Document:

Exhibit
10.8

 

	
   

  	
  AVENTINE
  RENEWABLE ENERGY — MT VERNON, LLC

  	
   

  
	
   

  	
  7201 Port Road, Mt. Vernon,
  Indiana 47620

  	
  CONTRACT
                             

  
	
   

  	
  SHORT FORM
  CONTRACT

  	
   

  
	
   

  	
  (AGREEMENT WITH INDEPENDENT
  CONTRACTOR)

  	
                                    ,
                

  

 

	
  AGREEMENT BETWEEN Fagen, Inc.,
  a Minnesota corporation with offices at 501 W. Highway 212, Granite Falls, MN
  56241

   (hereinafter called “CONTRACTOR”) and
  AVENTINE RENEWABLE ENERGY — MT VERNON, LLC, (hereinafter called “COMPANY”).

  
	
   

  
	
  DESCRIPTION OF WORK:   Contractor to provide labor and
  construction equipment, construction consumables, and other items as set
  forth on Exhibit E, attached hereto and incorporated herein, necessary to
  complete ethanol facility in Mt. Vernon, Indiana per Company’s design and specifications.

  
	
   

  
	
  TAX STATEMENT:  Contractor’s FEIN: 41-1604605. 
  Contractor is a Minnesota subchapter S corporation.

  
	
   

  
	
  All work must be performed in
  accordance with AVENTINE RENEWABLE ENERGY — MT VERNON, LLC GENERAL CONDITIONS
  B-241 and AVENTINE RENEWABLE ENERGY — MT VERNON, LLC OUTSIDE CONTRACTORS
  SAFETY REQUIREMENTS SH-100

  
	
   

  
	
  Above work shall be performed at
  the direction of          Jeff
  See                                                                                                               

  
	
   

  
	
  MATERIALS, EQUIPMENT,
  FACILITIES, SERVICES, ETC. TO BE FURNISHED BY COMPANY:   Company shall provide other equipment,
  materials, and facilities, including those already present at the jobsite,
  but specifically excluding those items set forth on Exhibit E,  and such other services and equipment as
  the parties may mutually agree.

  
	
   

  
	
  TARGET PRICE   $*****

  TARGET FEE:  $*****

  
	
   

  
	
   

  	
  Price not to exceed                                                                                                                                                                       

  All invoices must itemize labor,
  materials, transportation and taxes paid on materials.  Waiver(s) of lien must be submitted with
  invoices for materials used and for all subcontracted work.

  
	
   

  	
   

  
	
   

  	
  Payment Terms:
                                                                                                                                                                             

  
	
   

  	
   

  
	
  PERIOD OF PERFORMANCE

  	
  Contractor shall begin work on the
                    day of
                                          ,
                         

  and fully complete the same by
                        
  day of
                                          ,
                         .

  
	
   

  	
   

  
	
  INSURANCE COVERAGE

  	
  Contractor shall comply with
  Aventine Renewable Energy, Inc. Insurance Requirements Form    C-2C   

   

  
	
   

  	
   

  
	
  RENDERING OF INVOICES

  	
  Render all invoices
  to:   AVENTINE RENEWABLE
  ENERGY, INC., P.O. BOX 10, PEKIN, IL 61555

  ATTN:
  ACCOUNTS PAYABLE

  
	
   

  	
   

  
	
  OTHER TERMS AND PROVISIONS

  	
  All provisions on the reverse side
  hereof and Exhibits A-D attached hereto and included by reference, whether
  printed, typewritten and/or written are hereby made part of this
  agreement.  In the event of any
  conflict between the provisions of this Agreement as set forth on the reverse
  side hereof and the provisions of any attachments hereto, the provisions of
  this Agreement shall govern.

  
	
   

  	
   

  
	
  Executed in the State of
  Nebraska on the date first hereinabove written.

  
			

 

	
   

  	
   

  	
  FOR

  	
  AVENTINE RENEWABLE ENERGY — MT
  VERNON, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY

  	
  /s/ Thomas Manuel

  	
  CEO

  
	
  WITNESS OR SEAL

  	
   

  	
   

  	
   

  	
  (TITLE)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FOR

  	
  Fagen, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
  (CONTRACTOR)

  	
   

  
	
  WITNESS OR SEAL

  	
   

  	
  BY

  	
  /s/
  Evan Fagen

  	
  EVP

  
	
   

  	
   

  	
   

  	
   

  	
  (TITLE)

  

 

AVENTINE G/L Charge Code                                                                                                                                   

 

 

Exhibit A

 

ADDITIONAL PROVISIONS OF
AGREEMENT

 

1.               Company and Contractor acknowledge and agree that this Short
Form Contract, and all exhibits and appendices hereto, is being entered into to
accommodate Company’s schedule and that it does not reflect the full and final
agreement of the parties, if any, with respect to the project to which the work
relates. The parties will negotiate in good faith for the execution of a
complete and final construction agreement which will include such additional
and other terms customary to a project of this type and magnitude.  In the event Company and Contractor are
unable to agree upon such additional terms on or before May 17, 2010, then
Contractor has the right to terminate this agreement, be paid for all costs
incurred to date plus a fee in the amount of 15% of all such costs, and the
aggregate liability of Contractor, its subcontractors, vendors, suppliers,
agents and employees,  to Company (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
Contractor’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 amount paid to
Contractor.  In the event a complete and
final construction agreement is executed and delivered between the parties, all
work performed hereunder and all payments made hereunder with respect to such
work, or any portion thereof, shall be treated as Work performed and payments
made under such final construction agreement. 
Additionally, the parties acknowledge and agree that all terms and
conditions set forth in this agreement applicable to the Work performed or to
be performed under such final construction agreement shall be superseded and
replaced in their entirety by the terms and conditions of such complete and
final construction agreement, provided that all payments made hereunder are
credited dollar for dollar toward the final price under such final construction
agreement.

 

Subject to the foregoing, Contractor
shall, at Contractor’s expense:

 

(a) Except as otherwise provided in
this agreement, supply and pay for all labor, service, supplies, and all other
things to be used, directly or indirectly, in the performance of or in
connection with said work, and hold Company harmless against all claims, liens,
and demands in connection therewith and against all consequent cost, expense
and damages;

 

(b) Procure all permits and licenses
which may be required in the performance of said work, and pay all excise,
license, occupation and other taxes which may become payable to any authority
by reason of said work, including all taxes upon the sale, use, storage,
consumption and/or fabrication of the materials, supplies, equipment and other
things furnished by Contractor;

 

(c) Accept full and exclusive
responsibility and liability for payment of federal and state payroll taxes and
for contributions for unemployment insurance, old age pensions, annuities,
retirement and other benefits, imposed or assessed under any provision of any
law, state or federal, and measure by wages, salaries or other remuneration
paid or payable by Contractor to employees of Contractor engaged in said work
or in any operation incidental thereto, and agrees that it will cause each
subcontractor who performs any part of said work to accept the same
responsibility and liability with respect to employees of such subcontractor;

 

(d) Fully defend, protect, indemnify
and hold Company and its affiliates (and their respective officers, directors,
employees, and agents) harmless against claimed or actual infringement or
contributory infringement of any patent, or infringement of any copyright or
trademark, or violation of any trade secret arising out of or in connection
with any construction processes employed by Contractor or technologies or
equipment supplied by Contractor in the performance of said work, and shall
hold harmless Company and its affiliates (and their respective officers,
directors, employees, and agents) against any and all judgments, costs and
expenses (including attorney fees) incurred by Company and its affiliates (and
their respective officers, directors, employees, and agents)  by reason of any such claim or suit thereof.
Contractor specifically represents and warrants in this regard that its
performance of the work herein shall not violate any patent, copyright, trademark,
trade secret, or other contractual or legal obligation it has or may have with
respect to ICM technology and that it has entered into appropriate agreements
with, or obtained the necessary consents from, Applied Process Technology
International in order for Contractor to be deemed an Approved Contractor under
APTI’s License with Company and to perform the work without violation of any
contractual and/or legal obligations it has. 
For purposes of clarity, it is understood and agreed to by the parties
that Contractor is not supplying any Delta T (n/k/a/ APTI) technologies or
equipment in completing its work;

 

(e) Perform and complete said work
in a good and workmanlike manner satisfactorily and acceptable to the Company,
and comply with all federal, state, county and municipal laws, rules,
regulations and ordinances applicable to the performance of said work or
incident thereto;

 

(f) Upon request of Company, furnish
Company with such affidavits, receipts, waivers, releases, statements and other
evidence as Company may require to satisfy itself that all such claims, liens,
demands, liability, cost, expense, loss and damage have been paid and
discharges;

 

(g) At all times while on Company’s
premises, observe and be subject to such rules and regulations as Company from
time to time may promulgate for security reasons or for minimizing fire and
explosion risks and for the maintenance or restoration of good order and compel
observance thereof by Contractor’s employees and agents and others entering
upon premises in the performance of or in connection with said work; said rules
and regulations shall include among others, those now in force prohibiting
smoking, lighting of matches, intoxication, misconduct and the like.  Contractor shall take steps to assure that
his employees or employees of his subcontractors at all times observe the
reasonable rules and regulations while entering, leaving or on Company’s
premises, and shall cause them to be removed from such premises upon their
failure to comply.

 

2.               If any payment provided for hereunder is to be made in the
basis of Contractor’s cost or other flexible billing basis, the Company shall
have the right to audit Contractor’s books, receipts, invoices and records
pertinent to such costs, and Contractor agrees to maintain such documents for a
period of at least two (2) years from the date such costs were incurred and to
make them available to the Company at any reasonable time or times within the
two-year period for the Company’s use in making such audits.

 

3.               Contractor acknowledges that prior to the execution of this
agreement, Contractor has made sufficient examination and tests to determine
the difficulties and hazards incident to the doing of said work, whether
arising from the location of said work, conditions of the premises, proximity
of said work to adjacent facilities, equipment, tanks, buildings and other
structures, or otherwise and has determined to Contractor’s satisfaction the
nature and extent of all such difficulties and hazards.

 

4.               Contractor shall not assign this agreement or any monies to
become due hereunder, or subcontract the whole or any part of said work without
Company’s proper written consent. 
Company’s consent to such assignment or subcontract shall not relieve
Contractor or Contractor’s surety.  If
there is a surety, of any liability for the full and faithful performance of
this contract according to its terms and conditions.

 

5.               Contractor hereby authorizes Company to deduct from any
payable to Contractor (whether or not arising out of this agreement) all
amounts which may be payable by Contractor to Company, and also all amounts for
which Company may become liable to third parties by reason of Contractor’s acts
in performing or failing to perform Contractor’s obligations under this
agreement, and in the event that any claim is made by a third party, the amount
of validity of which is disputed by Contractor, or any indebtedness shall exist
which shall appear to be the basis for a claim of lien, Company may withhold
from any payment due, without liability for interest because of such
withholding, an amount sufficient to cover such claim.  The failure of Company to exercise such right
to deduct or withhold shall not, however, affect the obligation of Contractor
to protect Company as elsewhere provided herein.

 

6.               Neither party shall be liable in damages or otherwise if, by
reason of an act of God or public enemy strike, lockout, boycott, picketing,
riot, insurrection, fire or any governmental order, rule or regulation, or any
ordinance, such party shall be delayed in, or prevented from, furnishing any
materials, equipment, facilities, services, etc., provided to be furnished by
it hereunder.

 

7.               In the event Contractor fails to commence said work on the
day herein provided, or after such commencement abandons said work or for any
reason suspends or refuses to continue it for a period of five (5) days (unless
prevented from commencing or continuing said work by an act of God or public
enemy, strike, lockout, boycott, picketing, riot, insurrection, or any
governmental order, rule or regulation or any ordinance, or by any failure or
delay on the part of the Company as described in Paragraph 5), Company shall
have the right to take over said work and all materials and supplies furnished
by Contractor.

 

8.               Contractor’s Right to Terminate Contract

 

(a) If work is stopped by any public
authority for a period of thirty (30) days or more through no fault of
Contractor, or if Company fails to pay Contractor any payment within thirty
(30) days after it is due, the Contractor, upon seven (7) days’ written notice
by registered mail to the Company, may stop work or terminate the contract and
recover from Company payment for all work properly executed.

 

(b) 
If Company delays or interrupts Contractor’s work beyond the limits
specified in the Specification, Contractor shall be entitled to request
reimbursement for the actual additional costs incurred thereby.  Such request shall be supported by detailed
evidence of such additional costs. 
Should Company wrongfully refuse to accept such costs within seven (7)
days of its receipt of Contractor’s requests, then if Company has hereafter
received seven (7) days additional written notice by registered mail to
Company, Contractor may stop work or terminate the contract and recover from
Company, payment for all work properly executed.

 

9.               If any part of said work provided for by this agreement was
commenced by Contractor under oral agreement prior to the execution of this
agreement, this written agreement shall apply thereto in the same manner as if
made before said work was commenced.

 

10.         No modification of this agreement and no authorization for
extras or additions or for eliminations or changes in specifications shall be
binding on Company unless it is in writing and signed by a duly authorized
representative of Company.

 

11.         COMPLIANCE WITH THE LAWS — Contractor expressly represents
that it and the materials, equipment or services covered by this order comply
with all applicable federal, state or local governmental statutes, regulations,
orders (including clauses in federal Executive Orders incorporated herein to
the extent required by law) and ordinances, including but not limited to the
following: the Fair Labor Standards Act of 1938, as amended, and regulations
thereunder; the Federal Food, Drug and Cosmetic Act, as amended, and
regulations thereunder; the Federal Hazardous Substances Act, as amended, and
regulations thereunder; applicable Environmental laws, regulations and
ordinances; the Occupational Safety and Health Act, and regulations thereunder;
the Federal Insecticide, Fungicide and Rodenticide Act, as amended, and
regulations 

 

 

thereunder; the Toxic Substances
Control Act, and regulations thereunder; Executive Order 11246 (relating to
non-segregated facilities and equal employment opportunity) Executive Order
11758 (relating to employment of the handicapped); Executive order 11701
(relating to job listing of veterans), and Executive Order 11598 (relating to
employment of qualified disabled veterans and veterans of the Vietnam era),
Executive Order 11625 (relating to utilization of minority business
enterprises) and regulations promulgated pursuant to the foregoing Orders.  In the event that any law referred to herein
is changed or amended, such changes or amendments are incorporated by reference
herein to the extent applicable, and Contractor agrees to comply with the
requirements of such changes or amendments. 
Contractor expressly agrees, as part of its performance under this order
to sign and promptly return to Company such separate guarantees and certificates
(affirming that it and any materials, equipment or services covered by this
order comply with applicable governmental statutes, regulations, orders and
ordinances) as Company may from time to time request from Contractor.  Any such guarantees and certificates are
reasserted and incorporated by reference herein.

 

12.         Contractor shall maintain, at his sole cost and will require
any subcontractors he may engage to maintain, at all times while performing
work hereunder, the insurance coverage set forth in Company’s insurance
requirements as indicated on the reverse side of this form which is appended to
and forms a permanent part of this contract. 
ANY exception to these insurance requirements must be confirmed by
written agreement which must be appended to and form a permanent part of this
contract.

 

13.         Contractor covenants and agrees to fully defend, protect,
indemnify, hold harmless and render whole the Company, Partners, officers,
directors, employees and agents, from and against each and every claim, demand
or cause of action and any liability, cost and/or expense (including but not
limited to reasonable attorneys’ fees and expenses incurred in defense of the
Company, Partners, its officers, directors, employees and/or agents), for
damage or loss in connection therewith, which may be made or asserted by
Contractor, Contractor’s officers, directors, employees and/or agents, or which
may be made or asserted by any subcontractor, subcontractor’s officers,
directors, employees and/or agents, or which may be made or asserted by any
third party (including but not limited to personal injury or death or property
damage caused by, arising out of, or in any way incidental to, or in connection
with the performance of the work hereunder, including but not limited to those
situations where personal injury or death or property damage (or liability
therefore) was caused by the sole negligence of the Contractor, or any of its subcontractors
(and/or any of their respective employees and agents), by the negligence of any
combination of the Contractor or any of its subcontractors (and any of their
respective officers, directors, employees and/or agents), or where liability
for such personal injury or death or property damage with or without fault is
imposed on any theory of strict liability by operation of law, provided
however, that in no event shall Contractor be liable for any amount in any way
associated with injury, death, or property damage to the extent caused by
Company, or any party under its direction or control.

 

14.         If Contractor’s employees, subcontractors of others under
Contractor’s control perform services at Company’s premises or at Company’s
direction at premises of others, (1) such persons shall comply with all rules
and regulations of such premises and (2) Contractor shall keep materials and
the premises on which the work is to be done free and clear of all liens for
materials and labor incident to the performance of Contractor’s services,
hereunder.

 

15.         The drawings or other documents processed in relation to
this agreement, and the information therein contained are the property of
AVENTINE RENEWABLE ENERGY — MT VERNON, LLC which has furnished them in
confidence upon the understanding and condition that all persons, firms or
corporations receiving such drawings and information shall by the act of
receiving them be deemed to have agreed: To make no copy, duplication,
disclosure or use whatsoever of all or any part thereof except as expressly
authorized in writing by AVENTINE RENEWABLE ENERGY — MT VERNON, LLC, not to
give, lend or otherwise dispose of such drawings or documents and to return
same promptly upon request.

 

16.         A waiver on the part of the Company of Contractor of the
breach of any term, provision, or condition of this contract shall not constitute
a precedent, nor bind either party hereto to a waiver of any succeeding breach
of the same or any other term, provision or condition of this agreement.

 

17.         This contract shall be governed in all respects by the laws
of the State of Indiana.

 

18.         Notwithstanding anything herein to the contrary, neither
Contractor nor Company 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.

 

19.         If any of the work requires the purchase of equipment or
materials or the procurement of services, Contractor shall, for the protection
of the Company, demand from all vendors and subcontractors guarantees,
warranties, indemnities and/or insurance coverage (collectively “guarantees”)
with respect to such equipment, materials and services, which shall be made
available to the Company to the full extent thereof.  Contractor’s liability with respect to such
equipment and materials obtained from vendors shall, except for Contractor’s
obligations to pay such vendors, be limited to procuring such guarantees from
such vendors and rendering all reasonable assistance to the Company for
purposes of enforcing same.

 

20.         Company shall fully defend, protect, indemnify and hold
Contractor and its affiliates(and their officers, directors, employees, and
agents) harmless against claimed or actual infringement or contributory
infringement of any patent, or infringement of any copyright or trademark, or
violation of any trade secret, arising out of or in connection with the Delta T
(n/k/a APTI) technology and equipment incorporated into said work, and shall
hold harmless Contractor and its affiliates (and their officers, directors,
employees, and agents) against any and all judgments, costs and expenses
(including attorney fees) incurred by Contractor (and their officers,
directors, employees, and agents)  by
reason of any such claim or suit thereof.

 

21.         Except to the extent timely payment has not been
made by Company to Contractor for work performed and billed by Contractor,
Contractor shall not directly or indirectly create, incur, assume or suffer to
be created by it, or any of its Subcontractors, employees, laborers, mechanics
or materialmen of goods or services, any lien on the project site, the project,
the work or any part of, or interest in, any part thereof.  In the event such a lien is recorded in contravention
of this provision, Contractor shall take all necessary actions to immediately
have such lien released.

 

22.         Contractor acknowledges that Company is leasing the premises
on which Contractor’s work will be performed.

 

 

Exhibit B

AVENTINE RENEWABLE ENERGY — MT
VERNON, LLC

 

To:

 

Subject:  Insurance Requirements C-2C

 

Gentlemen:

 

Any Contractor who is presently
working for, or who will be working for AVENTINE RENEWABLE ENERGY — MT VERNON,
LLC (Company), must comply with the terms of this rider. Contractor covenants
and agrees to fully defend, protect, indemnify, hold harmless and render whole
the Company, its officers, directors, employees and agents from and against
each and every claim, demand or cause of action and any liability, cost and/or
expense (including but not limited to reasonable attorneys’ fees and expenses
incurred in the defense of the Company, its officers, directors, employees
and/or agents), for damage or loss in connection therewith, which may be made
or asserted by Contractor, Contractor’s officers, directors, employees and/or
agents, or which may be made or asserted by any subcontractor, subcontractor’s
officers, directors, employees and/or agents, or which may be made or asserted
by any third party (including but not limited to Company’s officers, directors,
employees and/or agents), on account of personal injury or death or property
damage caused by, arising out of, or in any way incidental to, or in connection
with the performance of the work hereunder, including but not limited to, those
situations where personal injury or death or property damage (or liability
therefor) was caused by the negligence of, the Contractor, any subcontractor
(and/or any of their respective employees and agents), by the concurrent
negligence of any combination of the Contractor or any subcontractor (and any
of their respective officers, directors, employees and/or agents), provided
however, that in no event shall Contractor be liable for any amount in any way
associated with injury, death, or property damage to the extent caused by Company,
or any party under its direction or control.

 

Contractor shall maintain at its
sole cost, and shall require any subcontractors it may engage to maintain, at
all times while performing work hereunder, the insurance coverage set forth
below with companies satisfactory to Company with full policy limits applying,
but not less than as stated.  A
certificate naming the Company as an additional insured and evidencing the
Comprehensive General Liability and Excess Liability coverages specifically
quoting the indemnification provision set forth in this Agreement, shall be
delivered to the Company prior to commencement of the work.  Such certificate shall provide that any
change restricting or reducing coverage or the cancellation of any policies
under which certificates are issued shall not be valid as respects the Company’s
interest therein until the Company has received 30-days notice in writing of
such change or cancellation.  Further, it
shall state that it is primary coverage and not concurrent or excess over other
valid insurance which may be available to AVENTINE RENEWABLE ENERGY — MT
VERNON, LLC.

 

Worker’s Compensation Insurance as
required by laws and regulations applicable to and covering employees of
Contractor engaged in the performance of the work under this Agreement.

 

Employer’s Liability Insurance
protecting Contractor against common law liability, in the absence of statutory
liability, for employee bodily injury arising out of the master-servant
relationship with a limit of not less than $1,000,000.00*.

 

Comprehensive General Liability
Insurance including products/completed operations with limits of liability of
not less than:  Bodily Injury
$2,000,000.00/$2,000,000.00 each occurrence/aggregate; Property Damage $2,000,000.00*
each occurrence/aggregate.  This policy
shall cover, among other risks, the contractual liability assumed under the
indemnification provision set forth in this Agreement.

 

 

Longshoresmen’s and Harborworkers’
Compensation Act Insurance to the extent required under such Act with regard to
the work performed hereunder.

 

Automobile Liability Insurance
including non-owned and hired vehicle coverage with limits of liability of not
less than:  Bodily Injury
$1,000,000.00/$1,000,000.00 per occurrence/aggregate; Property Damage
$1,000,000.00 each occurrence.

 

Excess Liability Insurance over
Comprehensive General Liability and Comprehensive Automobile Liability
coverages afforded by the primary policies described above, with minimum limits
of $20,000,000.00 excess of the specified limits.

 

Each policy shall be endorsed to
provide waiver of subrogation rights in favor of the Company, its subsidiaries
and affiliates and all other parties owning an interest in the property on
which work covered by this Agreement is to be performed.

 

Failure of the Contractor to keep
the required insurance policies in full force and effect during the work
covered by this Agreement and during any extensions, extra or additional work
agreed to by the Contractor hereunder shall constitute a breach of this
Agreement and Company shall have the right, in addition to any other rights, to
immediately cancel and terminate this Agreement without further cost to the
Company.

 

Nothing contained in these
provisions relating to coverage and amounts set out herein shall operate as a
limitation of Contractor’s liability in tort or contracted for under the terms
of this Agreement.

 

 

Exhibit C

AVENTINE RENEWABLE ENERGY — MT
VERNON, LLC

 

OUTSIDE CONTRACTORS’ SAFETY
REQUIREMENTS   SH-100

 

I.  Safety

 

(A)      General Requirements

 

The Contractor and any personnel
under his jurisdiction shall continuously observe and enforce all applicable
governmental safety regulations and all safety rules and signs that have been
or may be established by Aventine Renewable Energy — Mt Vernon, LLC (hereafter
called “Company”) during the performance of this agreement.  Good housekeeping shall be maintained at all
times and proper safety procedures and equipment must be utilized for
protection of all personnel and facilities. 
These instructions are minimum requirements to be met by the Contractor
and are not all inclusive.

 

(B)        Before beginning work, the Contractor or his qualified
supervisor shall inspect premises, location of work and proximity to adjacent
facilities and examine all applicable Company safety rules and instructions to
determine to his satisfaction, the nature and extent of difficulties and
hazards.

 

(C)        Contractor shall promptly report in writing to Owner, all
accidents in connection with the work. 
Full details and statements of witnesses shall be included in reports on
accidents which result in injury, death or property damage.

 

(D)       All lost time injuries occurring and recorded by the
Contractor during the performance of the contract, shall be reported to the
Company in writing.  A meeting will be
held monthly between the Contractor and the Company to discuss lost time
injuries or illnesses incurred by the Contractor during the performance of this
agreement.  At the Company’s discretion,
no monthly meeting will be called if the Contractor has incurred no lost time
injuries in the most recent month.

 

(E)         The Company reserves the right to suspend Contractor’s
operations where, in its opinion, life or Company property is imperiled.  Contractor shall suspend work when notified
by the Company Representative, or when any personnel or equipment are exposed
to unreasonable hazards.  In the event of
any emergency, Contractor’s personnel shall assemble at a location remote from
the scene and await further instructions.

 

(F)         The Company reserves the right to regulate all ignition
sources by permits when and where deemed necessary in the interest of safety.

 

1.               CUTTING AND WELDING PERMITS — Before any cutting or welding
is performed in the Plant, the following rules shall be observed:

 

a)              Outside contractors shall contact the Plant person in charge
of the job who shall determine if cutting & welding permits are required
for the specific job and will make the necessary arrangements to obtain cutting
or welding permits if needed.

b)             Cutting or welding permits shall be renewed each day.

c)              Outside contractors shall provide adequate fire protection
equipment at the job site.

d)             Good housekeeping standards shall be maintained in cutting
and welding areas.

e)              Cutting and welding equipment shall be maintained and used
as per OSHA standards.

 

2.               “Alcohol Area Hot Work Permit” must be obtained for any work
in the alcohol production storage or loading areas, or any other areas defined
by the Plant contact.  Such permits must
be obtained from the production department.

 

(G)        Contractor shall obtain approval from the Plant contact
prior to moving a large crane or other heavy construction equipment from one
Plant area to another.  Caution is to be
exercised in the movement of heavy equipment on the Company’s roadways.  Flagmen or groundmen will be provided by
Contractor, as needed ahead of and behind heavy moving loads to ensure safe
movement of this equipment, the safety of other traffic, protection of plant
power lines, pipelines, supports and other operating lines, supports and other
operating equipment along the roadways. 
Contractor will be responsible for all damage to road surfaces and
adjacent structures as a result of its operations, normal wear and tear
excepted.

 

(H)       General.

 

1.               Contractor shall take all measures necessary to prevent
contamination of Owner’s products, whether finished or in process, during the
course of all construction or installation work performed by Contractor.

2.               No toxic materials shall be brought into the facility
without written permission of Owner, and then only subject to all requirements
of applicable law and such additional conditions of control, storage and
advance use as Owner may prescribe.

3.               Compressed gas and oxygen cylinders must be handled with
care and must be stored in an upright position held by straps or chains to
prevent their falling over.  Cylinders
shall never be allowed to fall or otherwise receive shock.

4.               Contractor’s equipment, supplies and building materials
shall be kept in order at all times to eliminate accident hazard and possible
injury to Owner’s employees and the security is the responsibility of the
Company.  Company shall consult with
Contractor and hire a security firm familiar with union picketing and related
interferences so as to minimize disruption to the Work.

5.               At the end of the work day, work areas shall be fenced,
boarded or secured as necessary.  All of
the Contractor’s equipment shall be shut off and all obstacles removed from all
walking areas.

 

(I)            All drivers of Contractor’s vehicles are required to observe
speed limits (15 mph) and posted instructions on Company roads.  Reckless driving or non-observance of
these instructions will be cause for withdrawal of driving privileges.

 

(J)           Movement of Contractor’s personnel on Company property MUST
be confined to the location of the work to which they are assigned.  In going to and from designated work
assignments, or to lunchrooms or restrooms (if agreed upon), Contractor’s
personnel must stay on established roads and walks.  They must not walk through buildings or
shops.

 

1.               All contractor supervisors will sign in and out on a daily
basis at the Security Office.

2.               All contractor employees and equipment will enter and leave
the Plant via the Main Gate or Contractor’s gate as directed by Security.

3.               All contractor employees are to park their personal vehicles
in the CONTRACTOR’S PARKING LOT, which is located south of the Main Gate, or as
directed by Security.

4.               Contractor trucks are NOT TO BE USED TO CARRY EMPLOYEES TO
AND FROM THE WORK AREA.

 

(K)       Contractor must provide first aid facilities as may be
needed for his employees.  Except in the
case of serious accidents where the employee’s life or health may be seriously
endangered due to lack of prompt attention, Contractor’s personnel are not to
use the Company’s first aid facilities.

 

 

(L)         The Contractor is responsible for and will provide all
necessary training of Contractor’s personnel so that they will be familiar with
the pertinent Company rules and regulations, and can safely perform the
job.  All Company rules and regulations
are minimum requirements to be met by the Contractor and are not all inclusive.

 

(M)    The Contractor is to provide all necessary safety equipment.

 

(N)       Contractor shall rope off or barricade all work areas as a
protective measure to prevent injury to Owner’s employees, including work areas
around and under overhead scaffolds and staging, floor openings, open shafts,
overhead work (i.e., cutting through floors, tower constructions, excavations,
etc.).  Contractor shall provided and
maintain suitable coverings or barricades on floor openings.  Planks used on overhead beams or scaffolds
shall be tied down for added safety and removed when work is finished.  The Company will assume no responsibility
whatsoever for possible damage to Contractor’s employees’ vehicles or other
personal property while within the confines of the Company.

 

(O)       Manlifts.  All
employees of outside contractors are FORBIDDEN to ride Plant manlifts.

 

(P)         For their own protection, all Contractor’s employees must
abide by the following safety dress rules:

 

1.               Be fully clothed — shirts with sleeves and trousers (no
shorts).

2.               Hard hats are mandatory in all areas of the Plant, except in
the offices, lunchrooms, restrooms and parking lot (outside Plant).

3.               Safety Glasses are mandatory in all areas of the Plant,
except in offices, lunchrooms, restrooms and parking lot (outside Plant).

4.               Footwear — shoes of durable work type must be worn.  Tennis or canvas shoes are not allowed in the
Plant.  Company encourages the use of
steel toed safety shoes.

5.               Hearing Protection is mandatory in those areas of the Plant
designated “Hearing Protection Required”, OSHA 1910.95.

 

(Q)       Contact lenses should not be worn in areas where there is a
potential exposure to corrosive, irritating or toxic chemical vapors, mists,
fumes or dusty environment.  A
contaminant may permeate the lens and be held in contact with the eye, thereby
producing eye damage.  Wearing contact
lenses in contaminated atmospheres with a full-face respirator is prohibited by
Federal regulation: OSHA 29 CFR 1910.134(e).

 

(R)        Gambling, drunkenness, fighting, firearms, habit-forming
drugs, intoxicating liquor and “Practical Joking” or “Horseplay” are not
permitted on Company property.

 

(S)         Radios capable of receiving commercial broadcast are not
permitted in the Plant.

 

(T)        Cameras are not allowed in the Plant.

 

(U)       Running is prohibited in the Plant.

 

(V)        Crossing standing railcars by climbing though cars or
climbing over the car couplers is strictly forbidden.  Care must be taken that no railcar switching
or pulling is being done before crossing the tracks at the end of the cars.

 

II. Fire Regulations

 

(A)      No smoking shall be permitted anywhere on Owner’s premises
except in areas clearly designated for that purpose.

(B)        Storage or use of combustible or otherwise hazardous
materials is prohibited except in amounts allowed by Owner’s fire insurance
underwriters.  Flammable liquids, such as
gasoline, kerosene, alcohol, diesel oil, etc. must be kept under lock and key
in locations designated by the Owner.

(C)        At the end of each day, Contractor shall dispose of any
combustible or otherwise hazardous debris and remove all empty gas and oxygen
cylinders.

(D)       No gasoline, fuel oil, alcohol or other flammables are
allowed on the premises without the permission of the Owner.

(E)         No tar pots or similar equipment are allowed on any roof.

(F)         All welding will be performed by properly grounding directly
to piece being welded and requires Plant permits.

(G)        All tarpaulins must be fire retardant.

(H)       All fires and accidents must be reported to Owner’s Project
Engineer.

(I)            Contractor is prohibited from using any stud riveter
depending on any explosive cartridge as a means of operations.

 

I have read, understand and have
received a copy of the above requirements regarding:

 

I.      Safety

II.    Fire Regulations

 

and understand my responsibility as
a representative of my employer.

 

	
  CONTRACTOR EMPLOYEE

  	
   

  
	
   

  	
   

  
	
  COMPANY EMPLOYEE

  	
   

  
	
   

  	
  (WITNESS)

  

 

 

Exhibit D

AVENTINE RENEWABLE ENERGY — MT
VERNON, LLC

“Owner”

 

GENERAL CONDITIONS FOR
CONSTRUCTION WORK   B-241

 

I.  General

 

(A)      The intent of these General Conditions and such Drawings and
Specifications as may be specifically referred to, unless otherwise specified,
is to provide for all labor, materials, tools, appliances, equipment and
services of every kind necessary for the proper execution of the work, and the
terms and conditions of payment therefor. 
No oral modification of these conditions, Drawings and Specifications,
or any of the documents comprising the contract is permissible.

 

(B)        The contract documents are to be considered as one, and
whatever is called for by any one of the documents shall be binding as if
called for by all.  Your company, the “Contractor”,
shall be responsible for bringing any contradictions to the attention of the
Owner.

 

(C)        Three (3) sets of contract Drawings and Specifications will
be furnished to Contractor without charge (for bidding purposes, one (1) set
only).  Additional sets will be furnished
on request at the cost of the reproduction as established by Owner.  All Drawings and Specifications shall remain
the property of Owner and shall be returned upon request.  The Drawings, in general, are prepared in
scale.  Dimensions used shall not be
those obtained, but shall be those read directly or computed.  Where dimensions are not given on the
Drawing, Contractor shall be responsible for the routing or location in the
most practical manner consistent with the operation intended, free from interferences
and from an unsightly appearance.  In
general, Contractor is expected to make minor modifications or changes in
dimension in order to adapt his work to existing conditions and avoid
obstructions or hindrances.  CONTRACTOR
SHALL INFORM OWNER’S CONSTRUCTION SUPERINTENDENT OR REPRESENTATIVE, PRIOR TO
CONSTRUCTION, OF ANY CONFLICTS BETWEEN THE CONTRACT DOCUMENTS, OR ANY
OBSTRUCTIONS OR HINDRANCES THAT MIGHT INTERFERE WITH OR NECESSITATE CHANGES TO
THE WORK.  There shall be no variation
from Owner’s Drawing and Specifications without express prior written approval
of Owner.  Should extra costs be
involved, me procedures provided in Section IV hereof shall be followed.  Contractor shall keep an accurate record during
construction of all variations between the work, as shown in the Drawings, and
the actual installation.  Contractor
shall inform Owner of these variations, in wiring, and by marked-up drawing,
completely dimensioned.

 

(D)       At or prior to completion of the work, Contractor shall
furnish to Owner as-built tracings or other reproducible copies of all
Contractor’s shop drawings.  Final
payment hereunder may be withheld by Owner until such as-built tracings have
been furnished.

 

(E)         Owner’s review and written approval of Contractor’s shop
drawings shall not relieve Contractor from final responsibility for variations
from Drawings and Specifications furnished therewith or from responsibility for
errors made by Contractor in such shop drawings.

 

(F)         Contractor shall not copy, duplicate or use whatsoever or
any part of me drawings or documents provided by the Owner, except as expressly
authorized in writing by the Owner, and shall not give, lend or otherwise
dispose of such drawings or documents and shall return same promptly upon
request.

 

II. Employee and Sub-
Contractors

 

(A)      Except as otherwise noted, Contractor shall provide and pay
for all materials, labor, tools, water, power and other items necessary to
complete the work.

 

(B)        Before commencing work on this contract, Contractor shall
submit to Owner a list of all his representatives, employees and associates who
will be connected with the work hereunder. 
Contractor shall secure Owner’s approval of this list before any person
thereon seeks entry to Owner’s property. 
Such person shall comply with Owner’s regulations concerning entry to
the property.

 

(C)        No work may be sub-contracted without Owner’s written
approval.  If such approval is granted by
Owner, before commencing work, Contractor shall submit to Owner a list of all
subcontractors to be used and Contractor shall secure Owner’s approval of this
list.  Whether or not expressly so stated
it is understood that Contractor assumes the responsibility for any and all
acts and performance on the part of his sub-contractors.  The term “Sub-contractor(s)” throughout
includes all tiers of sub-contractors (e.q., sub-sub-contractor(s), etc.).

 

(D)       Contractor shall not begin work hereunder, nor leave the
completed job without first notifying Owner’s representative.

 

(E)         Contractor shall inform Owner before shipping any material
or equipment to be delivered to the jobsite.

 

(F)         Contractor shall have on the jobsite, at all times while
work is being done, a competent superintendent satisfactory to Owner.

 

(G)        This contract is personal in nature and no rights may be
assigned without Owner’s written approval.

 

III. Overtime Work

 

Contractor shall work overtime, if
so directed by Owner in writing.  In that
event, Owner shall be required to reimburse Contractor only for the actual
overtime premium portion of its payroll costs and the applicable insurance
premiums and payroll taxes thereon. 
Contractor shall make no charge for rental equipment, use of tools,
overhead expense, profit or on any other account.

 

IV. Surveys and Permits

 

(A)      Owner shall furnish all surveys unless otherwise
specified.  All permits and licenses
necessary for the prosecution of the work, whether of a temporary nature or for
permanent structures or permanent changes in existing facilities shall be
secured and paid for by Contractor, unless otherwise specified.  Contractor shall comply with all laws and
regulations bearing on the conduct of the work and shall notify Owner if the
Drawings and Specifications are at variance therewith.

 

(B)        Owner shall establish the base line and reference elevation
for the commencement of the work.  Contractor
shall furnish and place all additional stakes, templates and benchmarks
necessary for marking and maintaining points, lines and elevations and preserve
same, as required.  Contractor shall be
responsible to see that the finished work complies with the contract drawings
and lines and grades established. 
Contractor shall preserve drawings and protect all survey points,
including benchmarks and monuments which have been established prior to or
during the course of the work.

 

V. Protection of Work, Property
and Person

 

(A)      Contractor shall adequately protect the work, adjacent
property and the public, in connection with the work and shall be responsible
for any damage or injury due to his act or negligence.

 

(B)        Before any work begins, general working conditions shall be
approved by Owner.

 

(C)        All exposed operating equipment which is susceptible to
damage shall be protected at all times by Contractor.

 

VI. Inspection of Work

 

Contractor shall permit and
facilitate inspection of the work by Owner and its agents and public
authorities at all reasonable times.

 

 

VII. 
Changes in Scope of Work

 

Owner may order changes in the work,
the contract sum being adjusted accordingly. 
All such orders and adjustments shall be in writing. Claims by
Contractor for extra cost must be made in writing and approved by Owner’s
Purchasing Department, in writing before Contractor executes the work involved.

 

VIII. Correction of Work and
Warranties

 

Contractor warrants the workmanship
furnished hereunder to be free from defects and to be of the kind and quality
described.  Contractor shall re-execute
any work that fails to conform to the requirements of the contract whenever
non-conformity appears during the progress of the work, and shall remedy any
non-conformity and any defects due to faulty materials procured by Contractor
or Contractor’s workmanship.    If within
one year from the date of Owner’s acceptance the workmanship fails in any
respect to meet the warranties specified, Owner may require Contractor, at its
own expense, to take such measure as may be necessary to meet said warranties. EXCEPT FOR CONTRACTOR’S WARRANTIES EXPRESSLY PROVIDED HEREIN,
CONTRACTOR MAKES NO REPRESENTATIONS, GUARANTEES, WARRANTIES, OR CLAIMS WITH
RESPECT TO, AND ASSUMES NO RESPONSIBILITY FOR, THE PERFORMANCE OR USE OF THE
COMPLETED WORK AND SHALL HAVE NO RESPONSIBILITY FOR TESTING OR OPERATION OF THE
WORK.  CONTRACTOR EXPRESSLY DISCLAIMS ALL
IMPLIED WARRANTIES AND GUARANTEES OF ANY KIND OR NATURE, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, AND
OPERABILITY.

 

IX. 
Owner’s Right to Terminate Contract

 

If Contractor, at any time, defaults
in the performance of the work or violates any provisions of the contract,
Owner, after seven (7) days’ written notice by registered mail to Contractor,
without prejudice to any other remedy it may have, may make good the
deficiencies and deduct the cost of doing so from any monies then or thereafter
due Contractor or, at Owner’s option, may terminate the contract, take
possession of all materials, tools and appliances paid for by Owner and finish
the work by such means as it sees fit. 
If the unpaid balance of the contract price exceeds the cost of
finishing the work, such excess shall be paid to Contractor, but if such cost
exceeds such unpaid balance, Contractor shall pay the difference to Owner.

 

X. Payments

 

Payments shall be made as provided
in the Contract.  Acceptance of the final
payment by Contractor shall not constitute a waiver of any and all claims by
Owner.  Final payment does not relieve
Contractor from any and all obligations stipulated under this Contract.

 

XI. 
Liens

 

At Owner’s option, Contractor shall
provide a performance bond at the beginning of the work, lien waivers for every
payment in the event progress payments are required and/or a final lien waiver
at the completion of the work.  If
required, final payment shall not be due until Contractor has delivered to
Owner a complete conditional release of all liens arising out of this contract
and receipts in full covering all labor and materials for which a lien could be
filed or in lieu of such receipts a bond satisfactory to Owner indemnifying it
against any lien.

 

XII. 
Separate Contracts

 

Owner has the right to let separate
contracts in connection with the work subject to the conditions of paragraph
II(C) and Contractor shall properly cooperate with any other contractors.

 

XIII.  Clean-up

 

Contractor shall keep the premises
free from accumulation of waste material and rubbish and at the completion of the
work it shall leave the premises broom-clean. 
Any materials used by Contractor which adhere to floors, walls, posts,
beams, ceilings, equipment, etc., and any stains resulting therefrom must be
removed by Contractor at the completion of the work.

 

XIV. Protection of Product

 

(A)      Glass, china and like materials not required by
specifications shall not be brought onto Owner’s processing areas.  The most likely means of entry of such
materials in the form of food containers carried by Contractor’s employees,
such as glass jars, china cups, drink bottles, etc.  Owner’s Construction Superintendent, or
representative, shall define the specific areas where these materials are
prohibited.

 

(B)        When work is scheduled in or near a product processing area,
such work shall not be started without the sanction of Owner.

 

(C)        Demolition work, including cutting of concrete and wood,
shall not be started in or near a product processing area until the area is
either walled off or protected by means of suitable-hung tarpaulins or
protected in some other manner approved by Owner.

 

XV. Sanitation Regulations

 

(A)      It shall be the responsibility of Contractor to remove
litter, debris, trash, etc. from the job site on a daily basis and to maintain
the work site in as neat a manner as practicable.

 

(B)        Spitting is prohibited in all buildings.

 

XVI. Acceptance, Procedure, Conflict

 

Acceptance by Contractor of order or
contract to do work indicated will be considered by Owner as evidence that
Specifications and Drawings are understood and can be executed in accordance
thereto.  Any ambiguity or conflict must
be corrected before acceptance of order by Contractor.  “THE GENERAL CONDITIONS OF THE CONTRACT FOR
THE CONSTRUCTION OF BUILDINGS” being the standard form of the American Institute
of Architects, Form A201, latest issue, shall serve to answer all questions or
conditions that may arise between Owner and Contractor, on points not covered
by the contact and these General Conditions and any other additional
specification that may be written to govern a particular project of work, in
conjunction with the drawings that may be prepared for such project.

 

XVII. Performance Bond

 

If so required by Owner, Contractor
shall furnish at Owner’s expense a surety company material and performance bond,
which is to be satisfied to the Owner in every respect.

 

XVIII. Independent Contractor Status

 

It is understood and agreed that
your Contractor’s status under the Contract, is that of an independent
contractor rather than that of an agent or employee of Owner.  Contractor shall have the sole responsibility
for the satisfaction of any and all claims made by third parties on account of
its conduct or that of its employees or agents under the performance of this
Purchase Order.

 

 

Exhibit E

AVENTINE RENEWABLE ENERGY — MT
VERNON, LLC

 

Contractor’s Scope of Work

 

See attached consisting of three
pages.Exhibit 10.9

 

CONSTRUCTION AGREEMENT

 

BETWEEN

 

AVENTINE RENEWABLE ENERGY -
AURORA WEST, LLC (“Owner”)

 

AND

 

FAGEN, INC. (“Fagen”)

 

April 12, 2010

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article 1

  	
  Definitions;
  Rules of Interpretation

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
  Rules of Construction

  	
   

  	
  1

  
	
  1.2

  	
  Defined Terms

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 2

  	
  The Project

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
  Services to be Performed

  	
   

  	
  5

  
	
  2.2

  	
  Extent of Agreement

  	
   

  	
  6

  
	
  2.3

  	
  Conflicting Provisions

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 3 

  	
  Fagen
  Responsibilities

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  Fagen’s Services in General

  	
   

  	
  6

  
	
  3.2

  	
  Standard of Care

  	
   

  	
  7

  
	
  3.3

  	
  Government Approvals and Permits

  	
   

  	
  7

  
	
  3.4

  	
  Subcontractors

  	
   

  	
  7

  
	
  3.5

  	
  Maintenance of Site

  	
   

  	
  8

  
	
  3.6

  	
  Project Safety

  	
   

  	
  8

  
	
  3.7

  	
  Submission of Reports

  	
   

  	
  9

  
	
  3.8

  	
  Startup and Performance Testing

  	
   

  	
  9

  
	
  3.9

  	
  Decisions Involving the Work

  	
   

  	
  9

  
	
  3.10

  	
  Performance of Work

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4

  	
  Owner’s
  Responsibilities

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Duty to Cooperate

  	
   

  	
  9

  
	
  4.2

  	
  Furnishing of Services and Information

  	
   

  	
  10

  
	
  4.3

  	
  Owner’s Representative

  	
   

  	
  11

  
	
  4.4

  	
  Government Approvals and Permits

  	
   

  	
  11

  
	
  4.5

  	
  Owner’s Separate Contractors

  	
   

  	
  11

  
	
  4.6

  	
  Security

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 5

  	
  Ownership of Work
  Product; Risk of Loss

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Work Product

  	
   

  	
  12

  
	
  5.2

  	
  Risk of Loss

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 6

  	
  Commencement and
  Completion of the Project

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
  Reserved

  	
   

  	
  12

  
	
  6.2

  	
  Notice to Proceed; Commencement

  	
   

  	
  12

  
	
  6.3

  	
  Project Start-Up

  	
   

  	
  13

  
	
  6.4

  	
  Mechanical Completion

  	
   

  	
  13

  
	
  6.5

  	
  Final Completion

  	
   

  	
  14

  
	
  6.6

  	
  Post Completion Support

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 7

  	
  Waiver of Damage
  Claims

  	
   

  	
  14

  

 

i

 

Table of Contents

(continued)

 

	
   

  	
   

  	
  Page

  
	
  7.1

  	
  Waiver of Damage Claims

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 8

  	
  Warranties

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  Fagen Warranty

  	
   

  	
  15

  
	
  8.2

  	
  Correction of Defective Work

  	
   

  	
  15

  
	
  8.3

  	
  Warranty Period Not Limitation to Owner’s
  Rights

  	
   

  	
  16

  
	
  8.4

  	
  Disclaimer

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 9

  	
  Contract Price

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
  Payment Basis

  	
   

  	
  16

  
	
  9.2

  	
  Fagen’s Fee

  	
   

  	
  19

  
	
  9.3

  	
  Additional Costs

  	
   

  	
  20

  
	
  9.4

  	
  Books and Records

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 10

  	
  Payment Procedures

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
  Payment Prior to Financial Closing

  	
   

  	
  21

  
	
  10.2

  	
  Rework and Enhancements

  	
   

  	
  21

  
	
  10.3

  	
  Progress Payments

  	
   

  	
  21

  
	
  10.4

  	
  Final Payment

  	
   

  	
  23

  
	
  10.5

  	
  Failure to Pay Amounts Due

  	
   

  	
  23

  
	
  10.6

  	
  Fagen’s Payment Obligations

  	
   

  	
  23

  
	
  10.7

  	
  Reconciliation of Fagen’s Fee

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 11 

  	
  Hazardous
  Conditions and Differing Site Conditions

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
  Hazardous Conditions

  	
   

  	
  24

  
	
  11.2

  	
  Differing Site Conditions; Inspection

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 12 

  	
  Force Majeure;
  Change in Legal Requirements

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
  Force Majeure Event

  	
   

  	
  25

  
	
  12.2

  	
  Effect of Force Majeure Event

  	
   

  	
  26

  
	
  12.3

  	
  Change in Legal Requirements

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 13

  	
  Changes to the
  Contract Price and Scheduled Completion Dates

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
  Change Orders

  	
   

  	
  27

  
	
  13.2

  	
  Emergencies

  	
   

  	
  27

  
	
  13.3

  	
  Failure to Complete Owner’s Milestones

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 14

  	
  Indemnity

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  14.1

  	
  Tax Claim Indemnification

  	
   

  	
  28

  
	
  14.2

  	
  Payment Claim Indemnification

  	
   

  	
  28

  
	
  14.3

  	
  Fagen’s General Indemnification

  	
   

  	
  28

  
	
  14.4

  	
  Owner’s General Indemnification

  	
   

  	
  29

  
	
  14.5

  	
  Indemnification

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 15

  	
  Stop Work;
  Termination for Cause

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  15.1

  	
  Owner’s Right to Stop Work

  	
   

  	
  30

  

 

ii

 

Table of Contents

(continued)

 

	
   

  	
   

  	
  Page

  
	
  15.2

  	
  Owner’s Right to Perform and Terminate for
  Cause

  	
   

  	
  30

  
	
  15.3

  	
  Fagen’s Right to Stop Work

  	
   

  	
  31

  
	
  15.4

  	
  Fagen’s Right to Terminate for Cause

  	
   

  	
  32

  
	
  15.5

  	
  Bankruptcy of Owner or Fagen

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 16

  	
  Representatives of
  the Parties

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  16.1

  	
  Designation of Owner’s Representatives

  	
   

  	
  34

  
	
  16.2

  	
  Designation of Fagen’s Representatives

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 17

  	
  Insurance

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  17.1

  	
  Insurance

  	
   

  	
  35

  
	
  17.2

  	
  Fagen’s Insurance Requirements

  	
   

  	
  36

  
	
  17.3

  	
  Owner’s Liability Insurance

  	
   

  	
  37

  
	
  17.4

  	
  Owner’s Property Insurance

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 18

  	
  Representations and
  Warranties

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  18.1

  	
  Fagen and Owner Representations and
  Warranties

  	
   

  	
  39

  
	
  18.2

  	
  Fagen Representations and Warranties

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 19

  	
  Dispute Resolution

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  19.1

  	
  Dispute Avoidance and Mediation

  	
   

  	
  40

  
	
  19.2

  	
  Arbitration

  	
   

  	
  40

  
	
  19.3

  	
  Duty to Continue Performance

  	
   

  	
  41

  
	
  19.4

  	
  No Consequential Damages

  	
   

  	
  41

  
	
  19.5

  	
  Limitation of Liability

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 20

  	
  Confidentiality of
  Shared Information

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  20.1

  	
  Non-Disclosure Obligation

  	
   

  	
  42

  
	
  20.2

  	
  Publicity and Advertising

  	
   

  	
  43

  
	
  20.3

  	
  Term of Obligation

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 21

  	
  Miscellaneous

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  21.1

  	
  Assignment

  	
   

  	
  43

  
	
  21.2

  	
  Successors

  	
   

  	
  43

  
	
  21.3

  	
  Governing Law

  	
   

  	
  44

  
	
  21.4

  	
  Severability

  	
   

  	
  44

  
	
  21.5

  	
  No Waiver

  	
   

  	
  44

  
	
  21.6

  	
  Headings

  	
   

  	
  44

  
	
  21.7

  	
  Notice

  	
   

  	
  44

  
	
  21.8

  	
  No Privity with Design Consultant/Subcontractors

  	
   

  	
  46

  
	
  21.9

  	
  Amendments

  	
   

  	
  46

  
	
  21.10

  	
  Entire Agreement

  	
   

  	
  46

  
	
  21.11

  	
  Third-Party Beneficiaries

  	
   

  	
  46

  
	
  21.12

  	
  Counterparts

  	
   

  	
  46

  
	
  21.13

  	
  Survival

  	
   

  	
  46

  

 

iii

 

Table of
Contents

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Owner’s Scope of
  Work

  	
  A-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B 

  	
  General Scope of
  Work for Fagen

  	
  B-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C 

  	
  Owner’s
  Requirements

  	
  C-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D 

  	
  Fagen’s Standard
  Rates

  	
  D-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT E 

  	
  Form of
  Informational Report

  	
  E-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT F 

  	
  Required Permits

  	
  F-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT G 

  	
  Fagen’s Time and
  Material Rates

  	
  G-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT H 

  	
  Reserved

  	
  H-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT I 

  	
  Reserved

  	
  I-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT J 

  	
  Form of
  Summary of Payment

  	
  J-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT K 

  	
  Form of Lien
  Waiver

  	
  K-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT L 

  	
  APTI License

  	
  L-1

  

 

iv

 

CONSTRUCTION AGREEMENT

 

This CONSTRUCTION AGREEMENT (the “Agreement”)
is made and entered into effective as of April 12, 2010, (the “Effective
Date”) by and between Aventine Renewable Energy-Aurora West, LLC, a
Delaware limited liability company (the “Owner”) and Fagen, Inc., a
Minnesota corporation (“Fagen”) (each a “Party” and collectively,
the “Parties”).

 

RECITALS

 

A.    The
Owner desires to complete construction of a dry grind ethanol production
facility in Aurora, Nebraska (the “Plant”);

 

B.    Fagen
desires to provide construction services for the Plant; and

 

C.    The
Parties desire to enter into this Agreement to set forth their respective
rights and obligations with respect to the Plant.

 

NOW, THEREFORE, in consideration of the
mutual covenants and obligations contained herein and for other good and
valuable consideration, Owner and Fagen 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 in the present or past tense.  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 ethanol industry. 
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.

 

1

 

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

 

AAA is defined in Section 19.1.

 

Agreement is defined in the Preamble.

 

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.

 

APTI is defined in Section 20.1.

 

Bankrupt Party is
defined in Section 15.5.1.

 

Certificate of Mechanical Completion
is defined in Section 6.4.3.

 

Change Order is
defined in Section 13.1.1.

 

Confidential Information is defined in Section 20.1.

 

Contract Documents is defined in Section 2.2.

 

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

 

Damages is defined
in Section 14.3.1.

 

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

 

Design Consultant is
a qualified, licensed design professional that is not an employee of Fagen, but
is retained by Fagen, or employed or retained by anyone under contract with
Fagen or Subcontractor, to furnish design services required under the Contract
Documents.

 

2

 

Differing Site Conditions
is defined in Section 11.2.1.

 

Effective Date is
defined in the Preamble.

 

Enhancements is defined in Section 10.2

 

Fagen is defined in
the Preamble.

 

Fagen’s Fee is defined in Section 9.2.

 

Fagen’s Representative is
defined in Section 16.2.

 

Fagen’s Senior Representative is
defined in Section 16.2.

 

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 10.4.

 

Final Summary of Payment is
defined in Section 10.4.

 

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, Fagen, Subcontractors and their affiliates
in connection with any activity related to the Project.

 

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, Fagen, 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.

 

Informational Report is defined in Section 3.7.

 

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

 

3

 

materials, products, systems, and services established by ASTM
International, any successor organization thereto, or any Governmental
Authority.

 

License is defined in Section 20.1.

 

Manufacturer’s Warranty shall mean a warranty provided by the
original manufacturer or vendor of equipment used in the Plant.

 

Mechanical Completion
is defined in Section 6.4.2.

 

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 Fagen,
Subcontractors, or any other party who provided, or will provide, equipment or
other materials to the Project, from time to time concerning the ownership,
operation, maintenance and repair of the Plant, subject to the limitations
provided in the Agreement.

 

Owner is defined in the Preamble.

 

Owner Indemnified Parties is defined in Section 14.3.1.

 

Owner’s Milestones
is defined in Section 13.3.

 

Owner’s Operator means, if applicable, the
entity that Owner identifies, upon written notice to Fagen, as operator of
the Project or any other entity that Owner chooses, upon notice
to Fagen, to replace such entity as operator of the Project.

 

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 Fagen by a Subcontractor, which will all be assigned
to Owner.

 

Pay Period means,
with respect to a given Summary of Payment, the two (2) week period
following the last day of the previous Pay Period to which the immediately
prior Summary of Payment is applied; provided that the initial Pay Period shall
commence on the date of delivery of the Notice to Proceed and end on the
earlier of the ninth (9th) or
twenty-fourth (24th) day
of the calendar month during which the Notice to Proceed is issued.

 

Payment Basis is defined in Section 9.1.

 

4

 

Plant is defined in the Recitals.

 

Prior Work is defined in Section 10.2.

 

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 Fagen pursuant to Section 11.1.2.

 

Reimbursable Costs is defined in Section 9.1.1.

 

Safety Representative is
defined in Section 3.6.1.

 

Scheduled Mechanical Completion Date is
defined in Section 6.4.1.

 

Site is the land or
premises on which the Plant is located.

 

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

 

Summary of Payment is
defined in Section 10.3.1.

 

Target Price as used herein shall refer to the sum of
all estimated Reimbursable Costs, which for purposes of this Agreement shall be
$*****.  For clarity, the Target Price
does not include Fagen’s Fee.

 

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, and except as
otherwise set forth herein, Fagen shall perform all work and services in
connection with the construction of the Plant, and provide all material,
equipment, tools and labor necessary to complete the Plant in accordance with
the terms of this Agreement.  Fagen will
assign a Field Representative who will represent Fagen and report Project status
to Owner periodically. The Plant, together with all equipment, labor, services
and materials to be furnished hereunder is defined as the “Project.”

 

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”):

 

5

 

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

 

2.2.2    This Agreement, including all exhibits and
attachments, executed by Owner and Fagen, including those below:

 

	
  List of Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Owner’s Scope of Work

  
	
  Exhibit B

  	
  General Scope of Work for Fagen

  
	
  Exhibit C

  	
  Owner’s Requirements

  
	
  Exhibit D

  	
  Fagen’s Standard Rates

  
	
  Exhibit E

  	
  Form of Informational Report

  
	
  Exhibit F

  	
  Required Permits

  
	
  Exhibit G

  	
  Fagen’s Time and Materials Rates

  
	
  Exhibit H

  	
  [Reserved]

  
	
  Exhibit I

  	
  [Reserved]

  
	
  Exhibit J

  	
  Form of Summary of Payment

  
	
  Exhibit K

  	
  Form of Lien Waiver

  
	
  Exhibit L

  	
  APTI License

  

 

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.

 

Article 3

 

Fagen Responsibilities

 

3.1          Fagen’s Services in General.  Except for services and information to be
provided by Owner and specifically set forth in Article 4 and Exhibits A
and C, Fagen shall perform or cause to be performed, and shall provide or cause
to be provided, all construction services, supervision, labor, inspection,
material, and machinery to complete construction of the Project consistent with
the Contract Documents (the “Work”). 
All construction services and other Work of Fagen shall be performed in
accordance with (i) the general project scope guidelines set forth in
Exhibit B, (ii) all Legal Requirements, and (iii) generally
accepted construction and design-build standards of the 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

 

6

 

performed by Fagen under the Contract
Documents shall not be construed to limit in any way the general undertakings
of Fagen as set forth herein.  Fagen’s
Representative shall be reasonably available to Owner and shall have the
necessary expertise and experience required to supervise the Work.  Fagen’s Representative shall communicate
regularly with Owner and shall be vested with the authority to act on behalf of
Fagen.

 

3.2          Standard of Care.  All services performed by Fagen and its
Subcontractors shall be performed in accordance with the standard of care and
skill generally accepted in the ethanol industry during the relevant time
period and 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, would 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 ethanol industry.  Fagen 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.  Subject to the other provisions of this
Agreement, Fagen shall at all times exercise complete and exclusive control
over the means, methods, sequences and techniques of construction.

 

3.3          Government Approvals and Permits.  Except as identified in Exhibits A and C and,
with respect to items identified as Owner’s responsibility, in Exhibit F
(which items shall be obtained by Owner pursuant to Section 4.4), Fagen
shall obtain all necessary permits, approvals and licenses required for the
prosecution of the Work from any government or quasi-government entity having
jurisdiction over the Project. Notwithstanding the foregoing, Owner shall pay
for all costs, fees, inspections, reviews, charges, and expenses of whatever
kind or nature necessary for Fagen to obtain such permits, approvals, and
licenses.  Fagen shall provide reasonable
assistance to Owner in obtaining those permits, approvals and licenses that are
Owner’s responsibility.

 

3.4          Subcontractors.

 

3.4.1    Fagen may subcontract portions of the Work in
accordance with the terms hereof.  Fagen
shall coordinate with Owner its selection of any Subcontractors, and the scope
of work for such Subcontractors, for any portion of the Work for which Fagen
subcontracts.  Fagen shall solicit Owner’s
input to the selection process for Subcontractors and their scope of work,
however the Parties agree that the ultimate selection of any Subcontractor, and
its scope of work, shall be determined solely by Fagen.

 

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

 

7

 

3.4.3    Fagen shall coordinate the activities of all of
Fagen’s Subcontractors.  If Owner
performs other work on the Project or at the Site with separate contractors
under Owner’s control, Fagen 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.

 

3.4.4    Fagen 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 Fagen shall be in an uncured
default or terminated with cause under the terms of this Agreement.

 

3.5          Maintenance of Site.  Fagen shall keep the Site reasonably free
from debris, trash and construction wastes to permit Fagen to perform its
construction services efficiently, safely and without interfering with the use
of adjacent land areas.  Upon Mechanical
Completion of the Work, Fagen shall remove all debris, trash, construction
wastes, materials, equipment, machinery and tools arising from the Work to
permit Owner to occupy the Plant for its intended use (provided however, that
Fagen may keep such materials, equipment, machinery, and tools on Site through
Final Completion as are necessary to complete the Punch List).

 

3.6          Project Safety.

 

3.6.1    Fagen 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.  Fagen assumes responsibility
for implementing and monitoring all safety precautions and programs related to
the performance of the Work.  Fagen
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, Fagen’s Safety Representative shall be an individual stationed at
the Site who may have responsibilities on the Project in addition to safety.

 

3.6.2    Fagen and Subcontractors shall comply with all
Legal Requirements relating to safety, as well as any Owner-specific safety
requirements set forth in the Contract Documents; provided, that such
Owner-specific requirements do not violate any applicable Legal
Requirement.  Fagen will promptly 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 Plant or the Work.

 

3.6.3    Fagen’s responsibility for safety under this
Section 3.6  is not intended
in any way to relieve Subcontractors of their own contractual and legal
obligations and responsibility for (i) complying with all Legal
Requirements, including those related to health and safety matters, and (ii) taking
all necessary measures to

 

8

 

implement and monitor all safety precautions and programs to guard
against injury, losses, damages or accidents resulting from their performance
of the Work.

 

3.7          Submission of Reports.  Fagen shall provide Owner with a monthly
informational report substantially in
the form of Exhibit E attached hereto (“Informational Report”).

 

3.8          Startup and Performance Testing.  Fagen
shall provide such services as Owner may request in writing in conjunction with
the startup of the Plant after Mechanical Completion and any performance tests
of the Plant. All such services shall be provided by Fagen on a time and
materials basis.

 

3.9          Decisions Involving the Work.  Fagen’s
on-site project manager will consult with Owner’s on-site project manager in the
decisions regarding the performance of the Work on a  daily basis. 
In this regard, Owner’s on-site project manager will have equal input in
such decisions.  If there is disagreement
between Fagen’s on-site project manager and Owner’s on-site project manager on
any decision, the matter will immediately be referred to Fagen’s Representative
and Owner’s Representative for resolution. 
In the event of disagreement between Fagen’s Representative and Owner’s
Representative, the Parties shall proceed pursuant to Article 19.

 

3.10        Performance of Work.  Fagen
hereby acknowledges that, based upon its review of all documents provided to it
by or on behalf of Owner and its review of the Site prior to its execution of
this Agreement, it believes in good faith it can perform the Work in order to
complete the Project for the Target Price and in accordance with the Contract
Times.  Owner acknowledges, however, that
the foregoing is not a guarantee that the Project will be completed for the
Target Price or in accordance with the Contract Times.

 

Article 4

 

Owner’s Responsibilities

 

4.1          Duty to Cooperate.  Owner shall, throughout the performance
of the Work, reasonably cooperate with Fagen and perform its responsibilities,
obligations and services in a timely manner to facilitate Fagen’s timely and
efficient performance of the Work and so as not to delay or interfere with
Fagen’s performance of its obligations under the Contract Documents.

 

4.2          Furnishing of
Services and Information.

 

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 Fagen
for Fagen’s information and use and all of which Fagen is entitled to rely upon
in performing the Work:

 

(a)                                  surveys
describing the Site, boundaries, topography and reference points for use during
construction, including existing service and utility lines;

 

9

 

(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 Plant and enable Fagen to perform the Work;

 

(d)                                 legal
descriptions of the Site;

 

(e)                                  to
the extent available, as-built and record drawings of any existing structures
at the Site;

 

(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;

 

(g)                                 all
standard operating procedures and permits necessary to construct the Plant;

 

(h)                                 all
P&IDs, ISOS (Pipe Detail Drawings), ORTHOS (Pipe Layout and General
Drawings), Mechanical (Including Plumbing & HVAC), Electrical Power
Drawings (Including all instrument & motor loops), Electrical Control
Drawings, Civil Drawings, Structural Drawings, Architectural Drawings, General
Arrangement Drawings, and Equipment Arrangement Drawings in each case that are
in Owner’s possession;

 

(i)                                     all
Civil, Structural, Mechanical (equipment), and Electrical specifications in
Owner’s possession; and

 

(j)                                     such
other information as Fagen may reasonably request in order to perform the Work.

 

4.2.2    Owner shall provide to Fagen all Owner
deliverables under Exhibit C pursuant to Owner’s Milestones.  Such deliverables shall be provided, at Owner’s
own cost and expense, for Fagen’s information and use. Fagen 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 Fagen to perform the Work and that have been identified and
notified in writing by Fagen 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          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 Fagen to fulfill its obligations under
the Contract Documents.  Owner’s
Representative shall also provide Fagen with prompt notice if it observes any
failure on the part of Fagen to fulfill its contractual obligations, including
any errors, omissions or defects in the

 

10

 

performance of the Work.  Owner’s Representative shall be vested with
the authority to act on behalf of Owner and Fagen shall be entitled to rely on
written communication from Owner’s Representative with respect to any Project
matter.

 

4.4          Government Approvals and Permits.  Owner shall obtain and pay for all necessary
Governmental Approvals required by Law (including permits, approvals, licenses,
government charges, reviews, and inspection fees) which are identified in
Exhibit C and Exhibit F as Owner’s responsibility (the “Permits”).  Owner shall provide reasonable assistance to Fagen
in obtaining those permits, approvals and licenses that are Fagen’s
responsibility pursuant to Exhibit F and Section 3.3.  Notwithstanding the foregoing, in addition to
the indemnification set forth in Section 14.4.1, Owner shall hold harmless
Fagen, its officers, directors, employees, and agents, for Owner’s failure to
comply with all Applicable Laws in obtaining or maintaining the required
Permits.  The denial or revocation of any
permits obtained by Owner as a result of Owner’s failure to comply with
Applicable Law or the requirements of the permits and any Owner actions
affecting the validity of any required permit obtained by Owner, shall be
deemed a failure of Owner to fulfill Owner’s Milestones and shall entitle
Fagen, to the extent it is adversely impacted thereby, to any and all remedies
available pursuant to this Agreement and Applicable Law.

 

4.5          Owner’s Separate Contractors.  Owner is responsible for all work, including
such work listed on Exhibits A and C, performed on the Project or at the
Site by separate contractors under Owner’s control.  Owner shall contractually require its
separate contractors to reasonably cooperate and coordinate their activities
with Fagen so that the Project can be completed in an orderly and coordinated
manner without unreasonable disruption.

 

4.6          Security.  Owner shall be responsible for Site security
at the Site (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.  Owner shall consult with Contractor and hire
a security firm familiar with union picketing and related interferences so as
to minimize disruption to the Work.

 

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 Fagen to Owner under this
Agreement (“Work Product”) shall, upon payment in full therefore by
Owner, become the property of Owner.  For
the avoidance of doubt, as Owner pays in full for any portion of the Work
Product, such portion of the Work Product shall be owned by Owner.  In addition, for any portion of the Work
Product which Owner so pays in full Fagen shall be given an irrevocable,
royalty-free, exclusive license to use such Work Product at any time and for
all legal purposes.  Fagen’s use of such
Work Product shall be at its sole risk without liability or legal exposure to
Owner, its affiliates, or any of their officers, directors, employees or
agents. Transfer of title to the Work Product is conditioned on Owner’s express
agreement that its revision of, modification to, or failure to strictly adhere
to or follow, the Work Product by Owner or any party under its

 

11

 

direction or control, is at Owner’s sole risk
without liability or legal exposure to any Fagen, its affiliates, or any of
their officers, directors, employees, or agents; provided, however, that any
Pass Through Warranties or express warranties provided by this Agreement shall
remain in effect according to their terms.

 

5.2          Risk of Loss.  Fagen
shall have no liability for a physical loss of or damage to the Work unless
such loss or damage is caused by the misconduct or negligence of Fagen, its
Subcontractors, or someone acting under its direction or control. Fagen shall
not be liable for physical loss of or damage to the Work where such loss or
damage is caused by the misconduct or negligence of Owner’s employees or third
parties who are not Subcontractors. 
Except to the extent of a warranty claim, Fagen shall have no liability
for a physical loss of or damage to the Work occurring after Final
Completion.  Fagen shall have no liability
for losses or damages for a physical loss of or damage to the Work for which
insurance coverage obtained by Owner under this Agreement is available for such
loss or damage; in such circumstances, any liability for losses and damages as
described in this sentence shall be limited to payment of the deductible and
any losses or damages in excess of such coverage (or the percentage thereof
which is equal to Fagen’s or its Subcontractors’ degree of negligence or
misconduct - if it is or they are not the sole cause therefor) for the
applicable insurance policy.

 

Article 6

 

Commencement and Completion of the Project

 

6.1          Reserved.

 

6.2          Notice to Proceed; Commencement.  The
Work shall commence following Fagen’s receipt of Owner’s written valid notice
to proceed (“Notice to Proceed”) unless the Parties mutually agree
otherwise in writing.  The Parties agree
that a valid Owner’s Notice to Proceed cannot be given until:  (1) Owner has title to or has obtained
all necessary rights and permits to the real estate on which the Plant will be constructed
and; (2) the Site work required of Owner, as described in Exhibit C,
has been reviewed and deemed adequate by Fagen;  (3) the air permit(s) and/or other applicable
local, state or federal permits necessary so that construction can begin, as
listed on Exhibit F, have been obtained; (4) Owner has provided proof
of financing to Fagen; (5) if applicable, Owner has executed a sales tax
exemption certificate and provided the same to Fagen; (6) Owner has
provided the name of its property/all-risk insurance carrier and the specific
requirements for fire protection; (7) Owner has, in accordance with Section 17.4.4,
provided insurance certificates or copies of insurance policies demonstrating
that Owner has obtained the insurance policies required pursuant to Section 17.4
hereof and naming additional insured and protecting other interests as
prescribed in Section 17.4, and (8) Fagen provides Owner written
notification of its acceptance of the Notice to Proceed.  Such Notice to Proceed and Fagen’s acceptance
of same shall be provided concurrent with the execution of this Agreement.

 

6.2.1    Notice to Proceed shall be delivered by Owner to
Fagen, in a form reasonably acceptable to Fagen, pursuant to the notice
requirements set forth in Section 21.7 hereof, with a copy to:

 

12

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN  56241

Attention: Becky Dahl

Fax:  (320) 564-3278

 

6.3          Project Start-Up.Fagen shall have no responsibility for
start-up of the Plant, but shall provide such assistance as Owner may request
pursuant to Section 3.8 above.

 

6.4          Mechanical
Completion.

 

6.4.1       Mechanical Completion of the Plant shall be
achieved no later than September 1, 2010, subject to adjustment in
accordance with the Contract Documents hereof (the “Scheduled Mechanical
Completion Date”).

 

6.4.2       “Mechanical Completion” with respect to
the Plant shall be deemed to occur on the date on which the Work has been
physically completed as provided in this Agreement.  No production is guaranteed on the date of
Mechanical Completion.

 

6.4.3    Procedures.  Fagen
shall prepare and issue a “Certificate of Mechanical Completion” for the
Work for the Plant that will set forth (i) the date of Mechanical
Completion, (ii) the remaining items of Work, as reasonably agreed to by
Fagen and Owner, 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 Fagen’s responsibility for the Plant’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
Mechanical Completion, except as may otherwise be noted in the Certificate of
Mechanical Completion.  Upon Mechanical
Completion, Owner shall pay to Fagen all unpaid amounts, less an amount equal
to the reasonable value of all remaining or incomplete items of Work as noted
in the Certificate of Mechanical Completion, and less an amount equal to the
value of any Subcontractor lien waivers not yet obtained with respect to such
Plant, and less a portion of the Fee equal to ***** Dollars ($*****).

 

6.5          Final Completion.

 

6.5.1    Final Completion of the Work for the Plant must
be achieved by Fagen within ninety (90) Days after the earlier of the actual
date of Mechanical Completion or the Scheduled Mechanical Completion Date (the “Final
Completion Date”).

 

13

 

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

 

(a)                                  Mechanical
Completion has been achieved;

 

(b)                                 the
items identified on the Punch List have been completed by Fagen, unless and to
the extent of any such Punch List items which Fagen is prevented from
completing because of the actions or inactions of Owner or seasonal weather
conditions, provided however that in the event of weather delays, Fagen shall
complete such items as soon as reasonably practical;

 

(c)                                  clean-up
of the Site has been completed;

 

(d)                                 all
permits and inspections required to have been obtained or passed by Fagen have
been obtained and completed; and

 

(e)                                  release
and waiver of all claims and liens from Fagen and its Subcontractors and
suppliers have been provided.

 

After receipt of a Final Summary of Payment from Fagen in accordance
with Section 10.4, Owner shall make Final Payment in accordance with
Section 10.4, less an amount equal to the value of any Subcontractor lien
waivers not yet obtained.

 

6.5.3    Upon making Final Payment, Owner waives all claims
against Fagen under this Agreement and relating to the Work except claims
relating to (i) Fagen’s failure to satisfy its payment or indemnity,
defense and/or hold harmless obligations under the Contract Documents, (ii) Fagen’s
failure to complete the Work in accordance with the Contract Documents,
including, but not limited to, defects appearing within one (1) year after
Mechanical Completion, (iii) the terms of Fagen’s warranties under the
Contract Documents,  (iv) audit
rights of Owner and any claims resulting from the exercise of such audit
rights, and (v) Fagen’s failure to comply with its obligations under Article 20.

 

6.6          Post Completion Support.  Adequate
personnel to complete all Work within the Contract Time(s) will be
maintained on-Site by Fagen or a Subcontractor until Final Completion has been
achieved.

 

Article 7

 

Waiver of Damage Claims

 

7.1          Waiver of Damage Claims. Owner,
for itself and its successors and assigns, hereby expressly waives any claims,
causes of action (including breach of contract), and right it has, may have, or
may hereafter accrue to pursue or collect any amount of money or damages,
including but not limited to those relating to extra costs, losses, loss of
profits, expenses, claims, penalties and any other damages, whether special or
consequential, and of whatsoever nature

 

14

 

incurred by Owner which arise solely due to a delay in achieving Final
Completion by the Final Completion Date.

 

Article 8

 

Warranties

 

8.1          Fagen Warranty.  Fagen warrants to Owner that the
construction, including all materials and equipment furnished by Fagen and its
Subcontractors 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. 
Fagen’s warranty obligation excludes (i) defects caused by abuse,
damage, modification, alterations, or failure to maintain the Work by persons
other than Fagen or anyone for whose acts Fagen may be liable or responsible
and (ii) defects or errors in any Owner supplied or third party (i.e.
other than Fagen Affiliates or Subcontractors) supplied equipment, drawings,
deliverables, specifications, materials, labor, or information. Nothing in this
warranty is intended to limit any Manufacturer’s Warranty which provides Owner
with greater warranty rights than set forth in this Section 8.1 or the
Contract Documents.  Fagen will provide
to Owner all manufacturers’ and Subcontractors’ warranties upon the earlier of
Mechanical Completion or termination of this Agreement.   Owner’s failure to comply with all Operating
Procedures shall void those warranties, whether expressed or implied (if any),
that were given by Fagen to Owner that are affected by such failure.  If Fagen reasonably determines that all
damage caused by such failure can be repaired and Owner makes all repairs
needed to correct such damage, such 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    Fagen’s warranty obligation extends for a period
of one (1) year from the date of Mechanical Completion of the Work;
provided that Owner must report such non-conformance within ten (10) Days
of the date Owner first learns or should have learned of such failure or
non-conformance and that such one (1)-year period shall be extended one (1) Day
for any part of the warrantied Work that is found to be not in conformance with
the Contract Documents for each Day that such part of the Work is not 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    Fagen 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 and complete
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
Fagen fails to commence the necessary steps within such seven (7) Day
period or fails thereafter to continue to diligently perform such steps through
completion, Owner, in addition to any other remedies provided under the
Contract Documents, may provide Fagen with written notice that Owner will
commence or assume correction of such nonconforming Work and repair of such
damaged Work with its own resources.  If,
following such written notice, Owner performs such corrective and repair Work,
Fagen

 

15

 

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 Fagen’s
obligation to correct nonconforming Work and is not intended to constitute a
period of limitations for any other rights or remedies Owner may have regarding
Fagen’s other obligations under the Contract Documents.

 

8.4          Disclaimer.  EXCEPT FOR CONTRACTOR’S
WARRANTIES SET FORTH IN SECTION 8.1, CONTRACTOR MAKES NO REPRESENTATIONS,
GUARANTEES, WARRANTIES, OR CLAIMS WITH RESPECT TO, AND ASSUMES NO
RESPONSIBILITY FOR, THE PERFORMANCE OR USE OF THE COMPLETED WORK AND SHALL HAVE
NO RESPONSIBILITY FOR TESTING OR OPERATION OF THE WORK.  EXCEPT FOR CONTRACTOR’S WARRANTIES SET FORTH
IN SECTION 8.1, CONTRACTOR EXPRESSLY DISCLAIMS ALL WARRANTIES AND
GUARANTEES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, INFRINGEMENT,
AND OPERABILITY.

 

Article 9

 

Contract Price

 

9.1          Payment Basis.  As full consideration to Fagen for complete
performance of the Work and all costs incurred in connection therewith, Owner
shall pay to Fagen the following costs and fees, which shall along with Fagen’s
Fee, comprise the Contract Price:

 

9.1.1    All costs actually incurred by Fagen in
connection with its performance of the Work (“Reimbursable Costs”).

 

9.1.2    The Reimbursable Costs include but are not
limited to:

 

1.               Procurement and
related services provided by Fagen’s personnel in connection with the Work,
which services shall be billed to Owner at Fagen’s standard rates for such
services, which rates are attached hereto as Exhibit D;

 

2.               Wages and salaries
for Fagen’s personnel who provide services in connection with the Work,
including construction workers and supervisory and administrative personnel for
that portion of their time required for the Work, except for those personnel
whose services are reimbursable pursuant to Section 9.1.2.1;

 

3.               Costs paid or
incurred by Fagen for fringe benefits, statutory charges and employment
benefits, including but not limited to vacation pay, sick leave, per diems and
related expenses including but not limited to taxes, insurance contributions,
assessments and benefits required by law or collective bargaining agreements,

 

16

 

customary benefits such as sick leave,
medical and health benefits, holidays, vacations, and pensions, for Fagen’s
personnel who provide services in connection with the Work, except for those
personnel whose services are reimbursable pursuant to Section 9.1.2.1;

 

4.               Reasonable lodging
and subsistence expenses of Fagen’s personnel while traveling in discharge of
duties connected with the Work;

 

5.               Fagen’s payments to
Subcontractors, including service providers and consultants for Work performed,
services provided, and royalties and license fees paid for the use of a
particular design process or product required by this Agreement;

 

6.               Costs, including
transportation and storage thereof, of all materials, supplies and equipment
incorporated or to be incorporated in the Work including costs of materials in
excess of those actually installed to allow for reasonable waste and spoilage;

 

7.               Costs, including
transportation, storage, installation, maintenance, dismantling and removal, of
all materials, services, supplies, temporary facilities, machinery, equipment,
and tools (excluding hand tools referenced in item 12 below) that are provided
by Fagen at the Plant and used in the performance of the Work and the cost
(less salvage value) of such items used, but not consumed, which remain Fagen’s
property; provided, however, that all materials, supplies, temporary
facilities, machinery, equipment and tools (excluding hand tools referenced in
item 12 below) which are purchased by Fagen for performance of the Work for
which Fagen receives one hundred percent (100%) reimbursement from Owner shall
be owned by Owner upon completion of the Project.

 

8.               Rental charges for
temporary facilities, machinery, equipment and tools that are provided by Fagen
for the Project and rented from others, and costs of transportation, installation,
maintenance, repairs and replacements, dismantling and removal thereof, at
rental charges consistent with those prevailing in the area; or which cover
Fagen’s expenses, whichever is greater;

 

9.               Rental charges for
temporary facilities, machinery, equipment and tools that are provided by Fagen
for the Project, and are rented from Fagen, and costs of transportation,
installation, maintenance, repairs and replacements, dismantling and removal
thereof at rental rates equal to ten percent (10%) less than the lowest of the
then-current rates charged by Hertz, RSC, and United Rental;

 

10.         Costs of removal of Fagen
generated debris from the site;

 

11.         Costs of storage of
materials and equipment stored off-site, provided such storage is approved by
Owner;

 

12.         Costs for small hand
tools purchased by Fagen for the use of its workers on the Site shall be
reimbursed by the Owner based on an allowance of 4.0% of base wages of
construction workers described in Subparagraph 9.1.2.2 above (excluding
benefits, per

 

17

 

diems, taxes, etc.).  The list of hand tools that apply to this
section shall be agreed to in advance by Owner and Fagen.

 

13.         Costs of blueprinting and
other document reproduction, computer services, facsimile transmissions,
messenger services, office supplies, payroll services, postage and parcel
delivery charges, photographs, fixed and mobile telephone (installation,
monthly service, local and long distance calls), word and data processing, and
other incidental expenses in carrying on the Work;

 

14.         All reasonable costs
incurred by Fagen for frost removal so that winter construction, if necessary,
can proceed;

 

15.         Premiums for all
insurance which Fagen is required to procure under the Contract Documents;

 

16.         Any sales, use, excise
and other taxes on materials, labor, receipts, installations or services
furnished (including those furnished by Owner), or any other taxes arising out
of the performance of the Work (excluding income taxes) imposed by any governmental
authority, for which Fagen may become liable, to the extent Owner is not exempt
from such taxes;

 

17.         Costs, fees and
assessments for the building permit and other permits, licenses and inspections
by any Governmental Authority for which Fagen is required to pay under this
Agreement;

 

18.         Fees and expenses related
to any testing required by this Agreement, including heat and x-ray testing,
except for those related to retesting defective or non-conforming Work;

 

19.         Out-of-pocket legal,
mediation and arbitration costs, including attorneys’ fees and expenses, other
than those arising from disputes between Owner and Fagen, incurred by Fagen in
connection with the Work;

 

20.         Other costs reasonably
incurred in performance of the Work if and to the extent proven to be expended
in the execution of the Work, including but not limited to Work performed as a
result of Differing Site Conditions or Hazardous Materials, excluding: the
costs identified above, overhead and general expenses, capital expenses on
Fagen’s capital, and costs to correct damaged, defective or nonconforming Work
resulting from Fagen’s gross negligence or material breach of its obligations
under the Contract Documents;

 

21.         Costs of repairing,
reperforming, or otherwise correcting damaged or non-conforming Work executed
by Fagen or its Subcontractors, provided that the damage to or nonconformance
of the Work was not caused by Fagen, Subcontractors, or parties within their
control and only to the extent that the cost of repair, reperformance or other
correction is not recovered by Fagen or Owner from insurance, sureties,
Subcontractors, or suppliers; and

 

22.         Removing debris, trash,
and other materials left at the Site by third parties prior to Fagen’s
acceptance of Notice to Proceed.

 

18

 

9.1.3     The Reimbursable Costs shall not include:

 

(a)   Salaries
and other compensation of Fagen’s personnel stationed at Fagen’s principal
office or offices other than the Site office except as provided in Section 9.1.2;

 

(b)   Expenses
of Fagen’s principal office and offices other than the Site office, except as
may be expressly included in Section 9.1.2;

 

(c)   Overhead
and general expenses, except as may be expressly included in Section 9.1.2;

 

(d)   Fagen’s
capital expenses, including interest on Fagen’s capital employed for the Work;
and

 

(e)   Costs,
including costs to repair damage to the Work or defective Work, arising from
the negligence or misconduct of Fagen, its Subcontractors, or anyone directly
or indirectly employed by them or those for whose acts any of them may be
liable.

 

9.2          Fagen’s Fee. Fagen
shall be paid a fee in addition to all Reimbursable Costs (“Fagen’s Fee”).  Fagen’s Fee shall be in the minimum amount of
***** Dollars ($*****) and shall be subject to adjustment as follows:

 

9.2.1       After taking into consideration any and
all adjustments as may be provided herein, Fagen’s Fee shall be increased by an
amount equal to *****.

 

9.2.2       If *****, as each may be adjusted
pursuant to this Agreement, Fagen’s Fee shall be ***** Dollars ($*****).

 

9.2.3.      For illustrative purposes only: If *****,
then Fagen’s Fee shall be an amount determined as follows;

 

*****

 

*****

 

*****

 

19

 

9.3          Additional Costs.  The Parties agree that any time and materials
work performed by Fagen under this Agreement (i.e. work specifically identified
in this Agreement as to be performed on a time and material basis or
specifically requested in writing by Owner to be performed on a time and material
basis) shall not be calculated in, or impact, either the Reimbursable Costs or
the Target Price.  Additionally, Change
Order amounts (excluding Change Order amounts involving Change Orders which
expand the scope of Work to be provided by Fagen under the Contract Documents,
with work under such Change Orders to be provided on a time and material basis
(unless otherwise agreed in writing by Fagen and Owner)) , or other adjustments
to Fagen’s Work and/or the Schedule which impact Fagen and are agreed to by the
Parties, shall be added to, or subtracted from, (as applicable) both the
Reimbursable Costs and Target Price. 
Further, any adjustment resulting from a Force Majeure event shall be
added to, or subtracted from, the Reimbursable Costs and the Target Price.

 

9.4          Books and Records. 
Contractor shall keep and maintain such full and detailed books, records
and accounts as may be reasonably necessary for proper financial management of
the Project under the Contract Documents, including one set of records showing
all payments made to Contractor by Owner. 
Such records shall be maintained for at least two (2) years after
final payment to Contractor.  At any
reasonable time within two (2) years after final payment to Contractor,
Owner and its representatives may inspect, copy and audit all such books,
records and accounts, including, without limitation, those relating to (i) payments
to Contractor for Work performed, (ii) Taxes assessed or imposed on the
Work or (iii) any regulatory or other proceeding before a Governmental
Authority.  All information, books,
records and accounts provided to Owner by Contractor pursuant to this Section shall
be subject to the confidentiality requirements of Section 20.1.

 

Article 10

 

Payment Procedures

 

10.1        Payment Prior to Financial
Closing.

 

10.1.1  Mobilization
Fee.  As part of the Payment Basis, Owner shall pay
Fagen ***** Dollars ($*****), as a mobilization fee as soon as allowed by its
organizational documents, but in no event later than five (5) days after
the Effective Date.

 

10.2        Rework and Enhancements.  Owner
and Fagen acknowledge the Plant has been partially constructed prior to the
Effective Date by a third party (“Prior Work”) and Fagen has not
verified the Prior Work’s conformance with the Contract Documents.  Accordingly, should Fagen discover any
nonconforming or defective Prior Work, Fagen will immediately notify Owner, and
following consultation with Owner, repair and/or replace such Prior Work on a
time and materials basis, if and to the extent such Work is within Fagen’s
capabilities (i.e. within the expertise and capability of Fagen’s
employees).  Any such rework not within
Fagen’s capabilities may be contracted to a third party by Owner, provided that
such third party shall not interfere with Fagen’s Work and/or schedule.  Additionally, should Owner request in writing
that

 

20

 

Fagen design or construct any enhancements to
the Plant’s existing design (“Enhancements”), such Enhancements shall be
performed on a time and materials basis. 
Fagen’s time and materials rates are attached hereto as Exhibit G
and are incorporated herein by reference.

 

10.3        Progress Payments.

 

10.3.1  Following the issuance of Notice to Proceed
pursuant to Section 6.2, Fagen shall submit to Owner, on or before the
tenth (10th) and twenty-fifth (25th) day of each month
following the acceptance of Notice to Proceed requests for payment (each, a “Summary
of Payment”).  Each Summary of
Payment shall seek payment for Reimbursable Costs incurred by Fagen during the
pay period for which the Summary of Payment is issued together with the
applicable portion of Fagen’s Fee (excluding *****) of Fagen’s Fee until such
withheld amount equals ***** Dollars ($*****) (after which time no amount of
Fagen’s Fee shall be withheld)).  The *****
Dollars ($*****) withheld by Owner pursuant to this paragraph 10.3.1 shall be
referred to herein as “Retainage”.  Along
with each Summary of Payment Fagen will submit to Owner (1) an itemized
list of employee labor costs, including benefits, fringe, statutory burdens,
and per diem amounts; (2) details of labor hours worked (e.g., copies of timesheets) to the extent not already
provided to Owner during the performance of the work; (3) invoices and
purchase orders for Reimbursable Costs; and (4) a schedule showing rental
equipment used during the relevant pay period. 
One half of the Retainage ($*****) shall be paid to Fagen upon
Mechanical Completion and all remaining Retainage shall be paid to Fagen upon
Final Completion.

 

10.3.2  The Summary of Payment shall be substantially in
the form attached hereto as Exhibit J.  Along with each Summary of
Payment, Fagen shall submit to Owner, via hardcopy or by electronic means
including facsimile or portable document format, signed lien waivers,
substantially in the form attached hereto as Exhibit K, received from
Subcontractors and suppliers for the Work included in the Summary of Payment
submitted for the immediately preceding Pay Period and for which payment has
been received.  Notwithstanding the
foregoing, nothing herein requires that signed lien waivers submitted pursuant
to this section be notarized or otherwise certified in any manner.

 

10.3.3  The Summary of Payment shall constitute Fagen’s
representation that the Work has been performed in accordance with the Contract
Documents and has progressed to the point indicated in the Summary of
Payment.  No additional documentation
will be provided to Owner in support of the Summary of Payment, provided however,
that Fagen will work with Owner to provide such additional information as Owner
needs to apply for sales tax exemptions and/or refunds.  The Work completed at the Site and the
documentation provided pursuant to Section 10.3.1 and 10.3.2 hereof shall
provide sufficient substantiation to Owner of the accuracy of the Summary of
Payment for Owner to pay such Summary of Payment.  Title to the Work, including Work reflected
in a Summary of Payment, which is in process, is in transit, is in storage, or
has been incorporated into the Site or is otherwise on Site, shall

 

21

 

pass
to Owner free and clear of all claims, liens, encumbrances, and security
interests upon Fagen’s receipt of payment therefore.

 

10.3.4  Within
ten (10) Days after Owner’s receipt of each Summary of Payment in
accordance with Section 10.3.2, Owner shall pay Fagen all amounts properly
due, and less amounts properly withheld under this Agreement.

 

10.3.5  The Summary of Payment may request payment for: (i) completed Work; (ii) prepayments
for materials or equipment for the Project when prepayment is required by the
manufacturer or supplier of such materials or equipment; or (iii) equipment
and materials not yet incorporated into the Project provided that (x) the
equipment and materials are suitably stored at either the Site or another
location (subject to Owner’s prior approval), (y) the equipment and
materials are protected by suitable insurance, and (z) upon payment, Owner
will receive the equipment and materials free and clear of all liens and
encumbrances.

 

10.3.6  Withholding of Payments.  On or before the date set forth in Section 10.3.4,
Owner shall pay Fagen all amounts properly due. 
If Owner determines that Fagen is not entitled to all or part of a
Summary of Payment, it will notify Fagen in writing at least five (5) Days
prior to the date payment is due.  The
notice shall indicate the specific amounts Owner intends to withhold, the
reasons and contractual basis for the withholding, and the specific measures
Fagen must take to rectify Owner’s concerns. 
Fagen and Owner will attempt to resolve Owner’s concerns prior to the
date payment is due.  If the Parties
cannot resolve such concerns, Fagen 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 Fagen all undisputed amounts in a
Summary of Payment within the times required by the Agreement.

 

10.4        Final Payment.  Fagen shall deliver to Owner
a request for final payment (the “Final Summary of Payment”) when Final
Completion has been achieved in accordance with Section 6.5. Owner shall
make final payment (except for amounts in dispute) within thirty (30) Days
after Owner’s receipt of the Final Summary of Payment (“Final Payment”).

 

10.5        Failure to Pay Amounts Due.

 

10.5.1  Interest.  Payments which are due and unpaid by Owner to
Fagen shall bear interest commencing five (5) Days after payment is due at
the rate that is the lower of eighteen percent (18%) per annum, or the maximum
rate allowed by Law.

 

10.5.2  Right to Suspend Work.  If Owner fails to pay Fagen any undisputed
amount that becomes due, Fagen, in addition to all other remedies provided in
the Contract Documents, may stop Work pursuant to Section 15.3
hereof.  All payments properly due and unpaid
shall bear interest at the rate set forth in Section 10.5.1.

 

22

 

10.5.3  Failure to Make Final Payment.  Owner’s failure to make Final
Payment pursuant to section 10.4 hereof shall void any and all warranties,
whether express or implied, provided by Fagen pursuant to this Agreement.

 

10.6        Fagen’s Payment Obligations.  Fagen will pay
Subcontractors in accordance with its contractual obligations to such parties,
all the amounts Fagen has received from Owner on account of their work.  Fagen will impose similar requirements on
Subcontractors to pay those parties with whom they have contracted.  Fagen will indemnify and defend Owner against
any claims for payment and mechanic’s liens as set forth in Section 14.2
hereof.

 

10.7        Reconciliation of Fagen’s Fee.  Within thirty (30) days
after all Reimbursable Costs are totaled and made known to Owner, but in no
event sooner than thirty (30) days after Final Completion, Owner shall pay to
Fagen the sum of money necessitated by the adjustment provided for in Section 9.2.1.

 

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, Fagen is not responsible for any Hazardous Conditions encountered
at the Site.  Upon encountering any
Hazardous Conditions, Fagen will stop Work immediately in the affected area and
as promptly as practicable notify Owner and, if Fagen is specifically required
to do so by Legal Requirements, all Governmental Authorities having
jurisdiction over the Project or Site. 
Fagen 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 Conditions in order for the Work to
proceed.  Owner’s choice of such
Qualified Independent Experts shall be subject to the prior approval of Fagen,
which approval shall not be unreasonably withheld or delayed.

 

11.1.3  Fagen 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 

 

23

 

entities
having jurisdiction over the Project or Site and a remediation plan has been
undertaken permitting the Work to proceed.

 

11.1.4  Fagen will be entitled, in accordance with this Article 11, to an
adjustment in Contract Time(s) and Target Price to the extent Fagen’s time
of performance and costs have been adversely impacted by the presence of
Hazardous Conditions, provided that such Hazardous Materials were not
introduced to the Site by Fagen, 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 Fagen, 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.

 

11.1.6  Notwithstanding the preceding provisions of this Section 11.1, Owner
is not responsible for Hazardous Conditions introduced to the Site by Fagen,
Subcontractors or anyone for whose acts they may be liable.  Fagen 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 Fagen, 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 Fagen encounters a Differing Site
Condition, Fagen will be entitled to an adjustment in the Contract Time(s) and
Target Price to the extent Fagen’s time of performance and costs are adversely
impacted by the Differing Site Condition.

 

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

 

24

 

Article 12

 

Force
Majeure; Change in Legal Requirements

 

12.1        Force Majeure Event.  A force
majeure event (“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 under Section 13.2,
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.

 

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 Owner’s or Fagen’s obligations to pay money
(including but not limited to, Summary of Payments), 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 seventy two (72) hours after the nonperforming
Party actually becomes aware of the occurrence of the Force Majeure Event,
gives the other Party written notice describing the event or circumstance in
detail, including if known, 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 possible time after cessation of such occurrence;

 

25

 

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

 

(f)                                    Fagen 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 Fagen’s performance of its
obligations under this Agreement.

 

12.3        Change in Legal Requirements.  The Contract Time(s) shall be adjusted
to compensate Fagen 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 Fagen is
required to make to the Work because of changes in Legal Requirements.

 

Article 13

 

Changes to
the Contract Price and Scheduled Completion Dates

 

13.1        Change Orders.

 

13.1.1  A change order (“Change Order”) is a written instrument issued
after execution of this Agreement signed by Owner and Fagen, 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 Target 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.  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, Fagen 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 Fagen and
subsequently elects not to proceed with the change, a Change Order shall be
issued to reflect resulting adjustments to the Contract Times, and reimburse
Fagen 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        Emergencies.  In any emergency affecting the safety of
persons and/or property, Fagen 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 seventy two (72) hours after Fagen becomes
aware of the emergency.  The notice to
Owner shall describe the emergency in detail, 

 

26

 

including a reasonable estimation of its expected
duration and impact, if any, on the performance of Fagen’s obligations
hereunder.  Any change in the Target
Price and/or Contract Time(s) on account of emergency work shall be
determined as provided in this Article 13. 
Notwithstanding the above, the Parties agree that impact to the Target
Price and/or Contract Time(s) shall be borne by the Party responsible for
the emergency, or to the extent both Parties are partially responsible, to the
extent of their comparative fault.

 

13.3        Failure to Complete Owner’s Milestones.  The dates when Owner’s obligations are
required to be completed to enable Fagen to achieve the Contract Time(s) are
identified 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.

 

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 Fagen (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 or costs) incurred by Fagen as a result of any action taken
by Fagen in accordance with Owner’s directive.

 

14.2        Payment Claim Indemnification.  To the extent Fagen has
received payment for any portion of the Work, Fagen 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 Fagen, 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, Fagen shall commence, and shall thereafter diligently,  take the steps necessary to discharge such
claim or lien.

 

14.3        Fagen’s General Indemnification.

 

14.3.1  Fagen, to the fullest extent permitted by Law, shall indemnify, hold
harmless and defend Owner and its 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 acts, willful misconduct or omissions of
Fagen, Subcontractors, their agents or anyone employed directly or indirectly
by any of them or anyone for whose acts any of them may be liable.

 

27

 

14.3.2  If an employee of Fagen, Subcontractors, their agents, 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, Fagen’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
Fagen, Subcontractors, their agents 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, Fagen
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 Fagen or any
Subcontractor or any of their agents to comply with Legal Requirements as
required by this Agreement, or (b) failure of Fagen or any Subcontractor
or any of their agents to properly administer and pay any taxes or fees
required to be paid by Fagen under this Agreement.

 

14.3.4  Nothing in Fagen’s General Indemnification contained in this Section 14.3
shall be read to limit in any way any entitlement Fagen 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 Fagen and any of Fagen’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 Fagen and any of Fagen’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  Owner shall indemnify and hold harmless Fagen, 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 but not limited to all fees and expenses
of engineers, architects, attorneys, and other professionals and all court or
arbitration or other dispute resolution costs), arising out of or relating to the
(i) implementation, (ii) construction, (iii) performance, (iv) maintenance,
or (v) lack; in each case, of soil stabilization on  the Site after Final Completion.

 

28

 

14.4.3  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.

 

14.5        Indemnification.  Owner, to the fullest extent permitted by
Law, shall (i) indemnify, hold harmless and defend Fagen and all of Fagen’s
officers, directors, employees and agents from and against all third party
claims, losses, damages, liabilities, including attorneys’ fees and expenses,
and (ii) waive all claims, rights, causes of action, losses, damages,
liabilities, including attorneys’ fees and expenses against Fagen and its
officers, directors, employees and agents, in each case; arising from or
attributable to (a) any Prior Work, and (b) agreements for design,
build, procurement, engineering, construction, or related services entered into
by Aventine with third parties which relate to, or were related to, the
Project.

 

Article 15

 

Stop Work;
Termination for Cause

 

15.1        Owner’s Right to Stop Work.  Owner may, without cause and
for its convenience, order Fagen in writing to stop and suspend the Work.  Such suspension shall not exceed sixty (60)
consecutive Days, or in the aggregate more than ninety (90) Days, during the
duration of construction of the Plant. 
Fagen is entitled to seek an adjustment of the Contract Time(s) and
Target Price if its time and/or cost 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 Fagen 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,
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 written notice to Fagen that it intends to terminate the
Agreement unless the problem cited is cured, or commenced to be cured within
seven (7) Days of Fagen’s receipt of such notice.  If Fagen fails to cure, or reasonably
commence to cure such problem and thereafter diligently pursue such cure to
completion, then Owner may give a second written notice to Fagen of its intent
to terminate following an additional seven (7) Day period.  If Fagen, 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 Fagen of
such declaration.  If (i) the
insurance coverage required to be provided by Fagen pursuant to 

 

29

 

Article 17
hereof is suspended or cancelled without Fagen providing immediate replacement
coverage (and, in any case, within seven (7) Days of the occurrence
thereof) meeting the requirements specified in Article 17 hereof; (ii) Fagen
purports to make an assignment of this Agreement in breach of the provisions of
Section 21.1 hereof, or (iii) any representation or warranty made by
Fagen under Section 18.1 hereof was false or materially misleading when
made, then Owner may terminate this Agreement upon written notice to Fagen.

 

15.2.3  In addition to any other remedy available to Owner under the Contract
Documents or at Law, 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 the Work, of all materials,
equipment, scaffolds, tools, appliances and other items thereon, which have
been paid for by Owner for the performance of the Work, all of which Fagen
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.  If Owner improperly terminates the Agreement
for cause, Owner shall pay Fagen for the following:

 

(a)                                  all Work,
including without limitation costs and expenses incurred in performing the
Work, executed but not previously paid for;

 

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

 

(c)                                  amounts due in
settlement of terminated contracts with Subcontractors; and

 

(d)                                 A termination
fee in the amount of twenty percent (20%) on the sum of items (a), (b), and (c) above.

 

15.3        Fagen’s Right to Stop Work.

 

15.3.1  Fagen may, in addition to any other rights afforded under the Contract
Documents or at Law, stop work for Owner’s failure to pay amounts properly due
under Fagen’s Summary of Payment in accordance with Section 15.3.2 below.

 

15.3.2  If any of the events set forth in Section 15.3.1 above occur, Fagen
has the right to stop work by providing written notice to Owner that Fagen will
stop work unless such event is cured within seven (7) Days from Owner’s
receipt of Fagen’s notice. If Owner fails to cure or reasonably commence to
cure such problem and thereafter diligently pursue such cure to completion,
then Fagen 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 Fagen may stop work unless such problem involves
an amount 

 

30

 

disputed
in good faith by Owner.  In such case,
Fagen shall be entitled to make a claim for adjustment to the Contract Time(s) to
the extent it has been adversely impacted by such stoppage.

 

15.4        Fagen’s Right to Terminate for Cause.

 

15.4.1  Fagen, 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)                                  Work on the Plant has been
stopped for thirty five (35) consecutive Days, or more than sixty (60) Days,
during the duration of construction of such Plant, 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 Fagen, Design Consultant and their respective
officers, agents, employees, Subcontractors or any other person for whose acts
Fagen may be liable under Law.

 

(b)                                 Owner’s failure to provide Fagen
with any information, permits or approvals that are Owner’s responsibility
under the Contract Documents which result in the Work being stopped for thirty
five (35) consecutive Days, or more than sixty (60) Days, during the duration
of the Work, even though Owner has not ordered Fagen in writing to stop and
suspend the Work pursuant to Section 15.1 hereof.

 

(c)                                  Owner fails to meet its
obligations under Exhibits A or C and such failure results in the Work being
stopped for thirty five (35) consecutive Days, or more than sixty (60)  Days, during the duration of the Work even
though Owner has not ordered Fagen 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 15.3.1 above within seven (7) Days
after Fagen has stopped the Work.

 

15.4.2  Upon the occurrence of an event set forth in Section 15.4.1 above,
Fagen 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 Fagen may give a second written notice to
Owner of its intent to terminate within an additional seven (7) Day
period.  If Owner, within such second
seven (7) Day period, fails to cure, such problem, then Fagen may declare
the Agreement terminated for default by providing written notice to Owner of
such declaration.  In such case, Fagen
shall be entitled to recover in the same manner as if Owner had wrongfully
terminated the Agreement as provided in Section 15.2.3.

 

15.5        Bankruptcy of Owner or Fagen.

 

15.5.1  If either Owner or Fagen 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

 

31

 

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.

 

15.5.2  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.

 

15.5.3  The rights and remedies under this Section 15.5 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 Fagen, if it is the non-Bankrupt Party, to stop
Work under any applicable provision of this Agreement.

 

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:

 

Tom Manuel

Chief Executive Officer

Aventine Renewable Energy - Aurora
West, LLC

P.O.  Box
1800

Pekin, IL
61555

Phone: (309)
347-9388

Facsimile: (309) 347-8541

 

Owner designates the individual listed below as its
representative (“Owner’s Representative”), which individual has the
authority and responsibility set forth in Section 4.3:

 

Jeffrey G. See

V.P. of Project Development

Aventine Renewable Energy - Aurora
West, LLC

 

32

 

7201 Port Road

Mount Vernon, IN 47620

Cell 605-691-9258

Facsimile:                              

 

16.2        Designation of Fagen’s Representatives. 
Fagen designates the individual listed below as its senior
representative (“Fagen’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

 

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

 

Evan Fagen

Executive Vice President

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Telephone:  (320) 564-3324 

Facsimile: (320) 564-5196

 

Article 17

 

Insurance

 

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

 

	
  Commercial General
  Liability:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  General Aggregate

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  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

  	
   

  

 

33

 

	
  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        Fagen’s Insurance Requirements.

 

17.2.1  Fagen is responsible for procuring and maintaining
from insurance companies authorized to do business in the state in which the
Plant is located, the following insurance coverage for  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 Fagen’s employees
for bodily injury, sickness, disease, or death;

 

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

 

(d)                                 coverage for personal injury liability
claims for damages sustained by a person as a direct or indirect result of
Fagen’s employment of the person, or sustained by any other person;

 

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

 

34

 

(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 Fagen’s obligations under Section 14.3.

 

17.2.2  Fagen’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, and shall name Owner as an
additional insured, without application of deductible, retention or
retrospective premiums as to the additional insured.

 

17.2.3  To the extent Owner requires Fagen or any Design
Consultant to provide professional liability insurance for claims arising from
the negligent performance of design services by Fagen 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 coverage because of the design-build delivery
of the Project.  Such policies shall be
provided prior to the commencement of any design services hereunder.

 

Promptly following
execution of this Agreement, Fagen shall provide Owner with copies of insurance
certificates reflecting coverage required under this Section 17.2.
evidencing that (i) all of Fagen’s 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.  All
insurance certificates provided by Fagen pursuant to this Section 17.2.3
shall, as applicable, clearly identify in writing as additional insured and/or
expressly include Owner. 
Fagen’s insurance shall not lapse or be cancelled during the term of
this Agreement. Owner shall have the right to review, at Fagen’s offices, all
insurance policies to which Owner is named as an additional insured.  In the event Fagen replaces insurance
providers for any policy required under this Section, revises policy coverage,
or otherwise modifies any applicable insurance policy in any way, Fagen shall
provide Owner, for its review or possession as provided under this
Section 17.2.3, prompt notice of such fact and the certificate of
insurance for such new, revised or modified policy when available.

 

17.3        Owner’s Liability Insurance. 
Owner shall procure and maintain from insurance companies authorized to
do business in the state in which the Plant is located the following liability
insurance with the policy limits indicated:

 

35

 

	
  Commercial General
  Liability:

  	
   

  	
   

  	
   

  

 

	
  General Aggregate

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  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

  	
   

  

 

	
  Employers’ Liability:

  	
   

  	
   

  	
   

  

 

	
  Each Accident

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Disease-Policy Limit

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Disease-Each Employee

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

The general liability insurance obtained by Owner
shall name Fagen, and Subcontractors as additional insured, without application
of deductible, retention or retrospective premiums as to the additional
insured.

 

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 Plant is located, and maintain through Final Completion,
property insurance upon the entire Plant in a minimum amount equal to the full
insurable value of the Plant, including professional fees, overtime premiums
and all other expenses incurred to replace or repair the insured property.  The property insurance obtained by Owner
shall include as additional insured the interests of Owner, Fagen, and
Subcontractors and shall insure against the perils of fire and extended
coverage, theft, vandalism, malicious mischief, collapse, flood, earthquake,
debris removal and other perils or causes of loss as called for in the Contract
Documents and without application of any deductible, retention or retrospective
premium.  Except as set forth in the last
sentence of this paragraph.  Owner shall
maintain coverage equal to or in excess of the value of each of Fagen’s 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.  Notwithstanding the foregoing,
the property insurance 

 

36

 

provided by Owner
hereunder shall not be required to include Fagen’s and Subcontractors’ tools or
construction equipment.

 

17.4.2  Unless the Contract Documents provide otherwise (e.g.
the last sentence of Section 17.4.1 above), (i) Owner shall procure
and maintain Work equipment and machinery insurance that will include as
additional insured Owner, Fagen, and Subcontractors, in an amount not less than
the Contract Price , and without application of any deductible, retention or
retrospective premium as to the additional insured and (ii) Owner shall
maintain coverage equal to or in excess of the value of each of Fagen’s, and
Subcontractors’ interest or investment in Work equipment or machinery on the
Site.

 

17.4.3  [Reserved.]

 

17.4.4  Promptly following execution of this Agreement, Owner
shall provide Fagen with copies of the insurance certificates reflecting
coverage 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 Fagen 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 Fagen.  All
insurance certificates provided by Owner pursuant to this Section 17.4.4
shall, as applicable, clearly identify in writing as additional insured and/or
expressly include the interests of Fagen and Subcontractors.  Owner’s property insurance shall not lapse or
be cancelled during the term of this Agreement. Fagen shall have the right to
review, at Owner’s offices, all insurance policies to which Fagen  and Subcontractors are named as additional
insured.  In the event Owner replaces
insurance providers for any policy required under this Section, revises policy
coverage, or otherwise modifies any applicable insurance policy in any way,
Owner shall provide Fagen prompt notice of such fact, the certificate of
insurance for such new, revised or modified policy when available.

 

17.4.5  Owner and Fagen waive against each other and Owner’s
separate contractors, Subcontractors, agents and employees of each and all of
them all damages covered by insurance provided herein, except such rights as
they may have to the proceeds of such insurance.  Fagen and Owner shall, where appropriate and
where agreed to by applicable counterparties, (i) require similar waivers
of subrogation from Owner’s separate contractors, Subcontractors, and insurance
providers and (ii) require each of them to include similar waivers in
their contracts or policies.

 

Article 18

 

Representations
and Warranties

 

18.1        Fagen and Owner Representations and
Warranties.  Each of Fagen and Owner represents that:

 

37

 

(a)                                  it is duly organized, validly existing
and in good standing under the Laws of its state of 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 F, 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        Fagen Representations and Warranties. 
Fagen 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 times so
as to avoid or minimize disputes or disagreements.  If disputes or disagreements do arise, Fagen
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.

 

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

 

If a dispute or disagreement cannot be resolved
through Fagen’s Representative and Owner’s Representative, Fagen’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.

 

38

 

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 Omaha, Nebraska 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.  Mediation is a condition precedent to
arbitration, unless the Parties agree otherwise.

 

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 Omaha, Nebraska in
accordance with the Construction Industry Arbitration Rules and Mediation
Procedures of the AAA then in effect, unless the Parties mutually agree
otherwise.  A demand for arbitration
shall be made within a reasonable time after the dispute has arisen, and in no
event shall it be made after the date when institution of legal or equitable
proceedings based on such dispute would be barred by the applicable statute of
limitations.  The arbitration shall be governed
by the Federal Arbitration Act.

 

The award of the arbitrator(s) shall be final and
binding upon the Parties.  Judgment may
be entered upon it by any court having jurisdiction thereof.

 

Fagen 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 Fagen and Owner will include appropriate provisions in all
contracts they execute after the date of execution of this Agreement with other
parties in connection with the Project to require arbitration of all disputes
and such joinder or consolidation (to the extent such other parties will agree
to such provisions).

 

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 in such arbitration or such other
dispute proceeding.

 

19.3        Duty to Continue Performance. 
Unless provided to the contrary in the Contract Documents, Fagen shall
continue to perform the Work and Owner shall continue to satisfy its payment
obligations to Fagen, pending the final resolution of any dispute or
disagreement between Fagen and Owner.

 

19.4        No Consequential Damages. 
Notwithstanding anything herein to the contrary, neither Fagen 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,

 

39

 

19.5        Limitation of Liability. 
Notwithstanding anything else in this Agreement to the contrary, the
aggregate liability of Fagen, 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 Fagen’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 Target Price
and shall be reduced, upon the issuance of each Summary of Payment, by the
total value of such Summary of Payment until such time as Fagen’s aggregate
liability has been reduced to ***** Dollars ($*****).  Upon Final Completion, Fagen’s aggregate liability
shall be reduced to the greater of (1) Ten Percent (10%) of the Target
Price or (2) the amount of insurance coverage available to respond to the
claim or liability under any policy of insurance provided by Fagen under this
Agreement. Except for any remaining warranty obligations, Fagen’s aggregate
liability shall be reduced to zero on the one year anniversary of the Final
Completion Date.

 

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 

 

40

 

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, Owner’s name and Plant location.

 

Each Party’s obligation
to maintain Confidential Information in confidence will be deemed 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.  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 Fagen of the requirement and seeking confidential treatment of the
Contract Documents, or as much thereof as such Governmental Authority permits,
prior to filing the documents or a portion thereof.

 

Notwithstanding the
above, or any other provision of this Agreement, Fagen agrees that any Delta-T
Technology (as defined in the License) it receives from Owner, APTI, or any other
person or entity in conjunction with the Project is subject to the terms and
provisions of that certain Amended and Restated License of Technology between
Applied Process Technology International LLC (“APTI”), as successor to
Delta-T Corporation, and Aventine Renewable Energy - Aurora West, LLC dated
February 26, 2010 (the “License”), a copy of which is attached
hereto as Exhibit L.  As such, Fagen
agrees to maintain the confidentiality of, and to use, the Delta-T Technology
in accordance with and as permitted under the terms of the License.

 

20.2        Publicity and Advertising. 
Neither Party shall make, nor 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 the other Party unless prior written
consent is obtained from such Party, 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, except for the obligations
relating to the Delta-T Technology, which shall apply as long as the License is
in effect.

 

41

 

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 Fagen nor Owner shall, without the
written consent of the other, assign or transfer this Agreement or any of the
Contract Documents.  Fagen’s
subcontracting portions of the Work in accordance with this Agreement shall not
be deemed to be an assignment of this Agreement.

 

21.2      Successors.  Fagen 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 Fagen 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, or to such other address as a Party may
notify the other Party in accordance with this Section 21.7.  Notice will be deemed to have been validly
given if delivered (i) in person to the individual intended to receive
such notice, (ii) by registered or by certified mail, postage prepaid to
the address indicated in the Agreement within four (4) Days after being
sent, or (iii) by facsimile, by the time stated in a machine-generated
confirmation that notice was received at the facsimile number of the intended
recipient.

 

42

 

If to Fagen, to:

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN  56241

Attention: Evan Fagen

Fax:  (320) 564-5196

 

with a copy to:

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN  56241

Attention: Jennifer Johnson

Fax:  (320) 564-3278

 

and to:

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN  56241

Attention: Ryan Manthey

Fax:  (320) 564-3278

 

If to Owner, to:

 

Aventine
Renewable Energy - Aurora West, LLC

7201 Port Road

Mount Vernon, IN 47620

Cell 605-691-9258

Attention:
Jeffrey G. See

Fax:                                  

 

with a copy to:

 

Aventine
Renewable Energy - Aurora West, LLC

P.O. Box
1800

Pekin, IL  61555

Attention:
John Castle

Fax:    (309) 347-8541

 

43

 

and to:

 

Aventine
Renewable Energy - Aurora West, LLC

P.O. Box 1800

Pekin, IL  61555

Attention: Chris Nichols

Fax:    (309) 347-8541

 

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 and shall supersede and replace in all
respects any other agreement entered into by and between the Parties with
respect to the Project.

 

21.11    Third-Party
Beneficiaries. 
Except as expressly provided herein, this Agreement is intended to be
solely for the benefit of the Owner, Fagen 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, the warranty provisions set forth in Article 8, the
indemnity, defense and hold harmless obligations set forth herein, and the
confidentiality and other obligations set forth in Article 20, shall
survive (in full force and effect) the expiration or termination of this
Agreement and shall 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.

 

44

 

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 April 12,
2010.

 

 

	
  OWNER:

  	
   

  	
  FAGEN:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Aventine Renewable Energy-Aurora West, LLC

  	
   

  	
  Fagen, Inc.

  
	
  (Owner)

  	
   

  	
  (Name of Fagen)

  
	
   

  	
   

  	
   

  
	
  /s/ Thomas Manuel

  	
   

  	
  /s/ Evan Fagen

  
	
  (Signature)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Thomas Manuel

  	
   

  	
  Evan Fagen

  
	
  (Printed Name)

  	
   

  	
  (Printed Name)

  
	
   

  	
   

  	
   

  
	
  CEO

  	
   

  	
  Executive Vice President

  
	
  (Title)

  	
   

  	
  (Title)

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  May 16, 2010

  	
   

  	
  Date:

  	
  May 14, 2010

  
					

 

45

 

EXHIBIT A

 

Owner’s Scope of Work

 

Owner’s Scope of Work shall consist of all
work not expressly provided as the responsibility of Fagen in Exhibit B
attached to this Agreement or as expressly agreed to by the parties. 

 

A-1

 

EXHIBIT B

 

General Scope of Work for Fagen

 

See attached.

 

B-1

 

EXHIBIT C

 

Owner’s Requirements

 

[To be determined.]

 

C-1

 

EXHIBIT D

 

Fagen’s Standard Rates

 

Home Office Purchasing and Procurement - $*****/hour

 

D-1

 

EXHIBIT E

 

Form of Informational Report

 

E-1

 

EXHIBIT F

 

Required Permits

 

See attached.

 

F-1

 

EXHIBIT G

 

Fagen’s
Time and Material Rates

 

See attached.

 

G-1

 

EXHIBIT
H

 

Reserved

 

H-1

 

EXHIBIT
I

 

Reserved

 

I-1

 

EXHIBIT J

 

Form of
Summary of Payment

 

See attached.

 

J-1

 

EXHIBIT K

 

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 Fagen)
regarding labor and materials for construction and maintenance work performed
for (   INSERT CUSTOMER/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   )

 

K-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:

  	
   

  	
   

  	
   

  

 

 

K-2

 

EXHIBIT L

 

APTI License

 

See attached.

 

L-1

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