Document:

exv10w62

 

Exhibit 10.62

WAIVER AND THIRD AMENDMENT

     WAIVER AND THIRD AMENDMENT, dated as of October 25, 2006 (this “Amendment”), to the Loan and
Security Agreement, dated as of August 1, 2005 (the “Loan Agreement”), among Del Global
Technologies Corp. (“Del Global”), RFI Corporation and Del Medical Imaging Corp. (collectively, the
“Borrowers”) and North Fork Business Capital Corporation (the “Lender”). Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan
Agreement.

W I T N E S S E T H :

     WHEREAS, the Borrowers and the Lender are parties to the Loan Agreement, under which the
Lender has agreed to make, and has made, Loans and other extensions of credit and accommodations to
the Borrowers on the terms and subject to the conditions set forth therein; and

     WHEREAS, the Borrowers have requested that the Lender agree, and the Lender has agreed, (i) to
waive Events of Default that have occurred and are continuing and (ii) to amend certain provisions
of the Loan Agreement, each upon the terms and subject to the conditions set forth herein.

     NOW, THEREFORE, the Borrowers and the Lender agree as follows:

     SECTION 1 Waiver. Effective as of the date hereof, the Lender hereby waives
compliance with Sections 8.1(b), 8.2, 8.3(b), 8.4, 8.5(b) and 8.7 of the Loan Agreement solely to
the extent of the Borrowers’ failure to comply with the covenant contained therein for the period
ended July 31, 2006.

     SECTION 2 Amendments to the Loan Agreement. Effective as of the date hereof, the Loan
Agreement is amended as follows:

(a) The definition of “Adjusted U.S. Earnings” contained in Section 1.1 of the Loan Agreement
is amended and restated as follows:

“Adjusted U.S. Earnings” means Adjusted Earnings without
giving effect to the net income of Villa Sistemi or any adjustments
thereto, but including any dividends received from Villa Sistemi.”

(b) Section 7.2(c) is amended and restated as follows:

“(c) Corporate Changes, Etc. Each Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly,
merge or consolidate with any Person or amend, alter or modify its
Governing Documents or its legal name, mailing address, chief
executive office or principal places of business, structure, status
or existence, or liquidate or dissolve itself (or suffer any
liquidation or dissolution) or issue any capital stock or other
equity interests

 

 

other than (i) the issuance of shares of capital
stock by Del Global upon the exercise of warrants for shares of
capital stock of Del Global or the issuance of any other capital
stock of Del Global so long as all the Net Cash Proceeds thereof are
applied to the outstanding amount of the Loans within three Business
Days of receipt thereof ; (ii) the issuance of shares of capital
stock by Del Global in exchange for shares of Villa Sistemi’s
capital stock not owned by Del Global as of the Closing Date; (iii)
the issuance of shares of capital stock of Del Global in connection
with a rights offering, in form and substance satisfactory to the
Lender and (iv) an amendment to the certificate of incorporation of
Del Global to increase the aggregate number of shares of common
stock authorized to be issued by Del Global from 20,000,000 to
50,000,000.”

(c) Section 8.1(b) is amended and restated as follows:

“(b) After the Lender receives the Financial Statements and other
documents required under Section 7.1(k)(i) with respect to the
fiscal year ended July 29, 2006 and so long as no Default has
occurred and is continuing and ExcessAvailability is at least
$500,000, the Adjusted U.S. Earnings for any period set forth below
shall not be less than the amount set forth below opposite such
period:

	 	 	 	 	 
	 	 	Minimum Adjusted U.S.	 
	Period	 	Earnings	 
	 
	 	 	 	 
	November 1, 2005 through October 31, 2006
	 	$	250,000	 
	February 1, 2006 through January 31, 2007
	 	 	300,000	 
	May 1, 2006 through April 30, 2007
	 	 	1,100,000	 
	August 1, 2006 through July 31, 2007
	 	 	1,750,000	 
	Each period of four consecutive fiscal quarters ending
January 31, April 30, July 31 and October 31 of each
fiscal year thereafter
	 	 	1,750,000	 

(d) Section 8.2 is amended and restated as follows:

     “SECTION 8.2 Adjusted Earnings. The Adjusted Earnings for any period set
forth below shall not be less than the amount set forth below opposite such period:

2

 

	 	 	 	 	 
	 	 	Minimum Adjusted	 
	Period	 	Earnings	 
	 
	 	 	 	 
	November 1, 2005 through October 31, 2006
	 	$	3,250,000	 
	February 1, 2006 through January 31, 2007
	 	 	3,400,000	 
	May 1, 2006 through April 30, 2007
	 	 	4,750,000	 
	August 1, 2006 through July 31, 2007
	 	 	5,500,000	 
	Each period of four consecutive fiscal quarters ending
January 31, April 30, July 31 and October 31 of each
fiscal year thereafter
	 	 	5,500,000	 

(e) Section 8.3(b) is amended and restated as follows:

“(b) After the Lender receives the Financial Statements and other
documents required under Section 7.1(k)(i) with respect to the
fiscal year ended July 29, 2006 and so long as no Default has
occurred and is continuing and Excess Availability is at least
$500,000, the ratio of (i) the outstanding amount of all Loans and
all outstanding Letters of Credit to (ii) Adjusted U.S. Earnings (on
an annualized basis) shall not, as of the last day of any period set
forth below, be greater than the ratio set forth below opposite such
period:

	 	 	 
	Period	 	Maximum Senior U.S. Debt Ratio
	 
	 	 
	November 1, 2005 through October 31, 2006

	 	18.0: 1.00
	February 1, 2006 through January 31, 2007

	 	17.0: 1.00
	May 1, 2006 through April 30, 2007

	 	6.70: 1.00
	August 1, 2006 through July 31, 2007

	 	3.50: 1.00
	Each period of four consecutive fiscal quarters
ending January 31, April 30, July 31 and October 31
of each fiscal year thereafter

	 	3.50: 1.00

(f) Section 8.4 is amended and restated as follows:

     “SECTION 8.4 Senior Debt Ratio. The ratio of (i) the outstanding amount of all
Loans and all outstanding Letters of Credit to (ii) Adjusted Earnings (on an annualized
basis) shall not, as of the last day of any period set forth below, be greater than the
ratio set forth below opposite such period:

3

 

	 	 	 
	Period	 	Maximum Senior Debt Ratio
	 
	 	 
	November 1, 2005 through October 31, 2006
February 1, 2006 through January 31, 2007
May 1, 2006 through April 30, 2007
August 1, 2006 through July 31, 2007
Each period of four consecutive fiscal quarters
ending January 31, April 30, July 31 and October 31
of each fiscal year thereafter

	 	4.75: 1.00
4.50: 1.00
3.40: 1.00
3.00: 1.00
3.00: 1.00

(g) Section 8.5(b) is amended and restated as follows:

“(b) After the Lender receives the Financial Statements and other
documents required under Section 7.1(k)(i) with respect to the
fiscal year ended July 30, 2006 and so long as no Default has
occurred and is continuing and Excess Availability is at least
$500,000, the Fixed Charge Coverage Ratio for any period set forth
below shall not be less than the ratio set forth below opposite such
period:

	 	 	 	 	 
	Period	 	Minimum Fixed Charge	 
	 	 	Coverage Ratio	 
	 
	 	 	 	 
	November 1, 2005 through October 31, 2006
	 	Not applicable
	February 1, 2006 through January 31, 2007
	 	Not applicable
	May 1, 2006 through April 30, 2007
	 	 	1.10: 1.00	 
	August 1, 2006 through July 31, 2007
	 	 	2.00: 1.00	 
	Each period of four consecutive fiscal quarters ending
January 31, April 30, July 31 and October 31 of each
fiscal year thereafter
	 	 	2.00: 1.00	 

(h) Section 8.7 is amended and restated as follows:

     “Capital Expenditures. The aggregate amount of Borrowers’ consolidated Capital
Expenditures made or committed to be made in any fiscal year commencing with the fiscal year
ending July 30, 2007, shall not exceed $400,000.”

(i) Section 2.1(a) is amended and restated as follows:

“(a) The Lender agrees, subject to Section 2.5 and the other terms
and conditions of this Agreement, to make loans (“Revolving Credit
Loans”) to the Borrowers, from time to time

4

 

from the Closing Date to
but excluding the Expiration Date, at the Administrative Borrower’s
request to the Lender, in the aggregate principal amount at any one
time outstanding which, when combined with the aggregate undrawn
amount of all unexpired Letters of Credit, does not exceed (i) 85%
of Eligible Receivables plus (ii) 40% of Eligible Inventory,
all of the foregoing less such reserves as the Lender may
establish in its sole discretion including, without limitation a
reserve in an amount equal to twice the amount of any dilution of
the Borrower’s Receivables from time to time (the “Borrowing Base”);
provided, however, that in no event shall the
aggregate amount of the Revolving Credit Loans and the Letters of
Credit outstanding at any time(x) in respect of Eligible Inventory
exceed $2,000,000 or (y) exceed the Maximum Amount of the Revolving
Facility.”

(j) The $300,000 sinking fund reserve taken in March 2006 pursuant to Section 2.1(a) is hereby
reversed.

(k) Section 2.5(b)(iv) is hereby deleted in its entirety.

(l) The definition of “Sinking Fund Reserve” contained in Section 1.1 is hereby deleted in its
entirety.

     SECTION 3 Conditions of Effectiveness. This Amendment shall become effective when,
and only when, the Lender shall have received (a) counterparts of this Amendment, duly executed by
the Borrowers, and (b) payment of the costs and expenses (including, without limitation, reasonable
attorneys’ fees) incurred by the Lender in connection with this Amendment.

     SECTION 4 Representations and Warranties of the Borrowers. Each Borrower represents
and warrants as follows:

               (a) Such Borrower is a corporation duly organized, validly existing and in good standing under
the laws of the State of New York or Delaware, as the case may be, and is qualified to do business
under the laws of such other jurisdictions in which its failure to so qualify could have a Material
Adverse Effect.

               (b) The execution, delivery and performance by such Borrower of this Amendment (i) are within
such Borrower’s corporate powers, have been duly authorized by all necessary corporate action and
do not contravene (A) such Borrower’s Governing Documents, (B) any Requirement of Law or (C) any
Material Contract and (ii) will not result in or require the creation or imposition of any Lien
upon or with respect to any property now owned or hereafter acquired by such Borrower.

5

 

               (c) No authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority or other Person is required for the due execution, delivery and performance
by such Borrower of this Amendment.

               (d) This Amendment and the Loan Agreement as amended hereby constitute the legal, valid and
binding obligations of such Borrower enforceable against such Borrower in accordance with their
respective terms except as enforceability may be limited by (i) bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) general principles of equity.

               (e) Except as specified in Schedule 6.1(r) to the Loan Agreement and the litigation between
Del Global and Jeffrey Moeller, there is no pending or, to the best of such Borrower’s knowledge
after due inquiry, threatened litigation, contested claim, investigation, arbitration or
governmental proceeding by or against such Borrower before any court, Governmental Authority or
arbitrator which individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect or which purports to affect the legality, validity or enforceability of this
Amendment or the Loan Agreement as amended hereby.

(f) Except as specified in Section 1 hereof, no Default has occurred and is continuing.

     SECTION 5 Reference to and Effect on the Loan Agreement.

               (a) On and after the date hereof, each reference in the Loan Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein” and words of like import, and each reference in the other Loan
Documents to the Loan Agreement shall mean and be a reference to the Loan Agreement as amended
hereby.

               (b) Except as specifically waived or amended above, (i) the Loan Agreement and each other Loan
Document shall remain in full force and effect and are hereby ratified and confirmed by each of the
parties hereto and (ii) the Lender shall not be deemed to have waived any rights or remedies it may
have under the Loan Agreement, any other Loan Document or applicable law.

               (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of or an amendment to any right, power or remedy of the Lender
under any of the Loan Documents, or constitute a waiver of or an amendment to any provision of any
of the Loan Documents.

     SECTION 6 Costs and Expenses. The Borrowers agree to pay, on demand, all reasonable
out-of-pocket costs and expenses incurred by the Lender in connection with the preparation,
negotiation and execution of this Amendment (including, without limitation, the reasonable fees and
expenses of counsel to the Lender).

     SECTION 7 Counterparts; Telecopied Signatures. This Amendment may be executed in
counterparts and by the parties hereto in separate counterparts, each of which when

6

 

so executed and delivered shall be an original, but all of which shall together constitute one
and the same instrument. This Amendment may be executed and delivered by telecopier or other
facsimile transmission with the same force and effect as if the same were a fully executed and
delivered original manual counterpart.

     SECTION 8 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT, WHETHER SOUNDING IN
CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.

SIGNATURES CONTINUE ON FOLLOWING PAGE

7

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 
	 	DEL GLOBAL TECHNOLOGIES CORP.

 	 
	 	By:  	/s/ Mark A. Zorko
 	 
	 	 	Name:  	Mark A. Zorko 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	RFI CORPORATION

 	 
	 	By:  	/s/ Mark A. Zorko
 	 
	 	 	Name:  	Mark A. Zorko 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	DEL MEDICAL IMAGING CORP.

 	 
	 	By:  	/s/ Mark A. Zorko
 	 
	 	 	Name:  	Mark A. Zorko 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	NORTH FORK BUSINESS CAPITAL CORPORATION

 	 
	 	By:  	/s/  Robert R. Wallace
 	 
	 	 	Name:  	Robert R. Wallace 	 
	 	 	Title:  	Vice President 	 
	 

8exv10w05

 

Exhibit 10.5

***** PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMISSIONS HAVE BEEN INDICATED BY ASTERISKS
(“*****”), AND THE OMITTED TEXT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

     US BioEnergy Corporation has entered into a First
Amended and Restated Master Agreement for Design, Engineering and Construction of Dry Grind Ethanol Production Facilities (Projects
in Advanced Development), dated August 10, 2006, with Fagen,
Inc. (“Master Agreement”) attached hereto. Pursuant to the Master
Agreement, certain of US BioEnergy Corporation's subsidiaries have entered into separate lump sum design-build agreements that are
substantially identical in all material respects to Exhibit B to the
Master Agreement as follows:

	 	 	 	 	 	 	 	 	 
	US BioEnergy Subsidiary	 	Date of Agreement	 	Production Capacity	 	Contract Price
	 
	 	 
	 	 
	 	 

	US Bio Dyersville, LLC	 	September 22, 2006	 	100 mmgy	 	        $	118,948,365.00	         
	US Bio Hankinson, LLC	 	September 22, 2006	 	100 mmgy	 	$	105,997,000.00	 
	US Bio Janesville, LLC	 	September 22, 2006	 	100 mmgy	 	$	97,250,000.00	 

     In accordance with Instruction 2 to
Item 601 of Regulation S-K, only the Master Agreement is
filed herewith.

 

 

FIRST AMENDED AND RESTATED

MASTER AGREEMENT

FOR

DESIGN, ENGINEERING AND CONSTRUCTION OF

DRY GRIND ETHANOL PRODUCTION FACILITIES

(PROJECTS IN ADVANCED DEVELOPMENT)

BETWEEN

US BIOENERGY CORPORATION

AND

FAGEN, INC.

August 10, 2006

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

FIRST AMENDED AND RESTATED MASTER AGREEMENT

     This FIRST AMENDED AND RESTATED MASTER AGREEMENT FOR DESIGN, ENGINEERING AND CONSTRUCTION OF
DRY GRIND ETHANOL PRODUCTION FACILITIES (PROJECTS IN ADVANCED DEVELOPMENT) (the
“Agreement”) is made as of August 10, 2006 (the “Effective Date”), by and between
US BioEnergy Corporation, a South Dakota corporation (“US BioEnergy”), and Fagen, Inc., a
Minnesota corporation (“Fagen”) (each a “Party” and, collectively, the
“Parties”).

RECITALS

     WHEREAS, US BioEnergy plans to develop, build, own and operate, directly or through
subsidiaries, multiple dry grind fuel grade ethanol plants in the United States with capacities of
100 or 40-50 million gallons per year (“MGY”) (each a “Plant” and, collectively,
“Plants”); and

     WHEREAS, Fagen desires to provide design, engineering, procurement and construction services
(the “Services”) for the Plants; and

     WHEREAS, US BioEnergy and Fagen have entered into that certain Master Design Build Letter
Agreement dated January 31, 2005 (“Initial Agreement”); and

     WHEREAS, US BioEnergy and Fagen desire to terminate the Initial Agreement and replace it in
its entirety; and

     WHEREAS, US BioEnergy and Fagen entered into that certain Master Agreement for Design,
Engineering and Construction of Dry Grind Ethanol Production Facilities (Projects in Advanced
Development) dated August 1, 2006 (the “Initial Advanced Development Master Agreement”)
which superseded and replaced the Initial Agreement in its entirety; and 

     WHEREAS, US BioEnergy and Fagen desire to amend the Initial Advanced Development Master
Agreement and replace it with this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein and
for other good and valuable consideration, US BioEnergy and Fagen agree as follows:

AGREEMENT

	1.	 	Design-Build Agreements. Fagen agrees that, if US BioEnergy so requests, it will enter into
a separate Lump-Sum Design-Build Agreement with US BioEnergy or its designated subsidiary for
the design, engineering and construction of each Committed Plant on, and subject to, the terms
and conditions set forth in this Section 1 (each a “Design-Build Agreement”). As used
in this Agreement, “Committed Plant” means any of the Plants listed on Exhibit A to
this Agreement or, if US BioEnergy notifies Fagen, at least ninety (90) days prior to the
first day of the quarter in which construction for a specific Plant listed in Exhibit A is
scheduled to commence, that US BioEnergy has ceased actively developing any such Plant or has
experienced any other delays or changed circumstances which warrant delaying the development
of such Plant, another Plant specified in the notice (a “Replacement Plant”) that is
located in the continental, contiguous, United

			
	 	 	 
	US BioEnergy Corporation	 	 
	Master Agreement
	 	August 10, 2006

 

 

	 	 	States with similar capacity as the Plant US BioEnergy seeks to delay or has ceased actively
developing .

	 	(a)	 	Each Design-Build Agreement will be in the form of Exhibit B to this Agreement,
with appropriate information completed as contemplated by this Agreement, subject to
such additions, deletions and other changes as mutually agreed by the Parties.
	 
	 	(b)	 	Subject to Section 2(d) below, the “Contract Price” under each Design-Build
Contract will be as set forth on Exhibit A to this Agreement for the applicable
Committed Plant; provided, however, that if a Committed Plant is replaced as
contemplated in Paragraph 1, above, the Contract Price shall also be adjusted to
reflect, among other things, the different location and scheduling of the Replacement
Plant.
	 
	 	(c)	 	*****

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 2 of 11

 

	2.	 	Development Services. Fagen also will provide US BioEnergy the following services related to
the development of the Committed Plants:

	 	(a)	 	Front-end design and engineering sufficient for development and analysis of the
cost of construction and the feasibility of financing;
	 
	 	(b)	 	Conceptual design and technical information required to support application by
US BioEnergy or its subsidiaries for construction air permits;
	 
	 	(c)	 	Assistance in evaluating, form both a technical and a commercial perspective,
US BioEnergy’s organizational options, the appropriate location of Committed Plants and
business development generally;
	 
	 	(d)	 	Subject to compliance with applicable securities laws, assistance in presenting
information on Plants to potential equity investors in, lenders to, or governmental or
other entities regulating US BioEnergy and its subsidiaries; and

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 3 of 11

 

	 	(e)	 	Assistance in locating appropriate management for Committed Plants.

	 	 	Fagen assumes no risk or liability for advice or information provided to US BioEnergy under
this Section 2, it being understood that all decisions regarding the feasibility, financing
and commercial risks of a particular Plant are US BioEnergy’s responsibility. Further, US
BioEnergy acknowledges that the technical data provided by Fagen under this Section 2 is
preliminary and may not be suitable for construction. US BioEnergy further acknowledges
that Fagen has no control over cost of labor, materials, equipment, or services furnished by
others, over other contractors’ methods of determining prices, or other competitive bidding
or market conditions. Fagen’s estimates of project construction costs will be made on the
basis of its experience and qualifications and will represent Fagen’s best judgment as
experienced and qualified professionals familiar with the construction industry. Fagen does
not guarantee that proposals, bids, or actual construction costs will not vary from its
estimates of project cost and US BioEnergy acknowledges the same.
	 
	3.	 	Default by Fagen. Notwithstanding the other provisions of this Agreement, including, without
limitation, Section 1(c)(iii) above, if Fagen willfully or through gross negligence fails or
refuses to comply with its obligations under this Agreement, Fagen shall be solely responsible
for all its costs or expenses with respect to any Plant and US BioEnergy shall have the right
to select a company other than Fagen to perform the services with respect to the Plant in
question upon thirty (30) days’ written notice to Fagen and Fagen’s failure to cure such
failure within ten (10) days thereof.
	 
	4.	 	Default by US BioEnergy; Failure to Develop a Committed Plant. Should US BioEnergy choose
not to develop a Committed Plant prior to the execution of the Design-Build Agreement for such
Plant or to develop or pursue a relationship with a company other than Fagen to provide the
preliminary engineering or design-build services for the Committed Plant, then US BioEnergy
will reimburse Fagen for all expenses Fagen has incurred in connection with the Committed
Plant based upon Fagen’s standard rate schedule plus all third party costs incurred from the
date of this Agreement. Such expenses include, but are not limited to, labor rates and
reimbursable expenses such as legal charges for document review and preparation, travel
expenses, reproduction costs, long distance phone costs, and postage.
	 
	5.	 	Confidentiality. Each Party will, and will cause its affiliates to, hold in confidence and
use only for the purposes of completing the Plants and the other transactions under this
Agreement any and all confidential information disclosed to it, except that a Party or its
affiliates may disclose confidential information to its lenders, lenders’ agents, prospective
investors, advisors and/or consultants as may be reasonably necessary to enable them to advise
a Party or its affiliates on the Plants and the other transactions contemplated by this
Agreement, provided that any party to which confidential information is disclosed is informed
of the existence of this confidentiality obligation and agree to be obligated to keep such
information confidential. The term “confidential information” means (i) any and all
information concerning the Plants and the other transactions contemplated by this Agreement,
including that Fagen and US BioEnergy have entered into this Agreement

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 4 of 11

 

	 	 	and its terms, and (ii) all information that one Party, directly or indirectly, may acquire
from the other, but confidential information does not include information falling into any
of the following categories:

	 	(a)	 	information that, at the time of disclosure hereunder, is in the public domain;
	 
	 	(b)	 	information that, after disclosure hereunder, enters the public domain other
than by breach of this Agreement or the obligation of confidentiality;
	 
	 	(c)	 	information that, prior to disclosure hereunder, was already in the possession
of a Party or its affiliates, either without limitation on disclosure to others or
subsequently becoming free of such limitation;
	 
	 	(d)	 	information obtained by a Party or its affiliates from a third party having an
independent right to disclose this information; and
	 
	 	(e)	 	information that is available through discovery by independent research without
use of or access to the confidential information acquired from the other Party as its
affiliates.

	 	 	A Party’s obligation to maintain confidential information in confidence will be deemed
performed if that Party observes with respect to the confidential information the same
safeguards and precautions that Party observes with respect to its own confidential
information of the same or similar kind. Notwithstanding the preceding provisions of this
Section 5, it will not be deemed to be a breach of the obligation to maintain confidential
information in confidence if confidential information is disclosed upon the order of a court
or other authorized governmental entity, or pursuant to other legal requirements, including,
without limitation, disclosure of confidential information to a governmental entity required
in connection with an offering of securities by a Party or any of its affiliates. However,
if a Party or its affiliates is required to file this Agreement with or disclose the terms
of this Agreement to a governmental entity, it agrees that, to the extent permitted by
applicable law, it will not do so without first informing the other Party of the requirement
and, if requested by the other Party, seeking confidential treatment prior to filing this
Agreement or disclosing the terms thereof if there is a reasonable basis to seek
confidential treatment. The Parties’ confidentiality obligations under this Section 5 shall
survive the expiration or termination of this Agreement and shall be a legally binding
obligation of each Party for five (5) years following the later to occur of termination of
this Agreement or completion of the Plants contemplated by the Transaction Documents.
	 
	6.	 	Publicity. Neither Party nor any of its affiliates, shareholders, subcontractors, or vendors
or their officers, representatives, agents and employees will issue any press or publicity
release or otherwise release, distribute, announce, or disseminate any information for
publication concerning this Agreement or the transactions it contemplates, the existence of
this Agreement, the participation of the other Party in this Agreement or the transactions it
contemplates, or any other matter affecting the other Party hereunder, without the prior
written consent of the other Party, which consent may be withheld for

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 5 of 11

 

	 	 	any reason, except where such press or publicity release is required by order of a court or
necessary or appropriate under the rules or regulations of any governmental agency,
including, without limitation, disclosure of confidential information to a governmental
entity required in connection with an offering of securities by a Party or any of its
affiliates.
	 
	 	 	The Parties will jointly agree on the timing and content of any public disclosure by US
BioEnergy, including but not limited to, press releases, relating to Fagen’s involvement in
the Plants, and no such disclosure will be made without Fagen’s consent and approval, except
for disclosures required by applicable law, including, without limitation, disclosure of
confidential information to a governmental entity required in connection with an offering of
securities by a Party or any of its affiliates.
	 
	7.	 	Disclaimer of Consequential Damages. Except as specifically set forth herein, in no event
will Fagen or US BioEnergy be liable to the other pursuant to this Agreement, or for
activities conducted under this Agreement, under any theory of recovery for any indirect,
special, incidental or consequential damages (including, without limitation, loss of revenues
or profits, loss of use, cost of replacement, cost of capital and claims of customers,
interest charges, or increased costs of any nature whatsoever).
	 
	8.	 	Governing Law. This Agreement is governed by, and will be construed and interpreted in
accordance with the laws of the State of Minnesota, without regard to any conflicts of law or
choice of law rules.

	9.	 	Expenses. Except as set forth in Sections 1, 2 and 3 above, unless otherwise agreed by Fagen
and US BioEnergy, each Party will bear its own expenses in connection with the negotiation and
execution of definitive documentation for the transactions contemplated herein.

	10.	 	Indemnification. Each Party will indemnify, defend and hold harmless the other Party and its
respective agents, servants, officers, directors, employees and affiliates from and against
any loss, cost, liability, claim, damage, expense (including reasonable attorneys’ and
consultants’ fees and disbursements), penalty or fine incurred in connection with any claim or
cause of action arising from or in connection with this Agreement to the extent caused by the
negligence, misrepresentation, fraud, fault or misconduct of the indemnifying Party or its
breach of this Agreement.

	11.	 	Notices. All notices under this Agreement, to be effective, must be in writing and shall be
effective only on physical delivery (including by courier) or facsimile transmission to the
following address or such other address as the receiving Party may have specified by notice to
the other Party:

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 6 of 11

 

	 	 	If to US BioEnergy:

US BioEnergy Corporation

Attn: General Counsel

5500 Cenex Drive, MS 175

Inver Grove Heights, MN 55077

Fax: (651) 355-8301

     With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Attn: John C. Ale

1000 Louisiana Street, Suite 6800

Houston, Texas 77002

Facsimile No.:(713) 655-5200

     If to Fagen:

Fagen, Inc.

Attn: Aaron Fagen

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Facsimile No.:(320) 564-3278

     With a copy to:

Fagen, Inc.

Attn: Jennifer Johnson

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Facsimile No.:(320) 564-3278

     and to:

Fagen, Inc.

Attn: Wayne Mitchell

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Facsimile No.: (320) 564-5190

	12.	 	Assignability; Binding Effect; Benefit. This Agreement will inure to the benefit of and be
binding upon the Parties and their respective successors and assigns. Nothing in this
Agreement, either expressed or implied, is intended to confer on any person other than the
Parties and their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. Neither Fagen nor US
BioEnergy shall, without the written consent of the other, assign or transfer this Agreement,
except that Fagen agrees that US BioEnergy may assign its rights and obligations under the
Agreement to entities in which US BioEnergy holds a majority ownership or voting control (each
a “subsidiary”); provided, however, US BioEnergy

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 7 of 11

 

	 	 	shall deliver, at least ten days prior to any such assignment, to Fagen (i) notice of such
assignment and (ii) a copy of the instrument of assignment in form and substance reasonably
acceptable to Fagen, whose approval shall not be unreasonably withheld. Notwithstanding any
such assignment, US BioEnergy shall remain jointly liable for any failure of any assignee to
fulfill its obligations under this Agreement, including but not limited to any payment and
confidentiality obligations established hereunder.

	13.	 	Further Action. Each Party agrees to execute and deliver all further instruments, legal
opinions and documents, and take all further action not inconsistent with the provisions of
this Agreement that may be reasonably necessary to complete performance of the Parties’
obligations hereunder and to effectuate the purposes and intent of this Agreement.

	14.	 	Amendments. The Parties agree that this Agreement may be modified only by written agreement
by the Parties.

	15.	 	Integration. This Agreement represents the entire understanding between the Parties in
relation to the subject matter hereof and supersedes any and all previous agreements,
arrangements or discussions between the Parties (whether written or oral) in respect of the
subject matter hereof, including the Initial Agreement and the Initial Advanced Development
Master Agreement, but does not supersede the Master Agreement for Design, Engineering and
Construction of Dry Grind Ethanol Production Facilities (Future Development) dated August 1,
2006 between the Parties or any existing Design-Build Agreement or services agreement between
the Parties and/or their affiliates, other than the Initial Agreement and the Initial Advanced
Development Master Agreement. No change, amendment or modification of this Agreement will be
valid or binding upon the Parties unless such change, amendment or modification will be in
writing and duly executed by both Parties.

	16.	 	No Representations, Warranties or Covenants. Notwithstanding anything contained herein to
the contrary, Fagen is not making any representation, warranty or covenant of any kinds with
respect to any design, engineering or construction scheduling, or with respect to any
projections, estimates or budgets heretofore delivered to or made available to US BioEnergy of
future revenues, expenses, expenditures, future results of operations (or any component
thereof) or the future business and operations of US BioEnergy, nor any commitments or
assurances except as maybe provided in the Design-Build Agreement(s).

	17.	 	Counterparts. This Agreement may be executed in one or more counterpart, each of which when
so executed and delivered will be deemed an original, but all of which taken together
constitute one and the same instrument. Signatures which have been affixed and transmitted by
facsimile or other electronic means will be binding to the same extent as an original
signature, although the Parties contemplate that a fully executed counterpart with original
signatures will be delivered to each Party.

			
	 	 	 
	US BioEnergy Corporation	 	 
	Master Agreement
	 	August 10, 2006

Page 8 of 11

 

	18.	 	Term and Termination. The Parties’ obligations under Section 2 of this Agreement will
terminate on the execution and delivery of the last Design-Build Agreement to be
executed as provided in Section 1. For the avoidance of doubt, the obligations of Fagen and
US BioEnergy or its applicable subsidiary under any executed Design-Build Agreement will
survive the termination of this Agreement. Notwithstanding the foregoing, in the event that
Fagen has fulfilled its obligations hereunder and US BioEnergy refuses, for any reason
whatsoever, to execute any of the Design-Build Agreements delivered by Fagen pursuant to
Section 1, this agreement shall terminate and Fagen shall be compensated by US BioEnergy
pursuant to Section 4 hereof.

     IN WITNESS WHEREOF, the Parties hereto have caused their names to be hereunto subscribed by
their officers thereunto duly authorized, intending thereby that this Agreement shall be effective
as of August 10, 2006.

	 	 	 	 	 	 	 	 	 	 	 
	US BIOENERGY CORPORATION	 	 	 	FAGEN, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ GORDON OMMEN
 

	 	 	 	By:
	 	/s/ RON FAGEN
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Gordon Ommen	 	 	 	Roland “Ron” Fagen	 	 
	(Printed Name)	 	 	 	(Printed Name)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Chief Executive
Officer 
	 	 	 	CEO and
President 
	 	 
	(Title)	 	 	 	(Title)	 	 

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 9 of 11

 

EXHIBIT A

COMMITTED PLANTS

	 	 	 	 	 	 	 	 	 	 	 
	Site	 	Capacity	 	Contract Price	 	Baseline Index	 	Construction Start Date
	Janesville, MN
	 	100 MGY	 	$	97,250,000	 	 	N/A1	 	4th Quarter 2006
	Hankinson, ND
	 	100 MGY	 	$	105,997,000	 	 	7540.38
(Sept. 2005)
(no 4% adder)2	 	4th Quarter 2006
	Dyersville, IA
	 	100 MGY	 	$	118,948,365	 	 	7699.59	 	4th Quarter 2006
	 
	 	 	 	 	 	 	 	(June 2006)	 	 
	Grinnell, IA
	 	100 MGY	 	$	113,998,443	 	 	7699.59	 	1st Quarter 2007
	 
	 	 	 	 	 	 	 	(June 2006)	 	 
	Springfield, MN3
	 	50 MGY	 	$	65,826,178	 	 	7695.40	 	2nd Quarter 2007
	 
	 	 	 	 	 	 	 	(April 2006)	 	 

			
	NOTE:	 	The Contract Price for each Committed Plant listed in this exhibit includes, where
applicable, a discount of ***** from Fagen’s standard lump sum pricing for one hundred (100)
MGY facilities as provided in Section 1(b) of the Master Agreement for Design, Engineering and
Construction of Dry Grind Ethanol Production Facilities (Future Development) dated August 1,
2006 between the Parties.

 

			
	1	 	The Contract Price for the 100 MGY Plant
located at Janesville, MN will not be adjusted to reflect the effect of
increases in the Construction Cost Index. The Design-Build Agreement for
the Janesville, MN Plant shall not include Section 9.2 of the form
Design-Build Agreement attached hereto as Exhibit B. Notwithstanding the
foregoing, if this Plant is substituted pursuant to the terms of Section 1
hereof, the Contract Price for any substitute Plant shall be adjusted
pursuant to the terms of the form agreement attached as Exhibit B.
	 
	2	 	The Contract Price for the 100 MGY Plant
located at Hankinson, ND shall be adjusted to reflect increases in the
Construction Cost Index only. The Design-Build Agreement for the
Hankinson, ND Plant shall not contain the additional four percent (4%)
adder contained in Section 9.2 of Exhibit B. Notwithstanding the
foregoing, if this Plant is substituted pursuant to the terms of Section 1
hereof, the Contract Price for any substitute Plant shall be adjusted
pursuant to the terms of the form agreement attached as Exhibit B.
	 
	3	 	If the Plant located at Springfield, MN is
developed as a 100 MGY facility, the following pricing shall apply:

	 	 	 	 	 	 	 	 	 
	Springfield, MN
	 	100 MGY
	 	$113,186,407
	 	7695.40
(April 2006)
	 	2nd Quarter 2007

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 10 of 11

 

EXHIBIT B

FORM DESIGN-BUILD AGREEMENT

			
	 	 	 
	US BioEnergy Corporation
	 	August 10, 2006
	Master Agreement	 	 

Page 11 of 11

 

LUMP SUM DESIGN-BUILD AGREEMENT

BETWEEN

[Name of Project Company] (“OWNER”)

AND

FAGEN, INC. (“DESIGN-BUILDER”)

                     ___, 20___

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	Article 1 Definitions; Rules of Interpretation
	 	 	1	 
	 
	 	 	 	 
	1.1 Rules of Construction
	 	 	1	 
	1.2 Defined Terms
	 	 	1	 
	 
	 	 	 	 
	Article 2 The Project
	 	 	6	 
	 
	 	 	 	 
	2.1 Services to be Performed
	 	 	6	 
	2.2 Extent of Agreement
	 	 	7	 
	2.3 Conflicting Provisions
	 	 	7	 
	 
	 	 	 	 
	Article 3 Design-Builder Responsibilities
	 	 	8	 
	 
	 	 	 	 
	3.1 Design-Builder’s Services in General
	 	 	8	 
	3.2 Design Development and Services
	 	 	8	 
	3.3 Standard of Care
	 	 	9	 
	3.4 Government Approvals and Permits
	 	 	9	 
	3.5 Subcontractors
	 	 	9	 
	3.6 Maintenance of Site
	 	 	10	 
	3.7 Project Safety
	 	 	10	 
	3.8 Submission of Reports
	 	 	11	 
	3.9 Training
	 	 	11	 
	 
	 	 	 	 
	Article 4 Owner’s Responsibilities
	 	 	11	 
	 
	 	 	 	 
	4.1 Duty to Cooperate
	 	 	11	 
	4.2 Furnishing of Services and Information
	 	 	11	 
	4.3 Financial Information; Cooperation with Lenders; Failure to Obtain Financial Closing
	 	 	12	 
	4.4 Owner’s Representative
	 	 	13	 
	4.5 Government Approvals and Permits
	 	 	13	 
	4.6 Owner’s Separate Contractors
	 	 	13	 
	4.7 Security
	 	 	13	 
	 
	 	 	 	 
	Article 5 Ownership of Work Product; Risk of Loss
	 	 	14	 
	 
	 	 	 	 
	5.1 Work Product
	 	 	14	 
	5.2 Owner’s Limited License Upon Payment in Full
	 	 	14	 
	5.3 Owner’s Limited License Upon Owner’s Termination for Convenience or Design-Builder’s Election to Terminate
	 	 	14	 
	5.4 Owner’s Limited License Upon Design-Builder’s Default
	 	 	15	 
	5.5 Owner’s Indemnification for Use of Work Product
	 	 	15	 
	5.6 Risk of Loss
	 	 	15	 
	 
	 	 	 	 
	Article 6 Commencement and Completion of the Project
	 	 	16	 
	 
	 	 	 	 
	6.1 Phase I and Phase II Engineering
	 	 	16	 
	6.2 Notice to Proceed; Commencement
	 	 	16	 
	6.3 Project Start-Up and Testing
	 	 	16	 

 i

 

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	6.4 Substantial Completion
	 	 	17	 
	6.5 Final Completion
	 	 	17	 
	6.6 Post Completion Support
	 	 	19	 
	 
	 	 	 	 
	Article 7 Performance Testing and Liquidated Damages
	 	 	19	 
	 
	 	 	 	 
	7.1 Performance Guarantee
	 	 	19	 
	7.2 Performance Testing
	 	 	19	 
	7.3 Liquidated Damages
	 	 	20	 
	7.4 Bonds and Other Performance Security
	 	 	21	 
	 
	 	 	 	 
	Article 8 Warranties
	 	 	22	 
	 
	 	 	 	 
	8.1 Design-Builder Warranty
	 	 	22	 
	8.2 Correction of Defective Work
	 	 	22	 
	8.3 Warranty Period Not Limitation to Owner’s Rights
	 	 	23	 
	 
	 	 	 	 
	Article 9 Contract Price
	 	 	23	 
	 
	 	 	 	 
	9.1 Contract Price
	 	 	23	 
	9.2 Effect of Construction Cost Index Increase on Contract Price
	 	 	23	 
	 
	 	 	 	 
	Article 10 Payment Procedures
	 	 	24	 
	 
	 	 	 	 
	10.1 Payment at Financial Closing
	 	 	24	 
	10.2 Progress Payments
	 	 	24	 
	10.3 Final Payment
	 	 	25	 
	10.4 Failure to Pay Amounts Due
	 	 	25	 
	10.5 Design-Builder’s Payment Obligations
	 	 	26	 
	10.6 Record Keeping and Finance Controls
	 	 	26	 
	 
	 	 	 	 
	Article 11 Hazardous Conditions and Differing Site Conditions
	 	 	26	 
	 
	 	 	 	 
	11.1 Hazardous Conditions
	 	 	26	 
	11.2 Differing Site Conditions; Inspection
	 	 	27	 
	 
	 	 	 	 
	Article 12 Force Majeure; Change in Legal Requirements
	 	 	28	 
	 
	 	 	 	 
	12.1 Force Majeure Event
	 	 	28	 
	12.2 Effect of Force Majeure Event
	 	 	28	 
	12.3 Change in Legal Requirements
	 	 	29	 
	12.4 Time Impact And Availability
	 	 	29	 
	 
	Article 13 Changes to the Contract Price and Scheduled Completion Dates
	 	 	29	 
	 
	13.1 Change Orders
	 	 	29	 
	13.2 Contract Price Adjustments
	 	 	30	 
	13.3 Emergencies
	 	 	31	 
	13.4 Failure to Complete Owner’s Milestones
	 	 	31	 
	 
	 	 	 	 
	Article 14 Indemnity
	 	 	31	 
	 
	 	 	 	 
	14.1 Tax Claim Indemnification
	 	 	31	 

			
	 	 	 
	[Name of Project Company]
	 	_____ ___, 2006

 ii

 

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	14.2 Payment Claim Indemnification
	 	 	31	 
	14.3 Design-Builder’s General Indemnification
	 	 	31	 
	14.4 Owner’s General Indemnification
	 	 	32	 
	 
	 	 	 	 
	Article 15 Stop Work; Termination for Cause
	 	 	33	 
	 
	 	 	 	 
	15.1 Owner’s Right to Stop Work
	 	 	33	 
	15.2 Owner’s Right to Perform and Terminate for Cause
	 	 	33	 
	15.3 Owner’s Right to Terminate for Convenience
	 	 	34	 
	15.4 Design-Builder’s Right to Stop Work
	 	 	34	 
	15.5 Design-Builder’s Right to Terminate for Cause
	 	 	35	 
	15.6 Bankruptcy of Owner or Design-Builder
	 	 	36	 
	15.7 Lenders’ Right to Cure
	 	 	36	 
	 
	 	 	 	 
	Article 16 Representatives of the Parties
	 	 	36	 
	 
	 	 	 	 
	16.1 Designation of Owner’s Representatives
	 	 	36	 
	16.2 Designation of Design-Builder’s Representatives
	 	 	37	 
	 
	 	 	 	 
	Article 17 Insurance
	 	 	37	 
	 
	 	 	 	 
	17.1 Insurance
	 	 	37	 
	17.2 Design-Builder’s Insurance Requirements
	 	 	38	 
	17.3 Owner’s Liability Insurance
	 	 	39	 
	17.4 Owner’s Property Insurance
	 	 	39	 
	 
	 	 	 	 
	Article 18 Representations and Warranties
	 	 	41	 
	 
	 	 	 	 
	18.1 Design-Builder and Owner Representations and Warranties
	 	 	41	 
	18.2 Design-Builder Representations and Warranties
	 	 	41	 
	 
	 	 	 	 
	Article 19 Dispute Resolution
	 	 	41	 
	 
	 	 	 	 
	19.1 Dispute Avoidance and Mediation
	 	 	41	 
	19.2 Arbitration
	 	 	42	 
	19.3 Duty to Continue Performance
	 	 	43	 
	19.4 No Consequential Damages
	 	 	43	 
	19.5 Limitation of Liability
	 	 	43	 
	 
	 	 	 	 
	Article 20 Confidentiality of Shared Information
	 	 	44	 
	 
	 	 	 	 
	20.1 Non-Disclosure Obligation
	 	 	44	 
	20.2 Publicity and Advertising
	 	 	45	 
	20.3 Term of Obligation
	 	 	45	 
	 
	 	 	 	 
	Article 21 Miscellaneous
	 	 	45	 
	 
	 	 	 	 
	21.1 Assignment
	 	 	45	 
	21.2 Successors
	 	 	46	 
	21.3 Governing Law
	 	 	46	 
	21.4 Severability
	 	 	46	 

			
	 	 	 
	[Name of Project Company]
	 	______ ___, 2006

 iii

 

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	21.5 No Waiver
	 	 	46	 
	21.6 Headings
	 	 	46	 
	21.7 Notice
	 	 	46	 
	21.8 No Privity with Design Consultant/Subcontractors
	 	 	47	 
	21.9 Amendments
	 	 	47	 
	21.10 Entire Agreement
	 	 	47	 
	21.11 Third-Party Beneficiaries
	 	 	47	 
	21.12 Counterparts
	 	 	47	 
	21.13 Survival
	 	 	47	 
	EXHIBIT A Performance Guarantee Criteria
	 	 	A-1	 
	 
	 	 	 	 
	EXHIBIT B General Project Scope
	 	 	B-1	 
	 
	 	 	 	 
	EXHIBIT C Owner’s Responsibilities
	 	 	C-1	 
	 
	 	 	 	 
	EXHIBIT D ICM License Agreement
	 	 	D-1	 
	 
	 	 	 	 
	EXHIBIT E Schedule of Values
	 	 	E-1	 
	 
	 	 	 	 
	EXHIBIT F Form of Informational Report
	 	 	F-1	 
	 
	 	 	 	 
	EXHIBIT G Required Permits
	 	 	G-1	 
	 
	 	 	 	 
	EXHIBIT H Form of Performance Bond
	 	 	H-1	 
	 
	 	 	 	 
	EXHIBIT I Form of Payment Bond
	 	 	I-1	 
	 
	 	 	 	 
	EXHIBIT J Draw (Payment) Schedule
	 	 	J-1	 
	 
	 	 	 	 
	EXHIBIT K Air Emissions Application or Permit
	 	 	K-1	 
	 
	 	 	 	 
	EXHIBIT L Phase I and Phase II Engineering Services Agreement
	 	 	L-1	 
	 
	 	 	 	 
	EXHIBIT M Form of Application for Payment
	 	 	M-1	 
	 
	 	 	 	 
	EXHIBIT N Form of Lien Waiver
	 	 	N-1	 
	 
	 	 	 	 
	EXHIBIT O Form of Consent to Assignment
	 	 	O-1	 

			
	 	 	 
	[Name of Project Company]
	 	______ ___, 2006

 iv

 

 

LUMP SUM DESIGN-BUILD CONTRACT

This LUMP SUM DESIGN-BUILD CONTRACT (the “Agreement”) is made as of [Date], (the
“Effective Date”) by and between [Name of Project Company], a [State] [type of entity], a
(the “Owner”) and Fagen, Inc., a Minnesota corporation (the “Design-Builder”) (each
a “Party” and collectively, the “Parties”).

RECITALS

A. The Owner desires to develop, construct, own and operate a [Capacity Spelled Out] ([Capacity in
Numbers]) million gallons per year (“MGY”) dry grind ethanol production facility located
[in/near] [City], [State] (the “Plant”); and

B. Design-Builder desires to provide design, engineering, procurement and construction services for
the Plant.

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

AGREEMENT

Article 1

Definitions; Rules of Interpretation

     1.1 Rules of Construction. The capitalized terms listed in this Article shall have the meanings
set forth herein whenever the terms appear in this Agreement, whether in the singular or the plural
or any tense or variant form. Other terms used in this Agreement but not listed in this Article
shall have meanings as commonly used in the English language and, where applicable, in generally
accepted construction and design-build standards of the fuel ethanol industry in the United States.
Words not otherwise defined herein that have well known and generally accepted technical or trade
meanings are used herein in accordance with such recognized meanings. In addition, the following
rules of interpretation shall apply:

	 	(a)	 	The masculine shall include the feminine and neuter.
	 
	 	(b)	 	References to “Articles,” “Sections,” “Schedules,” or “Exhibits” shall be to
Articles, Sections, Schedules or Exhibits of this Agreement.
	 
	 	(c)	 	This Agreement was negotiated and prepared by each of the Parties with the
advice and participation of counsel. The Parties have agreed to the wording of this
Agreement and none of the provisions hereof shall be construed against one Party on the
ground that such Party is the author of this Agreement or any part hereof.
	 
	 	(d)	 	The use of “includes” and its variants is without limitation.

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

			
	 	 	 
	[Name of Project Company]
	 	______ ___, 2006

 

 

AAA is defined in Section 19.1.

Agreement is defined in the Preamble.

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

Applicable Law means

	 	(a)	 	any and all laws, legislation, statutes, codes, acts, rules, regulations,
ordinances, treaties or other similar legal requirements enacted, issued or promulgated
by a Governmental Authority;
	 
	 	(b)	 	any and all orders, judgments, writs, decrees, injunctions, Governmental
Approvals or other decisions of a Governmental Authority; and
	 
	 	(c)	 	any and all legally binding announcements, directives or published practices or
interpretations, regarding any of the foregoing in (a) or (b) of this definition,
enacted, issued or promulgated by a Governmental Authority;

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

Application for Payment is defined in Section 10.2.1.

As Built Plans is defined in Section 5.2.

Bankrupt Party is defined in Section 15.6.1.

Baseline Index is defined in Section 9.2.1.

Change Order is defined in Section 13.1.1.

CCI is defined in Section 9.2.

Certificate of Substantial Completion is defined in Section 6.4.3.

Confidential Information is defined in Section 20.1.

Construction Documents is defined in Section 3.2.1.

Contract Documents is defined in Section 2.2.

Contract Price is defined in Section 9.1.

Contract Time(s) means scheduled dates provided for in the Contract Documents including Scheduled
Substantial Completion Date and Final Completion Date.

			
	 	 	 
	[Name of Project Company]
	 	______ ___, 2006

2

 

Damages is defined in Section 14.3.1.

Day or Days means calendar days unless otherwise specifically noted in the Contract Documents.

Design-Builder is defined in the Preamble.

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

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

Design Consultant means a qualified, licensed design professional that 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 a Subcontractor, to furnish design services required under the Contract
Documents.

Differing Site Conditions is defined in Section 11.2.1.

Effective Date is defined in the Preamble.

Fagen Engineering is defined in Section 6.1.

Final Application for Payment is defined in Section 10.3.

Final Completion is defined in Section 6.5.2.

Final Completion Date is defined in Section 6.5.1.

Final Payment is defined in Section 10.3.

Financial Closing means the execution of the Financing Documents by all the parties thereto, and
the fulfillment of all conditions precedent thereunder necessary to permit the advance of funds to
pay amounts due under this Agreement.

Financing Documents means the final loan documents with persons or entities providing
financing for the construction or term financing of the Plant and any and all agreements necessary
to demonstrate a binding commitment of Owner or the persons or entities providing financing for the
construction or term financing of the Plant to fund the construction of the Plant.

Force Majeure Event is defined in Section 12.1.

Governmental Approvals are any material authorizations or permissions issued or granted by any
Governmental Authority to the Project, its Owner, the Design-Builder, Subcontractors and their
affiliates in connection with any activity related to the Project.

			
	 	 	 
	[Name of Project Company]
	 	______ ___, 2006

3

 

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

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.

ICM means ICM, Inc., a Kansas corporation.

ICM License Agreement means the license agreement to be executed between Owner and ICM, Inc.,
substantially in the form attached hereto as Exhibit D.

Indemnified Parties is defined in Section 5.2.

Independent
Engineer means Owner’s and Lenders’ independent engineer.1

Industry-Wide Disruption is defined in Section 12.4.

Informational Report is defined in Section 3.8.

Legal Requirements or Laws are all applicable federal, state and local statutes, laws, codes,
ordinances, rules, regulations, judicial decisions, orders, decrees, plans, injunctions, permits,
tariffs, governmental agreements and governmental restrictions, whether now or hereafter in effect,
of any government or quasi-government entity having jurisdiction over the Project or Site, the
practices involved in the Project or Site, or any Work, including any consensus standards for
materials, products, systems, and services established by ASTM International, any successor
organization thereto, or any Governmental Authority.

Lenders means the persons or entities providing financing under the Financing Documents.

Lenders’ Agent means an agent or agents acting on behalf of the Lenders, including any trustee.

 

			
	1	 	This definition is only applicable if Lender
requires that an independent engineer have participation and review
rights. If this definition is not applicable, references to “Independent
Engineer” should be deleted from Sections 3.2.4, 3.2.5, 6.3, 7.2.2, 7.2.3,
and 10.2.2. The following sentences from Section 4.3 should also be
deleted.:

Design-Builder and Owner also acknowledge that the Lenders, as a condition
to providing financing for the Plant, shall require Owner to provide the
Independent Engineer with certain participation and review rights with respect
to Design-Builder’s performance of the Work. Design-Builder acknowledges and
agrees that such participation and review rights shall consist of the right to
(i) enter the Site and inspect the Work upon reasonable notice to
Design-Builder; (ii) attend all start-up and testing procedures; and (iii)
review and approve such other items for which Owner is required by Lenders to
obtain the concurrence, opinion or a certificate of the Independent Engineer or
the Lenders pursuant to the Financing Documents which items do not alter the
rights or impose additional obligations on Design-Builder.

			
	 	 	 
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Manufacturer’s Warranty means a warranty provided by the original manufacturer or vendor of
equipment used by Design-Builder in the Plant.

MGY is defined in the Recitals.

Notice to Proceed is defined in Section 6.2.

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

Owner is defined in the Preamble.

Owner Indemnified Parties is defined in Section 14.3.1.

Owner’s Milestones is defined in Section 13.4.

Owner’s Operator means [Name of Operator] or any other entity that Owner chooses to replace [Name
of Operator] as operator of the
Project.2

Owner’s Representative is defined in Section 16.1.

Owner’s Senior Representative is defined in Section 16.1.

Party or Parties is defined in the Preamble.

Pass Through Warranties mean any warranties provided to Design-Builder by a Subcontractor which are
required to be assigned to Owner.

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

Payment Bond is defined in Section 7.4.2.

Performance Bond is defined in Section 7.4.1.

 

			
	2	 	This definition is only applicable if Owner
contracts with an Operator to operate the Plant. If not applicable, this
definition should be deleted. References to Operator and Operator’s personnel
or employees in Sections 3.9, 6.3, and 6.6 should also be deleted.

			
	 	 	 
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Performance Guarantee Criteria means the criteria listed in Exhibit A.

Performance Tests is defined in Section 7.2.1.

Phase I is defined in Exhibit L.

Phase I and Phase II Engineering Services Agreement is defined in Section 6.1.

Phase II is defined in Exhibit L.

Plant is defined in the Recitals.

Project is defined in Section 2.1.

Punch List is defined in Section 6.4.3.

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

Safety Representative is defined in Section 3.7.1.

Schedule of Values is defined in Section 10.2.5.

Scheduled Substantial Completion Date is defined in Section 6.4.1.

Site means the land or premises on which the Project is located.

Subcontractor means any person or entity retained by Design-Builder, or by any person or entity
retained directly or indirectly by Design-Builder, in each case as an independent contractor to
perform a portion of the Work, and shall include materialmen and suppliers.

Substantial Completion is defined in Section 6.4.2.

Work is defined in Section 3.1.

Work Product is defined in Section 5.1.

Article 2

The Project

          2.1 Services to be Performed.

     Pursuant to this Agreement, Design-Builder shall perform all work and services in connection
with the engineering, design, procurement, construction startup, testing and training for the
operation and maintenance of the Plant, and provide all material, equipment, tools and labor
necessary to complete the Plant in accordance with the terms of this Agreement. The Plant,
together with all equipment, labor, services and materials furnished hereunder is defined as the
“Project.”

			
	 	 	 
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          2.2 Extent of Agreement. This Agreement consists of the following documents, and all exhibits,
schedules, appendices and attachments hereto and thereto (collectively, the “Contract
Documents”):

               2.2.1 All Change Orders and written amendments to this Agreement entered into as provided in
this Agreement.

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

List of Exhibits

	 	 	 
	Exhibit A

	 	Performance Guarantee Criteria
	Exhibit B

	 	General Project Scope
	Exhibit C

	 	Owner’s Responsibilities
	Exhibit D

	 	ICM License Agreement
	Exhibit E

	 	Schedule of Values
	Exhibit F

	 	Form of Informational Report
	Exhibit G

	 	Required Permits
	Exhibit H

	 	Form of Performance Bond
	Exhibit I

	 	Form of Payment Bond
	Exhibit J

	 	Draw (Payment) Schedule
	Exhibit K

	 	Air Emissions Application or Permit
	Exhibit L

	 	Phase I and Phase II Engineering Services Agreement
	Exhibit M

	 	Form of Application for Payment
	Exhibit N

	 	Form of Lien Waiver
	Exhibit O

	 	Form of Consent to Assignment

               2.2.3 Construction Documents to be prepared by Design-Builder pursuant to Section 3.2.1 shall
be incorporated in this Agreement.

          2.3 Conflicting Provisions. In the event of any conflict or inconsistency between the body of this
Agreement and any Exhibit or Schedule hereto, the terms and provisions of this Agreement, as
amended from time to time, shall prevail and be given priority. Subject to the foregoing, the
several documents and instruments forming part of this Agreement are to be taken as mutually
explanatory of one another and in the case of ambiguities or discrepancies within or between such
parts the same shall be explained and interpreted, if possible, in a manner which gives effect to
each part and which avoids or minimizes conflicts among such parts. No oral representations or
other agreements have been made by the Parties except as specifically stated in the Contract
Documents.

			
	 	 	 
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Article 3

Design-Builder Responsibilities

     3.1 Design-Builder’s Services in General.
Except for services and information to be provided by
Owner and specifically set forth in Article 4 and Exhibit C, Design-Builder shall perform or cause
to be performed all design, engineering, procurement, construction services, supervision, labor,
inspection, testing, start-up, material, equipment, machinery, temporary utilities and other
temporary facilities to complete construction of the Project consistent with the Contract Documents
(the “Work”). All design and engineering and construction services and other Work of the
Design-Builder shall be performed in accordance with (i) the general project scope guidelines set
forth in Exhibit B, (ii) the Construction Documents, (iii) all Legal Requirements, and (iv)
generally accepted construction and design-build standards of the fuel ethanol industry in the
United States during the relevant time period. Any design and engineering or other professional
service to be performed pursuant to this Agreement, which under Applicable Law must be performed by
licensed personnel, shall be performed by licensed personnel as required by Law. The enumeration
of specific duties and obligations to be performed by the Design-Builder under the Contract
Documents shall not be construed to limit in any way the general undertakings of the Design-Builder
as set forth herein. 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.

     3.2 Design Development and Services.

          3.2.1 Where required by Law, Design-Builder shall 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 required to permit construction of the Work in accordance with this Agreement
(such drawings, specifications and design submittals collectively, the “Construction
Documents”). To the extent not prohibited by Legal Requirements, Design-Builder may prepare
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.

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

          3.2.3 Design-Builder shall maintain a current, complete set of drawings and specifications at
the Site. Owner shall have the right to review such drawings and specifications. Owner and
Independent
Engineer3 may not make copies of the available drawings and specifications
without Design-Builder’s written permission, and, granted such permission, may only do so to the
extent such drawings and specifications directly pertain to the Plant; provided however that,
pursuant to Section 5.1 of this Agreement, Design-Builder retains

 

			
	3	 	See footnote to definition of Independent
Engineer. (Footnote 1).

			
	 	 	 
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ownership of and property
interests in any drawing or specifications made available and/or copied.

          3.2.4 Except as provided elsewhere in this Agreement, it is understood and agreed that review,
comment and/or approval by Owner (or its designees) or Independent Engineer4 of any
documents or submittals that Design-Builder is required to submit to Owner (or its designees) or
Independent Engineer5 hereunder for their review, comment and/or approval (including
without limitation the Construction Documents pursuant to Sections 3.2.1 and 3.2.3 hereof) shall
not relieve or release Design-Builder from any of its duties, obligations or liabilities provided
for under the terms of this Agreement or transfer any design liability from Design-Builder to
Owner.

     3.3 Standard of Care. All services performed by the Design-Builder and its Subcontractors pursuant
to the Construction Documents shall be performed in accordance with the standard of care and skill
generally accepted in the fuel ethanol industry in the United States during the relevant time
period or in accordance with any of the practices, methods and acts that in the exercise of
reasonable judgment in light of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at a reasonable cost consistent with good business
practices, safety and expedition. This standard of care is not intended to be limited to the
optimum practice, method or act to the exclusion of all others, but rather to be acceptable
practices, methods or acts generally accepted in the construction and design-build standards of the
fuel ethanol industry in the United States. Design-Builder and its Subcontractors shall perform
all construction activities efficiently and with the requisite expertise, skill, competence,
resources and care to satisfy the requirements of the Contract Documents and all applicable Legal
Requirements. Design-Builder shall at all times exercise complete and exclusive control over the
means, methods, sequences and techniques of construction.

     3.4 Government Approvals and Permits. Except as identified in Exhibit C and, with respect to items
identified as Owner’s responsibility, in Exhibit G (which items shall be obtained by Owner pursuant
to Section 4.5), 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. Design-Builder shall
provide reasonable assistance to Owner in obtaining those permits, approvals and licenses that are
Owner’s responsibility.

     3.5 Subcontractors.

          3.5.1 Design-Builder may subcontract portions of the Work in accordance with the terms hereof.

          3.5.2 Design-Builder assumes responsibility to Owner for the proper performance of any of the
Work performed by Subcontractors and any acts and omissions in connection with such performance.
Nothing in the Contract Documents is intended or deemed to

 

			
	4	 	See footnote to definition of Independent
Engineer. (Footnote 1).
	 
	5	 	See footnote to definition of Independent
Engineer. (Footnote 1).

			
	 	 	 
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9

 

create any legal or contractual
relationship between Owner and any Subcontractor, including but not limited to any third-party
beneficiary rights.

          3.5.3 Design-Builder shall coordinate the activities of all of Design-Builder’s
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 separate contractors so that the Project can be completed in an orderly and
coordinated manner without unreasonable disruption.

          3.5.4 Design-Builder shall ensure that each subcontract with a Subcontractor is assignable to
Owner without consent of the Subcontractor or any other person or entity in the event that
Design-Builder shall be in an uncured default or terminated with cause under the terms of this
Agreement.

     3.6 Maintenance of Site. 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 Design-Builder shall remove all debris, trash, construction wastes, materials, equipment,
machinery and tools arising from the Work to permit Owner to occupy the Project for its intended
use.

     3.7 Project Safety.

          3.7.1 Design-Builder recognizes the importance of performing the Work in a safe manner so as
to prevent damage, injury or loss to (i) any individuals at the Site, whether working or visiting,
(ii) the Work, including materials and equipment incorporated into the Work or stored on-Site or
off-Site, and (iii) any 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
representative (the “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.

          3.7.2 Design-Builder shall, and shall ensure that all 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. As promptly as practicable,
Design-Builder will report in writing any safety-related injury, loss, damage or accident arising
from the Work to Owner’s Representative and, to the extent mandated by Legal Requirements, to all
government or quasi-government authorities having jurisdiction over safety-related matters
involving the Project or the Work.

          3.7.3 Design-Builder’s responsibility for safety under this Section 3.7 is not intended in any
way to relieve Subcontractors of their own contractual and legal obligations and

			
	 	 	 
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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.

     3.8 Submission of Reports. Design-Builder shall provide Owner with a monthly informational report
substantially in the form of Exhibit F attached hereto (“Informational Report”).

     3.9 Training. At a mutually agreed time prior to start-up, Design-Builder shall provide up to two
(2) weeks of training at the Plant (or another suitable location) for all of Owner’s employees and
Owner
Operator’s6 employees required for the operation and maintenance of the Plant in
accordance with all design specifications therefor contained in the Contract Documents and
necessary in order to maintain the Performance Guarantee Criteria, including operators, laboratory
personnel, general, plant and maintenance managers. Other personnel of Owner and Owner Operator may
receive such training by separate arrangement between Owner and Design-Builder and as time is
available. All training personnel and costs associated with such training personnel, including
labor and all training materials will be provided to Owner and Owner Operator within the Contract
Price at no additional cost. Owner and Owner Operator will be responsible for all travel and
expenses of their employees and the Owner and Owner Operator will pay all wages and all other
expenses for their personnel during the training. The training services will include training on
computers, laboratory procedures, field operating procedures, and overall plant section performance
expectations. Prior to the start-up training, Design-Builder shall provide Owner training manuals
and operating manuals and other documents reasonably necessary for the start-up process.

Article 4

Owner’s Responsibilities

4.1 Duty to Cooperate.

          4.1.1 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.

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

4.2 Furnishing of Services and Information.

 

			
	6	 	See footnote to definition of Owner’s
Operator. (Footnote 2).

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

	 	(a)	 	surveys describing the property, boundaries, topography and reference points
for use during construction, including existing service and utility lines;
	 
	 	(b)	 	geotechnical studies describing subsurface conditions including soil borings,
and other surveys describing other latent or concealed physical conditions at the Site;
	 
	 	(c)	 	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;
	 
	 	(d)	 	A legal description of the Site;
	 
	 	(e)	 	to the extent available, as-built and record drawings of any existing
structures at the Site; and
	 
	 	(f)	 	all environmental studies, reports and impact statements describing the
environmental conditions, including Hazardous Conditions, in existence at the Site that
have been conducted or performed.

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

          4.2.3 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 and that
have been identified and notified in writing by Design-Builder to Owner prior to the Effective
Date. Owner is further responsible for all costs, including attorneys’ fees, incurred in securing
these necessary agreements.

     4.3 Financial Information; Cooperation with Lenders; Failure to Obtain Financial Closing.
7 Design-Builder acknowledges that Owner is seeking financing for the Project.
Design-Builder agrees to cooperate with Owner in good faith in order to satisfy the reasonable
requirements of Owners’ financing arrangements, including, where appropriate and reasonable, the
execution and delivery of documents or instruments necessary to accommodate the Financial Closing.
Owner agrees to pay all documented costs incurred by Design-Builder incurred prior to and at
Financial Closing, and thereafter during the term of this Agreement, in connection with satisfying
the requirements of Owners’ financing arrangements including all documented attorney’s fees.
Design-Builder and Owner also acknowledge that the Lenders, as a condition to providing financing
for the Plant, shall require Owner to provide the Independent Engineer with certain reasonable
participation and review rights with respect to Design-Builder’s performance of the Work.
Design-Builder acknowledges and agrees that such reasonable participation and review rights shall
consist of the right to (i) enter the Site and inspect the Work

 

			
	7	 	See footnote to definition of Independent
Engineer. (Footnote 1).

			
	 	 	 
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upon reasonable notice to
Design-Builder; (ii) attend all start-up and testing procedures; and (iii) review and approve such
other items for which Owner is required by Lenders to obtain the concurrence, opinion or a
certificate of the Independent Engineer or the Lenders pursuant to the Financing Documents which
items do not alter the rights or impose additional obligations on Design-Builder. Nothing in this
Section 4.3 shall be deemed to require Design-Builder to agree to any amendments to this Agreement
that would adversely affect Design-Builder’s risks, rights or obligations under this Agreement.
Upon Financial Closing, Owner shall promptly provide to Design-Builder an officer’s certificate
certifying that Financial Closing has occurred and such Owner’s officer’s certificate shall
constitute evidence satisfactory to Design-Builder that Owner has adequate funds available and
committed to fulfill its obligations under the Contract Documents for all purposes hereunder.
Owner must provide such officer’s certificate prior to issuing the Notice to Proceed.

     4.4 Owner’s Representative. Owner’s Representative, as set forth in Section 16.1 hereof, 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. Owner’s Representative shall be vested with the authority to act
on behalf of Owner and Design-Builder shall be entitled to rely on written communication from
Owner’s Representative with respect to a Project matter.

     4.5 Government Approvals and Permits. Owner shall obtain and pay for all necessary Governmental
Approvals required by Law, including permits, approvals, licenses, government charges and
inspection fees set forth in Exhibit C and, to the extent identified as Owner’s responsibility,
Exhibit G. Owner shall provide reasonable assistance to Design-Builder in obtaining those permits,
approvals and licenses that are Design-Builder’s responsibility pursuant to Exhibit G and Section
3.4.

     4.6 Owner’s Separate Contractors. Owner is responsible for all work, including such work listed on
Exhibit C, 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.

     4.7 Security. Owner shall be responsible for Site security (including fencing, alarm systems,
security guarding services and the like) at all times during the term of this Agreement to prevent
vandalism, theft and danger to the Project, the Site, and personnel. Owner shall coordinate and
supervise ingress and egress from the Site so as to minimize disruption to the Work.

			
	 	 	 
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Article 5

Ownership of Work Product; Risk of Loss

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

     5.2 Owner’s Limited License Upon Payment in Full. Upon Owner’s payment in full for all Work
performed under the Contract Documents, Design-Builder hereby grants Owner a limited license to use
the Work Product in connection with Owner’s ownership, operation, and repair of the Plant.
Design-Builder acknowledges and agrees that the limited license to use the Work Product granted
hereby shall provide Owner sufficient rights in and to the Work Product as shall be necessary for
Owner to operate and maintain the Plant and shall include any Pass Through Warranties in connection
therewith. Design-Builder shall provide Owner with a copy of the plans of the Plant, as built (the
“As Built Plans”), it being Owner’s express understanding that its use of the Work Product
and its acceptance of the As Built Plans 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”); provided, however, that
any warranties (of equipment or otherwise) shall remain in effect according to the terms of this
Agreement.

          5.2.1 Design-Builder is utilizing certain proprietary property and information of ICM in the
design and construction of the Project and Design-Builder may incorporate proprietary property and
information of ICM into the Work Product. Owner’s use of the proprietary property and information
of ICM shall be governed by the terms and provisions of the ICM License Agreement, to be executed
by Owner and ICM in connection with the execution of this Agreement. Owner shall be entitled to
use the Work Product solely for purposes relating to the Plant, but shall not be entitled to use
the Work Product for any other purposes whatsoever, including without limitation, expansion of the
Plant. Notwithstanding the
foregoing sentence, Owner shall be entitled to use the Work Product for the operation,
maintenance and repair of the plant including the interconnection of, but not the design of, any
future expansions to the Plant. The limited license granted to Owner under Sections 5.2, 5.3 or
5.4 to use the Work Product shall be limited by and construed according to the same terms contained
in the ICM License Agreement, attached hereto as Exhibit D and incorporated herein by reference
thereto, except (i) references in such ICM License Agreement to ICM and Proprietary Property shall
refer to Design-Builder and Work Product, respectively, (ii) the Laws of the State of Minnesota
shall govern such limited license, and (iii) the dispute resolution provisions contained in Article
19 hereof shall apply to any breach or threatened breach of Owner’s duties or obligations under
such limited license, except that Design-Builder shall have the right to seek injunctive relief in
a court of competent jurisdiction against Owner or its Representatives for any such breach or
threatened breach. This paragraph also applies to Sections 5.3 and 5.4 below.

     5.3 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 Section 15.3
hereof, or if Design-Builder elects to terminate this Agreement in

			
	 	 	 
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accordance with Section 15.5,
Design-Builder shall, upon Owner’s payment in full of the amounts due Design-Builder under this
Agreement, grant Owner a limited license to use the Work Product to complete the Plant and
subsequently occupy and repair the Plant, subject to the following:

	 	(a)	 	Use of the Work Product is at Owner’s sole risk without liability or legal
exposure to any Indemnified Party; provided, however, that any Pass Through Warranties
regarding equipment or express warranties regarding equipment provided by this
Agreement shall remain in effect according to their terms; and
	 
	 	(b)	 	If the termination for convenience is by Owner in accordance with Section 15.3
hereof, or if Design-Builder elects to terminate this Agreement in accordance with
Section 15.5, then Owner agrees to pay Design-Builder the additional sum of [Negotiated
Amount] as compensation for the limited right to use the Work Product completed “as is”
on the date of termination in accordance with this Article 5.

     5.4 Owner’s Limited License Upon Design-Builder’s Default. If this Agreement is terminated due to
Design-Builder’s default pursuant to Section 15.2 and (i) it is adjudged that Design-Builder was in
default, and (ii) Owner has fully satisfied all of its obligations under the Contract Documents
through the time of Design-Builder’s default, then Design-Builder shall grant Owner a limited
license to use the Work Product in connection with Owner’s completion and occupancy and repair of
the Plant. This limited license is conditioned on Owner’s express agreement that its use of the
Work Product is at Owner’s sole risk without liability or legal exposure to any Indemnified Party;
provided, however, that any Pass Through Warranties regarding equipment or express warranties
regarding equipment provided by this Agreement shall remain in effect according to their terms.
This limited license grants Owner the ability to repair the Plant at Owner’s discretion.

     5.5 Owner’s Indemnification for Use of Work Product. If Owner uses the Work Product or Plant under
any of the circumstances identified in this Article 5, to the fullest extent allowed by Law, 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 and Plant; provided, however, that any Pass Through
Warranties regarding equipment or express warranties regarding equipment provided by this Agreement
shall remain in effect according to their terms.

     5.6 Risk of Loss. Design-Builder shall have no liability for a physical loss of or damage to the
Work unless such loss or damage is caused by the willful misconduct or gross negligence of
Design-Builder or someone acting under its direction or control. Design-Builder shall not be liable
for physical loss of or damage to the Work where such loss or damage is caused by the willful
misconduct or gross negligence of Owner’s employees or third parties who are not Subcontractors.
Design-Builder shall have no liability for a physical loss of or damage to the Work occurring after
Final Completion. Design-Builder shall have no liability for losses or damages for which insurance
coverage under this Agreement is available to Owner; in such circumstances, any liability for
losses and damages as described in this Section 5.6 shall be limited to losses or damages which
exceed insurance coverage available to the Owner without

			
	 	 	 
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the application of any reductions from
such coverages due to deductible, retention, or retrospective premiums.

Article 6

Commencement and Completion of the Project

     6.1 Phase I and Phase II Engineering. Owner shall have entered into that certain Phase I and Phase
II Engineering Services Agreement dated [Date] between Owner and Fagen Engineering, LLC (“Fagen
Engineering”) and attached hereto as Exhibit L (“Phase I and Phase II Engineering Services
Agreement”). The Phase I and Phase II Engineering Services Agreement provides for Fagen
Engineering to commence work on the Phase I and Phase II engineering for the Project as set forth
therein. Owner has agreed to pay Fagen Engineering [Price Spelled Out Dollars ($Price in Numbers]
for such engineering services pursuant to the terms of that agreement, the full amount of which
shall be included in and credited to the Contract Price. Notwithstanding the foregoing sentence,
if a Notice to Proceed is not issued pursuant to Section 6.2, or Financial Closing is not obtained
pursuant to Section 4.3, then no amount paid under the Phase I and Phase II Engineering Services
Agreement shall be refunded to Owner.

     6.2 Notice to Proceed; Commencement. Design-Builder shall commence the Work within five (5) Days
of Design-Builder’s receipt of Owner’s written notice to proceed (“Notice to Proceed”)
unless the Parties mutually agree otherwise in writing. The Parties agree that a Notice to
Proceed cannot be given until: *****. Provided that Owner has fulfilled all of the requirements
listed in (1) through (7) above to
Design-Builder’s satisfaction, Design-Builder shall accept Notice to Proceed no later than [DATE].
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. Design-Builder must receive a valid Owner’s Notice to
Proceed within one hundred and eighty (180) Days of the Effective Date; otherwise, this Agreement
may be terminated, at Design-Builder’s sole option. If Design-Builder chooses to terminate this
Agreement pursuant to its right under the immediately preceding sentence, then Design-Builder shall
have no further obligations hereunder.

          6.2.1 Notice to Proceed shall be delivered by Owner to Design-Builder pursuant to the notice
requirements set forth in Section 21.7 hereof, with a copy to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Becky Dahl

Fax: (320) 564-5190

     6.3 Project Start-Up and Testing. Owner shall provide, at Owner’s cost, equipment, tools,
instruments and materials necessary for Owner to comply with its obligations under Exhibit C, raw
materials, consumables and personnel necessary for start-up and testing of the Plant, and
Design-Builder shall provide supervision, standard and special test instruments, tools, equipment
and materials required to perform component and equipment checkout and testing, initial start-up,
operations supervision and corrective maintenance of all permanent Plant

			
	 	 	 
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equipment within the scope
of the Work. Notwithstanding the foregoing sentence, Design-Builder shall be responsible for raw
materials and consumables to the extent such amounts provided by Owner are destroyed or damaged (as
opposed to consumed in the ordinary course of start-up and testing) by Design-Builder or its
personnel during start-up and testing. Design-Builder shall supervise and direct Owner’s employees
and Owner
Operator’s8 personnel who shall participate in the start-up activities with
Design-Builder’s personnel to become familiar with all aspects of the Plant. Owner and the
Independent Engineer may witness start-up and testing activities. Performance testing will be
conducted in accordance with the provisions of Section 7.2 hereof.

     6.4 Substantial Completion.

          6.4.1 Substantial Completion of the entire Work shall be achieved no later than Five Hundred
and Forty Five (545) Days after the date of the Notice to Proceed, subject to adjustment in
accordance with the Contract Documents (the “Scheduled Substantial Completion Date”).

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

          6.4.3 Procedures. Design-Builder shall notify Owner in writing when it believes Substantial
Completion has been achieved with respect to the Work. Within five (5) Days of Owner’s receipt of
Design-Builder’s notice, Owner and Design-Builder will jointly inspect such Work to verify that it
is substantially complete in accordance with the requirements of the Contract Documents. If such
Work is deemed substantially complete, Design-Builder shall prepare and issue a “Certificate
of Substantial Completion” for the Work that will set forth (i) the date of Substantial
Completion, (ii) the remaining items of Work that have to be completed before Final Payment
(“Punch List”), (iii) provisions (to the extent not already provided in this Agreement)
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 with
respect to the Work commence on the date of Substantial Completion, except as may otherwise be
noted in the Certificate of Substantial Completion. Upon Substantial Completion and satisfaction
of the Performance Guarantee Criteria listed in Exhibit A, Owner shall release to Design-Builder
all retained amounts, less an amount equal to the reasonable value of all remaining or incomplete
items of Work as noted in the Certificate of Substantial Completion, and less an amount equal to
the value of any Subcontractor lien waivers not yet obtained.

     6.5 Final Completion.

          6.5.1 Design-Builder shall cause Final Completion to be achieved within ninety (90) Days after
the earlier of the actual date of Substantial Completion or the Scheduled Substantial Completion
Date (the “Final Completion Date”).

 

			
	8	 	See footnote to definition of Owner’s
Operator. (footnote 2)

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

	 	(a)	 	Substantial Completion has been achieved;
	 
	 	(b)	 	any outstanding amounts owed by Design-Builder to Owner have been paid in full;
	 
	 	(c)	 	the items identified on the Punch List have been completed by Design-Builder;
	 
	 	(d)	 	clean-up of the Site has been completed;
	 
	 	(e)	 	all permits required to have been obtained by Design-Builder have been
obtained;
	 
	 	(f)	 	the information in Section 6.5.4 has been provided to Owner;
	 
	 	(g)	 	release and waiver of all claims and liens from Design-Builder and
Subcontractors have been provided; and
	 
	 	(h)	 	the Performance Tests have been successfully completed.

          6.5.3 After receipt of a Final Application for Payment from Design-Builder, Owner shall make
Final Payment in accordance with Section 10.3, less an amount equal to the value of any
Subcontractor lien waivers not yet obtained.

          6.5.4 At the time of submission of its Final Application for Payment, and as a condition to
receipt of the Final Payment, Design-Builder shall provide the following information:

	 	(a)	 	an affidavit that there are no claims, obligations or liens outstanding or
unsatisfied for labor, services, material, equipment, taxes or other items performed,
furnished or incurred for or in connection with the Work which will in any way affect
Owner’s interests;
	 
	 	(b)	 	a general release executed by Design-Builder waiving, upon receipt of final
payment by Design-Builder, all claims for payment, additional compensation, or damages
for delay, except those previously made to Owner in writing and remaining unsettled at
the time of Final Payment provided such general release shall not waive defenses to
claims that may be asserted by Owner after payment or claims arising after payment;
	 
	 	(c)	 	consent of Design-Builder’s surety, if any, to Final Payment; and
	 
	 	(d)	 	a hard copy of the As Built Plans; provided, however, that such plans will
remain the Work Product of the Design-Builder and subject in all respects to Article 5.

          6.5.5 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, (ii) Design-Builder’s
failure to complete the Work consistent with the Contract Documents,

			
	 	 	 
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including defects appearing
within one (1) year after Substantial Completion, and (iii) the terms of any warranties required by
the Contract Documents.

     6.6 Post Completion Support. Adequate personnel to complete all Work within the Contract Time(s)
will be maintained on-Site by Design-Builder or a Subcontractor until Final Completion has been
achieved. In addition to prosecuting the Work until Final Completion has been achieved,
Design-Builder or its Subcontractor will provide one (1) month of on-Site operational support for
Owner’s and Owner Operator’s9 personnel after successful completion of the Performance
Tests and, from the date of Substantial Completion, will provide six (6) months of off-Site
technical and operating procedure support by telephone and other electronic data transmission and
communication.

Article 7

Performance Testing and Liquidated Damages

     7.1 Performance Guarantee.
The Design-Builder guarantees that the Plant will meet the performance criteria listed in
Exhibit A (the “Performance Guarantee Criteria”) during a performance test conducted and
concluded pursuant to the terms hereof not later than Ninety (90) Days after the date of
Substantial Completion. If there is a performance shortfall, Design-Builder will pay all design
and construction costs associated with making the necessary corrections so that the Performance
Guarantee Criteria are met. Design-Builder retains the right to use its sole discretion in
determining the method (which shall be in accordance with generally accepted construction and
design-build standards of the fuel ethanol industry in the United States) to remedy any performance
related issues.

     7.2 Performance Testing.

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

          7.2.2 No later than thirty (30) Days prior to the earlier of the Scheduled Substantial
Completion Date or Substantial Completion, Design-Builder shall provide to Owner for review a
detailed testing plan for the Performance Tests (other than for air emissions). Owner and
Design-Builder shall agree upon a testing plan that shall be consistent with the Performance Test
Protocol contained in Exhibit A hereto. After such agreement has been reached, Design-Builder
shall notify the Owner five (5) business days prior to the date Design-Builder intends to commence
the Performance Tests and shall notify the Owner upon commencement of the Performance Tests. Owner
and Independent Engineer each have the right

 

			
	9	 	See footnote to definition of Owner’s
Operator. (footnote 2)

			
	 	 	 
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to witness all testing, including the Performance
Tests and any equipment testing, whether at the Site or at the Subcontractor’s or equipment
supplier’s premises during the course of this Agreement. Notwithstanding the foregoing sentence,
Owner shall bear the costs of providing a witness to any such testing and all such witnesses shall
comply at all times with Design-Builder’s, Subcontractor’s or equipment supplier’s safety and
security procedures and other reasonable requirements, and otherwise conduct themselves in a manner
that does not interfere with Design-Builder’s, Subcontractor’s or equipment supplier’s activities
or operations.

          7.2.3 Design-Builder shall provide to Owner a Performance Test report (excluding results from
air emissions testing), including all applicable test data, calculations and certificates
indicating the results of the Performance Tests and, within five (5) business days of Owner’s
receipt of such results, Owner, Independent Engineer and Design-Builder will jointly
inspect such Work and review the results of the Performance Tests to verify that the
Performance Guarantee Criteria have been met. If Owner or Independent Engineer reasonably
determines that the Performance Guarantee Criteria have not been met, Owner shall notify
Design-Builder the reasons why Owner determined that the Performance Guarantee Criteria have not
been met and Design-Builder shall promptly take such action or perform such additional work as will
achieve the Performance Guarantee Criteria and shall issue to the Owner another notice in
accordance with Section 7.2.2; provided however that if the notice relates to a retest, the
notice may be provided no later than two (2) business days prior to the Performance Tests. Such
procedure shall be repeated as necessary until Owner and Independent Engineer verifies that the
Performance Guarantee Criteria have been met.

          7.2.4 If Owner, for whatever reason, prevents Design-Builder from demonstrating the
Performance Guarantee Criteria within thirty (30) Days of Design-Builder’s notice that the Plant is
ready for Performance Testing, then Design-Builder shall be excused from demonstrating compliance
with the Performance Guarantee Criteria during such period of time that Design-Builder is prevented
from demonstrating compliance with the Performance Guarantee Criteria; provided however that
Design-Builder will be deemed to have fulfilled all of its obligations to demonstrate that the
Plant meets the Performance Guarantee Criteria should such period of time during which
Design-Builder is prevented from demonstrating the Performance Criteria exceed thirty (30) Days or
extend beyond the Final Completion Date.

     7.3 Liquidated Damages.

          7.3.1 Design-Builder understands that if Final Completion is not attained by the Final
Completion Date, Owner will suffer damages which are difficult to determine and accurately specify.
Design-Builder agrees that if Final Completion is not attained by the end of the Final Completion
Date, Design-Builder shall pay Owner ***** as liquidated damages, and not as a penalty, for each
Day that Final Completion extends beyond the Final Completion Date. Owner, at its discretion, may
elect to offset any such liquidated damages from any retainage. Liquidated damages shall be paid
by Design-Builder by the fifteenth (15th) Day of the month following the month in which
the liquidated damages were incurred. The liquidated damages provided herein shall be in lieu of
all liability for any and all extra costs, losses, loss of profits, expenses, claims, penalties and
any other damages, whether special or consequential, and of whatsoever nature incurred by Owner
which are occasioned solely by any delay in achieving Final Completion.

			
	 	 	 
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          7.3.2 Maximum Liquidated Damages. Design-Builder’s liability for liquidated damages under
Section 7.3.1 shall be capped at and shall not exceed *****.

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

          7.3.4 Design-Builder shall not be liable for liquidated damages during any period of time for
which an extension of the Scheduled Substantial Completion Date and/or Final Completion Date is
available pursuant to Article 12.

     7.4 Bonds and Other Performance Security.

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

	 	(a)	 	Design-Builder shall post additional bonds or security (which must be in form
and substance satisfactory to Owner and the Lenders) or shall increase the amount of
the Performance Bond by the amount of any increases to the Contract Price; provided,
however, that Owner shall pay all costs of obtaining such bonds or security, plus pay
Design-Builder a fee of seven and one half percent (7.5%) for obtaining such bonds or
security, such fee to be calculated by multiplying seven and one half percent (7.5%)
times the cost of the bonds or security.
	 
	 	(b)	 	The Performance Bond shall secure the Design-Builder’s obligations to complete
the Work in accordance with this Agreement.

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

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

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

Article 8

Warranties

     8.1 Design-Builder Warranty. Design-Builder warrants to Owner that the construction, including all
materials and equipment furnished as part of the construction, shall be new, of good quality, in
conformance with the Contract Documents and all Legal Requirements, 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 any warranty. Design-Builder hereby assigns to Owner all manufacturers’
and Subcontractors’ warranties upon the earlier of Substantial Completion or termination of this
Agreement. Owner’s failure to comply with all Operating Procedures shall void those guarantees,
representations and warranties, whether expressed or implied, that were given by Design-Builder to
Owner, concerning the performance of the Plant that are reasonably determined by Design-Builder to
be affected by such failure. If Design-Builder reasonably determines that all damage caused by
such failure can be repaired and Owner makes all repairs needed to correct such damage, as
reasonably determined by Design-Builder, all guarantees, representations and warranties shall be
reinstated for the remaining term thereof, if any, from the date of the repair.

     8.2 Correction of Defective Work.

          8.2.1 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 8.1, within a period of
one (1) year from the date of Substantial Completion of the Work; provided that Owner must report
such non-conformance within seven (7) Days of the appearance of such failure or non-conformance and
that such one (1)-year period shall be extended one (1) Day for any part of the Work that is found
to be not in conformance with the Contract Documents for each Day that such part of the Work is not
operating in conformity with the Contract Documents, including any time during which any part of
the Work is repaired or replaced pursuant to this Article 8.

          8.2.2 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 correction or replacement of any Work damaged by such nonconforming Work.
If Design-Builder fails to commence the necessary steps within such seven (7) Day period or fails
to continue to perform such steps through completion, Owner, in addition to any other remedies
provided under the Contract Documents, may provide Design-Builder with notice that Owner will
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Work and repair of such damaged Work with its
own resources. If, following such notice, Owner performs such corrective and repair Work,
Design-Builder shall be responsible for all reasonable costs incurred by Owner in performing the
correction.

     8.3 Warranty Period Not Limitation to Owner’s Rights.
The one (1)-year period referenced in Section 8.2 above applies only to Design-Builder’s
obligation to correct nonconforming Work under Section 8.2 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 9

Contract Price

     9.1 Contract Price.
As full consideration to Design-Builder for full and complete performance of the Work and all
costs incurred in connection therewith, Owner shall pay Design-Builder in accordance with the terms
of Article 10, the sum of [Contract Price Spelled Out] Dollars ($[Contract Price in Numbers])
(“Contract Price”), subject to adjustments made in accordance with Article 13. The
Contract Price does not include the water pre-treatment system and the fire protection system which
shall be provided by Design-Builder pursuant to a separate side-letter agreement executed by Owner
and Design-Builder at Design-Builder’s standard time plus material rates during the relevant time
period and at the relevant locale. Owner acknowledges that it has taken no action which would
impose a union labor or prevailing wage requirement on Design-Builder, Owner or the Project. The
Parties acknowledge and agree that if, after the date hereof, an Owner’s action, a change in
Applicable Law, or a Governmental Authority acting pursuant to a change in Applicable Law shall
require Design-Builder to employ union labor or compensate labor at prevailing wages, the Contract
Price shall be adjusted upwards to include any increased costs associated with such labor or wages.
Such adjustment shall include, but not be limited to, increased labor, subcontractor, and material
and equipment costs resulting from any union or prevailing wage requirement; provided, however,
that if an option is made available to either employ union labor, or to compensate labor at
prevailing wages, such option shall be at Design-Builder’s sole discretion and that if such option
is executed by Owner without Design-Builder’s agreement, Design-Builder shall have the right to
terminate this agreement and shall be entitled to compensation pursuant to Section 15.3.1 hereof.

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

          9.2.1 The Baseline Index for this Agreement shall be [CCI Spelled Out (CCI in Number)]
(“Baseline Index”).

          9.2.2 In the event that the CCI as of the date on which the Notice to Proceed is given
increases over the Baseline Index, the Contract Price shall be increased by a percentage amount
equal to the percentage increase in CCI plus four percent (4%). By way of example, if

			
	 	 	 
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the CCI
increases two percent (2%), the total adjustment to the Contract Price shall be six percent (6%).

Article 10

Payment Procedures

     10.1 Payment at Financial Closing. As part of the Contract Price, Owner shall pay Design-Builder
***** as a mobilization fee, as soon as allowed by its organizational documents and any other
agreements or Laws and at the latest, at the earlier to occur of Financial Closing or the issuance
of a Notice to Proceed. The ***** payment shall be subject to retainage as provided by Section
10.2.7.

     10.2 Progress Payments.

          10.2.1 Application for Payment. On or before the twenty-fifth (25th) Day of each
calendar month beginning with the first (1st) calendar month following the Notice to
Proceed, Design-Builder shall submit to Owner its request for payment for all Work performed and
not paid for during the previous Pay Period (the “Application for Payment”). The
Application for Payment shall be substantially in the form attached hereto as Exhibit M.
Design-Builder shall submit to Owner, along with each Application for Payment, signed lien waivers,
substantially in the form attached hereto as Exhibit N, received from Subcontractors and suppliers
for the Work included in the Application for Payment submitted for the immediately preceding Pay
Period and for which payment has been received.

          10.2.2 The Application for Payment shall constitute Design-Builder’s representation that the
Work has been performed consistent with the Contract Documents and has progressed to the point
indicated in the Application for Payment. The Parties agree that the Work completed at the Site,
the comparison of the Application for Payment against the Work schedule, and the Schedule of Values
shall provide sufficient substantiation of the accuracy of the Application for Payment and that no
additional documentation will be provided to Owner or Independent Engineer10 in support
of an Application for Payment. Title to the Work, including Work reflected in an Application for
Payment which is in process, is in transit, is in storage, or has been incorporated into the Site,
shall pass to Owner free and clear of all claims, liens, encumbrances, and security interests upon
Design-Builder’s receipt of payment therefor.

          10.2.3 Within ten (10) Days after Owner’s receipt of each Application for Payment, Owner shall
pay Design-Builder all amounts set forth in the Application for Payment that are properly due, but
in each case less the total of payments previously made, and less amounts properly withheld or
retained under this Agreement.

          10.2.4 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 location acceptable to Owner, provided,
however, that Owner’s acceptance shall not be unreasonably withheld; (ii) the equipment and
materials are protected by suitable insurance; and (iii) upon payment, Owner will

 

			
	10	 	See footnote to definition of Independent
Engineer. (Footnote 1).

			
	 	 	 
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receive the
equipment and materials free and clear of all liens and encumbrances except for liens of the
Lenders and other liens and encumbrances permitted under the Financing Documents.

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

          10.2.6 Withholding of Payments. On or before the date set forth in Section 10.2.3, Owner
shall pay Design-Builder all amounts set forth in the Application for Payment that are 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 at least five (5) Days prior to the date payment in respect
of that Application for Payment is due. The notice shall indicate the specific
amounts Owner contests, the reasons and contractual basis for the contest, and the specific
measures Design-Builder must take to rectify Owner’s concerns. Owner may withhold amounts so
contested. 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 19. 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.

          10.2.7 Retainage on Progress Payments. Owner will retain ten percent (10%) of each payment up
to a maximum of [Five Percent of Contract Price Spelled Out] Dollars($[5% of Price in Numbers]).
Once [Five Percent of Contract Price Spelled Out] Dollars($[5% of Price in Numbers]) has been
retained, in total, Owner will not retain any additional amounts from any subsequent payments.
Owner will also reasonably consider reducing retainage for Subcontractors completing their work
early in the Project. Upon Substantial Completion of the Work Owner shall release to
Design-Builder all retained amounts less an amount equal to the reasonable value of all remaining
or incomplete items of Work and less an amount equal to the value of any Subcontractor lien waivers
not yet obtained, as noted in the Certificate of Substantial Completion, provided that such payment
shall only be made if Design-Builder has met the Performance Guarantee Criteria listed in Exhibit A
as demonstrated in Performance Tests conducted pursuant to Section 7.2.

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

     10.4 Failure to Pay Amounts Due.

          10.4.1 Interest. Payments which are due and unpaid by Owner to Design-Builder, whether
progress payments or Final Payment, shall bear interest commencing five (5) Days after payment is
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          10.4.2 Right to Suspend Work. If Owner fails to pay Design-Builder any undisputed amount that
becomes due, Design-Builder, in addition to all other remedies provided in the Contract Documents,
may stop Work pursuant to Section 15.4 hereof.

          10.4.3 Failure to Make Final Payment. Owner’s failure to make Final Payment pursuant to
section 10.3 hereof shall void any and all warranties, whether express or implied, provided by
Design-Builder pursuant to this Agreement.

     10.5 Design-Builder’s Payment Obligations. 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 14.2 hereof.

     10.6 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 11

Hazardous Conditions and Differing Site Conditions

     11.1 Hazardous Conditions.

          11.1.1 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 as promptly as practicable notify Owner and, if Design-Builder is specifically required to
do so by Legal Requirements, all Governmental Authorities having jurisdiction over the Project or
Site. Design-Builder shall not remove, remediate or handle in any way (except in case of
emergency) any Hazardous Conditions encountered at the Site without prior written approval of
Owner.

          11.1.2 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 is required under applicable
Legal Requirements to take with respect to such Hazardous

			
	 	 	 
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Conditions in order for the Work to
proceed. Owner’s choice of such Qualified Independent
Experts shall be subject to the prior approval of Design-Builder, which approval shall not be
unreasonably withheld or delayed.

          11.1.3 Design-Builder shall be obligated to resume Work at the affected area of the Project
only after Owner’s Qualified Independent 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 entities having jurisdiction over the Project or Site and a
remediation plan has been undertaken permitting the Work to proceed.

          11.1.4 Design-Builder will be entitled, in accordance with this Article 11, 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 adversely impacted by the presence of Hazardous Conditions, provided that
such Hazardous Materials were not introduced to the Site by Design-Builder, Subcontractors or
anyone for whose acts they may be liable.

          11.1.5 To the fullest extent permitted by Law, Owner shall indemnify, defend and hold harmless
Design-Builder, 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,
provided that such Hazardous Materials were not introduced to the Site by Design-Builder,
Subcontractors or anyone for whose acts they may be liable.

          11.1.6 Notwithstanding the preceding provisions of this Section 11.1, 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.

     11.2 Differing Site Conditions; Inspection.

          11.2.1 Concealed or latent physical conditions or subsurface conditions at the Site that (i)
differ from the conditions indicated in the Contract Documents, or (ii) are of an unusual nature,
differing 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.

          11.2.2 Upon encountering a Differing Site Condition, Design-Builder shall provide prompt
notice to Owner of such condition, which notice shall not be later than fourteen (14) business 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.

			
	 	 	 
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Article 12

Force Majeure; Change in Legal Requirements

     12.1 Force Majeure Event. A Force Majeure event shall mean a cause or event beyond the reasonable
control of, and without the fault or negligence of a Party claiming Force Majeure, including,
without limitation, an emergency, floods, earthquakes, hurricanes, tornadoes, adverse weather
conditions not reasonably anticipated or acts of God; sabotage; vandalism beyond that which could
reasonably be prevented by a Party claiming Force Majeure; terrorism; war; riots; fire; explosion;
blockades;
insurrection; strike; slow down or labor disruptions (even if such difficulties could be resolved
by conceding to the demands of a labor group); economic hardship or delay in the delivery of
materials or equipment that is beyond the control of a Party claiming Force Majeure, and action or
failure to take action by any Governmental Authority after the Effective Date (including the
adoption or change in any rule or regulation or environmental constraints lawfully imposed by such
Governmental Authority), but only if such requirements, actions, or failures to act prevent or
delay performance; and inability, despite due diligence, to obtain any licenses, permits, or
approvals required by any Governmental Authority (any such event, a “Force Majeure Event”).

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

	 	(a)	 	the nonperforming Party, within forty-eight (48) hours after the nonperforming
Party actually becomes aware of the occurrence and impact of the Force Majeure Event,
gives the other Party notice describing the event or circumstance in detail, including
an estimation of its expected duration and probable impact on the performance of the
affected Party’s obligations hereunder and continues to furnish timely regular reports
with respect thereto during the continuation of and upon the termination of the Force
Majeure Event;
	 
	 	(b)	 	the suspension of performance is of no greater scope and of no longer duration
than is reasonably required by the Force Majeure Event;
	 
	 	(c)	 	the obligations of either Party that arose before the occurrence causing the
suspension of performance and the performance that is not prevented by the occurrence,
shall not be excused as a result of such occurrence;
	 
	 	(d)	 	the nonperforming Party uses its best efforts to remedy its inability to
perform and mitigate the effect of such event and resumes its performance at the
earliest practical time after cessation of such occurrence or until such time that
performance is practicable;

			
	 	 	 
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	 	(e)	 	when the nonperforming Party is able to resume performance of its obligations
under the Contract Documents, that Party shall give the other Party notice to that
effect; and
	 
	 	(f)	 	Design-Builder shall be entitled to a Day-for-Day time extension for those
events set forth in Section 12.1 to the extent the occurrence of such event delayed
Design-Builder’s performance of its obligations under this Agreement.

     12.3 Change in Legal Requirements. The Contract Price and/or the Contract Time(s) shall be
adjusted to compensate Design-Builder for the effects of any changes to the Legal Requirements that
occur after the date of this Agreement and as a result of such change, the performance of the Work
is adversely affected. Such effects may include, without limitation, revisions Design-Builder is
required to make to the Construction Documents because of changes in Legal Requirements.

     12.4 Time Impact And Availability. If Design-Builder is delayed at any time in the commencement or
progress of the Work due to a delay in the delivery of, or unavailability of, essential materials
or labor to the Project as a result of a significant industry-wide economic fluctuation or
disruption beyond the control of and without the fault of the Design-Builder or its Subcontractors
which is experienced or expected to be experienced by markets providing essential materials and
equipment to the Project during the performance of the Work and such economic fluctuation or
disruption adversely impacts the price, availability, and delivery timeframes of essential
materials, equipment, or labor (such event an “Industry-Wide Disruption”), the
Design-Builder shall be entitled to an equitable extension of the Contract Time(s) on a Day-for-Day
basis equal to such delay. The Owner and Design-Builder shall undertake reasonable steps to
mitigate the effect of such delays. Notwithstanding any other provision to the contrary, the
Design-Builder shall not be liable to the Owner for any expenses, losses or damages arising from a
delay, or unavailability of, essential materials or labor to the Project as a result of an
Industry-Wide Disruption.

          12.4.1 If during the course of the Project the CCI increases over the Baseline Index
established in Section 9.2.1, Design-Builder shall notify Owner that it is adjusting the Contract
Price.

          12.4.2 In the event that the CCI increases over the Baseline Index, the Contract Price shall
be adjusted to reflect such increase, but only with respect to those Applications for Payment
submitted after the date on which written notice of the adjustment in Contract Price is given.

          12.4.3 Payment for any adjustment in the Contract Price as a result of this Article 12 shall
be made in accordance with the terms of this Agreement.

Article 13

Changes to the Contract Price and Scheduled Completion Dates

     13.1 Change Orders.

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

	 	(a)	 	the scope of the change in the Work;
	 
	 	(b)	 	the amount of the adjustment to the Contract Price; and
	 
	 	(c)	 	the extent of the adjustment to the Contract Time(s).

          13.1.2 All changes in the Work authorized by an applicable Change Order 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. Prior to incurring any costs with respect to estimating services, design services and any
other services involved in the preparation of the proposed revisions to the Contract Documents,
Design-Builder must obtain the written approval of Owner for such costs.

          13.1.3 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 any other
services involved in the preparation of proposed revisions to the Contract Documents; provided that
such costs were previously approved by Owner pursuant to Section 13.1.2.

     13.2 Contract Price Adjustments.

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

          13.2.2 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 19. 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 (x) such payment by Owner
does not prejudice Owner’s right to argue that it has no responsibility to pay for such
services, and (y) receipt of such payment by Design-Builder does not prejudice Design-Builder’s
right to seek full payment of the disputed services if Owner’s order is deemed to be a change to
the Work.

			
	 	 	 
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     13.3 Emergencies. 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 and shall notify the
Owner as soon as practicable and in any event within forty-eight (48) hours after Design-Builder
becomes aware of the emergency. The notice to Owner shall describe the emergency in detail,
including a reasonable estimation of its expected duration and impact, if any, on the performance
of Design-Builder’s obligations hereunder. Any change in the Contract Price and/or the Contract
Time(s) on account of emergency work shall be determined as provided in this Article 13.

     13.4 Failure to Complete Owner’s Milestones. The dates when Owner’s obligations are required to be
completed to enable Design-Builder to achieve the Contract Time(s) are identified in Table 3 in
Exhibit C (“Owner’s Milestones”). The Contract Time(s) shall be revised to provide a
Day-for-Day extension of the Contract Time(s) for completion of the Work for each full Day during
which Owner fails to timely complete its obligations pursuant to the Owner’s Milestones. In the
event of Owner’s failure to timely complete its obligations pursuant to Owner’s Milestones results
in the extension of the Contract Time(s), the Contract Price shall be adjusted to compensate
Design-Builder for the effects, if any, of such change.

Article 14

Indemnity

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

     14.2 Payment Claim Indemnification. To the extent Design-Builder has received payment for the
Work, Design-Builder shall indemnify, defend and hold harmless Owner Indemnified Parties from any
claims or mechanic’s liens brought against Owner Indemnified Parties 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 items or obligations furnished or incurred
for or in connection with the Work. Within three (3) business 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 such claim or lien.

     14.3 Design-Builder’s General Indemnification.

          14.3.1 Design-Builder, to the fullest extent permitted by Law, shall indemnify, hold harmless
and defend Owner, Lenders, Lenders’ Agent, and their successors, assigns, officers, directors,
employees and agents (“Owner Indemnified Parties”) from and against any and all losses,
costs, damages, injuries, liabilities, claims, demands, penalties, interest and causes of action,
including without limitation attorney’s fees (collectively, the “Damages”) for bodily
injury, sickness or death, and property damage or destruction (other than to the Work itself) to
the extent resulting from the negligent or intentionally wrongful acts or from omissions of

			
	 	 	 
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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.

          14.3.2 If an employee of Design-Builder, Design Consultants, Subcontractors, anyone employed
directly or indirectly by any of them or anyone for whose acts any of them may be liable has a
claim against Owner Indemnified Parties, Design-Builder’s indemnity obligation set forth in Section
14.3.1 above 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.

          14.3.3 Without limiting the generality of Section 14.3.1 hereof, Design-Builder shall fully
indemnify, save harmless and defend the Owner Indemnified Parties from and against any and all
Damages in favor of any Governmental Authority or other third party to the extent caused by (a)
failure of Design-Builder or any Subcontractor to comply with Legal Requirements as required by
this Agreement, or (b) failure of Design-Builder or any Subcontractor to properly administer and
pay any taxes or fees required to be paid by Design-Builder under this Agreement.

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

     14.4 Owner’s General Indemnification. 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, willful misconduct, or
omissions of Owner, its officers, directors, employees, agents, or anyone for whose acts any of
them may be liable.

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

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

			
	 	 	 
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Article 15

Stop Work; Termination for Cause

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

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

          15.2.1 If Design-Builder persistently fails to: (i) provide a sufficient number of skilled
workers; (ii) supply the materials required by the Contract Documents; (iii) comply with applicable
Legal Requirements; (iv) timely pay, without cause, Design Consultants or Subcontractors; (v)
perform the Work with promptness and diligence to ensure that the Work is completed by the Contract
Time(s), as such times may be adjusted in accordance with this Agreement; 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 or equity, shall have the rights set forth in Sections
15.2.2 and 15.2.3 below.

          15.2.2 Upon the occurrence of an event set forth in Section 15.2.1 above, Owner may provide
notice to Design-Builder that it may 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 and thereafter diligently
pursue such cure to completion, then Owner may give a second notice to Design-Builder that it may
terminate following 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 and thereafter
diligently pursue such cure to completion, then Owner may declare the Agreement terminated for
default by providing written notice to Design-Builder of such declaration. If (i) the insurance
coverage required by Design-Builder pursuant Article 17 hereof is suspended or cancelled without
Design-Builder providing immediate replacement coverage (and, in any case, within fourteen (14)
Days of the occurrence thereof) meeting the requirements specified in Article 17 hereof; (ii) if
applicable, a default occurs under the Performance Bond or the Payment Bond, or the Performance
Bond or Payment Bond is revoked or terminated and such Performance Bond or the Payment Bond is not
immediately replaced (and, in any case, within
fourteen (14) Days of the occurrence thereof) by Design-Builder with a Performance Bond or a
Payment Bond providing at least the same level of coverage in a form and from a surety acceptable
to Owner and Lenders, or the surety under the Performance Bond or Payment Bond institutes or has
instituted against it a case under the United States Bankruptcy Code; (iii) Design-Builder purports
to make an assignment of this Agreement in breach of the provisions of Section 21.1 hereof, or (iv)
any representation or warranty made by Design-Builder under Section 18.1 hereof was false or
materially misleading when made, then Owner may terminate this Agreement upon notice to
Design-Builder.

          15.2.3 Upon declaring the Agreement terminated pursuant to Section 15.2.2 above, Owner may
enter upon the premises and take possession, for the purpose of completing

			
	 	 	 
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the Work, of all
materials, equipment, scaffolds, tools, appliances and other items thereon, which have been
purchased 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, Design-Builder will be paid
promptly by Owner 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 promptly 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 expenses, including attorneys’
fees and expenses, incurred by Owner in connection with the re-procurement and defense of claims
arising from Design-Builder’s default, subject to the waiver of consequential damages set forth in
Section 19.4 and the limitation of liability set forth in Section 19.5 hereof.

          15.2.4 If Owner improperly terminates this Agreement pursuant to Section 15.2, the termination
will be converted to a termination for convenience in accordance with the provisions of Section
15.3.

     15.3 Owner’s Right to Terminate for Convenience.

          15.3.1 Upon ten (10) Days’ 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:

	 	(a)	 	to the extent not already paid, all Work executed, and for proven loss, cost or
expense in connection with the Work;
	 
	 	(b)	 	the reasonable costs and expenses attributable to such termination, including
demobilization costs;
	 
	 	(c)	 	amounts due in settlement of terminated contracts with Subcontractors and
Design Consultants;
	 
	 	(d)	 	overhead and profit margin in the amount of fifteen percent (15%) on the sum of
items (a) and (b) above; and
	 
	 	(e)	 	all retainage withheld by Owner on account of Work that has been completed in
accordance with the Contract Documents.

          15.3.2 If Owner terminates this Agreement pursuant to this Section 15.3 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 5.3.

     15.4 Design-Builder’s Right to Stop Work.

			
	 	 	 
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          15.4.1 Design-Builder may, in addition to any other rights afforded under the Contract
Documents or at Law, stop work for Owner’s failure to pay, when due, amounts properly due under
Design-Builder’s Application for Payment.

          15.4.2 If the events set forth in Section 15.4.1 occur, Design-Builder has the right to stop
work by providing written notice to Owner that Design-Builder will stop work unless
such event is cured within seven (7) Days from Owner’s receipt of Design-Builder’s notice. If
Owner fails to cure or reasonably commence to cure such problem and thereafter diligently pursue
such cure to completion, then Design-Builder may give a second written notice to Owner of its
intent to stop work 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 and thereafter
diligently pursue such cure to completion, then 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.

     15.5 Design-Builder’s Right to Terminate for Cause.

          15.5.1 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:

	 	(a)	 	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 Governmental
Authority having jurisdiction over the Work, or orders by Owner under Section 15.1
hereof, provided that such stoppages are not due to the acts or omissions of
Design-Builder, Design Consultant and their respective officers, agents, employees,
Subcontractors or any other person for whose acts the Design-Builder may be liable
under Law.
	 
	 	(b)	 	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 15.1 hereof.
	 
	 	(c)	 	Owner fails to meet its obligations under Exhibit C and such failure results in
the Work being stopped for sixty (60) consecutive Days, or more than ninety (90)
Days during the duration of the Project even though Owner has not ordered
Design-Builder in writing to stop and suspend the Work pursuant to Section 15.1
hereof.
	 
	 	(d)	 	Owner’s failure to cure the problems set forth in Section 15.4.1 above within
seven (7) Days after Design-Builder has stopped the Work.

          15.5.2 Upon the occurrence of an event set forth in Section 15.5.1 above, Design-Builder may
elect to terminate this Agreement by providing written notice to Owner that it intends to terminate
the Agreement unless the problem cited is 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)

			
	 	 	 
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Day period, fails 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 Section 15.3.

     15.6 Bankruptcy of Owner or Design-Builder.

          15.6.1 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:

	 	(a)	 	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 obligations under the Contract Documents, which assurances shall be
provided within ten (10) Days after receiving notice of the request; and
	 
	 	(b)	 	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.

          15.6.2 If the Bankrupt Party fails to comply with its foregoing obligations, the non-Bankrupt
Party shall be entitled to request the bankruptcy court to reject the Agreement, declare the
Agreement terminated and pursue any other recourse available to the non-Bankrupt Party under this
Article 15.

          15.6.3 The rights and remedies under this Section 15.6 shall not be deemed 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 this Agreement.

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

Article 16

Representatives of the Parties

     16.1 Designation of Owner’s Representatives. 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 Article 19:

[Owner’s Representative

Title

Address

Telephone:

Facsimile:]

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

[Owner’s Senior Representative

Title

Address

Telephone:

Facsimile:]

     16.2 Designation of Design-Builder’s Representatives. 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 Article
19:

Roland “Ron” Fagen

CEO and President

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Telephone: (320) 564-3324

Facsimile: (320) 564-3278

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

Aaron Fagen

Chief Operating Officer

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Telephone: (320) 564-3324

Facsimile: (320) 564-3278

Article 17

Insurance

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

			
	 	 	 
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	Commercial General Liability:
	 	 	 	 
	 
	 	 	 	 
	General Aggregate
	 	 	 	 
	Products-Comp/Op AGG
	 	$	2,000,000	 
	Personal & Adv Injury
	 	$	1,000,000	 
	Each Occurrence
	 	$	1,000,000	 
	Fire Damage (Any one fire)
	 	$	50,000	 
	Med Exp (Any one person)
	 	$	5,000	 
	 
	 	 	 	 
	Automobile Liability:
	 	 	 	 
	 
	 	 	 	 
	Combined Single Limit
	 	 	 	 
	Each Occurrence
	 	$	1,000,000	 
	 
	 	 	 	 
	Excess Liability — Umbrella Form:
	 	 	 	 
	 
	 	 	 	 
	Each Occurrence
	 	$	20,000,000	 
	Aggregate
	 	$	20,000,000	 
	 
	 	 	 	 
	Workers’ Compensation
	 	 	 	 
	 
	 	 	 	 
	Statutory limits as required by
the state in which the Work is performed
	 	 	 	 
	 
	 	 	 	 
	Employers’ Liability:
	 	 	 	 
	Each Accident
	 	$	1,000,000	 
	Disease-Policy Limit
	 	$	1,000,000	 
	Disease-Each Employee
	 	$	1,000,000	 
	 
	 	 	 	 
	Professional Errors and Omissions
	 	 	 	 
	Per Claim
	 	$	5,000,000	 
	Annual
	 	$	5,000,000	 

     17.2 Design-Builder’s Insurance Requirements.

          17.2.1 Design-Builder is responsible for procuring and maintaining from insurance companies
authorized to do business in the state in which the Project is located, 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:

	 	(a)	 	coverage for claims arising under workers’ compensation, disability and other
similar employee benefit Laws applicable to the Work;
	 
	 	(b)	 	coverage for claims by Design-Builder’s employees for bodily injury, sickness,
disease, or death;
	 
	 	(c)	 	coverage for claims by any person other than Design-Builder’s employees for
bodily injury, sickness, disease, or death;
	 
	 	(d)	 	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;

			
	 	 	 
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	 	(e)	 	coverage for claims for damages (other than to the Work) because of injury to
or destruction of tangible property, including loss of use;
	 
	 	(f)	 	coverage for claims of damages because of personal injury or death, or property
damage resulting from ownership, use and maintenance of any motor vehicle; and
	 
	 	(g)	 	coverage for contractual liability claims arising out of Design-Builder’s
obligations under Section 14.2.

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

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

          17.2.4 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.

          17.2.5 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 required hereunder will be
canceled, renewal refused, or changed unless at least thirty (30) Days prior written notice is
given to Owner.

     17.3 Owner’s Liability Insurance. 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. The general and
professional liability insurance obtained by Owner shall name Design-Builder, Design Consultants,
Subcontractors, the Lenders and Lenders’ Agent as additional insureds, without application of
deductible, retention or retrospective premiums as to the additional insureds.

     17.4 Owner’s Property Insurance.

          17.4.1 Unless otherwise provided in the Contract Documents, Owner shall procure from insurance
companies authorized to do business in the state in which the Project is located, and maintain
through Final Completion, property insurance upon the entire Project in a minimum amount equal 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

			
	 	 	 
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property insurance obtained by Owner shall include as additional insureds the interests of
Owner, Design-Builder, Design Consultants, Subcontractors, the Lenders and Lenders’ Agent 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 and without application of any deductible, retention or retrospective premium.
Owner shall maintain coverage equal to or in excess of the value of each of Design-Builder’s,
Design Consultants’, and Subcontractors’ property on the Site. 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.

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

          17.4.3 Prior to Design-Builder commencing any Work, Owner shall obtain a builder’s risk
insurance policy naming Owner as the insured, with Design-Builder, Design Consultants and
Subcontractors as additional insureds, in an amount not less than the Contract Price and without
application of deductible, retention or retrospective premium as to the additional insureds.

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

          17.4.5 Prior to Design-Builder commencing any Work, Owner shall provide Design-Builder with
copies of the insurance certificates reflecting coverages required under this Section 17.4
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 changed unless at least thirty (30) Days prior written notice is given to
Design-Builder. Owner’s property insurance shall not lapse or be cancelled during the term of this
Agreement. Promptly after Owner’s receipt thereof, Owner shall be required to provide
Design-Builder with copies of all insurance polices to which Design-Builder, Design Consultants,
and Subcontractors are named as additional insureds. In the event Owner replaces insurance
providers for any policy required under this Section, revises policy coverages, or otherwise
modifies any applicable insurance policy in any way, Owner shall provide Design-Builder, for its
review or possession as provided under this Section 17.4.5, the certificate of insurance and a copy
of such new, revised or modified policy when available.

          17.4.6 Any loss covered under Owner’s property insurance shall be adjusted with Owner and
Design-Builder and made payable to both of them as trustees for the insureds as their

			
	 	 	 
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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 19 hereof.

               17.4.7 Owner and Design-Builder waive against each other
and Owner’s separate contracts, 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 Subcontractors,
and insurance providers and shall require each of them to include similar waivers in their contracts or policies.

Article 18

Representations and Warranties

     18.1 Design-Builder and Owner Representations and Warranties.
Each of Design-Builder and Owner
represents that:

	 	(a)	 	it is duly organized, validly existing and in good standing under the Laws of
its formation and has all requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby;
	 
	 	(b)	 	this Agreement has been duly executed and delivered by such Party and
constitutes the legal, valid and binding obligations of such Party, enforceable against
such Party in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or similar Laws affecting creditor’s
rights or by general equitable principles;
	 
	 	(c)	 	the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby do not and will not conflict with or violate
(a) the certificate of incorporation or bylaws or equivalent organizational documents
of such Party, or (b) any Law applicable to such Party and other than the permits
listed on Exhibit G, such execution, delivery and performance of this Agreement does
not require any Governmental Approval; and
	 
	 	(d)	 	there is no action pending or, to the knowledge of such Party, threatened,
which would hinder, modify, delay or otherwise adversely affect such Party’s ability to
perform its obligations under the Contract Documents.

     18.2 Design-Builder Representations and Warranties. Design-Builder further represents that it has
the necessary financial resources to fulfill its obligations under this Agreement.

Article 19

Dispute Resolution

     19.1 Dispute Avoidance and Mediation. The Parties are fully committed to working with each other
throughout the Project and agree to communicate regularly with each other at all

			
	 	 	 
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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.

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

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.

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 in Minneapolis, Minnesota
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 Arbitration Rules and Mediation Procedures. 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.

     19.2 Arbitration. 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 19.1 above shall be decided by arbitration to be conducted in
Minneapolis, Minnesota in accordance with the Construction Industry Arbitration Rules and Mediation
Procedures of the AAA then in effect, unless the Parties mutually agree otherwise.

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.

Design-Builder and Owner expressly agree that any arbitration pursuant to this Section 19.2 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.

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.

			
	 	 	 
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     19.3
Duty to Continue Performance. 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.

     19.4 No Consequential Damages.

               19.4.1 Notwithstanding anything herein to the contrary (except as set forth in Section 19.4.2
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,
except that Design-Builder does not waive any such damages resulting from or arising out of any
breach of Owner’s duties and obligations under the limited license granted by Design-Builder to
Owner pursuant to Article 5.

               19.4.2 The consequential damages limitation set forth in Section 19.4.1 above is not intended
to affect the payment of liquidated damages, if any, set forth in Section 7.3 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.

     19.5
Limitation of Liability. Notwithstanding anything else in this Agreement to the contrary, the
aggregate liability of Design-Builder, its Subcontractors, vendors, suppliers, agents and
employees, to Owner (or any successor thereto or assignee thereof) for any and all claims and/or
liabilities arising out of or relating in any manner to the Work or to Design-Builder’s performance
or non-performance of its obligations hereunder, whether based in contract, tort (including
negligence), strict liability, or otherwise, shall not exceed, in the aggregate, the Contract Price
and shall be reduced, upon the issuance of each Application for Payment, by the total value of such
Application for Payment; provided, however, that upon the earlier of Substantial Completion or such
point in time requests for payment pursuant to Article 10 have been made for ninety percent (90%)
of the Contract Price, Design-Builder’s aggregate liability shall be limited to the greater of (1)
Ten Percent (10%) of the Contract Price or (2) the amount of insurance coverage available to
respond to the claim or liability under any policy of insurance provided by Design-Builder under
this Agreement. The aggregate liability of Design-Builder shall not include increased costs of
purchasing equipment, materials, supplies, or services, except to the extent Owner has terminated
the Agreement pursuant to Section 15.2 and such equipment, materials, supplies, and services are
required to complete the Work or to the extent that any of such equipment, materials, supplies, and
services may be included in the payment of liquidated damages pursuant to Section 7.3 hereof.
Notwithstanding the foregoing, (a) the maximum aggregate liability of Design-Builder for failure to
achieve the Contract Time(s) shall be as set forth in Section 7.3; and (b) the maximum aggregate
liability of Design-Builder for the performance of the warranty obligations set forth in Article 8
shall not exceed the Contract Price.

			
	 	 	 
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Article 20

Confidentiality of Shared Information

     20.1
Non-Disclosure Obligation. Except as required by court order, subpoena, or Applicable Law,
the Parties will hold in confidence, and will use only for the purposes of completing the Project,
any and all Confidential Information disclosed to each other. Neither Party shall disclose to
third parties any Confidential Information without the express written consent of the other Party,
which consent shall not be
unreasonably withheld. The Parties shall at all times use their respective reasonable efforts to
keep all Confidential Information and information regarding the terms and conditions of this
Agreement confidential. However, the Parties may disclose Confidential Information to their
respective lenders, lenders’ agents, advisors and/or consultants only as reasonably necessary in
connection with the financing of the Plant or to enable them to advise the Parties with regard to
the Contract Documents and the Project, provided that prior to such disclosure any party to whom
Confidential Information is disclosed is informed by the disclosing Party of the existence of this
confidentiality obligation and agrees to be obligated to maintain the confidentiality of any
information received. The term “Confidential Information” will mean (i) confidential or
proprietary information regarding the other Party’s business affairs, finances, technology,
processes, plans or installations, product information, know-how, or other information that is
received from the other Party pursuant to this Agreement or the Parties’ relationship prior thereto
or is developed pursuant to this Agreement, (ii) any and all information concerning the Contract
Documents, the Agreement, or the terms thereof, and (iii) all information which one Party, directly
or indirectly, may acquire from another Party; however, Confidential Information will not include
information falling into any of the following categories:

	 	(a)	 	information that, at the time of disclosure hereunder, is in the public domain;
	 
	 	(b)	 	information that, after disclosure hereunder, enters the public domain other
than by breach of this Agreement or the obligation of confidentiality;
	 
	 	(c)	 	information that, prior to disclosure hereunder, was already in the recipient’s
possession, either without limitation on disclosure to others or subsequently becoming
free of such limitation;
	 
	 	(d)	 	information obtained by the recipient from a third party having an independent
right to disclose this information; and
	 
	 	(e)	 	information that is available through discovery by independent research without
use of or access to the Confidential Information acquired from the other Party; and
	 
	 	(f)	 	photographs and descriptive information regarding the Project, including Plant
capacity, Owner’s name, and Project location, as used by Fagen for purposes of
marketing and promotion.

Each Party’s obligation to maintain Confidential Information in confidence will be deemed

			
	 	 	 
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performed
if such Party observes with respect thereto the same safeguards and precautions which such Party
observes with respect to its own Confidential Information of the same or similar kind. It will not
be deemed to be a breach of the obligation to maintain Confidential Information in confidence if
Confidential Information is disclosed upon the order of a court or other authorized Governmental
Authority, or pursuant to other Legal Requirements, including disclosures to Governmental
Authorities in connection with any offering or registration of securities. However, if Owner is
required to file the Contract Documents or a portion thereof with a Governmental Authority, it
agrees that it will not do so without first informing Design-Builder of the requirement and seeking
confidential treatment of the Contract Documents prior to filing the
documents or a portion thereof.

     20.2
Publicity and Advertising. Owner shall not make or permit any of its subcontractors, agents,
or vendors to make any external announcement or publication, release any photographs or information
concerning the Project or any part thereof, or make any other type of communication to any member
of the public, press, business entity, or any official body which names Fagen unless prior written
consent is obtained from Fagen, which consent shall not be unreasonably withheld.

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

Article 21

Miscellaneous

     21.1
Assignment. This Agreement shall be binding upon, shall inure to the benefit of, and may be
performed by, the successors and permitted assigns of the Parties, except that neither
Design-Builder nor Owner shall, without the written consent of the other, assign or transfer this
Agreement or any of the Contract Documents. Design-Builder’s subcontracting portions of the Work
in accordance with this Agreement shall not be deemed to be an assignment of this Agreement. Owner
may assign all of its rights and obligations under the Contract Documents to its Lenders or
Lenders’ Agent as collateral security in connection with Owner obtaining or arranging any financing
for the Project; provided, however, Owner shall deliver, at least ten (10) Days prior to any such
assignment, to Design-Builder (i) written notice of such assignment and (ii) a copy of the
instrument of assignment in form and substance reasonably acceptable to Design-Builder, whose
approval shall not be unreasonably withheld. The Lenders or Lenders’ Agent may assign the Contract
Documents or their rights under the Contract Documents, including without limitation in connection
with any foreclosure or other enforcement of their security interest. Design-Builder shall
execute, if requested, a consent to assignment for the benefit of the Lenders and/or the Lenders’
Agent in form and substance reasonably acceptable to Design-Builder, which form is attached hereto
as Exhibit O, provided that with respect to any such assignments such assignee demonstrates to
Design-Builder’s satisfaction that it has the capability to fulfill Owner’s obligations under this
Agreement. Notwithstanding the foregoing, following Design-Builder’s receipt of Final Payment,
Design-Builder’s consent to assignment shall not be required with respect to Owner’s successors as
owners of the Plant.

			
	 	 	 
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     21.2
Successors. Design-Builder and Owner intend that the provisions of the Contract Documents are
binding upon the Parties, their employees, agents, heirs, successors and assigns.

     21.3
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with, the
substantive laws of the State of Minnesota, without regard to the conflict of laws provisions
thereof.

     21.4 Severability. 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.

     21.5 No Waiver. The failure of either Design-Builder or Owner to insist, in any one (1) 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.

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

     21.7 Notice. Whenever the Contract Documents require that notice be provided to a Party, notice
shall be delivered in writing to such Party at the address listed below. Notice will be deemed to
have been validly given if delivered (i) in person, including by courier, to the individual
intended to receive such notice at the address below or at another address designated by the
intended recipient by notice to the other Party, or (ii) by facsimile, by the time stated in a
machine-generated confirmation that notice was received at the facsimile number of the intended
recipient.

     If to Design-Builder, to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Aaron Fagen

Fax: (320) 564-3278

     with a copy to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

			
	 	 	 
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Attention: Jennifer Johnson

Fax: (320) 564-3278

     and to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Wayne Mitchell

Fax: (320) 564-5190

     If to Owner, to:

[Owner Contact]

[Address]

     and

Lender’s Agent at the address provided for Lender’s Agent to Design-Builder by Owner

by notice within five (5) Days following the Financial Closing.

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

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

     21.10 Entire Agreement. This Agreement consists of the terms and conditions set forth herein, as
well as the Exhibits hereto, which are incorporated by reference herein and made a part hereof.
This Agreement sets forth the full and complete understanding of the Parties as of the Effective
Date with respect to the subject matter hereof.

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

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

     21.13 Survival. Notwithstanding any provisions herein to the contrary, the Work Product
provisions set forth in Article 5 and the indemnity obligations set forth herein shall survive (in
full force and effect) the expiration or termination of this Agreement and shall

			
	 	 	 
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continue to apply to the Parties to this Agreement even after termination of this Agreement or the transfer of such
Party’s interest in this Agreement.

[The next page is the signature page.]

			
	 	 	 
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     IN WITNESS WHEREOF, the Parties hereto have caused their names to be hereunto subscribed by
their officers thereunto duly authorized, intending thereby that this Agreement shall be effective
as of this [Effective Date].

	 	 	 	 	 	 	 	 	 	 	 
	OWNER:	 	 	 	DESIGN-BUILDER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Fagen, Inc.	 	 
	 	 	 	 	 	 	 
	(Name of Owner)	 	 	 	(Name of Design-Builder)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Signature)	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Roland “Ron” Fagen	 	 
	 	 	 	 	 	 	 
	(Printed Name)	 	 	 	(Printed Name)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	CEO and President	 	 
	 	 	 	 	 	 	 
	(Title)	 	 	 	(Title)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

			
	 	 	 
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[THESE EXHIBITS ARE EXAMPLES ONLY AND WILL BE REVISED FOR EACH PROJECT’S SPECIFICATIONS —  THIS

GENERIC EXHIBIT IS NOT FINAL OR BINDING AND CANNOT BE RELIED UPON FOR ANY PURPOSE WHATSOEVER]

EXHIBIT A

Performance Guarantee Criteria

	 	 	 	 	 	 	 
	Criteria	 	Specification	 	Testing Statement	 	Documentation
	Plant Capacity –

fuel grade ethanol

	 	Operate at a rate
of [Capacity]
million gallons per
year of denatured
fuel grade ethanol
meeting the
specifications of
ASTM 4806 based on
353 days of
operation per
calendar year and
4.76% denaturant.
	 	Seven day

performance test
	 	Production records
and written report
by Design-Builder.
	 
	 	 	 	 	 	 
	Corn to Ethanol

Conversion ratio;

*****

	 	Not be less than
2.80 denatured
gallons of ethanol
per bushel (56#) of
corn
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.
	 
	 	 	 	 	 	 
	Electrical Energy

	 	0.75 kWh per
denatured gallon of
fuel grade ethanol
*****
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.
	 
	 	 	 	 	 	 
	Natural Gas

	 	Shall not exceed
34,000 Btu per
denatured gallon of
fuel grade ethanol.
(This Performance
Criteria relates to
production of
ethanol and
excludes any
natural gas usage
that may occur for
drying corn.)
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.

	 
	 	 	 	 	 	 
	Process Water
Discharge (not
including cooling
tower and boiler
blowdown and

	 	Zero gallons under
normal operations.
	 	Process discharge
meter.
	 	Control System
reports.

			
	 	 	 
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A-1 

 

	 	 	 	 	 	 	 
	Criteria	 	Specification	 	Testing Statement	 	Documentation
	water pre-treatment (RO) 

discharge)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Air Emissions

	 	Must meet the
requirements
prescribed as of
the date hereof by
the [State Agency].
	 	Must meet the
requirements as
prescribed in the
[Draft Air Permit
or Air Permit or
Air Permit
Application]
attached as Exhibit
K.
	 	Written report by
Owner’s Air
Emission Tester.

As part of the Performance Guarantee Criteria the Plant shall operate in accordance with all Legal
Requirements.

DISCLAIMER:

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

Owner understands that the startup of the plant requires resources and cooperation of the Owner,
vendors and other suppliers to the project. Design-Builder disclaims any liability and Owner
indemnifies Design-Builder for non-attainment of the Performance Guarantee Criteria directly or
indirectly caused by material non-performance or negligence of third parties not retained by
Design-Builder.

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

A-2 

 

[THESE EXHIBITS ARE EXAMPLES ONLY AND WILL BE REVISED FOR EACH PROJECT’S SPECIFICATIONS —  THIS

GENERIC EXHIBIT IS NOT FINAL OR BINDING AND CANNOT BE RELIED UPON FOR ANY PURPOSE WHATSOEVER]

EXHIBIT B

General Project Scope

Construct a [Capacity Spelled Out (Capacity in Numbers)] MGY dry mill fuel ethanol plant near
[City, State]. The plant will grind approximately [Spelled Out (in Numbers)] million bushels of
corn per year to produce approximately [Capacity Spelled Out (Capacity in Numbers)] MGY of
denatured fuel ethanol. The plant will also produce approximately [Spelled Out (in Numbers)] tons
per year of 11% moisture dried distillers grains with solubles (DDGS), and approximately [Spelled
Out (in Numbers)] tons per year of raw carbon dioxide (CO2) gas.

[Delete]Corn will be supplied to the ethanol plant corn surge day bin from the elevator located
adjacent to the site. The Design-Builder will install hammermills and the associated equipment to
grind the corn and transfer it to the slurry system.

Delivered corn will be dumped in the receiving building. The receiving building will have two
truck grain receiving bays and a rail receiving bay, including an underground conveyor from the
rail pit to the second truck receiving bay both of which share a common receiving leg. The truck
driver will drive onto the pitless scale located near the administration building, be weighed and
sampled, then drive to the receiving building, dump the grain, then proceed back to the pitless
scale and obtain a final weight ticket from the scale operator. Two independent ___-bushel legs
will lift the corn to one of two ___– bushel concrete/steel 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 slurry tank, routed through a pressure vessel and steam flashed off
in a flash vessel. Cooked mash will continue through liquefaction tanks and into one of the
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 beer well and then
to the beer column to vaporize the alcohol from the mash.

Alcohol streams are dehydrated in the rectifier column, the side stripper and the molecular sieve
system. Two hundred proof alcohol is pumped to the tank farm day tank and blended with five
percent natural gasoline as the product is being pumped into one of two [Spelled Out (in Numbers)]
gallon final storage tanks. Loading facilities for truck and rail cars will be provided. Tank
farm tanks include: one tank for 190 proof storage, one tank for 200 proof storage, one tank for
denaturant storage and two [Spelled Out (in Numbers)] gallon tanks for denatured ethanol storage.

Corn mash from the beer stripper is dewatered in the centrifuge(s). Wet cake from the
centrifuge(s) is conveyed to the DDGS dryer system. Wet cake is conveyed from the centrifuges to
the dryer(s) where the water is removed from the cake and the product is dried to 11% moisture. A
modified wet or wet cake pad is located along side the DDGS dryer building to divert modified wet
or wet cake to the pad when necessary or for limited production of modified

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

B-1 

 

wet or wet cake for sales. Water in the thin stillage is evaporated and recycled by the
Bio-Methanation system. Syrup is added to the wet cake entering the dryer(s). DDGS is cooled and
conveyed to flat storage in the DDGS storage building. Shipping is accomplished by scooping and
pushing the product with a front-end loader into an in-floor conveyor system. The DDGS load out
pit has capacity for approximately one semi-trailer load. DDGS is weighed as it is loaded for
shipment through a bulk-weigh system.

Fresh water for the boilers, cooking, cooling tower and other processes will be obtained from the
Owner supplied water pretreatment system. 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 Thermal Oxidizer (TO) driven boiler system utilizing a high
percentage of condensate return to a condensate receiver tank.

The TO/Heat Recovery Steam Generator is a process used to thermally oxidize the exhaust gasses from
the Dryers. This process will be used to reduce VOCs and particulates that are in the dryer
exhaust and ensure compliance with environmental regulations. The energy required to complete
thermal oxidization will then be ducted to a waste heat boiler that will produce 100% of the steam
requirements of the ethanol plant. The exhaust gasses from the waste heat boiler will be ducted
through stack gas economizer(s) to recover the maximum amount of energy possible from the exhaust
gas stream. After the economizer(s), the gas stream will be vented to atmosphere through a stack.

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 air compressor(s), a receiver tank,
pre-filter, coalescing filter, and double air dryer(s).

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 a tank.

Under normal operating circumstances, the plant will not have any wastewater discharges that have
been in contact with corn, corn mash, cleaning system, or contact process water. An ICM/Phoenix
Bio-Methanator will reduce the BOD in process water allowing complete reuse within the plant. The
plant will have blowdown discharges from the cooling tower and may have water discharge from any
water pre-treatment processes. Owner shall provide on-site connection to sanitary sewer or septic
system.

Most plant processes are computer controlled by a Siemens/Moore APACS distributed control system
with graphical user interface and three workstations. The control room control console will have
dual monitors to facilitate operator interface between two graphics screens at the same time.
Additional programmable logic controllers (PLCs) will control certain process equipment.
Design-Builder provides lab equipment.

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

B-2 

 

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

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

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

B-3 

 

[THESE EXHIBITS ARE EXAMPLES ONLY AND WILL TO BE REVISED FOR EACH PROJECT’S SPECIFICATIONS —  THIS

GENERIC EXHIBIT IS NOT FINAL OR BINDING AND CANNOT BE RELIED UPON FOR ANY PURPOSE WHATSOEVER]

EXHIBIT C

Owner’s Responsibilities

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

	1)	 	Land and Grading — Owner shall provide a site near [City, State]. Owner shall obtain all
legal authority to use the site for its intended purpose and perform technical due diligence
to allow Design-Builder to perform including, but not limited to, proper zoning approvals,
building permits, elevation restrictions, soil tests, and water tests. The site shall be rough
graded per Design-Builder specifications and be +/- three inches of final grade including the
rough grading for Site roadways. The site soils shall be modified as required to provide a
minimum allowable soil bearing pressure as described in Table 1.
	 
	 	 	Other items to be provided by the Owner include, but are not limited to, the following: initial
site survey (boundary and topographic) as required by the Design-Builder, layout of the property
corners including two construction benchmarks, Soil Borings and subsequent Geotechnical Report
describing recommendation for Roads, foundations and if required, soil
stabilization/remediation, land disturbance permit, erosion control permit, site grading as
described above with minimum soil standards, placement of erosion control measures, plant access
road from a county, state or federal road designed to meet local county road standards, plant
storm and sanitary sewers, fire water system with hydrants and plant water main branches taken
from the system to be within five feet of the designated building locations, all tanks, motors
and other equipment associated with or necessary to operate the fire water loop and associated
systems, plant roads as specified and designed for the permanent elevations and effective depth,
“construction” grading plan as drawn (including site retention pond), plant water well and
associated permit(s). The Owner shall provide for Design-Builder aggregate covered areas for
construction trailers and parking along with adequate aggregate covered area or areas for
material laydown purposes. The recommended aggregate specifications shall be as specified by
the Owner’s geotechnical engineer. Owner shall also provide the final grading, seeding, and
mulching, and the site fencing at the site.
	 
	 	 	Owner is encouraged to obtain preliminary designs/information and estimates of the cost of
performing all Owner required permits and services as stated in this Exhibit C. Specifically,
the cost of the fire water systems (including associated fire water pumps, required tank,
building (if required), sprinklers, and all other equipment and materials associated with the
fire water delivery systems) is estimated being in excess of Two Million Dollars ($2,000,000).
The requirements of each state and the decisions of each Owner will increase or decrease the
actual cost. Additionally, the cost of the required soil stabilization in Table 1 can be in the
range of, or may exceed, $2.5MM which cost is not included in the Contract Price. Owner shall
prepare site according to Design-Builder’s engineering plans provided for the site work under
the Phase I and Phase II Engineering Services Agreement.

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

C-1 

 

	2)	 	Permits - Owner shall obtain all Operating Permits including, but not limited to, air quality
permits, in a timely manner to allow construction and startup of the plant as scheduled by
Design-Builder.
	 
	3)	 	Storm Water Runoff Permit – Owner shall obtain the construction storm-water runoff permit and
permanent storm-water runoff permit. Design-Builder shall obtain the erosion control/land
disturbance permit.
	 
	4)	 	[State] Pollutant Elimination Discharge Permit – Owner shall obtain a permit to discharge
cooling tower water, boiler blowdown water, reverse osmosis (“R.O.”) reject water, and any
other waste water directly to a designated waterway or other location. If required by item 9
below, Owner will secure appropriate permits for emergency process water discharges.
	 
	5)	 	Natural Gas Supply and Service Agreement – Continuous supply of natural gas of at least 3.2
billion cubic feet per year, at a minimum rate of 450 — 550 MCF per hour and at a minimum
pressure of 75 – 200 psi at the plant site. Pressure reducing stations must be located so as
to provide stable pressure at the point of use. Owner shall provide all gas piping to the use
points and supply meters and regulators to provide burner tip pressures as specified by
Design-Builder. Owner shall also supply a digital flowmeter on-site with appropriate output
for monitoring by the plant’s computer control system.
	 
	6)	 	Temporary Electrical Service – Owner shall secure electrical service to supply a minimum 750
KW of 3-phase, 480/277 volt electrical power during construction. Owner shall procure,
install, and maintain temporary service to up to three 3-phase, 480/277 volt temporary service
transformers located throughout the site. The transformer sizing, locations, and underground
electrical feed routing layout are to be determined jointly by the Owner, the Design-Builder
and the energy supplier. Design-Builder shall pay energy demand and usage charges up to
Substantial Completion.
	 
	7)	 	Permanent Electrical Service – (1) Owner is responsible to secure continuous service from an
energy supplier to serve the facility. The service from the energy supplier shall be of
sufficient size to provide at a minimum 12.5 MW of electrical capacity to the site. (2) The
Owner is responsible for procurement, installation and maintenance of the site supply and
distribution system, including but not limited to the required substation and all associated
distribution lines. An on-site digital meter is also to be supplied for monitoring of
electrical usage. (3) The responsibility of the Design-Builder starts at the secondary
electrical terminals of the site distribution system transformers that have been installed by
Owner (i.e., the 480 volt terminals for the process building transformers; the 480 volt
terminals for the energy center transformers; the 480 volt terminals for the grains
transformer; the 480 volt terminals for the pumphouse transformer; and the 4160 volt terminals
for the chiller transformer; and the 4160 volt terminals of the thermal oxidizer transformer).
(4) The site distribution system requirements, layout, and meters are to be determined
jointly by the Owner, the Design-Builder and the energy supplier.
	 
	 	 	Design-Builder will be providing soft start motor controllers for all motors greater than 150
horsepower and where demanded by process requirements. Owner is encouraged to discuss

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

C-2 

 

	 	 	with its electrical supplier whether additional soft start motor controllers are advisable for
this facility and such can be added, with any increased cost being an Owner’s cost.
	 
	 	 	Design-Builder will provide power factor correction to 0.92 lagging at plant nameplate capacity.
Owner is encouraged to discuss with its electrical service supplier any requirements for power
factor correction above 0.92 lagging. Additional power factor correction can be added with any
increased cost being an Owner’s cost.
	 
	8)	 	Water Supply, Service Agreement, and Pre-Treatment System – Owner shall supply on-site
process wells or other water source that is capable of providing a quantity of raw water
satisfying the needs of the Plant. Owner should consider providing a redundant water supply
source. Owner will supply one process fresh water supply line terminating within five (5)
feet of the point of entry designated by Design-Builder, and one potable supply line
terminating within five (5) feet of the process building and to the administration building at
a point of entry designated by administration building contractor.
	 
	 	 	Owner shall pay for a water pre-treatment system to be designed and constructed by
Design-Builder and to be integrated into the Plant. The pre-treatment system will be designed
to provide the Plant with the quantity and quality of raw and treated water needed to supply the
Plant’s process needs. The water pre-treatment system design will also consider and recommend to
Owner equipment required to meet the discharge requirements under the Plant’s wastewater
discharge permit. Owner is to execute side-letter agreements as necessary for the design and
construction of such water pre-treatment system. Design-Builder shall recover costs for the
design and construction of such system from the Owner at Design-Builder’s standard time plus
material rates during the relevant time period and at the relevant locale. A side-letter
agreement between Owner and Design-Builder shall be executed by Owner and Design-Builder to
compensate Design-Builder, at Design-Builder’s standard time plus materials rates during the
relevant time period and at the relevant locale, for any costs and expenses related to such
water pre-treatment system.
	 
	9)	 	Wastewater Discharge System, Permits and/or Service Agreement – Owner to provide discharge
piping, septic tank and drainfield system or connect to municipal system as required for the
sanitary sewer requirements of the Plant. These provisions shall comply with all federal,
state, and local regulations, including any permitting issues.
	 
	10)	 	Roads and Utilities – Owner shall provide and maintain the ditches and permanent roads,
including the gravel, pavement or concrete, with the roads passing standard compaction tests.
(Design-Builder will maintain aggregate construction roads during construction of the Plant
and will return to original pre-construction condition prior to Owner completing final grade
and surfacing.)
	 
	 	 	Except as otherwise specifically stated herein the Owner shall install all utilities so that
they are within five (5) feet of the designated building/structure locations.
	 
	11)	 	Administration Building – The administration building – one story free standing, office
computer system, telephone system, office copier and fax machine and office furniture and

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

C-3 

 

	 	 	any other office equipment and personal property for the administration building shall be the
sole and absolute cost and responsibility of Owner and Design-Builder shall have no
responsibility in regards thereto.
	 
	12)	 	Maintenance and Power Equipment – The maintenance and power equipment as described in Table 2
and any other maintenance and power equipment as required by the plant or desired by Owner
shall be the sole and absolute cost and responsibility of Owner and Design-Builder shall have
no responsibility in regards thereto.
	 
	13)	 	Railroads – Owner is responsible for any costs associated with the railroads including, but
not limited to, all rail design and engineering and construction and Design-Builder shall have
no responsibility in regards thereto. Owner shall supply drawings and Phase II redline
drawings to Design-Builder.
	 
	14)	 	Drawings – Owner shall supply drawings to Design-Builder of items supplied under items 11)
and 13) and also supply Phase II redline drawings.
	 
	15)	 	Fire Protection System – Fire Protection System requirements vary by governmental
requirements per location and by insurance carrier requirements. Owner is responsible to
provide the required fire protection system for the Plant. This may include storage tanks,
pumps, underground fire water mains, fire hydrants, foam or water monitor valves, sprinkler
systems, smoke and heat detection, deluge systems, or other provisions as required by
governmental codes or Owner’s insurance carrier’s fire protection criteria.
	 
	 	 	Owner shall pay for a Fire Protection System to be designed and constructed by Design-Builder
and to be integrated into the Plant. The Fire Protection System shall be designed and constructed
to meet the governmental and insurance requirements. Owner is to execute side-letter agreements as
necessary for the design and construction of such Fire Protection System. Design-Builder shall
recover costs for the design and construction of such system from Owner at Design-Builder’s
standard time plus material rates during the relevant timeperiod and at the relevant locale. A
side-letter agreement between Owner and Design-Builder shall be executed by Owner and
Design-Builder to compensate Design-Builder, at Design-Builder’s standard time plus materials rates
during the relevant time period and at the relevant locale, for any costs and expenses related to
such Fire Protection System.

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

C-4 

 

Table 1 Minimum Soil Bearing Pressure – Responsibility of Owner

** Subject to revision based on detailed design and engineering.

	 	 	 
	 	 	Required Allowable Soil Bearing
	Description	 	Pressure (pounds per square foot)
	Grain Storage Silos
	 	8,000
	DDGS Storage Silos
	 	8,000
	Corn/DDGS Building
	 	4,000
	Cook Water Tank
	 	3,500
	Methanator Feed Tank
	 	3,500
	Liquefaction Tank #1
	 	3,500
	Liquefaction Tank #2
	 	3,500
	Fermentation Tank #1
	 	5,000
	Fermentation Tank #2
	 	5,000
	Fermentation Tank #3
	 	5,000
	Fermentation Tank #4
	 	5,000
	Fermentation Tank #5
	 	5,000
	Fermentation Tank #6
	 	5,000
	Fermentation Tank #7
	 	5,000
	Beerwell
	 	5,000
	Whole Stillage Tank
	 	3,500
	Thin Stillage Tank
	 	3,500
	Syrup Tank
	 	3,500
	190 Proof Day Tank
	 	3,000
	200 Proof Day Tank
	 	3,000
	Denaturant Tank
	 	3,000
	Fire Water Tank
	 	3,000
	Denatured Ethanol Tank #1
	 	4,000
	Denatured Ethanol Tank #2
	 	4,000
	All Other Areas
	 	3,000

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

C-5

 

Table 2 Maintenance and Power Equipment – Responsibility of Owner

	 	 	 	 	 
	Description	 	Additional Description	 	 
	Spare Parts

	 	Spare parts	 	 
	 

	 	Parts bins	 	 
	 

	 	Misc. materials, supplies and equipment	 	 
	 
	 	 	 	 
	Shop supplies and equipment

	 	One shop welder

One portable gas welder	 	 
	 

	 	One plasma torch	 	 
	 

	 	One acetylene torch	 	 
	 

	 	One set of power tools	 	 
	 

	 	Two sets of hand tools with tool boxes	 	 
	 

	 	Carts and dollies	 	 
	 

	 	Hoists (except centrifuge overhead crane)	 	 
	 

	 	Shop tables	 	 
	 

	 	Maintenance office furnishings & supplies	 	 
	 

	 	Fire Extinguishers	 	 
	 

	 	Reference books	 	 
	 

	 	Safety manuals	 	 
	 

	 	Safety cabinets & supplies, etc.	 	 
	 

	 	Safety showers as required	 	 
	 
	 	 	 	 
	Rolling stock

	 	Used 1 1/2 yard front end loader	 	 
	 

	 	New Skid loader	 	 
	 

	 	Used Fork lift	 	 
	 

	 	Used Scissors lift, 30 foot	 	 
	 

	 	Used Pickup truck	 	 
	 

	 	Track Mobile
	 	 

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

D-6

 

Table 3 Owner’s Milestones

	 	 	 
	 	 	Number Of Days To Be
	 	 	Completed After Notice To
	Owner’s Responsibilities	 	Proceed
	Temporary Electrical Service In Place
	 	0
	Obtain Builder’s Risk policy in the amount of
the Contract Price, obtain Boiler and
Machinery Insurance, and obtain Terrorism
Coverage per TRIA as long as it is required
under Article 17 of the Agreement.
	 	0
	Storm Water Permits Complete: Modify the
existing storm water discharge permit to
reflect the ethanol plant, if required.
	 	60
	Natural Gas/Propane Transportation / Storage
Agreement Complete
	 	90
	Water Supply and Service Agreements Complete
	 	90
	Electrical Service Arrangement
	 	90
	Wastewater Discharge System Complete
	 	180
	TTB Operating Permits Complete
	 	200
	Discharge Permits Complete
	 	200
	Pumphouse/Water System Complete
	 	305
	Fire Protection System Complete
	 	305
	Paving (Plant Roads) Complete
	 	90 days prior to SC
	Rail Spur Complete
	 	90 days prior to SC
	Permanent Electrical Service Complete
	 	60 days prior to SC
	Maintenance and Power Equipment Onsite (Table
2)
	 	60 days prior to SC
	Employees Hired and Ready for Training
	 	60 days prior to SC
	Natural Gas Pipeline/Delivery System Complete
	 	60 days prior to SC

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

D-7

 

EXHIBIT D

ICM License Agreement

THIS LICENSE AGREEMENT (this “License Agreement”) is entered into and made effective as of the
___ day of
                                        
, 2006 (“Effective Date”) by and between
                                        
, a                      corporation (“OWNER”), and ICM, Inc.,
a Kansas corporation (“ICM”).

     WHEREAS, OWNER has entered into that certain Design-Build Lump Sum Contract dated
                                        
, 2006 (the “Contract”) with Fagen, Inc., a Minnesota corporation (“Fagen”),
under which Fagen is to design and construct a ___ million gallon per year ethanol plant for OWNER
to be located in or near
                                        
 (the “Plant”);

     WHEREAS, ICM has granted Fagen the right to use certain proprietary technology and information
of ICM in the design and construction of the Plant; and

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

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

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

2. The “Proprietary Property” means, without limitation, documents, Operating Procedures
(hereinafter defined), materials and other information that are furnished by ICM to OWNER in
connection with the Purpose, whether orally, visually, in writing, or by any other means,
whether tangible or intangible, directly or indirectly (including, without limitation, through
Fagen) and in whatever form or medium including, without limitation, the design, arrangement,
configuration, and specifications of (i) the combinations of distillation, evaporation, and
alcohol dehydration equipment (including, but not limited to, pumps, vessels, tanks, heat
exchangers, piping, valves and associated electronic control equipment) and all documents
supporting those combinations; (ii) the combination of the distillers grain drying (DGD), and
heat recovery steam generation (HRSG) equipment (including, but not limited to, pumps, vessels,
tanks, heat exchangers, piping and associated electronic control equipment) and all documents
supporting those combinations; and (iii) the computer system, known as the distributed control
system (DCS and/or PLC) (including, but not limited to, the software configuration, programming,
parameters, set points, alarm points, ranges, graphical interface, and system hardware
connections) and all documents supporting that system. The “Operating Procedures” means,
without limitation, the process equipment and specifications manuals, standards of quality,
service protocols, data collection methods, construction specifications, training methods,
engineering standards and any other information prescribed by ICM from time to time concerning
the Purpose. Proprietary Property shall not include any information or materials that OWNER can
demonstrate by clear and convincing written evidence: (i) was lawfully in the possession of
OWNER prior to disclosure by ICM or Fagen; (ii) was in the public domain prior to disclosure by
ICM or

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

D-1

 

Fagen; (iii) was disclosed to OWNER by a third party other than Fagen having the legal right to
possess and disclose such information or materials; or (iv) after disclosure by ICM or Fagen
comes into the public domain through no fault of OWNER or its members, directors, officers,
employees, agents, contractors, consultants or other representatives (hereinafter collectively
referred to as “Representatives”). Information and materials shall not be deemed to be in the
public domain merely because such information is embraced by more general disclosures in the
public domain, and any combination of features shall not be deemed to be within the foregoing
exceptions merely because individual features are in the public domain if the combination itself
and its principles of operation are not in the public domain.

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

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

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

6. ICM has the exclusive right and interest in and to the Proprietary Property and the goodwill
associated therewith. OWNER will not, directly or indirectly, contest ICM’s ownership of the
Proprietary Property. OWNER’s use of the Proprietary Property does not give OWNER any ownership
interest or other interest in or to the Proprietary Property except for the limited license
granted to OWNER herein.

7. OWNER shall pay no license fee or royalty to ICM for OWNER’s use of the Proprietary Property
pursuant to this License Agreement, the consideration for the limited license granted herein is
certain payments by Fagen to ICM, which is funded by and included in the amounts payable by
OWNER to Fagen for the construction of the Plant under the Contract.

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

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

D-2

 

9. The Proprietary Property is confidential and proprietary. OWNER shall keep the Proprietary
Property confidential and shall use all reasonable efforts to maintain the Proprietary Property
as secret and confidential for the sole use of OWNER and its Representatives for the Purpose.
OWNER shall retain all Proprietary Property at its principal place of business and/or the Plant.
OWNER shall not at any time without ICM’s prior written consent, copy, duplicate, record, or
otherwise reproduce the Proprietary Property, in whole or in part, or otherwise make the same
available to any unauthorized person provided, OWNER shall be permitted to copy, duplicate or
otherwise reproduce the Proprietary Property in whole or in part in connection with, and to the
extent it is necessary and essential for, the Purpose so long as all such copies, duplicates or
reproductions are kept at its principal place of business and/or the Plant and are treated the
same as any other Proprietary Property. OWNER shall not disclose the Proprietary Property
except to its Representatives who are directly involved with the Purpose, and even then only to
such extent as is necessary and essential for such Representative’s involvement. OWNER shall
inform such Representatives of the confidential and proprietary nature of such information and,
if requested by ICM, OWNER shall obtain from such Representative a written instrument, in form
and substance reasonably acceptable to ICM, agreeing to be bound by all of the terms and
provisions of this License Agreement to the same extent as OWNER. OWNER shall make all
reasonable efforts to safeguard the Proprietary Property from disclosure by its Representatives
to anyone other than permitted hereby. OWNER shall notify ICM immediately upon discovery of any
unauthorized use or disclosure of the Proprietary Property, or any other breach of this License
Agreement by OWNER or its Representatives, and shall cooperate with ICM in every reasonable way
to help ICM regain possession of the Proprietary Property and prevent its further unauthorized
use or disclosure. In the event that OWNER or its Representatives are required by law
to disclose the Proprietary Property, OWNER shall provide ICM with prompt written notice of same
so that ICM may seek a protective order or other appropriate remedy. In the event that such
protective order or other appropriate remedy is not obtained, OWNER or its Representatives will
furnish only that portion of the Proprietary Property which in the reasonable opinion of its or
their legal counsel is legally required and will exercise its reasonable efforts to obtain
reliable assurance that the Proprietary Property so disclosed will be accorded confidential
treatment.

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

11. The duties and obligations of OWNER under this License Agreement, and all provisions
relating to the enforcement of such duties and obligations shall survive and remain in full
force and effect notwithstanding any termination or expiration of the Contract or this License
Agreement.

12. ICM may terminate this License Agreement upon written notice to OWNER if OWNER willfully or
wantonly (a) uses the Proprietary Property for any purpose, or (b) discloses the Proprietary
Property to anyone, in each case other than permitted herein. Upon termination of this License
Agreement, OWNER shall cease using the Proprietary Property for any purpose (including the
Purpose) and, upon request by ICM, shall promptly return to ICM all documents or other materials
in

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

D-3

 

OWNER’s or its Representatives’ possession that contain Proprietary Property in whatever format,
whether written or electronic, including any and all copies or reproductions of the Proprietary
Property. OWNER shall permanently delete all such Proprietary Property from its computer hard
drives and any other electronic storage medium (including any backup or archive system). OWNER
shall deliver to ICM a written certificate which certifies that all electronic copies or
reproductions of the Proprietary Property have been permanently deleted.

13. The laws of the State of Kansas, United States of America (or US), shall govern the validity
of the provisions contained herein, the construction of such provisions, and the interpretation
of the rights and duties of the parties. Any legal action brought to enforce or construe the
provisions of this License Agreement shall be brought in the federal or state courts located in
Wichita, Kansas, and the parties agree to and hereby submit to the exclusive jurisdiction of
such courts and agree that they will not invoke the doctrine of forum non conveniens or other
similar defenses in any such action brought in such courts. Notwithstanding the foregoing,
nothing in this License Agreement will affect any right ICM may otherwise have to bring any
action or proceeding relating to this License Agreement against OWNER or its properties in the
courts of any jurisdiction. In the event the Plant is located in, or OWNER is organized under
the laws of, a country other than the US, OWNER hereby specifically agrees that any injunctive
or other equitable relief granted by a court located in the State of Kansas, US, or any award by
a court located in the State of Kansas, shall be specifically enforceable as a foreign judgment
in the country in which the Plant is located, OWNER is organized or both, as the case may be,
and agrees not to contest the validity of such relief or award in such foreign jurisdiction,
regardless of whether the laws of such foreign jurisdiction would otherwise authorize such
injunctive or other equitable relief, or award.

14. OWNER hereby agrees to waive all claims against ICM and ICM’s Representatives for any
consequential damages that may arise out of or relate to this License Agreement, the Contract or
the Proprietary Property 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. OWNER further agrees that the aggregate recovery of OWNER and Fagen
(and everyone claiming by or through OWNER and Fagen), as a whole, against ICM and ICM’s
Representatives, collectively, for any and all claims that arise out of, relate to or result
from this License Agreement, the Proprietary Property or the Contract, whether arising in
contract, warranty, tort (including negligence), strict liability or otherwise, shall
not exceed One Million US Dollars ($1,000,000).

15. The terms and conditions of this License Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede any prior understandings,
agreements or representations by or between the parties, written or oral. Any rule of
construction to the effect that any ambiguity is to be resolved against the drafting party shall
not be applicable in the interpretation of this License Agreement. This License Agreement may
not be modified or amended at any time without the written consent of the parties.

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

17. In the event that any of the terms, conditions, covenants or agreements contained in this
License

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

D-4

 

Agreement, or the application of any thereof, shall be held by a court of competent jurisdiction
to be invalid, illegal or unenforceable, such term, condition, covenant or agreement shall be
deemed void ab initio and shall be deemed severed from this License Agreement. In such event,
and except if such determination by a court of competent jurisdiction materially changes the
rights, benefits and obligations of the parties under this License Agreement, the remaining
provisions of this License Agreement shall remain unchanged unaffected and unimpaired thereby
and, to the extent possible, such remaining provisions shall be construed such that the purpose
of this License Agreement and the intent of the parties can be achieved in a lawful manner.

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

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

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

IN WITNESS WHEREOF, the parties hereto have executed this License Agreement, the Effective Date of
which is indicated on page 1 of this License Agreement.

	 	 	 
	OWNER:

	 	ICM:
	 
	 	 
	 

	 	ICM, Inc.
	 
	 	 
	By:

	 	By:
	 
	 	 
	Title:

	 	Title:
	 
	 	 
	Date Signed:

	 	Date Signed:
	 
	 	 
	Address for giving notices:

	 	Address for giving notices:
	 
	 	 
	 

	 	301 N First Street
	 

	 	Colwich, KS 67030

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

D-5

 

[This exhibit is project-specific and will be provided by Fagen]

EXHIBIT E

Schedule of Values

Schedule of Values for:

[Owner Company Name]

Payment Request Breakdown

	 	 	 	 	 
	Description	 	 	 	 
	MOBILIZATION
	 	$[Amount in 10.1]
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 
	CONTRACT AMOUNT
	 	$[Price from 9.1]

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

E-1

 

EXHIBIT F

Form of Informational Report

	 	 	 
	

	 	PROJECT MEETING: Two-Week Look Ahead(s)

	 	 	 	 	 
	JOBSITE:

	 	MEETING	 	 
	 

	 	DATE:
	 	 

	 	 	 	 	 
	6 MANPOWER	 	TOTALS 6	 
	Fagen, Inc.
	 	 	0	 
	(sub)
	 	 	0	 
	 
	 	 	0	 
	 
	 	 	0	 
	 
	 	 	0	 
	 
	 	 	0	 
	 
	 	 	0	 
	 
	 	 	0	 
	 
	 	 	0	 
	 
	 	 	0	 
	JOBSITE TOTAL
	 	 	0	 

6 SAFETY ISSUES

	 	1.	 	text
	 
	 	2.	 	text

6 WAREHOUSE ISSUES

	 	1.	 	text
	 
	 	2.	 	text

6 PROCUREMENT ISSUES

	 	1.	 	text
	 
	 	2.	 	text

6 OPERATIONS ISSUES

	 	1.	 	text
	 
	 	2.	 	text

6 CIVIL

Area

	1.	 	text
	 
	2.	 	text

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

F-1

 

6 STRUCTURAL

Area

	 	 	 	1.
text
	 
	 	 	 	2.
text

6 SIDING / INSULATION

Area

	 		 	1.
text
	 
	 	 	 	2.

6 MILLWRIGHT

Area

	 	 	 	1.
text
	 
	 	 	 	2.

6 PIPE

Area

	 	 	 	1.
text
	 
	 	 	 	2.

6 ELECTRICAL

Area

	 	 	 	1.
text
	 
	 	 	 	2.

6 DELIVERIES

Area

	 	 	 	1.
text

6 SUBCONTRACTOR

Subcontractor Name

	 	1.	 	text

			
	 	 	 
	[Name of Project Company]
	 	___ ___, 2006

F-2

 

EXHIBIT G

Required Permits

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Responsibility for	 	Assistance in	 	 
	No.	 	Type of Application/Permit	 	Obtaining Permit	 	Preparation	 	Notes
	1

	 	Underground Utility

Locating Service
	 	Design-Builder/Owner
	 	 	 	Notification
service for
underground work.
	 
	 	 	 	 	 	 	 	 
	2

	 	Septic Tank & Drain Field

Permit
	 	Owner	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	3

	 	Railroad Permit/Approval
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	4

	 	Archeological Survey
	 	Owner	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	5

	 	Highway Access Permit
	 	Owner
	 	 	 	State Department of
Transportation or
County
	 
	 	 	 	 	 	 	 	 
	6

	 	Building Permits
	 	Design-Builder	 	 	 	 
	 

	 	Mechanical
	 	Design-Builder	 	 	 	 
	 

	 	Electrical
	 	Design-Builder	 	 	 	 
	 

	 	Structures
	 	Design-Builder	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	7

	 	Construction Air Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	8

	 	Construction Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	9

	 	Operations Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	10

	 	Wastewater Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	11

	 	Water Appropriation Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	12

	 	Fire Protection
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	13

	 	Above Ground Storage Tank

Permit
	 	Owner	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	14

	 	TTB Permit
	 	Owner	 	 	 	 

G-1

 

EXHIBIT H

Form of Performance Bond

PERFORMANCE BOND

The American Institute of Architects,

AIA Document No. A312 (December, 1984 Edition)

Any singular reference to Contractor, Surety, Owner or other

party shall be considered plural where applicable.

	 	 	 
	CONTRACTOR (Name and Address):

	 	Description (Name and Location):
	Fagen, Inc.

	 	[Project Name and Location]
	P. O. Box 159

	 	OWNER (Name and Address):
	Granite Falls, MN 56241

	 	[Owner Name/Address]
	CONSTRUCTION CONTRACT 

Date:

	 	SURETY (Name and Principal Place of Business): [Name/Place of Business]
	Amount: [Amount]
	 	 
	BOND#
	 	 
	Date (Not earlier than Construction Contract Date):
	 	 
	Amount:
	 	 
	Modifications to this Bond:           o None

	 	          o See Page 2
	CONTRACTOR AS PRINCIPAL

	 	SURETY
	Company:            (Corporate Seal)

	 	Company:            (Corporate Seal)
	Fagen, Inc.
	 	 
	Signature:                                                                       

	 	Signature:                                                                       
	Name and Title:                                                             

	 	Name and Title:                                                             
	(Any additional signatures appear an page 2.)
	 	 
	(FOR INFORMATION Only- Name, Address and Telephone)

	 	OWNER’S REPRESENTATIVE (Architect, Engineer or other party):
	AGENT or BROKER:
	 	 

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

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

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

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

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

3.3 The Owner has agreed to pay the Balance of the Contract Price to the Surety in

			
	[Name of Project Company]
	 	____ __, 2006

H-1

 

accordance with the terms of the Construction Contract or to a contractor selected to perform the
Construction Contract in accordance with the terms of the contract with the Owner.

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

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

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

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

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

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

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

	5.	 	If the Surety does not proceed as provided in Paragraph 4 with reasonable promptness, the Surety
shall be deemed to be in default on this Bond fifteen days after receipt of an additional written
notice from the Owner to the Surety demanding that the Surety perform its Obligations under this
Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety
proceeds as provided in Subparagraph 4.4, and the Owner refuses the payment tendered or the Surety
has denied liability, in whole or in part, without further notice the Owner shall be entitled to
enforce any remedy available to the Owner.
	 
	6.	 	After the Owner has terminated the Contractor’s right to complete the Construction Contract, and
if the Surety elects to act under Subparagraph 4.1, 4.2, or 4.3 above, then the responsibilities of
the Surety to the Owner shall not be greater than those of the Contractor under the Construction
Contract, and the responsibilities of the Owner to the Surety shall not be greater than those of
the Owner under the Construction Contract. To the limit of the amount of this Bond, but subject to
commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on
the Construction Contract, the Surety is obligated without duplication for:
	 
	6.1	 	The responsibilities of the Contractor for correction of defective work and completion of the
Construction Contract;
	 
	6.2	 	Additional legal design professional and delay costs resulting from the Contractor’s Default,
and resulting from the actions or failure to act of the Surety under Paragraph 4; and
	 
	6.3	 	Liquidated damages, or if no liquidated damages are specified in the Construction Contract,
actual damages caused by delayed performance or non-performance of the Contractor.
	 
	7.	 	The Surety shall not be liable to the Owner or others for obligations of the Contractor that
	 
	 	 	 

			
	[Name of Project Company]
	 	___ ___,2006

H-2

 

are unrelated to the Construction Contract and the Balance of the Contract Price shall not be
reduced or set off on account of any such unrelated obligations. No right of action shall accrue on
this Bond to any person or entity other than the Owner or its heirs, executors, administrators or
successors.

8. The Surety hereby waives notice of any change, including changes of time, to the Construction
Contract or to related subcontracts, purchase orders and other obligations.

9. Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent
jurisdiction in the location in which the work or part of the work is located and shall be
instituted within two years after Contractor Default or within two years after the Contractor
ceased working or within two years after the Surety refuses or fails to perform its obligations
under this Bond, whichever occurs first. If the provisions of this Paragraph are void or
prohibited by law, the minimum period of limitation available to sureties as a defense in the
jurisdiction of the suit shall be applicable.

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

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

12. DEFINITIONS

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

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

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

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

MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:

This bond
is subject to the attached Dual Obligee Rider dated
                                                                                                    
                                                                                                                                                                                                        
                                                                                                                                            

(Space is provided below for additional signatures of added parties other than those appearing on the cover page.)

	 	 	 	 	 	 	 	 	 
	CONTRACTOR AS PRINCIPAL

	 	 	 	 	 
	          (Corporate Seal)

	 	 	 	 	 
	Company:

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 

			
	[Name of Project Company]
	 	___ ___,2006

H-3

 

	 	 	 	 	 	 	 
	 	 	 	 	SURETY

	 	 	 	 	     (Corporate Seal)

	 
	 	 	 	 	Company:
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name and Title:
	 	 	 	Address:	 	 
	 

	 	 
	 	 	 
	Signature:

	 	 	 	Name and Title: 	 
	 

	 	 
	 	 	 	 
	 	 	 	 	Signature: 	 	 
	 

	 	 
	 	 	 

			
	[Name of Project Company]
	 	___ ___,2006

H-4

 

DUAL OBLIGEE RIDER

(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)

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

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

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

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

SIGNED, SEALED AND DATED this ___day of ___, 200_.

	 	 	 	 	 
	 

	 	Fagen, Inc.
	 
	 	 	 	 
	 	 	   
	 

	 	(Contractor)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	[ ]	 	 
	 
	 	 	 	 
	 	 	   
	 

	 	(Surety)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 

			
	[Name of Project Company]
	 	___ ___,2006

H-5

 

EXHIBIT I

Form of Payment Bond

PAYMENT BOND

The American Institute of Architects,

AIA Document No. A312 (December, 1984 Edition)

Any singular reference to Contractor, Surety, Owner or other

party shall be considered plural where applicable.

	 	 	 
	CONTRACTOR (Name and Address):

	 	SURETY (Name and Principal Place of Business):
	Fagen, Inc.
	 	 
	P. O. Box 159
	 	 
	Granite Falls, MN 56241
	 	 
	OWNER (Name and Address):
	 	 
	[NAME AND ADDRESS]
	 	 
	CONSTRUCTION CONTRACT
	 	 
	Date:
	 	 
	Amount:
	 	 
	Description (Name and Location):
	 	 
	BOND #
	 	 
	Date (Not earlier than Construction 

Contract Date):
	 	 
	Amount:
	 	 
	Modifications to this Bond: o None           o See Page 2
	CONTRACTOR AS PRINCIPAL SURETY
	Company:           (Corporate Seal)           Company:           (Corporate Seal)
	Fagen, Inc.
	 	 

	 	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 
	 

	 
	 	 	 
	Name and Title: 

	 	 	Name and Title: 	 
	 

	 	 
	 	 	 	 

(Any additional signatures appear an page 2.)

	 	 	 
	(FOR INFORMATION Only—Name, Address and Telephone)

	 	OWNER’S REPRESENTATIVE(Architect, Engineer or other party):
	AGENT or BROKER:
	 	 

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

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

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

          2.2     Defends, indemnifies and holds harmless the Owner from claims, demands, liens or suits by any
person or entity whose claim, demand, lien or suit is for the payment for labor, materials or
equipment furnished for use in the performance of the Construction Contract, provided the Owner has
promptly notified the Contractor and the Surety (at the address described

      

			
	[Name of Project Company]
	 	___ ___,2006

I-1

 

in Paragraph 12) of any claims; demands, liens or suits and tendered defense of such claims,
demands, liens or suits to the Contractor and the Surety, and provided there is no Owner Default.

3.     With respect to Claimants, this obligation shall be null and void if the Contractor promptly
makes payment, directly or Indirectly, for all sums due.

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

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

          4.2     Claimants who do not have a direct contract with the Contractor:

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

          4.2.2     Have either received a rejection in whole or in part from the Contractor, or not
received within 30 days of furnishing the above notice any communication from the Contractor
by which the Contractor has indicated the claim will be paid directly or Indirectly; and

          4.2.3     Not having been paid within the above 30 days, have sent a written notice to the Surety
(at the address described in Paragraph 12) and sent a copy, or notice thereof, to the Owner,
stating that a claim is being made under this Bond and enclosing a copy of the previous
written notice furnished to the Contractor.

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

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

          6.1     Send an answer to the Claimant, with a copy to the Owner, within 45 days after receipt of the
claim, stating the amounts that are undisputed and the basis for challenging any amounts that are
disputed.

          6.2     Pay or arrange for payment of any undisputed amounts.

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

8.     Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for
the performance of the Construction Contract and to satisfy claims, if any, under any

      

			
	[Name of Project Company]
	 	___ ___,2006

I-2

 

Construction Performance Bond. By the Contractor furnishing and the Owner accepting this
Bond, they agree that all funds earned by the Contractor in the performance of the Construction
Contract are dedicated to satisfy obligations of the Contractor and the Surety under this Bond,
subject to the Owner’s priority to use the funds for the completion of the work.

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

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

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

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

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

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

     15.  DEFINITIONS

          15.1  Claimant: An individual or entity having a direct contract with the Contractor or with a
subcontractor of the Contractor to furnish labor, materials or equipment for use in the performance
of the Contract. The intent of this Bond shall be to include without limitation in the terms
“labor, materials or equipment” that part of water, gas, power, light, heat, oil, gasoline,
telephone service or rental equipment used in the Construction Contract, architectural and
engineering services required for performance of the work of the Contractor and the Contractor’s
subcontractors, and all other items for which a mechanic’s lien may be asserted in the jurisdiction
where the labor, materials or equipment were furnished.

           

			
	[Name of Project Company]
	 	___ ___,2006

I-3

 

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

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

MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:

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

            
                     
                     
                    
                    
                     
                     
                     
                     
                      

(Space is provided below for additional signatures of added parties other than those appearing on the cover page.)

	 	 	 	 	 	 	 
	CONTRACTOR AS PRINCIPAL

	 	 	 	SURETY	 	 
	          (Corporate Seal)

	 	 	 	    (Corporate Seal)	 	 
	Company:

	 	 	 	Company:	 	 
	 

	 	 

	Address:

	 	 	 	Address:	 	 
	 

	 	 

	Name and Title:

	 	 	 	Name and Title:	 	 
	 

	 	 

	Signature:

	 	 	 	Signature:	 	 
	 

	 	 

DUAL OBLIGEE RIDER

(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)

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

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

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

IT IS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held to change, alter or
vary the terms of the above described bond(s) except as hereinbefore set forth.
SIGNED, SEALED AND DATED this ___day of ___, 200_.

	 	 	 	 	 
	 

	 	Fagen, Inc.
	 	 
	 
	 	 	 	 
	 	 	   
	 

	 	(Contractor)	 	 
	 
	 	 	 	 

			
	[Name of Project Company]
	 	___ ___,2006

I-4

 

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	[ ]	 	 
	 
	 	 	 	 
	 	 	   
	 

	 	(Surety)	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 

			
	[Name of Project Company]
	 	___ ___,2006

I-5

 

EXHIBIT J

Draw (Payment) Schedule

	 	 	 	 	 	 	 	 	 	 
	MONTH	 	BILLING	 	 		 	TOTAL BILLING	 
	 
	1
	 	$	 	 	 	$	 	%	 
	2
	 	$	 	 	 	$	 	%	 
	3
	 	$	 	 	 	$	 	%	 
	4
	 	$	 	 	 	$	 	%	 
	5
	 	$	 	 	 	$	 	%	 
	6
	 	$	 	 	 	$	 	%	 
	7
	 	$	 	 	 	$	 	%	 
	8
	 	$	 	 	 	$	 	%	 
	9
	 	$	 	 	 	$	 	%	 
	10
	 	$	 	 	 	$	 	%	 
	11
	 	$	 	 	 	$	 	%	 
	12
	 	$	 	 	 	$	 	%	 
	13
	 	$	 	 	 	$	 	%	 
	14
	 	$	 	 	 	$	 	%	 
	15
	 	$	 	 	 	$	 	%	 
	16
	 	$	 	 	 	$	 	%	 
	 
	 	$[Price]	 	 	 	 	 

	 		
	[Name of Project Company]
	 	___ ___,2006

J-1

 

EXHIBIT K

Air Emissions Application or Permit

			
	[Name of Project Company]
	 	___ ___,2006

K-1

 

EXHIBIT L

Phase I and Phase II Engineering Services Agreement

			
	[Name of Project Company]
	 	___ ___,2006

L-1

 

EXHIBIT M

Form of Application for Payment

			
	[Name of Project Company]
	 	___ ___,2006

M-1

 

EXHIBIT N

Form of Lien Waiver

GENERAL CONTRACTOR’S PARTIAL WAIVER OF MECHANIC’S LIEN

RIGHTS AND AFFIDAVIT OF DEBTS AND CLAIMS

CONDITIONAL LIEN WAIVER

	 	 	 
	STATE: ( INSERT STATE )

	 	FAGEN, INC.
	COUNTY: ( INSERT COUNTY )
	 	 

     The undersigned is the General Contractor (aka Design-Builder) regarding labor and materials
for construction and maintenance work performed for ( INSERT OWNER/PLANT NAME ), at the
Facility located at or near ( INSERT PLANT CITY & STATE ) under the terms of a
contract.

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

TRACT 1: ( INSERT LEGAL DESCRIPTION )

TRACT 2: ( INSERT LEGAL DESCRIPTION )

 

			
	[Name of Project Company]
	 	___ ___,2006

N-1

 

     The undersigned further certifies that all obligations of General Contractor entered into
between suppliers/subcontractors and General Contractor regarding this Facility are current as of
this date, including all obligations of General Contractor for all work, labor and services
performed; materials and equipment furnished; and all known indebtedness and claims against General
Contractor for damages arising in any manner in connection with General Contractor’s performance of
the contract mentioned above for which General Contractor or property of General Contractor might
in any way be held responsible.

     Dated this ___day of ___, 200___

	 	 	 	 	 
	 	 	GENERAL CONTRACTOR:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	FAGEN, INC.
	 	 	By (Print):
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	(Signature):	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Witness (Print):	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	(Signature):	 	 
	 

	 	 	 	 

In the alternative (or if requested):

Subscribed and sworn to before me this

___day of ___, 200___.

                                                            

                    Notary Public

My Commission Expires:                                        

 

			
	[Name of Project Company]
	 	___ ___,2006

N-2

 

EXHIBIT O

Form of Consent to Assignment

 

			
	[Name of Project Company]
	 	___ ___,2006

N-1

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