN01         Final Civil Plan Review (County & Health Dept.)
CS8001   Install U/G Elect. Duct Banks                   3  06JUN01  18JUL01       Site Prep, Utilities & Roads
CS9051   Final Civil Plan Review (County & Health Dept.) 1  13JUN01  26JUN01  ------------------------------------------------------
CS2010   Site Prep, Utilities & Roads                    7  20JUN01  27SEP01         Structural Engineering
-------- ------------------------------------------ ------- -------- --------            Order Structural Steel
Ethanol Plant                                                                            Ethanol Plant Str. Eng. Plan Review
-------- ------------------------------------------ ------- -------- --------             Procure Civil/Structural Materials
EP9000   Structural Engineering                          1  02APR01  23APR01                  Fermentation Tank Foundations
EP5001   Order Structural Steel                          3  24APR01  12JUN01  ------------------------------------------------------
EP9050   Ethanol Plant Str. Eng. Plan Review             1  24APR01  14MAY01     Electrical U/G & Grounding
EP3500   Procure Civil/Structural Materials              3  01MAY01  12JUN01       Remaining Process Area Foundations
EP3000   Fermentation Tank Foundations                   3  13JUN01  01AUG01          Field Fab Fermentation Tanks
EP8000   Electrical U/G & Grounding                      7  20JUN01  04OCT01           Order Pipe, Valves, and Pumps
EP3010   Remaining Process Area Foundations              5  27JUN01  13SEP01             Balance of Fdn.'s & Slabs
EP6000   Field Fab Fermentation Tanks                    6  02AUG01  25OCT01  ------------------------------------------------------
EP7000   Order Pipe, Valves, and Pumps                   6  16AUG01  15NOV01             Erect Distillation Steel & Equipment
EP3020   Balance of Fdn.'s & Slabs                       3  14SEP01  01NOV01     Pipe Installation @ Process Area
EP5011   Erect Distillation Steel & Equipment            7  14SEP01  03JAN02            Field Fab Balance of Process Tanks
EP7001   Pipe Installation @ Process Area               10  05OCT01  28FEB02  Ethanol Power & Controls Limited Access
EP6010   Field Fab Balance of Process Tanks              4  12OCT01  17DEC01       Erect Pipe Racks & Equipment
EP8001   Ethanol Power & Controls Limited Access         6  12OCT01  10JAN02  ------------------------------------------------------
EP5003   Erect Pipe Racks & Equipment                    7  02NOV01  14FEB02                Ethanol Power & Controls
EP8002   Ethanol Power & Controls                        8  11JAN02  03MAY02      Pipe Installation @ Mash Area
EP7002   Pipe Installation @ Mash Area                   5  01FEB02  18APR02
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
Run Date 26OCT00 11:57      BSE2 PRELIMINARY 14 MONTH SCHEDULE                Sheet 1 of 3         CGP - EPC - Barry Morgan
                                      FAGEN, INC. && ICM                         Date                         Contract   Attachment
                                     BADGER STATE ETHANOL                       Revision  Checked Approved                  BM.
Primavera Systems, Inc.               MONROE, WISCONSIN
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------

Confidential                                         Page 1                               11/21/00

</TABLE>
<PAGE>

EXHIBIT F

<TABLE>
<CAPTION>
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
ACTIVITY         ACTIVITY                           ORIG    EARLY     EARLY                         MONTHS
   ID          DESCRIPTION                          DATE    START     FINISH      -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
<S>                                                 <C>     <C>      <C>      <C>
Ethanol Plant                                                                  Erect Ethanol Process Building
-------- ------------------------------------------ ------- -------- --------  Complete Building Electrical
EP8003   Complete Building Electrical                    2  22MAR02  18APR02   Start Up & Commision
EP0900   Start Up & Commision                            4  22APR02  31MAY02 ------------------------------------------------------
-------- ------------------------------------------ ------- -------- --------    Grain Receiving Str. Eng.
Grain Storage /Handling                                                                   Grain Receiving Str. Eng. Plan Review
-------- ------------------------------------------ ------- -------- -------- Bin & Elevator Foundations
GH9000   Grain Receiving Str. Eng.                       5  24APR01  30APR01     Electrical U/G & Grounding
GH9050   Grain Receiving Str. Eng. Plan Review           1  01MAY01  14MAY01     Erect Grain Storage Bins
GH3000   Bin & Elevator Foundations                      4  13JUN01  15AUG01  ------------------------------------------------------
GH8000   Electrical U/G & Grounding                      4  18JUN01  20AUG01     Erect Elevator Tower
GH6000   Erect Grain Storage Bins                        3  16AUG01  04OCT01     Electrical Power & Controls Limited Access
GH3502   Erect Elevator Tower                            2  05OCT01  08NOV01     Install GH Equipment
GH8001   Electrical Power & Controls Limited Access      2  05OCT01  08NOV01     Electrical Power & Controls
GH3503   Install GH Equipment                            6  09NOV01  14FEB02  ------------------------------------------------------
GH8002   Electrical Power & Controls                     8  09NOV01  07MAR02     DDGS Drying Str. Eng.
-------- ------------------------------------------ ------- -------- --------    Order Civil/Concrete Material
DDGS Drying                                                                      DDGS Drying Str. Eng. Plan Review
-------- ------------------------------------------ ------- -------- --------    DDG Dryer Foundations & Slabs
DG9000   DDGS Drying Str. Eng.                           1  24APR01  07MAY01     DDG Dryer Equipment
DG3000   Order Civil/Concrete Material                   4  08MAY01  03JUL01  ------------------------------------------------------
DG9050   DDGS Drying Str. Eng. Plan Review               1  08MAY01  21MAY01    DDG Electrical Power
DG3001   DDG Dryer Foundations & Slabs                   5  20JUN01  29AUG01    Tie In Dryer Equipment
DG6500   DDG Dryer Equipment                             4  30AUG01  01NOV01    Tie In Dryer Piping
DG8000   DDG Electrical Power                            5  21SEP01  10DEC01    Erect DDG Building
DG6000   Tie In Dryer Equipment                          1  26OCT01  15NOV01    DDGS Storage/Loadout Str. Eng.
DG7000   Tie In Dryer Piping                             4  26OCT01  26DEC01  ------------------------------------------------------
DG5000   Erect DDG Building                              4  02NOV01  03JAN02     DDGS Storage/Loadout Str. Eng. Plan Review
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
DDGS Storage / Handling                                                          Procure Civil/Concrete Material
-------- ------------------------------------------ ------- -------- --------    Foundations & Slabs
DS9000   DDGS Storage/Loadout Str. Eng.                  1  08MAY01  21MAY01     Erect Building
DS9050   DDGS Storage/Loadout Str. Eng. Plan Review      2  22MAY01  26JUN01     Electrical Power & Controls
DS3000   Procure Civil/Concrete Material                 4  30MAY01  25JUL01     Install DDG Storage Conveyors
DS3001   Foundations & Slabs                             4  27JUN01  22AUG01
DS4000   Erect Building                                  8  23AUG01  17DEC01
DS8000   Electrical Power & Controls                     8  27NOV01  21MAR02
DS6000   Install DDG Storage Conveyors                   2  18DEC01  17JAN02
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
Run Date 26OCT00 11:57      BSE2 PRELIMINARY 14 MONTH SCHEDULE                Sheet 2 of 3         CGP - EPC - Barry Morgan
                                      FAGEN, INC. && ICM                         Date                         Contract   Attachment
                                     BADGER STATE ETHANOL                       Revision  Checked Approved                  BM.
Primavera Systems, Inc.               MONROE, WISCONSIN
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------

Confidential                                         Page 2                               11/21/00
</TABLE>

<PAGE>

EXHIBIT F

<TABLE>
<CAPTION>
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
ACTIVITY         ACTIVITY                           ORIG    EARLY     EARLY                         MONTHS
   ID          DESCRIPTION                          DATE    START     FINISH      -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
<S>                                                 <C>     <C>      <C>      <C>
Office                                                                        Office Bldg. Design
-------- ------------------------------------------ ------- -------- --------
OT9000   Office Bldg. Design                             5  01MAY01  07MAY01  Office Plan Review
OT9050   Office Plan Review                              1  08MAY01  21MAY01  Procure Subcontracts
OT3000   Procure Subcontracts                            2  30MAY01  03JUL01  Install Scale Fnd.'s & Scale
OT3001   Install Scale Fnd.'s & Scale                    2  05JUL01  01AUG01  Construct Office Building
OT4000   Construct Office Building                       7  02AUG01  08NOV01  Power @ Offices
OT8000   Power @ Offices                                 2  16AUG01  13SEP01  Cooling Tower Str. Eng.
-------- ------------------------------------------ ------- -------- --------
Cooling Tower                                                                 Cooling Tower Str. Eng. Plan Review
-------- ------------------------------------------ ------- -------- --------
CT9000   Cooling Tower Str. Eng.                         5  22MAY01  29MAY01  Procure Civil/Concrete Materials
CT9050   Cooling Tower Str. Eng. Plan Review             1  30MAY01  12JUN01  CT Basin & Sump
CT3000   Procure Civil/Concrete Materials                4  13JUN01  08AUG01  Erect Cooling Tower
CT3001   CT Basin & Sump                                 2  12JUL01  08AUG01  Power & Controls
CT6500   Erect Cooling Tower                             4  09AUG01  04OCT01  Install Cooling Tower Piping
CT8000   Power & Controls                                5  07SEP01  15NOV01  Misc. MCC Rooms
CT7000   Install Cooling Tower Piping                    5  05OCT01  17DEC01  Painting
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
Balance Of Plant
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
BP4000   Misc. MCC Rooms                                 6  19JUL01  11OCT01  Field Erect Tank Farm Tanks
BP0100   Painting                                       12  28SEP01  21MAR02  Tank Farm & Load Out Equipment
BP6500   Field Erect Tank Farm Tanks                     4  18DEC01  14FEB02  Tank Farm Equipment Pads
BP6000   Tank Farm & Load Out Equipment                  3  01FEB02  14MAR02  Tank Farm & Load Out Electrical
BP3000   Tank Farm Equipment Pads                        1  15FEB02  07MAR02  Piping @ Tank Farm
BP8000   Tank Farm & Load Out Electrical                 4  08MAR02  03MAY02
BP7000   Piping @ Tank Farm                              2  15MAR02  11APR02
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------
Run Date 26OCT00 11:57      BSE2 PRELIMINARY 14 MONTH SCHEDULE                Sheet 3 of 3         CGP - EPC - Barry Morgan
                                      FAGEN, INC. && ICM                         Date                         Contract   Attachment
                                     BADGER STATE ETHANOL                       Revision  Checked Approved                  BM.
Primavera Systems, Inc.               MONROE, WISCONSIN
-------- ------------------------------------------ ------- -------- -------- ------------------------------------------------------

Confidential                                         Page 3                               11/21/00
</TABLE>

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