Document:

Exhibit 10.9

 

ENGINEERING, PROCUREMENT AND CONSTRUCTION
SERVICES

 

FIXED PRICE CONTRACT

 

BETWEEN

 

HARRIS MECHANICAL CONTRACTING COMPANY

 

AND

 

OTTER TAIL AG ENTERPRISES, LLC

 

DATED:  OCTOBER
24, 2006

 

*PORTIONS
OF THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES FIXED PRICE CONTRACT
HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

	
  INDEX

  
	
   

  	
  PAGE

  
	
  SECTION

  	
   

  	
  NUMBER

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Defined Terms and Order of
  Precedence

  	
  2

  
	
  2.

  	
  Harris Mechanical’s Scope
  of Work

  	
  5

  
	
  3.

  	
  Information, Goods and
  Services to Be Provided by Owner

  	
  9

  
	
  4.

  	
  Interface and Site
  Conditions

  	
  10

  
	
  5.

  	
  Schedule

  	
  11

  
	
  6.

  	
  Changes

  	
  13

  
	
  7.

  	
  Commissioning, Startup,
  Training of Owner’s Personnel, and Final Acceptance

  	
  15

  
	
  8.

  	
  Payment

  	
  18

  
	
  9.

  	
  Stop Work and Termination
  for Cause

  	
  22

  
	
  10.

  	
  Safety and Security

  	
  27

  
	
  11.

  	
  Project Execution

  	
  29

  
	
  12.

  	
  Warranty

  	
  32

  
	
  13.

  	
  Transfer of Title and Risk
  of Loss

  	
  36

  
	
  14.

  	
  Insurance; Bonds

  	
  36

  
	
  15.

  	
  Indemnity

  	
  42

  
	
  16.

  	
  Limitation of Liability

  	
  44

  
	
  17.

  	
  Dispute Resolution

  	
  45

  
	
  18.

  	
  Force Majeure

  	
  47

  
	
  19.

  	
  General Provisions

  	
  47

  
					

 

List of Exhibits

A.  Scope of Work

B.  Commercial Terms

C.  Performance Test Protocol

D.  Performance Guarantees

E.  Mechanical Completion, Commissioning, Startup

F.  Project Schedule

 

1

 

EPC Fixed Price Contract

Otter Tail
Ag Enterprises, LLC

 

Engineering, Procurement and Construction Services

FIXED PRICE CONTRACT

 

GENERAL CONDITIONS

 

THIS CONTRACT, Is made this 24th
day of October, 2006, by and between Otter Tail Ag Enterprises, LLC, a
Minnesota limited liability company organized and acting under and pursuant to
the laws of Minnesota and having its main place of business at 1220 North Tower
Road, Suite 201, Fergus Falls, Minnesota 56537 (hereinafter called the “Owner”)
and Harris Mechanical Contracting Company, a corporation organized and acting
under and pursuant to the laws of the State of Minnesota and having its main
place of business at 909 Montreal Circle, St. Paul, MN 55102 (hereinafter
called “Harris Mechanical”).  Owner and
Harris Mechanical may sometimes be referred to herein individually as a “Party”
or jointly as the “Parties.”

 

WITNESSETH:

 

WHEREAS, Harris Mechanical
is engaged in the performance of engineering, procurement and construction
services; and,

 

WHEREAS, Owner desires
Harris Mechanical to furnish and perform all design, engineering, procurement,
and construction services, and provide all material, equipment, tools, and
labor, necessary to complete the Work described and reasonably inferable from
this Contract;

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and conditions herein
contained, it is agreed as follows:

 

1.     Defined Terms and Order of
Precedence

 

1.1     Defined Terms:  The
following words, when capitalized, shall have the meanings set forth below:

 

1.1.1       Commissioning:  “Commissioning” means checking
and preparation of the Plant for operation, functional control loop checking,
interlock testing, system purging and utility system startups to confirm that
the Plant is ready for Startup, as further described in Exhibit E.

 

2

 

1.1.3       Contract:  “Contract” means these General Conditions,
the attached Exhibits A through F, any attached Schedules, and all additions or
modifications thereto made in accordance with Section 19.2 below.

 

1.1.4       Contract Sum:  “Contract Sum” means the sum set forth in Section 8.1
below, or such greater or lesser amount as may be determined in accordance with
Section 6 below.

 

1.1.5       Harris Mechanical’s Project Manager:  “Harris
Mechanical’s Project Manager” means the individual designated from time to time
by Harris Mechanical in writing as having the responsibilities described at Section 11.1
below.

 

1.1.6       Date of Commencement:  “Date of Commencement” means October 24,
2006, the date of commencement of this Contract.

 

1.1.7       Day:  “Day” means calendar day.

 

1.1.8       [INTENTIONALLY OMITTED]

 

1.1.9       Equipment:  “Equipment” means the equipment to be
procured by Harris Mechanical described in Exhibit A and the schedule
attached to Exhibit A.

 

1.1.10     Final Completion:  “Final Completion” means that (i) obligations
under the Performance Test protocol described at Exhibit C and D and any
right to cure that Delta-T may choose to exercise under Exhibit D have
been met, or that completion of such obligations has been waived by Owner in
writing or by passage of time as provided at Section 7.5 below, (ii) all
Work has been completed as required by the Contract and all of the items on the
Punch List signed by both Owner and Harris Mechanical have been corrected and
completed and (iii) all lien waivers, or affidavits, required under Section 8.5
have been delivered and (iv) all drawings and other documents identified
on Exhibit A as documents to be delivered by Harris Mechanical to Owner
have been delivered, and (v) a general release executed by Harris
Mechanical waiving, upon receipt of final payment by Harris Mechanical, all
claims, except those claims previously made in writing to Owner and remaining
unsettled at the time of final payment.

 

1.1.11     General Conditions:  “General Conditions” means all
portions of this Contract other than the attached Exhibits.

 

3

 

1.1.12     Legal Requirements: “Legal Requirements” means all applicable federal, state, and local
laws, codes, ordinances, rules, regulations, orders and decrees of any
government or quasi-government entity having jurisdiction over the Plant or the
Site, the practices involved in the Plant or the Site, or any Work.

 

1.1.13     Mechanical Completion:  “Mechanical Completion” means
that the Plant has satisfied all of the conditions to Mechanical Completion set
forth at Exhibit E.

 

1.1.14     Owner’s Representative:  “Owner’s Representative” means
the individual designated from time to time by Owner in writing as having the
responsibilities described at Section 11.2 below.

 

1.1.15     Performance Test:  “Performance Test” means the
test defined in Exhibits C and D.

 

1.1.16     Plant:  “Plant” means the name-plate 55 MGPY
undenatured ethanol plant to be constructed for Owner under this Contract.

 

1.1.17     Project:  “Project” means construction and equipping of
the Plant.

 

1.1.18     Punch List:  “Punch List” means a list of all portions of
the Work, if any, which are incomplete or do not conform to the Contract.

 

1.1.19     Schedule:  “Schedule” means the schedule set forth in Exhibit F,
as amended from time to time by mutual agreement of the Parties in accordance
with this Contract.

 

1.1.20     Site:  “Site” means the land upon which the Plant is
to be located.

 

1.1.21     Site Manager:  “Site Manager” means the individual
designated from time to time in writing by Harris Mechanical under Section 11.1
below.

 

1.1.22     Startup:  “Startup” means the commencement of operation
of the Plant for the purposes of either commencing the Performance Test or for
commercial purposes, as described in Exhibit E.

 

1.1.23     Subcontractor:  “Subcontractor” means any
person or entity retained by Harris Mechanical as a contractor to perform a
portion of the Work and shall include materialmen and suppliers.

 

4

 

1.1.24     Sub-Subcontractor:  “Sub-subcontractor” means any
person or entity retained by a Subcontractor as a contractor to perform any
portion of a Subcontractor’s Work which shall include materialmen and
suppliers.

 

1.1.25     Substantial Completion:  “Substantial Completion” means
the date on which the Plant has successfully completed performance testing and
performs, with permanent equipment, at 90% of the performance guarantees as
prescribed by Exhibit D for the periods required by Exhibit D.

 

1.1.26     Work:  “Work” means all of Harris Mechanical’s
design, engineering, procurement, construction, and other services required by
the Contract, and the furnishing of all materials, equipment, tools, and labor
required by the Contract, and reasonably inferable from’ the Contract.

 

1.1.27     Delta-T:  “Delta-T” means Delta-T Corporation, a
corporation organized and acting under and pursuant to the laws of the
Commonwealth of Virginia and having its main place of business at 323 Alexander
Lee Parkway, Williamsburg, VA 23185.

 

1.2     Order of Precedence:  In
the event of any conflict between these General Conditions and the Exhibits
hereto, these General Conditions shall be controlling.

 

2.     Harris Mechanical’s Scope of
Work

 

2.1     Description of Work: 
Harris Mechanical shall, in addition to its obligations under these
General Conditions, provide the Equipment and services described at Exhibit A,
all in accordance with these General Conditions and the specifications set out
in Exhibit A. Harris Mechanical shall furnish and perform all design,
engineering, procurement and construction services, and provide all material,
equipment, tools, and labor necessary to complete the Work described and
reasonably inferable from this Contract.

 

2.2     Permits: 
Harris Mechanical shall, at its expense, secure all permits identified
as permits to be procured by it in Exhibit A. All other permits required
by applicable law or regulation, including without limitation, permits related
to environmental protection, to operation of the plant at which the Equipment
is installed, or activities of Owner or any of its contractors, if any, other
than Harris Mechanical, shall be secured by Owner at Owner’s expense.

 

5

 

2.3     Drawings: 
Harris Mechanical shall, upon completion of the Work, deliver to Owner a
complete set of appropriately stamped or sealed ready for construction plans,
specifications or drawings (“Ready for Construction Design Drawings”) required
to perform the Work, as set forth under the applicable rules and
regulations related to the practice of professional engineering.  Harris Mechanical shall have no
responsibility to provide Owner with any other plans, specifications or
drawings for work performed by Owner or its contractors or subcontractors.  In the event that Harris Mechanical is
required, pursuant to Exhibit A, to provide Owner or any of Owner’s
contractors or subcontractors with electronic copies of plans, specifications
or drawings (“Electronic Drawings”), during execution of the Work, Harris
Mechanical expressly disclaims any and all liability associated with any
changes made to such Electronic Drawings. 
Owner acknowledges and agrees that should a dispute arise with respect
to the accuracy of the Electronic Drawings and the Ready for Construction
Design Drawings to be submitted under this Section 2.3, the Ready for
Construction Design Drawings shall be considered prima fade evidence in any
dispute resolution proceedings as set forth in Article 17 below.

 

2.4     License of Certain Documents
and Drawings:  Except as provided in the License Agreement
dated October 24, 2006 between Delta-T and Owner (the “License” or “License
Agreement”), Delta-T shall retain ownership of the copyright in, and any and
all inventions and trade secrets embodied in, the documents and drawings
delivered to Owner under this Contract and in all of the Delta-T Technology.

 

2.5     Or Equal: 
Whenever in any of the Contract, any Section, materials, or equipment is
defined by describing a proprietary product or by using the name of a
manufacturer or vendor, the term, “or equal” if not inserted, will be
implied.  The specific Section, material
or equipment mentioned will be understood as indicating the type, function,
minimum standard of design, efficiency, and quality desired and will not be
construed in such a manner as to exclude manufacturer’s products of comparable
quality, design, and efficiency.  Where a
product is mentioned by the name of a manufacturer or vendor in the Contract,
Harris Mechanical will identify to Owner the names of any products to be used
in lieu of the ones named in the documents prior to awarding a purchase
order.  Owner shall have the right to
reject any substituted product upon five (5) days written notice to Harris
Mechanical, unless

 

6

 

such product is critical to the successful completion of the Work, or
is the only product available that is suitable for the purpose for which it is
intended.

 

2.6     Design Professional
Services.  Harris Mechanical shall, consistent with
applicable state licensing laws, provide through qualified, licensed engineers,
and other design professionals employed by Harris Mechanical or procured from
qualified, independent license design professionals who are not employees of
Harris Mechanical but are retained by Harris Mechanical (the “Design
Consultants”), the necessary design services, including engineering, and other
design professional services, for the preparation of the required drawings,
specifications, and other design submittals to permit Harris Mechanical to
complete the Work consistent with the Contract. 
Harris Mechanical shall provide in its contracts with any retained
consultants that Owner is an intended third party beneficiary of the contracts
with the right to enforce them.

 

2.7     Standard of Care for Design
Professional Services.  The standard of care for all design
professional services performed to execute the Work shall be the care and skill
ordinarily used by members of the design profession practicing under similar
conditions at the same time and locality of the Plant.  Notwithstanding the preceding sentence, if
the parties agree upon specific performance standards for any aspect of the
Work, which standards are as set forth in the Contract, the design professional
services shall be performed to achieve such standards.

 

2.8     Design Development Services. 
Harris Mechanical shall submit to Owner construction plans and specifications
setting forth in detail drawings and specifications described in the
requirements for construction of the Plant and completion of the Work.  The construction documents shall meet the
requirements of the Contract and be consistent with the scope of the Work.  Harris Mechanical and Owner shall meet and
confer about the submissions, with Owner’s review of the design submissions and
construction documents being for the purpose of mutually establishing a
conformed set of construction documents compatible with the requirements of the
Work.  Neither Owner’s review nor
approval of any design submissions or construction documents shall be deemed to
transfer any design liability from Harris Mechanical to Owner.

 

7

 

2.9     Legal Requirements. 
Harris Mechanical shall perform the Work in accordance with all Legal
Requirements and prudent industry practices and shall provide all notices
applicable to the Work as required by all applicable federal, state, and local
laws, codes, ordinances, rules, regulations, orders, and decrees of any
government or quasi-government entity having jurisdiction over the Plant or the
Site, the practices involving the Plant or the Site, or any Work.

 

2.10   Government Approvals and
Permits.  Exhibit A sets forth all necessary
permits, approvals, and licenses required to be in Harris Mechanical’s name and
Harris Mechanical’s position as a construction contractor for the prosecution
of the Work by any government or quasi-government entity having jurisdiction
over the Plant.  Harris Mechanical shall
provide reasonable assistance to Owner in obtaining those permits, approvals,
and licenses that are Owner’s responsibility.

 

2.11   Harris Mechanical’s
Construction Phase Services.

 

2.11.1     Unless otherwise clearly provided in the
Contract to be the responsibility of Owner or a separate contractor, Harris
Mechanical shall provide through itself or Subcontractors the necessary
supervision, labor, inspection, testing, start-up, material, equipment,
machinery, and other temporary facilities to permit Harris Mechanical to
complete the Work consistent with the Contract.

 

2.11.2     Harris Mechanical shall perform all
construction activities efficiently and with the requisite expertise, skill and
competence to satisfy the requirements of the Contract.  Harris Mechanical shall at all times exercise
complete and exclusive control over the means, methods, sequences and
techniques of the Work.

 

2.11.3     Harris Mechanical shall employ only
Subcontractors who are duly licensed and qualified to perform the Work
consistent with the Contract.

 

2.11.4     Harris Mechanical assumes responsibility to
Owner for the proper performance of the Work of Subcontractors and Design
Consultants and any acts and omissions in connection with such performance.

 

8

 

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

 

3.     Information, Goods and
Services to Be Provided by Owner

 

3.1     Specific Goods and Services:  Owner
shall provide the following prior to commencement of any Work by Harris
Mechanical:  (a) a Plant site
suitable for construction of the Plant, complete with adequate space for office
and storage needs of Harris Mechanical during construction, (b) suitable
access of the Plant site, (c) utilities necessary for Harris Mechanical’s
performance of the Work, (d) all permits and licenses necessary for
construction and operation of the Plant other than those to be provided by
Harris Mechanical as listed on Exhibit A, and (e) evidence reasonably
satisfactory to Harris Mechanical that it has secured financing sufficient to
permit Owner to pay all its financial obligations in connection with building
of the Plant, including payment of all amounts due to Harris Mechanical.  Owner shall provide the following prior to
commencement of the Performance Test:  (i) personnel
required to be trained by Harris Mechanical, at the time(s) needed to meet
the training plan described at Exhibit A and (ii) supplies and
utilities required to perform Owner’s obligations under Exhibits C and D.

 

3.2     Other Goods and Services:  Owner
shall also furnish to Harris Mechanical, at Owner’s expense, all documents,
drawings, specifications, information and services showing all existing
structures, foundations and undergrounds in or adjacent to the Plant site that
may be relevant to performance of the Work, if any; coordinates, bench marks
and base lines for the land area and locations where all associated items of
equipment, if any, are to be installed; the existence and location of
subsurface obstructions and conditions; soil data and specific criteria for
foundation design relevant to the Work; adequate arrangement drawings, utility
requirements and process connections of all those existing items of machinery
and equipment of existing facilities, if any, with which the Work must
interconnect or accommodate, sufficient for Harris Mechanical’s performance of
the Work; and the specific emission, effluent and environmental criteria and
requirements for the Work; and all other documents, drawings, specifications,
information and services, if any, identified as

 

9

 

within the Owner’s Scope of Services in Exhibit A.  Harris Mechanical shall be entitled to rely
upon such data and design criteria in the performance of the Work.  Owner shall provide all such items within the
times prescribed in the Schedule, or if no time is prescribed, within the time
reasonably required to allow Harris Mechanical to perform its obligations under
this contract.  Furthermore, Harris
Mechanical shall have the right to receive from Owner reasonable written
assurance, and evidence reasonably acceptable to Harris Mechanical, that Owner
is not aware of any physical, financial or legal matters that would prevent
Owner from fulfilling its obligations hereunder or impede performance of the
Parties obligations under this Contract in accordance with the Schedule.  If Harris Mechanical becomes aware of any
error in a document, drawing, specification or other information supplied by
Owner it will promptly notify Owner of the same.  Harris Mechanical shall, however, have no
liability of any kind with respect to any en-or of which it is not actually
aware.  In addition, Owner shall be fully
responsible for providing all goods and services, if any, that become necessary
as a result of the discovery of hazardous materials or materials with
archeological significance, provided that Harris Mechanical shall be
responsible for any hazardous materials or hazardous substances released on the
Site by Harris Mechanical or its Subcontractors.

 

4.     Interface and Site
Conditions

 

4.1          Site Conditions: 
Harris Mechanical has visited the Site and has had the opportunity to
become familiar with the condition of the Site as it applies to performance of
the Work.  If conditions are encountered
at the Site which (1) were not readily observable by visual inspection of
the Site, or (2) are unknown physical conditions of an unusual nature,
which differ materially from those ordinarily found to exist and generally
recognized as inherent in construction activities of the character provided for
in this Contract, or (3) differ from conditions shown in any drawing, document
or other information, if any, that Owner is required to deliver to Harris
Mechanical under Section 3 above, then notice by the observing Party shall
be given to the other Party promptly before such conditions are further
disturbed and in no event later than 14 days after first observance of the
conditions.  If any such condition causes
any increase or decrease in Harris Mechanical’s cost of, or time required for,
performance of any part of the Work, or any increase or decrease in any other
obligation of Harris Mechanical, Owner shall within 14 days of issuance or
receipt of notice, as the case may be, under this Section 4.1, issue a
change or in accordance with Section 6 below, covering only such costs
incurred and time lost for properly documented cost and time.

 

10

 

4.2     Cooperation with Others: 
Harris Mechanical will cooperate with Owner’s other contractors, if any,
to facilitate coordination of the Work with the work of others.  Harris Mechanical shall not be required to
check the quality or quantity of work performed by Owner or Owner’s contractors
or subcontractors.  Harris Mechanical
shall not have control over or responsibility for the construction, methods,
techniques, sequences or procedures or for safety precautions and programs used
by Owner or Owner’s contractors or subcontractors in connection with the Owner’s
work or work of others and shall have no liability thereon.

 

5.     Schedule

 

5.1 Schedule:  The Work shall commence within
five (5) days of Harris Mechanical’s receipt of a Notice to Proceed from
Owner, which shall in no event be earlier than October 24, 2006, unless
the parties mutually agree otherwise in writing.  Harris Mechanical agrees that it will
commence performance of the Work and achieve the Contract Times in accordance
with the Schedule and this Article 5.

 

5.1.1       Substantial Completion and Final
Completion:  So long as Harris Mechanical
receives a Notice to Proceed not later than ten (10) days after November 1,
2006, Substantial Completion shall be achieved not later than April 1,
2008.  Final Completion of the Work shall
be achieved as expeditiously as reasonably practicable, but in no event, will
Final Completion of the Work be completed later than June 1, 2008.

 

5.1.2       Time is of the Essence:  Owner
and Hams Mechanical mutually agree that time is of the essence with regard to
completion of the Work.

 

5.1.3       Delays to Work:  If
Harris Mechanical is delayed in the performance of the Work due to acts,
omissions, conditions, events, or circumstances beyond its control and due to
no fault of its own, its.  Design
Consultants, Subcontractors, or others of those for whom Harris Mechanical is
responsible, the Contract Time(s) for performance shall be reasonably
extended by Change Order.  By way of
example, events  that will entitle Harris
Mechanical to an extension of the Contract Time(s) include acts or
omissions of Owner or anyone under Owner s control (including separate
contractors),

 

11

 

changes in the Work, Differing Site Conditions, Hazardous Conditions,
wars, floods, labor disputes not directed at Harris Mechanical or its
Subcontractors or Sub-subcontractors, epidemics abroad, earthquakes, adverse
weather conditions not reasonably anticipated, and other acts of God.

 

5.2     Compensation to Harris Mechanical
for Delay:  In the event any delay in the Work of Harris
Mechanical caused by Owner, its employees, its contractor’s or vendors for
reasons other than force majeure or events beyond the control of Owner or such
others, exceeds, individually or in the aggregate, twenty-one (21) days, Harris
Mechanical shall be entitled to an appropriate adjustment of the Contract Sum
for its direct costs for delays.

 

5.3     Early Completion Bonus.  If
Substantial Completion of the Plant is attained before February 14, 2008
(the “Bonus Date”), Owner shall pay Harris Mechanical at the time of Final
Payment an early completion bonus based on the number of days Substantial
Completion is attained prior to the Bonus date. 
Harris Mechanical will be paid a sum equal to $10,000.00 per day, for
each day that Substantial Completion is attained between February 1 and
the Bonus Date, $15,000.00 per day for each day that Substantial Completion is
attained between January 15 and January 31, 2008, and $20,000.00 for
each day that Substantial Completion is attained prior to January 14, 2008
(it being understood that the per-day early completion bonus escalates and is
payable on a $10,000.00, $15,000.00, or $20,000.00 per-day basis and not in the
aggregate per day).  By way of example,
if Substantial Completion is attained on January 30, 2008, the bonus will
be paid for thirteen (13) days at $10,000.00 per day and two (2) days of
bonus at $15,000.00, for a total bonus of $160,000.00.  Owner’s obligation to pay the bonus is
subordinate to its debt service obligations, but shall not be delayed for more
than twelve months from when the bonus payment is earned.

 

5.4     Substantial Completion Delay
Liquidated Damages.  Harris Mechanical understands that if
Substantial Completion is not attained by the earlier of April 1, 2008 or
the date that is thirty (30) days from the date Mechanical Completion is
attained (the first date to occur being the “Scheduled Substantial Completion
Date”), Owner will suffer damages which are difficult to specify-accurately and
ascertain.  Harris Mechanical agrees that
if Substantial Completion is not attained by the Scheduled Substantial
Completion Date, Harris Mechanical shall pay to Owner a sum equal to $10,000.00
per day for each day that

 

12

 

Substantial Completion is attained after April 1, 2008, $15,000.00
per day for each day that Substantial Completion is attained after April 16,
2008, and $20,000.00 for each day that Substantial Completion is attained after
April 30, 2008 (it being understood that the per-day liquidated damages
amount escalates and is payable on a $10,000.00, $15,000.00, or $20,000.00
per-day basis and not in the aggregate per day).  By way of example, if Substantial Completion
is attained on April 17, 2008, the liquidated damages will be paid for
fifteen (15) days at $10,000.00 per day and two (2) days at $15,000.00,
for a total liquidated damages amount of $180,000.00.  Harris Mechanical’s total collective
liability to Owner for Delay Liquidated Damages as provided in this Section 5.4,
shall not exceed $*

 

6.     Changes

 

6.1     Change Orders

 

6.1.1       A Change Order is a written instrument issued
after execution of the Agreement signed by Owner and Harris Mechanical, stating
their agreement upon all of the following: 
(1) The scope of the change in the Work; (2) the amount of the
adjustment to the Contract Price (If the Change Order is silent as to the
amount of the adjustment to the Contract Price, then the Contract Price shall
be deemed to be unchanged by the Change Order.); and (3) the extent of the
adjustment to the Contract Time(s).  If
the Change Order is silent as to the adjustments to the Contract Time(s), then
the Contract Time(s) shall be deemed to be unchanged by the Change Order.

 

6.1.2       All changes in the Work authorized by
applicable Change Order shall be performed under the applicable conditions of
the Contract.  Owner and Harris
Mechanical shall negotiate in good faith and as expeditiously as possible the
appropriate adjustments for such changes.

 

6.1.3       If Owner requests a proposal for a change in
the Work from Harris Mechanical and subsequently elects not to proceed with the
change, a Change Order shall be issued to reimburse Harris Mechanical for
reasonable costs incurred for estimating services, design services and services
involved in the preparation of proposed revisions to the Contract, but not to
exceed $2,000 per request unless authorized by Owner in writing to exceed this
limit.

 

*      PORTIONS OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

13

 

6.2     Work Change Directives

 

6.2.1       Owner has the right to order changes in the
Work at any time within the general scope of the Contract.  A Work Change Directive is a written order
prepared and signed by Owner, directing a change in the Work prior to agreement
on an adjustment in the Contract Price and/or the Contract Time(s).

 

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

 

6.2.3       If the change, in Harris Mechanical’s
judgment, would have a detrimental impact on performance of the Plant, or if
the amount of the cost of the change order in dispute exceeds 1% of the
Contract Sum, then Harris Mechanical shall have no obligation to proceed with
any change until such agreement is reached. 
Furthermore, Harris Mechanical shall in no case be required to agree to
any change requiring the handling of PCBs, asbestos or any other hazardous
material.

 

6.3     Minor Changes in the Work

 

6.3.1       Minor changes in the Work do not involve an
adjustment in the Contract Price and/or Contract Time(s) and do not
materially and adversely affect the Work, including the design, quality,
performance and workmanship required by the Contract.  Harris Mechanical may make minor changes in
the Work consistent with the intent and requirements of the Contract, but only
if approved by Owner in writing, Harris Mechanical shall promptly inform Owner,
in writing, of any such changes and record such changes on the documents maintained
by Harris Mechanical.

 

6.4     Contract Price Adjustments

 

6.4.1       The increase or decrease in Contract Price
resulting from a change in the Work shall be determined by one or more of the
following methods:  (1) unit prices
set forth in the Agreement or as subsequently agreed to between the parties; (2) a
mutually accepted, lump sum, properly itemized and supported by sufficient
substantiating data to permit evaluation by Owner; (3) costs, fees and any
other markups set forth in the

 

14

 

Agreement; and (4) if an increase or decrease cannot be agreed to
as set forth in items 1 through 3 above and Owner issues a Work Change
Directive, the cost of the change of the Work shall be determined by the
reasonable expense and savings in the performance of the Work resulting from
the change, including a reasonable overhead and profit, as may be set forth in
the Agreement.  Harris Mechanical shall
maintain a documented, itemized accounting evidencing the expenses and savings
associated with such changes.

 

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

 

6.4.3       If Owner and Harris Mechanical disagree upon
whether Harris Mechanical is entitled to be paid for any services required by
Owner, or if there are any other disagreements over the scope of Work or
proposed changes to the Work, Owner and Harris Mechanical shall resolve the
disagreement pursuant to Article 17 hereof.  As part of the negotiation process, Harris
Mechanical shall furnish Owner with a good faith estimate of the costs to
perform the disputed services in accordance with Owner s interpretations.

 

6.5     Emergencies

 

6.5.1       In any emergency affecting the safety of
persons and/or property, Harris Mechanical shall act, at its discretion, to
prevent threatened damage, injury or loss. 
Any change in the Contract Price and/or Contract Time(s) to which
Harris Mechanical is entitled under other provisions of the Contract on account
of emergency work shall be determined as provided in this Article 6.

 

7.     Commissioning, Startup,
Training of Owner’s Personnel, and Final Acceptance

 

7.1     Mechanical Completion and
Commissioning:  Harris Mechanical shall carry out the
Commissioning and Startup of the Plant according to the Schedule and as
specified in Exhibit E. Harris Mechanical shall give Owner at least three (3) calendar
day notice when Harris Mechanical-believes that the Work has reached Mechanical
Completion and with or before such notice, shall provide Owner a draft list of
items of Work that have to be

 

15

 

completed before final payment. 
Within five (5) days of Owner’s receipt of Harris Mechanical’s
notice, Owner and Harris Mechanical will jointly inspect such Work to verify
Mechanical Completion to verify the Plant has achieved Mechanical Completion
and verify the additional Work necessary to complete before Final Completion
and to develop a mutually-agreeable Punch List. 
Owner shall, within seven calendar days thereafter deliver to Harris
Mechanical its proposed Punch List signed by Owner’s Representative.  Such Punch List shall clearly designate which
items, if any, need to be completed in order to reach Mechanical
Completion.  Harris Mechanical shall
within six (6) calendar days of receipt of the Punch List mark the list to
show Harris Mechanical’s disagreement, if any, with any of the items listed by
Owner, and return a copy of the list so marked and signed by Harris Mechanical
to Owner.  In the event that Parties do
not agree on the items that should be included on the Punch List within eight (8) calendar
days thereafter, then either Party may submit the matter to disputes resolution
under Section ‘17 below.  Harris
Mechanical, with Owner’s assistance, shall commence Commissioning upon
achievement of Mechanical Completion. 
Commencement of Commissioning shall conclusively be deemed to indicate
that Mechanical Completion has been achieved.

 

7.2     Performance Test: 
Harris Mechanical, with Owner’s assistance, shall Startup the Plant and
begin the Performance Test as soon as the conditions to Startup described in Exhibit E
have been completed to achieve and sustain the Performance Guaranties described
in Exhibit D in accordance with the Performance Test Protocols described
in Exhibit C.

 

7.3     Substantial Completion:

 

7.3.1       Harris Mechanical shall notify Owner when it
believes the Plant has achieved Substantial Completion and, with or before such
notice.  Harris Mechanical shall prepare
and issue a Certificate of Substantial Completion that will set forth (i) the
date of Substantial Completion of the Work, (ii) the remaining items of
Work that have to be completed before Final Completion (omissions of an item
from the list shall not be a waiver of the right to have such items of Work
done or an admission that it was done), (iii) provisions (to the extent
not already provided in the Contract) establishing Owner’s and Harris
Mechanical’s responsibility for the Plant’s security, maintenance, utilities
and insurance pending final payment and (iv) an acknowledgment that
warranties commence to run on the date of 
Substantial Completion, except as may otherwise be

 

16

 

noted in the Certificate of Substantial Completion.  Within five (5) days of Owner’s receipt
of Harris Mechanical’s notice, Owner and Harris Mechanical will jointly inspect
the Plant Work to verify the Plant has achieved Substantial Completion with
permanent equipment installed in operating condition and order required under
the Contract, and verify the additional Work necessary to complete before Final
Completion and to develop a mutually-agreeable Punch List.  Owner shall give notice of objection to the
claim of Substantial Completion within seven (7) days of the joint
inspection date.  Owner shall, within
seven calendar days after the inspection deliver to Harris Mechanical its
proposed Punch List signed by Owner’s Representative.  Such Punch List shall clearly designate which
items, if any, need to be completed in order to reach Final Completion.  Harris Mechanical shall within six (6) calendar
days of receipt of the Punch List mark the list to show Harris Mechanical’s
disagreement, if any, with any of the items listed by Owner, and return a copy
of the list so marked and signed by Harris Mechanical to Owner.  In the event that Parties do not agree on the
items that should be included on the Punch List within eight (8) calendar
days thereafter, then either Party may submit the matter to disputes resolution
under Section 17 below.

 

7.3.2       Upon achieving Substantial Completion, Hams
Mechanical shall proceed to complete the Work and Delta-T with assistance from
Harris Mechanical and Owner will continue the Performance Test protocol
described at Exhibit C in effort to attain 100% of the performance
guarantees as prescribed by Exhibit D for the periods required by Exhibit D.
Upon achieving Substantial Completion, Owner shall release to Harris Mechanical
90% of the Retainage, and the remaining 10% of the Retainage shall be retained
until Final Completion or, if earlier, until the Plant achieves 100% of the
performance guarantees as prescribed by Exhibit D for the periods required
by Exhibit D. If earlier than Final Completion the Plant achieves 100% of
the performance guarantees, the then remaining Retainage shall be released,
less an amount equal to 150% of the reasonable value of all remaining or
incomplete items of Work as noted in the Certificate of Substantial Completion
or as previously documented in writing.

 

7.3.3       At Substantial Completion, care, custody and
control of the Plant, shall pass to Owner. 
Subsequent to Substantial Completion, Owner will permit Harris
Mechanical access to the Plant, subject only to restrictions as necessary for
security and safety, so that Harris Mechanical may conduct Corrective Action
and additional Performance

 

17

 

Tests as provided in this Article 7.  After Substantial Completion, Owner shall be
solely-responsible for providing property insurance coverage of the Plant,
provided, however, that (i) a Certificate of Substantial Completion has
been issued for the portion of Work addressing the items set forth in Section 7.3.1
above, (ii) Harris Mechanical and Owner have obtained the consent of their
sureties and insurers, and to the extent applicable, the appropriate government
authorities having jurisdiction over the Plant, and (iii) Owner’s use or
occupancy will not significantly interfere with Harris Mechanical’s completion
of the remaining Work.

 

7.4     Training of Owner’s
Personnel:  Harris Mechanical shall provide the training
described in Exhibit A. Except as provided otherwise in Exhibit A,
Owner shall provide appropriate personnel, and Harris Mechanical shall provide
such training, at times mutually agreed by them.

 

7.5     Failure to Reach Final
Completion for Reasons Beyond Harris Mechanical’s Control:  If
for any reason Owner fails to permit Harris Mechanical access to the Plant
after the date of Mechanical Completion in order to permit Harris Mechanical to
do all things necessary to achieve Final Completion, and such failure to permit
access continues for an aggregate of thirty (30) days, then Final Completion
shall be deemed to occur on the thirtieth day (in the aggregate) that such
access is denied.

 

8.     Payment

 

8.1     Contract Sum:  Owner
will pay Harris Mechanical for the full and satisfactory completion of the Work
the Contract Sum of $86,786,045.00, or such other sum as may be determined in
accordance with Section 6 or Section 5.  The Contract Sum does not include any sales
or other tax.  If Harris Mechanical is;
now or in the future, required to collect from Owner or pay any federal, state,
local or other tax with respect to all or any part of the Work, then that
amount shall be paid by Owner at Harris Mechanical’s request, in addition to
the Contract sum.

 

8.2     Payment Terms; Retainage:  Owner
shall make payment in accordance with this Section 8 and Exhibit B.
Harris Mechanical shall submit Applications for Payment in the form to be
mutually agreed upon by the Parties and set forth at Exhibit B requesting
payment for all Work performed as of the dale of the Application for
Payment.  The Application for Payment
shall be accompanied by all supporting documentation required by the Contract
in

 

18

 

the form of pay request, and shall include such other documentation as
may be reasonably required by Owner’s lender(s).  Five percent (5%) will be retained from all
payments made hereunder and retained by Owner as “Retainage.”  The 5% Retainage will be held on all payments
made by the Owner to Harris Mechanical until Final Completion.  The Retainage is held in part by Owner as
security for Harris Mechanical’s performance of the Work.  The entire Retainage amount is owed to Harris
Mechanical as the Final Payment once the Work has achieved Final Completion,
less any liquidated damages.

 

The Application for Payment may request payment for equipment and
materials not yet incorporated into the Plant, provided that (i) Owner is
satisfied that the equipment and materials are suitably stored at either the
Site (or another acceptable location if approved in writing in advance by
Owner), (ii) the equipment and materials are protected by suitable
insurance and (iii) upon payment, Owner will receive the equipment and
materials free and clear of all liens and encumbrances.  Applications for payment may also include the
value of incremental progress payments owed by Harris Mechanical to vendors of
major items of equipment.

 

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

 

If required by Owner, the Application for Payment shall be verified as
accurate and notarized and supported by such data substantiating Harris
Mechanical’s right to payment as Owner may reasonably require.  If requested by Owner, Harris Mechanical
shall provide lien waivers for itself for the current Application for Payment
and for Subcontractors, Sub-subcontractors, and Design Consultants for the
previous Application for Payments before Harris Mechanical has earned or has
the right to receive any payment.  All
lien waivers shall be provided on a mutually agreed upon form.  With the Final Application for Payment,
Harris Mechanical shall furnish final lien waivers to Owner for all Work
furnished by Harris Mechanical, Subcontractors, Sub-subcontractors, Design
Consultants, and other persons furnishing labor or materials for the Work, as a
precondition to Final Payment.  This Section

 

19

 

shall not limit other obligations of Harris Mechanical contained
elsewhere to provide lien waivers.

 

Application for Payment shall not include requests for payment for portions
of the Work for which Harris Mechanical does not intend to pay a Design
Consultant or Subcontractor within thirty (30) days, unless such Work has been
performed by others whom Harris Mechanical intends to pay within thirty (30)
days.

 

Owner shall, through Owner’s Representative, sign the Certificate for
Payment set forth on the Application for Payment for the full payment applied
for, unless it believes that all or any part of such amount is not then
due.  If Owner believes all or part of
the amount requested in the Application for Payment is not then due, Owner
shall amend the Certificate for Payment contained therein by indicating the
amount, if any, that it believes to be due, and shall sign the certificate as
amended and deliver the certificate, together with written notice of Owner’s
reasons for certifying less than the whole amount of applied for.  If for any reason Owner’s Representative
fails to deliver to Harris Mechanical a signed Certificate for Payment within
five (5) days prior to the date payment is due, then Owner shall be deemed
to have waived any right it may have had to withhold all or any part of the
payment applied for.

 

Provided Harris Mechanical has properly submitted the Application for
Payment with required documentation, and subject to Owner’s rights to withhold,
Owner shall wire transfer, in immediately available funds, all amounts for
which it has issued certificates, or failed to issue timely certificates, and
if no time is indicated thereon, within thirty (30) days of the date of its
receipt of the Application for Payment, to a bank account to be selected by
Harris Mechanical, at its sole discretion. 
Owner’s payment shall constitute a Certificate for Payment if the
Certificate for Payment form is not executed by Owner.  If Owner does not certify payment in the
amount of the Application, and Harris Mechanical and Owner cannot agree on a
revised amount within five (5) days of the date of the Certificate for
Payment for less than the full amount, then either Party may request a demand
for arbitration in accordance with Section 17.  In any case, when the reasons stated by Owner
for withholding payment of any amount for which an application has been made
are removed, in whole or in part, Owner shall immediately issue a Certificate
for Payment for the amount withheld and make payment, via wire transfer as
described in this Section 8.2, of the amount so certified on or before the
date that the next payment is due, but in no case more than thirty (30) days
after the date that such Certificate for Payment was due.  Harris Mechanical

 

20

 

shall pay Design Consultants and Subcontractors, in accordance with its
contractual obligations to such parties, all the amounts Harris Mechanical has
received from Owner on account of such parties’ work.  Harris Mechanical will impose similar
requirements on Design Consultants and Subcontractors to pay those parties with
whom they have contracted.

 

8.3     Late Payment:  Owner
shall pay interest at the rate of Wall Street Prime on all sums past due, not
to include those amounts contested in good faith by Owner, which interest shall
commence thirty (30) days after payment is due.

 

8.4     Mechanic’s Lien Waivers and
Indemnity:  Harris Mechanical shall pay promptly for all
valid amounts due for all materials, labor and equipment used in or in
connection with the performance of this Contract, including those of its
subcontractor’s and vendors, when bills or claims become due, and shall
indemnify and hold harmless Owner from and against all claims of its
subcontractors and vendors for amounts due arising from Harris Mechanical’s
failure to make any such payments, provided that Owner gives Harris Mechanical
prompt notice of such claim and cooperates with Harris Mechanical in defense of
such claim.

 

8.5     Mechanic’s Liens: 
Harris Mechanical shall keep the real property upon which the Plant is
to be located free and clear of laborer’s, materialmen’s and mechanic’s liens
arising out of the performance of the Work for which Owner has made
payment.  Owner shall promptly notify
Harris Mechanical in writing of any lien so arising of which it has notice or
knowledge.  Harris Mechanical shall
obtain and timely provide to Owner a partial release of lien with respect to
any partial or progress payment made to relevant subcontractors and shall also
obtain and timely provide a complete release of lien and general release with
respect to any subcontract for which full and final payment is made.  In each case, the release of lien may be for
an amount less amounts that will be paid from the payment for which such
release of lien is requested.  Harris
Mechanical shall promptly pay each subcontractor upon receipt of payment from
Owner of the amount invoiced that is due to such subcontractor.

 

8.6     Final Payment: 
Harris Mechanical shall invoice Owner for the final amount due to it
under this Contract upon reaching Final Completion.  Payment of all of the Contract Sum remaining
unpaid, arid any and all other amounts owing to Harris Mechanical under the
Contract, shall, unless provided otherwise in Exhibit B, be made within 30
days after Final Completion, subject to adjustment for any liquidated damages.

 

21

 

9.     Stop Work and Termination
for Cause.

 

9.1     Owners Right to Stop Work

 

9.1.1       Owner may, without cause and for its
convenience, order Harris Mechanical in writing to stop and suspend the
Work.  Such suspension shall not exceed
ninety (90) consecutive days or aggregate more than one hundred fifty (150)
days during the duration of the Project.

 

9.1.2       Harris Mechanical is entitled to seek an
adjustment of the Contract Price and/or Contract Time(s) if its cost or
time to perform the Work has been adversely impacted by any suspension of stoppage of
work by Owner not resulting from the fault of Harris Mechanical or its.  Design Consultants, Subcontractors, or others
of those for whom Harris Mechanical is responsible.

 

9.2     Owner s Right to Perform and
Terminate for Cause

 

9.2.1       If Harris Mechanical (i) persistently
fails to provide a sufficient number of skilled workers, (ii) fails to
supply the materials required by the Contract, (iii) fails to comply with
applicable Legal Requirements, (iv) fails to timely pay, without cause,
Design Consultants or Subcontractors, (v) fails to prosecute the Work with
promptness and diligence to ensure that the Work is completed by the Contract
Time(s), as such times may be adjusted, or (vi) fails to perform other
material obligations under the Contract, then Owner, in addition to any other
rights and remedies provided in the Contract or by law, shall have the rights
set forth in Sections 9.2.2 and 9.2.3 below.

 

9.2.2       Upon the occurrence of an event set forth in Section 9.2.1
above, Owner may provide written notice to Harris Mechanical that it intends to
terminate the Agreement unless the problem cited is cured, or commenced to be
cured, within seven (7) days of Harris Mechanical’s receipt of such
notice.  If Harris Mechanical fails to
cure, or reasonably commence to cure, such problem then Owner may give a second
written notice to Harris Mechanical declaring the Agreement terminated for
default.

 

9.2.3       Upon declaring the Agreement terminated
pursuant to Section 9.2.2 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

 

22

 

items thereon, which have been purchased or provided for the
performance of the Work, all of which Harris Mechanical hereby transfers,
assigns and sets over to Owner for such purpose, and to employ any person or
persons to complete the Work and provide all of the required labor, services,
materials, equipment and other items.  In
the event of such termination, Harris Mechanical shall not be entitled to
receive any further payments under the Contract until the Work shall be finally
completed in accordance with the Contract. 
At such time, if the unpaid balance of the Contract Price for Work
performed prior to its default exceeds the cost and expense incurred by Owner
in completing the Work, such excess shall be paid by Owner to Harris
Mechanical.  Harris Mechanical will only
be entitled to be paid for Work performed prior to its default.  If Owner’s cost and expense of completing the
Work exceeds the unpaid balance of the Contract Price, then Harris Mechanical
shall be obligated to pay the difference to Owner.  Such costs and expense shall include not only
the cost of completing the Work, but also losses, damages, costs and expense,
including attorneys fees and expenses, incurred by Owner in connection with the
reprocurement and defense of claims arising from Harris Mechanical’s default,
subject to the waiver of consequential damages set forth in this Contract.

 

9.3     Owner’s Right to Terminate
for Convenience.  Upon written notice to Harris Mechanical,
Owner may, for its convenience and without cause, elect to terminate this
Agreement.  In such event, Owner shall
pay Harris Mechanical for the following:

 

1.     all Work executed;

 

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

 

3.     overhead and profit in the amount of * on the
sum of items 1 and 2 above.  In no event
shall Owner be liable to Harris Mechanical for profit or overhead on Work not
executed.

 

*                 PORTIONS OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

23

 

9.3.1       If Owner improperly terminates the Agreement
for cause, the termination for cause will be converted to a termination for
convenience in accordance with the provisions of Section 9.3 of the
Contract.

 

9.4     Harris Mechanical s Right to Stop Work

 

9.4.1       Harris Mechanical may, in addition to any
other rights afforded under the Contract or at law, stop work for the following
reasons:  (1) Owner’s failure to
provide financial assurances as required under this Contract; or (2) Owner’s
failure to pay amounts properly due, under Harris Mechanical’s Application for
Payment.

 

9.4.2       Should any of the events set forth in Section 9.4.1
above occur, Harris Mechanical has the right to provide Owner with written
notice that Harris Mechanical will stop work unless said event is cured within
seven (7) days from Owner’s receipt of Harris Mechanical s notice.  If Owner does not cure the problem within
such seven (7) day period, Harris Mechanical may stop work.  In such case, Harris Mechanical shall be
entitled to make a claim for adjustment to the Contract Price and Contract Time(s) to
the extent it has been adversely impacted by such stoppage.

 

9.5     Assignments Upon Termination

 

9.5.1       Upon any termination by either party, to the
extent Owner elects to take legal assignment of contracts and purchase orders
(including rental agreements) (and Harris Mechanical hereby grants to Owner the
right to do so), Harris Mechanical shall execute and deliver all such documents
and take all such actions as Owner may require for the purpose of fully vesting
Owner with the rights and benefits of Harris Mechanical under such contracts
and purchase orders.  Harris Mechanical,
and not Owner, shall remain liable for all obligations under those contracts
and purchase orders preceding the later of the date of termination or the
effective date of the assignment.  The
effective date of the assignment shall be the date designated by Owner as the
effective date of the assignment.

 

9.6     Harris Mechanical s Right to
Terminate for Cause

 

9.6.1       Harris Mechanical, in addition to any other
rights and remedies provided in the Contract or by law, may terminate the
Agreement for cause for the following reasons: 
(1) the Work has been stopped for ninety (90) consecutive days, or
more than one

 

24

 

hundred fifty (150) days during the duration of the Plant, because of court
order, any government authority having jurisdiction over the Work, or orders by
Owner under Section 9.1.1 hereof, provided that such stoppages are
not due to the acts or omissions

 

25

 

of Harris Mechanical or anyone for whose acts Harris Mechanical may be
responsible; (2) Owner’s failure to provide Harris Mechanical with any
information, permits or approvals that are Owner s responsibility under the
Contract which result in the Work being stopped for ninety (90) consecutive
days, or more than one hundred fifty (150) days during the duration of the
Plant, even though Owner has not ordered Harris Mechanical in writing to stop
and suspend the Work pursuant to Section 9.1.1 hereof; (3) Owner’s
failure to cure the problems set forth in Section 9.4.1 above after Harris
Mechanical has stopped the Work.

 

9.6.2       Upon the occurrence of an event set forth in Section 9.6.1
above, Harris Mechanical may provide written notice to Owner that it intends to
terminate the Agreement unless the problem cited is cured, or commenced to be
cured, within seven (7) days of Owner’s receipt of such notice.  If Owner fails to cure, or reasonably
commence to cure, such problem, then Harris Mechanical may give a second
written notice to Owner of its intent to terminate within an additional seven (7) day
period.  If Owner, within such second
seven (7) day period, fails to cure, or reasonably commence to cure, such
problem, then Harris Mechanical may declare the Agreement terminated for default
by providing written notice to Owner of such declaration.  In such case, Harris Mechanical shall be
entitled to recover in the same manner as if Owner had terminated the Agreement
for its convenience under Section 9.3.

 

9.7     Bankruptcy of Owner or Harris
Mechanical

 

9.7.1       If either Owner or Harris Mechanical
institutes or has instituted against it a case under the United States
Bankruptcy Code (such party being referred to as the Bankrupt Party), such
event may impair or frustrate the Bankrupt Party’s ability to perform its
obligations under the Contract. 
Accordingly, should such event occur: 
(1) the Bankrupt Party, its trustee or other successor, shall
furnish, upon request of the non-Bankrupt Party, adequate assurance of the
ability of the Bankrupt Party to perform all future material obligations under
the Contract, which assurances shall be provided within ten (10) days
after receiving notice of the request; and (2) the Bankrupt Party shall
file an appropriate action within the bankruptcy court to seek assumption or
rejection of the Agreement within sixty (60)days of the institution of the
bankruptcy filing and shall diligently prosecute such action.  If the Bankrupt Party ails to comply with its
foregoing obligations, the non-Bankrupt Party shall be entitled to request the
bankruptcy court to

 

26

 

reject the Agreement, declare the Agreement terminated and pursue any
other recourse available to the non-Bankrupt Party under this Article 9.

 

9.7.2       The rights and remedies under Section 9.7.1
above shall not be deemed to limit the ability of the non-Bankrupt Party to
seek any other rights and remedies provided by the Contract or by law,
including its ability to seek relief from any automatic stays under the United
States Bankruptcy Code or the right of Harris Mechanical to stop Work under any
applicable provision of these General Conditions of Contract.

 

10.  Safety and Security

 

10.1     Premises: 
Harris Mechanical will keep the premises clean and free from rubbish
caused by performance of the Work and will insure that its subcontractors do
likewise.  At completion of the Work,
Harris Mechanical shall leave the premises clean of all debris resulting from
performance of the Work.  Harris
Mechanical shall provide dumpsters for disposal of material and Harris
Mechanical shall be responsible to insure that the proper material is placed in
the appropriate dumpster.  Harris
Mechanical shall provide the Plant in a clean condition upon the completion of
the Work.

 

10.2     Security: 
During construction and installation of the Work, Harris Mechanical will
use reasonable means to protect the Work and all Equipment and materials to be
used in connection with the Work and located on the Work site safe from injury
or defacement, within the defined battery limits, and all equipment owned or
leased by Harris Mechanical or any of its subcontractors, and all other
equipment and goods of any kind located at the Plant site for the purpose of
performing the Work.

 

10.3     Harris Mechanical’s Responsibility
for Plant Safety.

 

10.3.1       Harris Mechanical recognizes the importance
of performing the Work in a safe manner so as to prevent damage, injury or loss
to (i) all individuals at the Site, whether working or visiting, (ii) the
Work, including materials and equipment incorporated into the Work or stored
on-Site or off-Site, and (iii) all other property at the Site or adjacent
thereto.  Harris Mechanical assumes
responsibility for implementing and monitoring all safety precautions and
programs related to the performance of the Work.  Harris Mechanical shall, prior to commencing
construction, designate a Safety Representative with the necessary
qualifications and experience to supervise the implementation and monitoring of
all safety precautions and programs related to the Work.  Unless

 

27

 

otherwise required by the Contract, Harris Mechanical’s Safety
Representative shall be an individual stationed at the Site who may have
responsibilities on the Plant in addition to’ safety.  The Safety Representative shall make routine
daily inspections of the Site and shall hold weekly safety meetings with Harris
Mechanical’s personnel, Subcontractors and others as applicable.

 

10.3.2       Harris Mechanical and Subcontractors shall
comply with all Legal Requirements relating to safety, as well as any
Owner-specific safety requirements set forth in the Contract, provided that
such Owner-specific requirements do not violate any applicable Legal
Requirement.  Harris Mechanical will
immediately report in writing any safety-related injury, loss, damage or
accident arising from the Work to Owners 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.

 

10.3.3       Harris Mechanical’s responsibility for safety
under this Section 10.3 is not intended in any way to relieve
Subcontractors and Sub-Subcontractors, or Owner and its contractors, of their own
contractual and legal obligations and responsibility for (i) complying
with all Legal Requirements, including those related to health and safety
matters, and (ii) taking all necessary measures to implement and monitor
all safety precautions and programs to guard against injury, losses, damages or
accidents resulting from their performance of the Work.

 

10.3.4       Subsequent to Start-up of the Plant, Harris
Mechanical shall comply with Owner’s Safety Policy, Harris Mechanical’s safety
policy or applicable Legal Requirements, whichever shall be the more stringent.

 

10.4     Compliance with OSHA and
Similar Laws and Regulations:  Owner shall at all times be solely
responsible for compliance with the Occupational Safety and Health Act (“OSHA”),
and any similar state laws or regulations. 
with respect to its own employees. 
In particular, but without limitation, Owner shall be responsible for
claims made by any of its

 

28

 

employees, whether against Owner or Harris Mechanical, by reason of any
personal injury or death which results from a violation of any such law or
regulation.  Harris Mechanical shall be
solely responsible for compliance with OSHA, and any similar state laws or regulations,
with respect to its own employees and will require the same of its
subcontractors.  In particular, but
without limitation, Harris Mechanical shall be responsible for claims made by
any of its employees, whether against Owner or Harris Mechanical by reason of
any personal injury or death which results from a violation of any such law or
regulation.  The Schedule shall be
extended as necessary to allow for cure of any unsafe condition, which results
in a suspension of the Work, which is caused by anyone other than Harris
Mechanical, its agents, employees or sub-subcontractors.

 

11.  Project Execution

 

11.1     Harris Mechanical’s
Representative:  Harris Mechanical’s Project Manager and
Harris Mechanical’s Site Manager shall be reasonably available to Owner and
shall have the necessary expertise and experience required to supervise the
Work.  Harris Mechanical’s Project
Manager and Harris Mechanical’s Site Manager shall communicate regularly with
Owner.  Harris Mechanical’s Project
Manager shall represent Harris Mechanical, and written communications given to
Harris Mechanical’s Project Manager shall be as binding as if given to Harris
Mechanical itself.  All communications to
Harris Mechanical’s Project Manager or Site Manager by Owner shall be confirmed
in writing upon request by Harris Mechanical. 
The name, title, address, telephone numbers, and e-mail addresses of
Harris Mechanical’s Project Manager and Harris Mechanical’s Site Manager are
set forth below:

 

Project Manager/Site Manager

 

Rich Greenland

 

909 Montreal Circle

St. Paul, MN 55102

651-602-6679 direct

651-602-6699 fax

rqreenlandahmcc.com

651-602-6500 general office

 

11.2     Owner Representative:  Owner
will have at all times during the progress of the Work, a competent  representative  (“Owner’s Representative”)  assigned to the Work.  Owner’s Representative shall represent Owner,
and written communications given to- Owner’s Representative shall be as binding
as if given to Owner itself.  Owner shall
have its Owner’s

 

29

 

Representative on site, or available within 24 hours, at all times
during the progress of the Work.  Set
forth below is the name, title, address, telephone numbers and e-mail address
of Owner’s Representative:

 

Owners Representative

 

Kelly Longtin, CEO

Otter Tail Ag Enterprises, LLC

1220 North Tower Road, Suite 201

Fergus Falls, MN 56537

(218) 998-4301 office (218) 998-4302 fax Kellvionotinavahoo.com

(320) 760-0505

 

11.3     Project Reviews and
Approvals:

 

11.3.1       Reviews: 
Harris Mechanical will, as appropriate, and additionally upon Owner’s
request, issue a Project progress schedule to Owner.  Harris Mechanical shall participate in
reviews of the progress of the Work at the Work site at Owner’s request as set
forth in Exhibit A, and if no provision for progress reviews is made in such
exhibit, at Owner’s request up to once each month.  Owner may review and comment on any plan,
drawing or specification, that Harris Mechanical delivers to Owner.  No review or comment made by Owner shall
result in Owner’s being deemed to have assumed any responsibility for any of
the Work.  Harris Mechanical shall
attempt to incorporate Owner’s comments where it can do so without increasing
Harris Mechanical’s cost, the time required for performance, or any of its
other obligations, but Harris Mechanical shall have no obligation to suspend
work to allow time for review and comment except as provided in the Schedule,
or to incorporate any of Owner’s comments except as required in order to comply
with Harris Mechanical’s obligations under the Contract, or as agreed under Section 6
above.

 

Harris Mechanical shall provide Owner with monthly status reports
detailing the progress of the Work, including whether (i) the Work is
proceeding according to schedule, (ii) discrepancies, conflicts, or
ambiguities exist in the Contract that require resolution, (iii) health
and safety issues exist in connection with the Work or the Site, and (iv) other
items require resolution so as to not jeopardize Harris Mechanical’s ability to
complete the Work for the Contract Sum and within the Schedule.

 

30

 

11.3.2       Approval Process:  If Exhibit A
or the Schedule provides for approval by Owner of any portion of the Work or
any document, then Owner shall be deemed to have given its approval unless it
delivers written notice of its disapproval, and the specific reasons for its
disapproval within the time allowed according to the Exhibit or Schedule,
or in the absence of statement of the time allowed, within ten (10) business
days of receipt of the document or written request for approval.  In the event that the reason for disapproval
by the reviewing Party results from failure of the other Party (“submitting
Party”) to fulfill any of its obligations under this Contract, then the
submitting Party shall correct the work or document requiring correction and
resubmit it for review.  The reviewing
Party shall have five (5) business days, or one-half the time allowed
according to the applicable Exhibit or Schedule if such time is
prescribed, for the initial review to approve or disapprove the resubmitted
work or document, and it shall be deemed to have given its approval unless it
delivers written notice of its disapproval, and the specific reasons for its
disapproval, within that time.  The
review and resubmittal process shall continue in like manner until the
submitted Work is approved.  In the event
that any disapproval results from a cause other than failure of the submitting
Party to fulfill any of its obligations under this Contract, the Schedule shall
automatically be extended as provided at Section 5.1 above.

 

11.4   Subcontractors and Vendors:

 

11.4.1       Notice of Subcontractor
Selection:  Harris Mechanical shall, as soon as
practicable after award of the Contract, furnish in writing to Owner the names
of Subcontractors or Sub-subcontractors (including those who are to furnish
materials or equipment fabricated to a special design) proposed to complete any
portion of the Work (in excess of $50,000.00) not to be directly completed by
Harris Mechanical.  Owner acknowledges
that Harris Mechanical, particularly on large or fast-track projects, may not
make final selection of some subcontractor or vendors until later in the
project, and that Harris Mechanical has the right to select subcontractors and
vendors as long as the selection would not result in failure to satisfy the
requirements of this Contract.  The
subcontracting, or sub-subcontracting, of any portion of the Work, as described
in Exhibit A, shall not relieve Harris Mechanical of responsibility for
performance of the Work as provided therein. 
Notwithstanding the foregoing, Harris Mechanical shall have the right to
subcontract such portions of the Work as it shall determine to be necessary

 

31

 

to others which, in turn, shall have the right to subcontract such
portions of the Work assigned to them, if any, as they shall deem necessary.

 

11.5     Cooperation. 
Harris Mechanical agrees to cooperate at all times as reasonably
requested by Owner and any lender or assignee of Owner and their respective
agents and representatives in performance of this Contract.  Harris Mechanical shall sign any document
reasonably required by Owner in order to satisfy all lenders or investors
providing sources of funds for construction of the Plant.  Owner may assign its interest to one or more
lenders or financial institutions or investors, providing sources of funds for
construction of the Plant, at any time, provided that the party taking the
assignment can supply payment assurances acceptable to Harris Mechanical.

 

12.  Warranty

 

12.1     Equipment Warranties:  For a
period of one (1) year following Substantial Completion, Harris Mechanical
warrants to Owner that the construction, including all materials and equipment
furnished as part of the construction, shall be new unless otherwise specified
in Contract, of good quality, in conformance with the Contract, fit for their
intended purpose, and free of defects in materials and workmanship.  Harris Mechanical’s warranty obligation
excludes defects caused by abuse, alterations, or failure to maintain Work by
persons other than Harris Mechanical or anyone for whose acts Harris Mechanical
may be liable.  Harris Mechanical shall,
for the protection of Owner, assign to Owner all warranties and guarantees
supplied by all vendors and subcontractors from who it procured goods or
services incorporated into the Project. 
In addition, Harris Mechanical warrants to Owner that the Equipment will
be free from mechanical defects, structural defects and defects in material and
workmanship until the earlier of twelve (12) months from completion of the
Performance Test, eighteen (18) months from Mechanical Completion, or
twenty-four (24) months from delivery at the Plant site of that component.  OWNER’S SOLE AND EXLCUSIVE REMEDY IN CASE OF
BREACH OF THIS WARRANTY SHALL BE REPAIR OR REPLACEMENT AS PROVIDED IN THIS SECTION 12.1.  If any defect covered by the above warranties
is discovered within the warranty period, Harris Mechanical shall, subject to
the provisions set forth below, repair or replace the defective material or
Equipment.  The decision to repair or
replace shall be made by Owner.  If Owner
and Harris Mechanical do  not agree on
whether repair or replacement is the most appropriate remedy, and if the remedy
recommended by Harris Mechanical would not impair the performance of the Work

 

32

 

or otherwise materially diminish the value of the Work, then Harris
Mechanical shall not be required to perform the remedy elected by Owner unless
Owner pays Harris Mechanical the excess cost of performing such remedy over and
above the cost of performing the remedy recommended by Harris Mechanical.  Harris Mechanical shall in no case have any
liability, under this warranty or otherwise, for any defect or deterioration
which results from failure of Owner to provide any feedstock, utilities, or
other supplies, services or conditions specified in Exhibit C, force
majeure, improper operation or maintenance including damage caused by freezing,
foreign substance or impurity introduced into the equipment, or any other
matter not within Harris Mechanical’s control or the control of its Design
Consultants, Subcontractors, or others of those for whom Harris Mechanical is responsible.  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 12.1 or the Contract.  Harris Mechanical will provide Owner with all
manufacturer’s warranties upon Substantial Completion.

 

12.2     Desiccant Material: 
Harris Mechanical warrants that the molecular sieve desiccant will not
deteriorate due to mechanical abrasion to such an extent as to reduce the
dehydration capacity of the molecular sieve below the level specified in the
Performance Guarantee set forth at Exhibit D for a period of five years
from the earlier of twelve (12) months from the completion of the Performance
Test or eighteen (18) months from the date of Mechanical Completion.  OWNER’S SOLE AND EXCLUSIVE REMEDY UNDER THIS
WARRANTY SHALL BE REPLACEMENT OF THE DESICCANT MATERIAL AS PROVIDED IN THIS SECTION 12.2.  Replacement shall be made at no cost to Owner
in the event of a claim under this warranty within one year after Final
Acceptance.  With respect to any claim
made thereafter, the desiccant replacement cost to Owner shall be pro rated, on
a daily basis, on the basis of the number of days remaining in the last four (4) years
of the warranty period.  As an example,
Owner would pay 50% of the cost of replacement desiccant if the original
desiccant had to be replaced exactly three (3) years from the commencement
of the warranty period (100% x 730th day/ 1460 total Days).

 

12.3     Services: 
Harris Mechanical warrants, for a period ending one year after
Substantial Completion, or the last date on which Harris Mechanical performed
work under this Contract if this Contract is terminated for any reason prior to
Final Acceptance, that the services provided by it hereunder will be provided
with reasonable skill and care of the type normally exercised by other design
professionals under similar circumstances. 
Harris Mechanical

 

33

 

shall not have any obligation or liability for failures or defects due
to ordinary wear and tear, corrosion or erosion, or as a result of improper
operation, improper maintenance or operating conditions more severe than, or
different from, those contemplated in the original design of the Work.  EXCEPT AS PROVIDED OTHERWISE IN THIS CONTRACT
OR OTHER AGREEMENT, OWNER’S SOLE AND EXCLUSIVE REMEDY IN CASE OF BREACH OF THIS
WARRANTY SHALL BE TO HAVE HARRIS MECHANICAL REPERFORM THE SERVICES FOUND
NOT TO SATISFY THIS WARRANTY.

 

12.4     Notice of Warranty Claim:  Owner
shall notify Harris Mechanical of any defect covered by the warranty set forth
in Section 12 and Exhibit D as provided at Exhibit D, and shall
notify Harris Mechanical in writing of any defect covered by any other warranty
within thirty (30) Days after discovering such defect, and in no case later
than thirty (30) Days after expiration of the applicable warranty period.  Any claim for breach of warranty not made in
writing within the time prescribed in this Section 12 shall be deemed
waived.  In the event that the Owner has a
claim based solely on the acts or omissions of Delta-T or the performance of
Delta-T specified/furnished equipment, then the Owner agrees to pursue a claim
directly against Delta-T and/or the supplier of the equipment and accept
whatever, if anything, that it recovers with regard to such claim in total
satisfaction of the claim.  To the extent
necessary, Harris Mechanical will provide the Owner with an assignment of any
of Harris Mechanical’s rights necessary for the Owner to pursue such
claims.  This limitation on Harris
Mechanical’s liability shall not relieve Harris Mechanical from the obligation
to construct the Work as required by the Project plans and specifications.  Notwithstanding anything to the contrary in
this Section 12.6, in no event shall Delta-T’s cumulative liability to
Owner and Harris Mechanical exceed the sum of $*

 

12.5     Correction of Defective
Work:

 

12.5.1       Harris Mechanical agrees to correct any Work
that is found not to be in conformance with the Contract, including that part
of the Work subject to Section 12.1 hereof, within a period of one year
from the date of Substantial Completion of the Work or any portion of the Work,
or within such longer period to the extent required by the Contract.

 

*                 PORTIONS OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

34

 

12.5.2       Harris Mechanical shall, within two (2) days
of receipt of written notice from Owner that the Work is not in
conformance-with-the-Contract take meaningful steps to commence correction of
such nonconforming Work, including the correction, removal or replacement of
the nonconforming Work and any damage caused to other parts of the Work
affected by the nonconforming Work.  If
Harris Mechanical fails to commence the necessary steps within such two (2) day
period or to complete the necessary steps as soon as possible, Owner, in
addition to any other remedies provided under the Contract, may provide Harris
Mechanical with written notice that Owner will commence correction of such
nonconforming Work with its own forces. 
If Owner does perform such corrective Work, Harris Mechanical shall be
responsible for all reasonable costs incurred by Owner in performing such
correction.  If the nonconforming Work
creates an emergency requiring an immediate response, the two (2) day
periods identified herein shall be deemed inapplicable and Harris Mechanical
shall commence correction immediately.

 

12.5.3       The one year period referenced in Section 12.1
above and 12.7.1 above applies only to Harris Mechanical’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 Harris
Mechanical’s other obligations under the Contract.

 

12.5.4       Prior to Final Completion, and as a condition
to its approval by Owner, Harris Mechanical shall deliver the as-built drawings
and specifications with four (4) additional paper copies, arranged in
proper order, indexed, and certified as accurate to Owner.  Prior to the application for Final Payment,
Harris Mechanical shall provide any updated as-built drawings or specifications
as may be required in the same manner and with the same number of copies.  No review or receipt of such records by Owner
shall be considered a waiver of any deviation from the Contract nor in any way
relieve Harris Mechanical from its responsibility to perform the Work in
accordance with the Contract.

 

12.5.5       Harris Mechanical shall be responsible for
collecting, identifying and collating the following materials, and shall
deliver four (4) copies to Owner at least sixty (60) days prior to the
date Harris Mechanical is required to achieve Substantial Completion:  (1) complete equipment diagrams,
operating instructions, maintenance manuals, parts lists, tests and balance
reports, inspection reports, guarantees and warranties, as applicable, for each
piece of fixed equipment furnished under this Agreement, together

 

35

 

with specific information regarding manufacturer’s name and address,
nearest distributor, service representative s name, address, office phone
number, make and model numbers, operating designs and characteristics, and the
like.  These materials shall be supplied
in a ring binder, hard-cover books, properly indexed for easy reference
(organized according to Construction Specifications Institute Masterformat); (2) name
and address of all Subcontractors and Sub-Subcontractors (including equipment
and material suppliers), together with their respective areas of work,
materials, or equipment furnished; (3) complete operating instructions for
each equipment system; (4) complete parts lists, together with recommended
spare parts for each type and model of equipment installed; (5) complete
list of all materials and equipment utilized, together with the respective
location in the Work; (6) a complete list of ingredients and supplies,
including quantities and specifications, required for plant Start-up; and (7) a
complete set of record drawings, in both electronic format (.dwg files) and
black-lined drawings (D-size).

 

12.5.6 Harris Mechanical shall perform the following as part of the
commissioning process:  (a) provide
a team of workers as necessary to make corrections, modifications, and
adjustments as needed in the commissioning process; and (b) cooperate with
Owner and provide information and technical support as requested by Owner.

 

13.  Transfer of Title and Risk
of Loss

 

Title
to, and risk of loss of, the Equipment or any part thereof and all materials
and components used, or to be used in the Plant, shall pass to Owner upon ‘delivery
to the Work site.  This provision,
however, shall in no case be deemed to alter any of the rights or obligations
of any party under any insurance policy provided under this Contract, or any
waiver of subrogation set forth in Section 14 below.

 

14.  Insurance; Bonds

 

14.1     Required Insurance:  Each
Party shall carry the insurance coverage described- in this Article 14 as
insurance to be carried by it.

 

14.2     Adjustment of Loss:  Any
loss insured under property or builders risk insurance required under this Section 14
shall be adjusted by the insurance carrier with the insured as fiduciary for
the other party or parties whose interests are insured thereunder as their

 

36

 

interests may appear, and the insured shall pay the proceeds due to
them promptly.  The insured shall bear
the costs of the deductible, if any, under such policy.

 

14.3     Waiver of Subrogation:  Owner
and Harris Mechanical intend that all builder’s risk policies purchased, or
required to be purchased, in accordance with this Contract Will protect Owner,
Harris Mechanical and all subcontractors at any tier, and will provide primary
coverage for all losses and damages caused by the perils or causes of loss
covered thereby.  Owner and Harris Mechanical
waive all rights against each other and their respective subcontractors,
officers, directors, agents and employees of the other arising out of or
resulting from any of the perils or causes of loss covered by such policies and
any other property insurance during the period prior to Final Completion and
payment of all amounts due to Harris Mechanical under this Contact.  None of the above waivers shall extend to the
rights that any Party making such waiver may have to the proceeds of insurance
held by Owner as trustee or otherwise payable under any policy so issued.  In addition, Owner waives all rights against
Harris Mechanical, its subcontractors at any tier and the officers, directors
and employees and agents of any of them for business interruption and any other
consequential damages caused by, arising out of or resulting from any such
insured perils or causes of loss.  All
policies required under the Contract shall be endorsed to include such waivers
of subrogation, or confirmation of such waivers shall appear on the
certificates of insurance required to be delivered under Section 14.4
below.  Owner and the Harris Mechanical
shall require from each of their contractors and subcontractors who do work on
the Project similar waivers, each in favor of the other parties enumerated in
this Section.

 

14.4     Certificates of Insurance:  Before
commencing the Work, Harris Mechanical and Owner shall each furnish the other
with certificates evidencing the coverage required under this Article 14
from the insurance company or companies carrying the aforesaid coverage.  These certificates will provide that the
policies may not be amended or terminated unless at least thirty (30) days
prior written notice is given to Owner and Harris Mechanical.  Failure of either Party to demand any such
certificate prior to commencement of the Work shall not, however, be deemed to
relieve any Party of its obligation to carry such insurance.

 

14.5     Insurance — Miscellaneous:

 

14.5.1    Harris Mechanical at its sole cost and
expense is responsible for procuring and maintaining from insurance companies
authorized to do business in the state in which

 

37

 

the Plant is located, and with a minimum rating set forth below, the
following insurance coverages:

 

Workers Compensation - State Statutory (Policy to include a
waiver of subrogation in favor of Owner and its lender) Employer s Liability -
Bodily injury by accident -.  $1,000,000
each accident; bodily injury by disease - $1,000,000 contract limit; bodily
injury by disease -$1,000,000 each employee.

 

Commercial General Liability - (including, a waiver of subrogation in
favor of Owner and its lender and naming Owner and its lender as Additional
Insured and without limitation, Premises Operations; Independent Contractors
(let or sublet work); Contractual Liability; Products and Completed Operations;
Explosion, Collapse and Underground (“XCU”); Broad Form Property Personal
Injury and Advertising Liability (employment exclusion deleted); Incidental
Medical Malpractice; Amendment of Pollution Exclusion-hostile fire;
Cross-liability and severability of interests) Coverage of $1,000,000 per
Occurrence, $2,000,000 Aggregate with separate Products and Completed
Operations limits of $1,000,000 per Occurrence $2,000,000 Aggregate.

 

Commercial Auto Coverage - $1,000,000 C.S.L.  (This policy shall cover all Harris
Mechanical furnished, owned, hired, and non-owned vehicles, including the
loading or unloading thereof, name Own3er and its lender as Additional Insureds
and include a waiver of subrogation in favor of Owner and its lender.)

 

Umbrella Excess Liability - (following form on all terms and
conditions as indicated above with respect to Employer s Liability, Commercial
General Liability and Automobile Coverages). 
With limits of liability $10,000,000 per Occurrence and $10,000,000
Aggregate.  Professional Liability
Insurance with a minimum single limit of $2,000,000 per claim insuring Harris
Mechanical and all other persons for whose acts Harris Mechanical may be liable
against any and all liabilities arising out of or relating to the negligent
acts, errors, or omissions in connection with the carrying out of professional
responsibilities relating to the Work.

 

Harris Mechanical shall or shall cause all applicable Subcontractors to
obtain Inland Marine insurance covering shipments of equipment and materials
transported via land and shall provide evidence of such insurance to Owner
prior to the shipment of any such equipment or materials.  Minimum Limits of Liability should be equal
to the largest

 

38

 

value shipment.  If Harris
Mechanical or any of Harris Mechanical’s Subcontractors intends to ship any
equipment or materials by ocean marine, Harris Mechanical shall

 

notify Owner thirty (30) days prior to shipping.  At such time, Owner shall have the right and
option to purchase Ocean Marine Insurance Coverage for such equipment and/or
materials.  In the event Owner exercises
such right and option, Harris Mechanical or the applicable Subcontractor shall
be relieved from its obligation to purchase the insurance coverage specified in
the first sentence of this Section. 
Further, the Contract Price shall thereupon be reduced to reflect the
savings realized by Harris Mechanical, or by the applicable insurer, or
Subcontractor, as a result of the cost savings which accrued to the
Subcontractor by reason of release from the obligation to purchase ocean marine
insurance coverage.  Harris Mechanical
shall exercise its best efforts in obtaining the best possible cost savings
from such Subcontractors in the event Owner exercises the preceding right and
option.

 

14.5.2       Harris Mechanical’s liability insurance
required by this Article 14 shall be written for the coverage amounts set
forth in the Agreement and shall include completed operations insurance for the
period of time set forth in the Agreement. 
Harris Mechanical shall provide its insurance from insurance companies
with (i) a Best Insurance Reports rating of A or better and a financial
size category of IX or higher, or (ii) if not rated by Best, a Standard &
Poor financial strength rating of A or higher, or (iii) other companies
approved by Owner in writing signed by Owner and acknowledging that such
insurance companies do not have the foregoing ratings.

 

14.5.3       Harris Mechanical’s liability insurance shall
specifically provide coverage for design-build delivery of the Plant.

 

14.5.4       Such policies shall be provided to Owner
prior to the commencement of any design services hereunder.

 

14.5.5       Prior to commencing any Work hereunder,
Harris Mechanical shall provide Owner with certificates evidencing that (i) all
insurance obligations required by the Contract are in full force and in effect
and will remain in effect for at least two years past Plant completion and (ii) no
insurance coverage will be canceled, allowed to

 

39

 

expire, renewal refused, or materially changed unless at least thirty
(30)days prior written notice is given to Owner.

 

The insurance required by the Agreement shall be written for not
less-than limits of liability specified in the Agreement or required by law,
whichever coverage is greater.  Coverage,
whether written on an occurrence or claims-made basis, shall be maintained
without interruption from date of commencement of the Work until at least two
years past Plant completion for Products and Completed Operations under the
general liability and umbrella coverage. 
Coverage shall be on an “occurrence” basis (except professional
liability insurance coverage may be on a “claims made” basis if that insurance
is not reasonably available on an “occurrence” basis).  Harris Mechanical is responsible for
providing any additional insurance it deems necessary to protect its interest
from other hazards or claims in excess of the minimum coverage.

 

14.5.6       Harris Mechanical shall include Owner and its
lenders as additional insureds under Harris Mechanical’s insurance, except
Worker’s Compensation and Professional Liability Insurance.  With respect to all insureds, including all
additional insureds, Harris Mechanical’s insurance shall be primary and
non-contributing with respect to any insurance carried by or otherwise
available to Owner or its lender(s). 
Harris Mechanical’s insurance shall provide that for all insureds,
including all additional Insureds, cross-liability and severability of
interests shall exist for all coverages provided thereunder.  Harris Mechanical’s insurance policies must
all provide a waiver of subrogation endorsement in favor of Owner and its
lender(s).

 

14.5.7       Approval of the insurance by Owner shall not
relieve or decrease the liability of Harris Mechanical.  Owner does not in any way represent that the
insurance or the limits of insurance specified in these articles are sufficient
or adequate to protect Harris Mechanical’s interests or liabilities, but are
minimums.

 

14.5.8       Harris Mechanical’s Contractual Liability
Insurance shall cover Harris Mechanical’s obligations under this Agreement.

 

14.5.9       In the event Harris Mechanical fails to
procure or maintain any insurance coverage required under this Agreement, Owner
may purchase such coverage and deduct the cost thereof from the Contract
Price.  Harris Mechanical shall require
all Subcontractors and design consultants, to purchase and maintain insurance
of types and in amounts consistent with the Harris Mechanical s risk management
program.  All

 

40

 

policies provided by Subcontractors shall name Owner as an additional
insured.  Harris Mechanical shall obtain
insurance coverage certificates from Subcontractors and shall provide copies to
Owner.  The insurance obtained by Harris
Mechanical shall, subject to the terms and extent of such insurance, provide
coverage to Owner with respect to claims arising from the acts or omissions of
Harris Mechanical’s Subcontractors.

 

14.6       Performance Bond and Payment
Bond:  Harris Mechanical shall provide the following
performance bond and labor and material payment bond or other performance
security:  A Performance Bond and Labor
and Material Payment Bond in the amount of the Contract Sum.

 

14.6.1       At its sole cost and expense, Harris
Mechanical shall furnish a Performance Bond and Labor and Material Payment Bond
on standard AIA forms, complying with the following specific requirements:

 

14.6.1.1       Bond shall be executed by a surety, licensed
in the State of Minnesota, with a rating of no less than A/XII in the Best s
Insurance Guide, and shall remain in effect for a period of not less than one (1) years
following the date of Substantial Completion or the time required to resolve
any items of incomplete Work and the payment of any disputed amounts, whichever
time period is longer.

 

14.6.1.2       The Performance Bond and the Labor and
Material Payment Bond shall each be in amount equal to the Contract Sum and all
subsequent increases.

 

14.6.1.3       Harris Mechanical shall require the attorney
in fact who executes the required bonds on behalf of the Surety to affix
thereto a certified and current copy of his power of attorney indicating the
monetary limit of such power.

 

14.6.1.4       Every Bond must display the surety’s bond
number.  A rider including the following
provisions shall be attached to each bond: 
(i) The Surety hereby agrees that it consents to and waives notice
of any addition, alteration, omission, change, or other modifications of the
Contract.  Any addition, alteration,
change, extension of time, or other modification of the Contract, or a
forbearance on the part of either Owner or Harris Mechanical to the other,
shall not release the Surety of its obligations hereunder, and notice to the
Surety of such matters is hereby waived; and (ii) The Surety agrees that

 

41

 

it is obligated under the bonds to any successor, grantee, or assignee
of Owner.

 

14.6.2       Upon the request of any person or entity
appearing to be a potential beneficiary of bonds covering payment of
obligations arising under the Agreement, Harris Mechanical shall promptly
furnish a copy of the bonds or shall permit a copy to be made.

 

14.6.3       Harris Mechanical shall keep the surety
informed of the progress of the Work and, where necessary, obtain the surety s
consent to, or waiver of, (i) notice of changes in the Work; (ii) request
for reduction or release of retention; (iii) request for final payment;
and (iv) any other item required by the surety.  Owner shall be notified by Harris Mechanical,
in writing, of all communications with the surety.  Owner may, in Owner s sole discretion, inform
the surety of the progress of the Work and obtain consents as necessary to
protect Owner’s rights, interests, privileges, and benefits under and pursuant
to any bond issued in connection with the Work.

 

15.  Indemnity

 

15.1   Indemnity by Harris
Mechanical for Personal Injury and Property Damage: 
Harris Mechanical shall indemnify and hold harmless Owner and its agents
and employees from and against all claims made by a third party for any,
damages, losses and expenses, including, but not limited to attorney’s fees,
arising out of or resulting from Harris Mechanical’s performance of the Work,
provided that any such damage, loss or expense: 
(1) is attributable to bodily injury, sickness, disease or death,
or to injury to or destruction of tangible property (other than the Plant,
Equipment or the Work itself) and (2) is caused in whole or in part by any
negligent act or omission of Harris Mechanical, its subcontractors, or anyone
for whose acts any of them may be liable. 
In the event that any such damage, loss or expense was caused in part by
Owner or by any other person or entity, however, then Harris Mechanical shall
be obliged to pay only the portion of the damage, loss or expense, including
reasonable attorney’s fees as is attributable to its relative share of the
negligence or omission which caused such damage, loss or expense.

 

Harris Mechanical’s indemnity obligations set forth in this Section 15.1
shall not be limited by any limitation in the amount of damages, compensation,
or benefits payable by or for Harris Mechanical, its design consultants,
Subcontractors or other entity under any employee benefit acts, including
Worker’s Compensation and disability acts in instances where an

 

42

 

employee of any of them, or anyone for whose acts may be liable, has a
claim against Owner, its lenders, officers, directors, employees, or agents.

 

15.2   To the fullest extent permitted by law and
without limiting any other indemnification obligations of Harris Mechanical,
Harris Mechanical shall indemnify and defend Owner, its officers, directors,
assigns, lenders, agents, and employees from any claims, liens, charges
(including attorneys fees) or encumbrances (including but not limited to
mechanic’s and materialmen’s liens or bond claims) arising out of or in
connection with the performance of the Work except to the extent caused by the
uncured failure of Owner to make payment when required by the Contract or Owner’s
misconduct or breach of contract.  Owner
shall be entitled to recover from Harris Mechanical all costs and expenses
incurred in enforcing this provision, including attorneys fees.  In the event that any such damage, loss or
expense was caused in part by Owner or by any other person or entity, however,
then Harris Mechanical shall be obliged to pay only the portion of the damage,
loss or expense, including reasonable attorney’s fees as is attributable to its
relative share of the negligence or omission which caused such damage, loss or
expense.

 

Upon request of Owner (provided that Harris Mechanical does not have an
uncured breach), Harris Mechanical shall within 60 days remove any liens filed
against Owner or its property.  If
Mechanical fails to do so, Owner is authorized by Harris Mechanical to remove
or satisfy any such liens, and Harris Mechanical shall pay to Owner all costs
and damages incurred by Owner to do so, including attorneys fees.

 

15.3   Conditions to Indemnity:  The
indemnities set forth in Sections 15.1 and 15.2 above all shall not apply to
any design, process or product of a particular manufacturer or manufacturers,
which is specified by Owner.  These
indemnities are valid only if (a) Owner gives notice of any claim or
lawsuit for which it claims indemnity within time sufficient for Harris
Mechanical to contest such claim, (b) Owner cooperates fully and promptly
with Harris Mechanical in the defense thereof at Owner’s expense for all items
related to such defense for time of witnesses who are employees of Owner, costs
related to travel, production of documents, fees for any counsel it elects to
assist it in addition to counsel appointed by Harris Mechanical for defense of
the claim, and (c) Harris Mechanical has full authority in defense of such
lawsuit or claim and to settle such claim, provided that, it pays to Owner the
cost, if any, of any change in operations resulting from such settlement.  In no

 

43

 

case shall Harris Mechanical be liable under Sections 15.1 or 15.2 for
any amount, including costs and attorney’s fees, in excess of the limit set
forth at Section 16 below.

 

15.4   Indemnity by Owner:  Owner
shall indemnify and hold harmless Harris Mechanical and its agents and
employees from and against all damages, losses and expenses, including but not
limited to attorney’s fees, and arising or resulting from a claim, order,
requirement or charge made or brought by a third party or by the federal, state
or local government, or any department, agency or subdivision thereof, based,
in whole or in part, on:  (a) defects in
title; (b) negligence; (c) hazardous materials (excepting hazardous materials
introduced on the Site by Harris Mechanical or its subcontractors or vendors); (d)
the existence of any substance located on or under the Work site (excepting
substances introduced on the Site by Harris Mechanical or its subcontractors or
vendors); (e) a condition of the Work site subject to any law or regulation
related to protection of the environment; or (f) any other matters for which
Owner shall have responsibility pursuant to this Contract.  This indemnification is valid only if (a) Harris
Mechanical gives notice of any claim or lawsuit for which it claims indemnity
within time sufficient for Owner to contest such claim, (b) Harris Mechanical
cooperates fully and promptly with Owner in the defense thereof at its expense
for all items related to such defense for time of witnesses who are employees
of Harris Mechanical, costs related to travel, production of documents, fees
for any counsel it elects to assist it in addition to counsel appointed by
Owner for defense of the claim, and (c) Owner has full authority in defense of
such lawsuit or claim and to settle such claim, provided that such settlement
requires payment of monetary damages only and that Owner can, and does, pay the
full cost of any such settlement.  In the
event that any such damage, loss or expense was caused in part by Harris
Mechanical or by any other person or entity, however, then Owner shall be
obliged to pay only the portion of the damage, loss or expense, including
reasonable attorney’s fees as is attributable to its relative share of the
negligence or omission which caused such damage, loss or expense.

 

16.  Limitation of Liability

 

In
no case shall Harris Mechanical or Owner have any liability to the other under
or arising from any performance, delay in performance, or breach of this
Contract for any indirect, incidental, reliance, punitive, exemplary, or
consequential damages (including, without limitation, lost profits, increase in
costs of goods or services resulting from delay, cost of capital or losses due

 

44

 

to
business interruption) whether based on contract, tort or other legal theory,
whether or not Harris Mechanical had knowledge of the damages that might
result, except as expressly provided otherwise under this Agreement.  Furthermore, Harris Mechanical’s cumulative
liability for any and all direct damages under this Contract shall be reduced
by the amount of Harris Mechanical’s actual costs and expenses incurred in
making any changes, corrections, repairs or replacements contemplated in this
Contract and shall in no case exceed (i) prior to Substantial Completion,
an amount equal to * of the Contract Sum, and (ii) subsequent to
Substantial Completion, an amount equal to * of the Contract Sum.

 

17.  Dispute Resolution

 

17.1   Executive Conference or
Mediation:  In the event of any controversy or claim
arising out of or related to this Contract, or the interpretation, termination
or breach hereof, other than default in payment due under Section 8 above which
shall be subject to the provisions of this Section at Harris Mechanical’s
option, the Parties shall, upon the written request of either of them, attempt
to resolve the matter by agreement of the representatives of the Parties.  Such representatives shall be at least one
management level above the individuals who have had direct responsibility for
performance of the Contract, or the highest level of management of any Party
whose highest level of management has had direct responsibility for such
performance.  Such representatives shall
meet in person or by telephone or teleconference at least once, and shall
attempt to resolve any matter raised by either of them by the written notice
requesting such resolution for a period of at least thirty (30) Days.  In the event that the Parties are unable to
resolve the dispute by agreement of such representatives within such thirty
(30) Day period, then at the written request of either Party, the Parties shall
submit the matter to mediation under the then current rules of mediation and
conciliation of the American Arbitration Association.  The mediation shall occur using a mediator
qualified under the laws of the State of Minnesota to be held at St.  Cloud, Minnesota, or such other place as may
be mutually agreed to by the Parties. 
The Parties shall attempt to resolve any matter submitted to mediation
under this Section 17.1 within thirty (30) Days after the date of delivery of
the written request for mediation. 
Except where

 

*                 PORTIONS OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

45

 

clearly prevented by the
matter in dispute, the Parties agree to continue performing their
respective-obligations-under this-Contract while the dispute is being-resolved.

 

46

 

17.2   Arbitration:  Any
controversy or claim arising out of or related to this Contract, or the
interpretation, termination or breach hereof, which cannot be resolved by
mutual agreement of the parties or by mediation within the time periods
provided at Section 17.1 above, other than default in payment due under Section 8
above which shall be subject to the provisions of this Section at Harris
Mechanical’s option, may be submitted to binding arbitration in accordance with
the applicable rules of the American Arbitration Association.  The place of arbitration shall be St.  Cloud, Minnesota, or such other location as
mutually agreed to by the Parties. 
Neither Party shall submit any such matter to arbitration unless the
parties have been unable to resolve it by mediation for a period of at least
thirty (30) days after the date of request for mediation.  Any party who files a notice of demand for
arbitration must assert in the demand all claims then known to that party against
the other.  Judgment upon any award
rendered by an arbitrator or arbitrators under this Contract may be entered
upon it in accordance with applicable law in any court having jurisdiction
thereof, but either party hereto shall have the right to contest such award on
the grounds that it is contrary to applicable law.  Except where clearly prevented by the matter
in dispute, the Parties agree to continue performing their respective
obligations under this Contract while the dispute is being resolved.

 

17.3   Attorney’s Fees and Costs:  All
reasonable costs, expenses and attorney’s fees resulting from the litigation or
arbitration of any claim under this Contract shall be paid by the losing party
to the prevailing party.

 

18.  Force Majeure

 

No
delay in, or failure of, performance by either Party under this Contract will
constitute default hereunder or give rise to any claim for damages if and to
the extent caused by an occurrence beyond the control of the party affected, to
include but not limited to, acts of governmental authority, acts of God, strikes
or other concerted acts of workmen, fire, flood, explosions, riots, war,
rebellion or sabotage.

 

19.  General Provisions

 

19.1   Assignment:  Neither Harris Mechanical nor Owner shall
assign or transfer its duties or obligations hereunder without the prior
written consent of the other.  Harris
Mechanical hereby consents-to Owner collaterally assigning this Contract and
its rights hereunder to one or more lenders or other sources of financing as
necessary for Owner to obtain and

 

47

 

secure financing to
construct and operate the Plant.  This
Contract shall be binding upon and shall inure to the benefit of the Parties
and the successors and permitted assigns of Owner and Harris Mechanical.

 

19.2   Entire Contract; Waiver; Amendment:  These
General Conditions and the attached Exhibits constitute the full and complete
contract between the parties hereto with respect to the subject matter
hereof.  There are no statements,
agreements, understandings, representations or trade customs of any kind,
express or implied, concerning the subject matter which are not merged herein
or superseded hereby.  A waiver of any of
the terms of this Contract shall not bind either party unless signed by one of
its duly authorized representatives. 
Waiver by either Party of any default by the other party hereunder shall
not be deemed a waiver by such Party of any default by the other which may
occur thereafter.  This Contract may only
be modified or amended by an agreement in writing executed by both Parties
hereto.

 

19.3   Governing Law; Jurisdiction; Venue:  The
validity, performance, construction and effect of this Contract shall be
governed by the laws of the state of Minnesota, without regard to choice of law
or conflict of law provisions.  Each
Party consents to the state courts of Minnesota, Otter Tail County, as the
exclusive jurisdiction and venue to determine any non-arbitral disputes.  The parties waive any argument or objection
to such jurisdiction and venue and hereby agree that such jurisdiction and
venue are mutually convenient.

 

19.4   Notices:  All notices provided for herein will be
considered as properly given if in writing and delivered personally or, by fax
or sent properly addressed, postage pre-paid:

 

	
  If
  to Harris Mechanical, to:

  	
  909
  Montreal Circle

  
	
   

  	
  St.
  Paul, MN 55102

  
	
   

  	
  Attn:
  Richard Greenland

  
	
   

  	
  Its
  Senior Project Manager

  
	
   

  	
   

  
	
  If
  to Owner, to:

  	
  Otter
  Tail Ag Enterprises, LLC

  
	
   

  	
  1220
  North Tower Road, Suite 201

  
	
   

  	
  Fergus
  Falls, MN 56537

  
	
   

  	
  Attn:
  Jerry Larson, President

  

 

Notices shall be deemed effective upon actual receipt, or in the case
of posting in the U. S.  mail, on the
fourth Day after mailing.

 

48

 

19.5   Survival:  Sections 16, 17, and 19 shall survive
termination of this Contract.

 

19.6   Third Parties:  The
Parties agree that this Contract is not intended by either Party to give any
benefits, rights, privileges, actions or remedies to any person, partnership,
firm or corporation (other than a Party or its permitted assignee) as a third
party beneficiary under any theory of law.

 

19.7   Equal Bargain and
Representation:  The Parties have participated jointly in the
negotiations and drafting of this Contract. 
In the event that an ambiguity or question of intent or interpretation
arises, this Contract shall be construed as if drafted jointly by the Parties
hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement.  Each of the Parties
acknowledges that it has been represented by legal counsel of its own choice
throughout all negotiations, preparation, review and execution of this
Contract, and that each Party has executed this Contract voluntarily and with
the consent and on the advice of any such legal counsel.  In entering into this Contract, each Party
has undertaken such factual inquiry as it has deemed necessary and has relied
solely on that inquiry and not on statements or representations of the other
Party.

 

19.8   Time Bar to Legal Action:  All
legal actions by Owner or by Harris Mechanical arising out of or in any way
connected with this Contract or the services to be performed hereunder shall be
barred and under no circumstances shall any such legal action be initiated by
Owner or by Harris Mechanical three (3) years after the date of Mechanical
Completion unless this Contract shall be terminated earlier, as provided
herein, in which case the date of termination of this Contract shall be the
date on which such period shall commence.

 

49

 

[SIGNATURE
PAGE TO OTTER TAIL AG ENTERPRISES, LLC EPC FIXED PRICE CONTRACT]

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Contract on the 24 day
of October 2006.

 

 

	
   

  	
  Owner:

  
	
   

  	
   

  
	
   

  	
  OTTER
  TAIL AG ENTERPRISES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jerry Larson

  
	
   

  	
   

  	
  Jerry
  Larson

  
	
   

  	
   

  	
  Its
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARRIS
  MECHANICAL CONTRACTING

  COMPANY

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Rob Latta

  
	
   

  	
   

  	
  Rob
  Latta

  
	
   

  	
   

  	
  Its
  Vice-President

  

 

50

 

Exhibit A Scope of Work

                EPC Fixed
Price Contract

                Otter Tail Ag Enterprises, LLC

 

EXHIBIT A

SCOPE OF WORK

 

A.1          SCOPE
OF SERVICES

 

A.2          HARRIS
MECHANICAL TECHNICAL SPECIFICATIONS

 

A.3          OWNER’S
SCOPE OF SERVICES

 

A-1

 

Exhibit A Scope of Work

                EPC Fixed
Price Contract

                Otter Tail Ag Enterprises,
LLC

                A.1 Harris
Mechanical Technical Specs

A.1          SCOPE OF SERVICES

 

1.             PROJECT SCOPE DIVISION
OVERVIEW & BASE CONTRACT QUANTITIES

 

ATTACHED
AS SCHEDULE A.1 IS THE PROJECT DIVISION OF RESPONSIBILITIES” (DOR) DATED
OCTOBER 24, 2006.  SCHEDULE A.1 IS
INCORPORATED INTO THIS EXHIBIT A AND MADE PART HEREOF BY REFERENCE.  THE DOR PROVIDES FURTHER DETAIL ON THE OWNER’S,
HARRIS MECHANICAL’S AND DELTA-T’S SCOPE

 

2.                                      HARRIS MECHANICAL DETAILED
PROJECT SCOPE DEFINITION

 

ENGINEERING AND PROCUREMENT

 

Harris
Mechanical to be responsible for process design, procurement and detail
construction engineering for the Plant, consisting of:

 

·              Process design based on proprietary Delta-T
technology

·              Material and energy balances

·              Piping & Instrumentation Diagrams
(P&IDs)

·              Plant and equipment arrangements drawings

·              Detailed design and engineering of custom
fabricated components

·              Piping and equipment installation
specifications

·              Piping layout drawings, as necessary, to
facilitate piping installation

·              Equipment and component procurement
specifications

·      Equipment foundations and support steel

·      Site layout

·              Architectural drawings and specifications for

·      Administration Building offices and bathrooms

·      Plumbing and HVAC design drawings and
specifications

·              Electrical design to include:

·      Power distribution diagrams

·      MCC room equipment location plans

·      Lighting plans

·      Power and lighting plans for office, lab, and
control room areas

·      Grounding plans

·      Electrical equipment procurement
specifications

·              Instrumentation and controls design, to
include:

·      Instrumentation procurement specifications

·      Instrumentation wiring diagrams

 

A-2

 

·                  Control system hardware and software
configuration and programming with control narrative

·                  Control, shutdown and interlock system
philosophy and logic with description of the functioning systems for normal and
emergency shutdowns, for normal control, for startup, etc.

·                                          Harris Mechanical will review construction
and shop drawings submitted by Owner’s other engineers, contractors or vendors,
if any.

·                                          One HAZOP Review, and one Owner required
review for insurance or safety issues.  Article 6
of the General Conditions will establish if a change order is required.

·                                          Licensed design professionals will provide
stamped drawings for the Work where designated by government codes.

·                                          Convert engineering into specifications for
all equipment, materials and services provided per this scope.

·                                          Procurement, delivery and unloading of all
equipment and materials that are within Harris Mechanical’s scope.

·                                          Preparation of initial equipment records
including drawings, installation manuals and recommended spare parts lists for
all major equipment within Harris Mechanicals scope.  Harris Mechanical will assemble Maintenance
Manuals for all Equipment it procures under this Agreement.  These Manuals will normally consist of vendor
information and drawings, but special instructions may be included where the
yendor information is insufficient.

·                                          Preparation of an Operations Manual for all
process areas.  Six (6) sets of
Operations Manuals (2 Manuals during construction, 3 Manuals after Startup and
1 Manual for Harris Mechanical) will be provided which will include:

·                  Description of the entire PLANT PROCESS and
each system operation

·                  Detailed operating description of each
process unit

·                  Initial start-up procedures

·                  Normal operation

·                  Startup & shutdown under normal
operating conditions

·                  Startup & shutdown under emergency
conditions

·                  Cleaning & preventive maintenance
guidelines

·                  Safety & Health guidelines

·                  Basic troubleshooting guides

·                                          Harris Mechanical will prepare an electronic
model of the Plant, for which it has design responsibility, including equipment
arrangements and piping design, if provided to Harris Mechanical, and check for
interference.  Drawings from the model
will be provided in both an electronic format and hard copy (4 prints).

·                                          Record drawings to include the following:

·              P&I Ds

·              Equipment General Arrangement Drawings

·              Utilities, plumbing, and HVAC drawings

·              Electrical One Lines

 

A-3

 

·              Cable Schedule

·              Lighting Layout & Schedule

·              Electrical Panel Drawings

·              Manufacturers’ Shop Drawings

·              Software Configurations

·                                          Harris Mechanical will provide all drawings
and documentation to OWNER in electronic format.  In addition, Harris Mechanical will work with
OWNER to establish electronic communication practices, including FTP site on
Harris Mechanical’s website and videoconferencing.

·                                          Harris Mechanical will provide telephone
consultation at no charge to OWNER’s questions, concerns or problems with
regard to the operation and maintenance of the plant for a period of one (1) year
following Startup.  In the event that
OWNER requests Harris Mechanical personnel to travel to the Plant to address
occurrences not caused by Harris Mechanical’s or others under its control
failure to perform, OWNER agrees to pay a consulting fee at mutually agreeable
rates and to reimburse Harris Mechanical for its reasonable travel expenses.

 

GENERAL CONDITIONS

 

Harris Mechanical to be responsible for the general
conditions activities, pertaining to the Plant, consisting of:

 

·                  All necessary construction permits, licenses
and certifications for work within Harris Mechanical’s scope.

·                  Coordination ‘of inspections with local
authorities for work within Harris Mechanical’s scope.

·                  Insurance as defined in the General
Conditions.

·                  All tools, equipment rental, freight, and
temporary utilities (including water) to support the construction activities.

·                  Trash disposal and clean up, etc.  required to complete work in Harris
Mechanical’s scope.

·                  Harris Mechanical’s office trailer with
phone/fax.

·                  Temporary lighting on interior of buildings.

·                  Site safety materials and procedures.

·                  Security as required for Harris Mechanical’s
material and equipment.  Harris Mechanical
will be permitted to use, without restriction, any available storage space in
buildings during the construction period.

·                  Operator training during commissioning and
startup period for a period as necessary to successfully train Owner Staff by
two (2) Harris Mechanical people. The exact schedule for such training
will be coordinated with the Owner, but typically this would include a “classroom”
oriented approach for a week during the later stages of construction and “hands-on”
training during start-up activities.  If
additional training support is required, the per diem rates in Exhibit B
will apply.

 

A-4

 

·                  Commissioning and start-up support for up to
thirty (30) calendar days or as necessary to successfully complete startup of
the Plant by up to four (4) Harris Mechanical people.

·                  Weather protection (temporary tents, early
construction of portions of the building, etc.) so that work within Harris
Mechanical’s scope can continue to the best degree feasible (fabricating spool
pieces, cutting metal or pipe, etc.) during bad weather.

·                  Warranty for equipment within Harris
Mechanical’s scope of work in accordance with the General Conditions.

·                  Sales tax is excluded from Harris Mechanical’s
Scope.  Owner will provide Harris
Mechanical the information and paperwork necessary to utilize the tax-exempt
purchasing status.  If for any reason
sales taxes are required, the resultant additional cost will be paid by the
Owner.

·                  All freight charges, insurance and other fees
required to deliver and unload all components in Harris Mechanical’s scope to
the site.

·                  Unloading and storing of all project
components or materials within Harris Mechanical’s scope, including all
necessary labor and equipment to receive, off load and store the items.

·                  Project and administrative staff supporting
the Work of the project.

·                  All onsite as well as home office project
management including the clerical staff on site and scheduling/ project
controls personnel.  Includes Harris
Mechanical participation in Owner requested Progress Reviews in accordance with
General Conditions.

·                  Includes all cost associated with travel to
the Project office during the entire duration of the project.

·                  This includes all general liability and other
insurance that may be required for the project in accordance with the
Contract.  Builders risk insurance to be
provided by Harris Mechanical.

 

SITE WORK

 

Harris
Mechanical’s Plant site work consisting of the following:

 

·                  Provide and install sump pits and sump pumps
as required to meet contract design.

·                  Any site work required to install utilities
or equipment packages which Harris Mechanical is responsible for.

 

UTILITIES

 

Harris
Mechanical is responsible for the following Plant Utilities:

 

·                  Provide and install a natural gas fired
boiler of a steel watertube or firetube type, minimum 85% thermal efficiency,
with rated capacity in accordance with Section 2 of this Exhibit A;
constructed in accordance with ASME Section I, Power Boilers.  Package will include low Nox burners,
deaerator, stack, feedwater softener,

 

A-5

 

condensate
return system, feedwater pumps (duplex), alarms and controls.  If water quality at the site is poor and the
process requires a more comprehensive treatment system, the added scope will be
addressed through the change order procedure.

·                  Provide and install a cooling tower package
with rated capacity in accordance with Section 2 of this Exhibit A
using manufacturer recommended design basis for local environmental conditions.

·                  Provide and install a refrigeration unit
(chiller) to provide fermenter cooling during hot weather operating conditions.

·                  Provide and install a compressed air system
that will consist of two compressors, each capable of providing nominal design
flow rate of dry compressed air for all plant requirements at 100 psig.

·                  A fire protection system will be provided to
bring the Work in compliance with the Contract specifications and applicable
codes.  The system may include a fire
water storage lagoon (first used as a storm water runoff containment pond) with
firewater pumping system and piping to critical areas.  Hydrants will be installed for protection of
the buildings and the ethanol storage and loadout area.  Buildings will be equipped with sprinkler
systems where required by applicable codes.

·                  Except as specifically noted herein, Harris
Mechanical will provide all electrical equipment, switchgear, distribution
panels, motor starters, wiring and connections, trays, conduit, fittings, local
panels, fixtures, supplies and labor to implement the final electrical design generated
by Harris Mechanical for both the process equipment and buildings.  Harris Mechanical will also provide external
site lighting for the access road, parking area, and any external work areas.

 

BUILDINGS, STRUCTURES AND RELATED WORK

 

Harris Mechanical will provide access to equipment within its scope in
accordance with sound engineering and safety practices, including catwalks,
platforms and stairs in the Main Process Building for access to the major tanks
and equipment.

 

Unit heaters are provided for the DD&E, Main Process, Utility and
Maintenance buildings.  Unit heaters in
the process areas are designed to maintain temperatures above 40°F in the event
of a winter shutdown.

 

Harris Mechanical will provide the initial stocking of permanent safety
equipment for the plant including fire extinguisher stations, safety showers,
and eyewash stations so the plant is in compliance with the Uniform Fire Code
and governing building codes.

 

Harris Mechanical will install Owner furnished Delta T standard lab
equipment package to provide the Owner with the proper tools to continually
monitor process performance and help diagnose any process problems that
occur.  This lab package provided by
Owner will contain, as a minimum, one each of the following items:

 

·                  High Performance Liquid Chromatograph (HPLC)

·                  Karl Fisher product moisture analyzer

·                  Centrifuge - lab size

 

A-6

 

·      Microscope

·      pH meter

·      Dissolved oxygen meter

·      Analytical balance

·      Moisture meter

·      Hotplate

·      Sieves and shaker

·      Incubator

·      Provision of lab supplies, furniture, storage
and glassware

 

GENERAL EQUIPMENT AND PIPING SYSTEMS

 

Harris
Mechanical will provide all equipment, components and piping as required for
the Work for the Plant to meet the Contract specifications excluding any items
specifically defined herein or the attached DOR as being the Owner’s
responsibility.  Harris Mechanical’s
responsibilities include, but are not limited to, the following:

 

·      Installation of all equipment in final
position, complete, anchored, connected and in operable condition, except items
specifically defined herein as the Owner’s responsibility.

·      Erect large field-fabricated tanks on-site.

·      Provide all piping systems in accordance with
the final design and Contract specifications.

·      Provide piping system identification in
accordance with Contract specifications.

·      Prime and paint or insulate all carbon steel
materials.

·      Provide supplementary steel supports and
brackets for equipment.

·      Commission and test all tanks and mechanical
systems and connections in accordance with the Contract specifications.

·      Provide all manual and automated valves.

·      Provide all pipe racks, pipe supports,
hangers, anchors, and fasteners.

·      Provide all Plant process piping including
buried piping.

·      Provide required piping insulation and heat
tracing.

·      Provide adequate freeze protection for
exposed lines.

·      Provide bulk tanks for chemicals storage.

 

INSTRUMENTS AND CONTROLS

 

Harris
Mechanical will provide the following for the Plant:

 

·      All instruments and controls to adequately
monitor, measure and control the process per the final design and Contract
specifications, except for items specifically defined

 

A-7

 

herein
or the attached DOR as the Owner’s responsibility.  Harris Mechanical’s scope includes, but is
not limited to, the following:

·      All instrument wiring as required to provide
a complete and functioning system.

·      A complete Process Control System with
hardware and software to handle all regulatory, discrete and sequential control
applications.  The control system modules
and hardware will be suitably packaged for an industrial environment.

·      Three (3) operator interface units
located in the Main Process Building control room, with which plant operations
can be monitored and controlled.

·      Integration of loop and discrete control of
the dryer system into the Process Control System, as necessary to make it
consistent with process safety standards and standard industry practice.

 

3.             BASIS OF DESIGN

 

The
following establishes the design basis for a dry-mill ethanol plant capable of
producing fuel-grade ethanol using corn as the feedstock.  The rates and other data provided in this
section represent a range of expected performance values not guarantees.

 

The
plant will operate 350 days per year with corn feedstock.  The design capacity of the plant will be 55
MGPY undenatured.  Dried Grain with
Solubles (DDGS), will be produced to meet US Feed Grade requirements.

 

The
following utilities are required to support plant operation.  The figures are based on anticipated normal
production for the first year of operation. 
Electric power includes loads for process motors including drying,
milling and utility motors such as cooling tower fans and pumps and air
compressors.  Natural gas and electricity
shall be supplied by the Owner, as follows:

 

	
  UTILITY

  	
   

  	
  CONDITION

  	
   

  	
  NORMAL CONSUMPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Natural
  gas (MMBTU/hr)

  	
   

  	
  60
  psig

  	
   

  	
  36MMBTU

  
	
  Electrical
  Power (KW)

  	
   

  	
  480
  V, 3 phase, 60 HZ

  	
   

  	
  1.0KW

  

 

Unless
specifically noted to the contrary, Harris Mechanical’s Basis of Design will
conform with, and test in accordance with, the applicable sections and parts of
the codes and standards set forth below, including the most recent revisions
and supplements at the time of the execution of the Contract.

 

	
  Applicable
  Standards

  	
  Federal,
  State, Local, OSHA, Air quality (or appropriate government codes)

  
	
   

  	
   

  
	
  Building
  Codes

  	
  UBC

  
	
   

  	
   

  
	
  Cable
  Marking

  	
  ICEA
  (Insulated Cable Engineers Association)

  
	
   

  	
   

  
	
  Concrete

  	
  ACI
  (American-Concrete-Institute)

  

 

A-8

 

	
  Corrosion

  	
  NACE
  (National Association of Corrosion Engineers)

  
	
   

  	
   

  
	
  Electrical/Instrumentation

  	
  NEMA
  (National Electrical Manufacturers Association)

  
	
   

  	
   

  
	
   

  	
  NEC
  (National Electrical Code)

  
	
   

  	
   

  
	
   

  	
  ISA
  (Instrument Society of America)

  
	
   

  	
   

  
	
  Electrical
  Components

  	
  UL
  (Underwriters Laboratories)

  
	
   

  	
   

  
	
  Flanges

  	
  ANSI
  standard

  
	
   

  	
   

  
	
  Fire
  Protection

  	
  NFPA

  
	
   

  	
   

  
	
  Heat
  Exchanger

  	
  TEMA
  (Tubular Exchanger Manufacturers Association)

  
	
   

  	
   

  
	
  Nuts,
  Bolts, Fittings & Line Components

  	
  ASTM
  (American Society of Testing Materials)

  
	
   

  	
   

  
	
   

  	
  SAE
  (Society of Automotive Engineers)

  
	
   

  	
   

  
	
  Painting

  	
  SSPC
  (Steel Structure Painting Council)

  
	
   

  	
   

  
	
  Personnel
  Safety

  	
  OSHA
  (Occupational Safety and Health Association)

  
	
   

  	
   

  
	
  Piping,
  pumps

  	
  ANSI
  (American National Standards Institute)

  
	
   

  	
   

  
	
  Structural
  Steel

  	
  AISC
  (American Institute of Steel Construction)

  
	
   

  	
   

  
	
  Tanks

  	
  API
  (American Petroleum Institute)

  
	
   

  	
   

  
	
  Valves
  and Fittings

  	
  MSS
  (Manufacturers Standardization Society)

  
	
   

  	
   

  
	
  Vessels
  (Where required)

  	
  ASME
  (American Society of Mechanical Engineers)

  
	
   

  	
   

  
	
  Welding

  	
  AWS
  (American Welding Society)

  

 

A-9

 

Exhibit A Scope of Work

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

A.2
Harris Mechanical Technical Specs

 

A.2          HARRIS MECHANICAL’S
TECHNICAL SPECIFICATIONS

 

The
Plant will be constructed in accordance with the following specifications.

 

	
  Specification

  	
   

  	
  Specification
  Number

  
	
  1.
  Electrical

  	
   

  	
  000-S-ELEC-001

  
	
  2.
  Civil

  	
   

  	
  000-S-C-001

  
	
  3.
  Structural

  	
   

  	
  000-S-ST-001

  
	
  4.
  Piping

  	
   

  	
  000-S-Pipe-001

  
	
  5.
  Agitators & Mixers

  	
   

  	
  000-S-AG-001

  
	
  6.
  Augers, Conveyors & Legs

  	
   

  	
  000-S-Y-002

  
	
      Mix
  Tank Plug Auger

  	
   

  	
  000-S-Y-001

  
	
  7.
  Buildings

  	
   

  	
  000-S-BLDG-001

  
	
  8.
  Control Valves

  	
   

  	
  000-S-CV-001

  
	
  9.
  Instruments

  	
   

  	
  000-S-Inst-001

  
	
  10.
  Manual Valves

  	
   

  	
  000-S-MV-001

  
	
  11.
  Pumps

  	
   

  	
  000-S-PC-001

  
	
  12.
  Plate & Frame HX

  	
   

  	
  000-S-E-002

  
	
  13.
  Shell & Tube HX

  	
   

  	
  000-S-E-001

  
	
  14.
  Tanks:

  	
   

  	
   

  
	
        Field
  Erected

  	
   

  	
  000-S-TK-001

  
	
        Shop
  Erected

  	
   

  	
  000-S-TK-002

  
	
  15.
  Vessels

  	
   

  	
  000-S-VS-001

  
	
  16.
  CO2 Liquefaction

  	
   

  	
  000-S-00-001

  
	
  17.
  Centrifuge

  	
   

  	
  000-S-CF-001

  
	
  18.
  Cooling Tower

  	
   

  	
  000-S-CT-001

  
	
  19.
  Dryer

  	
   

  	
  000-S-DR-001

  
	
  20.
  Ethanol Load-Out

  	
   

  	
  000-S-ELO-001

  
	
  21.
  Air Compressor

  	
   

  	
  000-S-AC-001

  
	
  22.
  Boiler

  	
   

  	
  000-8-BLR-09-1

  

 

A-10

 

	
  23.
  Chiller

  	
   

  	
  000-S-CH-001

  
	
  24.
  Packing & Column Internals

  	
   

  	
  000-S-PK-001
  000-S-TR-001

  
	
  25.
  Equipment Installation

  	
   

  	
  000-S-EI-001

  
	
  26.
  Grain Handling:

  	
   

  	
   

  
	
        Grain
  Milling

  	
   

  	
  000-S-GM-001

  
	
        Grain
  Receiving & Storage

  	
   

  	
  000-S-GR-001

  
	
  27.
  DDGS Storage & Load-Out

  	
   

  	
   

  
	
  28.
  Ground Meal Specification

  	
   

  	
   

  
	
  29.
  Process Control System

  	
   

  	
  000-S-PCS-001

  
	
  30.
  DWGS Storage and Loadout

  	
   

  	
   

  

 

A-11

 

Exhibit A Scope of Work

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

A.2
Owner’s Scope

 

A.3 Owner’s Scope of Services

 

Owner
must provide the following (Harris Mechanical is responsible for all items not
specifically listed in this “Owner’s Scope of Services” section):

 

·         Preparation and filing of all environmental
permits.

·         Preparation of, filing for, and cost for
obtaining all required national, state and local permits including plant
operation requirements and construction permits for Owners scope.

·         Soils testing, geotechnical evaluation,
topographic and legal surveys.

·         Cleared flat site within 0.5 ft of final
grade suitable for.  Harris Mechanical
construction w/o hidden conditions or unusual expense required to make site
buildable.  Any sub-surface drainage and
tiling, if required, will be provided by the Owner as part of the site
preparation responsibilities.

·         Plant operation and maintenance personnel and
equipment from date of mechanical completion.

·         Supply of all utility services and streams to
the ethanol plant including power, water, steam, condensate return, and other
necessary services and costs for plant startup, commissioning, operation, and
performance tests.

·         Copies of all permit applications and
approvals that provide technical or commercial requirements to be considered in
the design or construction of the Plant.

·         Appropriate space and equipment to conduct
training.

·         Plant security, including the construction
site, throughout the performance of the Work.

·         Approval of the following documents:

·         Plant layout

·         Process Flow Diagram

·         Response to Requests for Approval of
documents or vendors/subcontractors within five (5) days of date request
is received.

·         Permanent Plant security systems including
fences and access control.

·         Office furniture and office equipment for
Administration Building, Control Room and Maintenance Building.

·         Plant operating equipment including, but not
limited to, front-end loaders, rail cars, forklifts, trucks, and shop equipment
(welders, power tools, etc).

·         Ali operational requirements, such as
feedstock, chemicals, spare parts, power, gas, needed to produce ethanol.

·         Plant utilities, such as water, sewer, gas,
electricity, at one location on the Plant boundary.

 

A-12

 

·         Corn receiving and storage equipment and
facilities including control system connections to the Plant Control Room,
electricity, and other utilities.

·         CO2 purification system including all utility
support.

·         Rail spur including track and switches.

·         Owner is responsible for hidden or unforeseen
site conditions that are required to complete the obligations of the Contract.

 

A-13

 

Exhibit B Commercial Terms

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

Exhibit
B Commercial Terms

 

EXHIBIT B

COMMERCIAL TERMS

 

B.1          PRICE

 

B.2          PAYMENT TERMS

 

B.3          PAYMENT MILESTONES SCHEDULE OF VALUES

 

B.4          FORMS (To Be Attached)

·   Application and Certificate for
Payment

·   Release of Lien (Partial and
Full)

 

B-1

 

Exhibit B Commercial Terms

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

B.1
Price; B.2 Payment Terms

 

B.1          PRICE

 

Contract
Sum $86,786,045.00

 

B.2.         PAYMENT TERMS

 

In
addition to the terms set forth in the Contract, the Contract Sum shall be paid
as follows:

 

	
  Construction
  and Equipment Procurement

  	
  Construction
  payments to be paid based on schedule of values and milestones to be mutually
  agreed upon and included in Exhibit B.3

  
	
   

  	
   

  
	
  General
  Conditions

  	
  Upon
  Owner providing Harris Mechanical with Notice to Proceed the following
  amounts shall be paid.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Delta T

  	
   

  	
  Tank Supplier

  	
   

  	
  Harris

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  1-Nov-2006

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
  15-Nov-2006

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
  1-Dec-2006

  	
   

  	
  *

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
  15-Dec-2006

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
  31-Dec-2006

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  
													

 

*      PORTIONS OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

B-2

 

Exhibit B Commercial Terms

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

B.3
Payment Schedule

 

B.3          PAYMENT SCHEDULE

 

EXCEPT AS SPECIFICALLY STATED IN SECTION B.2, ALL BILLINGS
WILL BE BASED ON THE SCHEDULE OF VALUES AND MILESTONES TO BE MUTUALLY AGREED
UPON AND ATTACHED AS SCHEDULE B.3

 

B-3

 

Exhibit C Performance Test Protocols

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

Exhibit C-1 Performance Test Data Sheet

 

EXHIBIT C

PERFORMANCE TEST PROTOCOLS

 

1.             Performance Test Protocols

 

1.1           Pre-Test
Preparation

 

1.1.1  Prior
to the PERFORMANCE TESTS, the PLANT must have reached Mechanical
Completion.  In addition, DELTA-T must
have run the PLANT or near design rate consistently for a period of seven (7) days,
as evidenced by plant operational data provided to Delta-T by OWNER, before the
PERFORMANCE TEST is initiated.  Before
commencement of PERFORMANCE TEST, DELTA-T shall notify OWNER in writing at
least seven (7) Days prior to planned commencement, of the PERFORMANCE
TEST that all pre-test conditions have been satisfied, including the following:

 

·                  Adequate and competent supervision, personnel
and resources for effective operation, maintenance and performance analysis of
the PLANT, including laboratory analysis, temporary meters or other measuring
devices and instrumentation specified as to accuracy and reproducibility by
DELTA-T in advance of the PERFORMANCE TEST required to conduct and evaluate the
PERFORMANCE TEST shall have been furnished. 
The PLANT shall be operated and maintained in accordance with the technical
advice and instruction from the DELTA-T Operations Manual and on-site
directives from DELTA-T, and otherwise within generally accepted practices
within the fuel ethanol industry.

·                  The PLANT, its machinery, equipment,
instrumentation and piping, shall all be clean lubricated where appropriate,
leak tight, and ready to operate according to design specifications.  All systems and appropriate checkouts and
calibrations shall have been completed and documented by responsible PLANT
technicians, contractors, and/or vendors. 
Analytical and any special test equipment and reagents will have been
calibrated and made accurate.

·                  Cleaning (CIP) of the process equipment has
been accomplished seven (7) days or less before the PERFORMANCE TEST per
DELTA-T direction and standard procedures set out in the DELTA-T Operations
Manual.  All ingredients and supplies
required to complete the test are on hand. 
This includes, but is not limited to, feedstock of corn (meeting
specifications listed in Exhibit D Section 1.2) supplied in stable
quantities sufficient to support PLANT operation at a rate up to 120% of the
guaranteed fuel ethanol production rate, as well as sufficient steam and other
utilities, enzymes, chemicals, and other ingredients of the type specified by
DELTA-T in the Operations Manual and supplies to support PLANT operation at a
rate up to 120% of the guaranteed fuel ethanol production rate.

·                  Adequate operation, analytical, and
maintenance support shall be scheduled for the test period.

 

C-1

 

1.2           Coordination

 

1.2.1  DELTA-T
shall coordinate the PERFORMANCE TEST with OWNER and Harris Mechanical during
the 24 hour/day around the clock PERFORMANCE TEST period.  This coordination of the PERFORMANCE TEST
activities will be handled by a DELTA-T representative designated to serve as
DELTA-T’s Test Coordinator (“Test Coordinator”).  The Test Coordinator will work with an
individual designated by the OWNER to be its representative for the PERFORMANCE
TEST to set the test schedule and to coordinate operations during the test
period.  DELTA-T will also assign DELTA-T
Shift Coordinators to support the operation during the test period.

 

1.2.2
OWNER shall supply, or cause to be supplied, all feedstock, utilities and other
supplies and services required to conduct the PERFORMANCE TEST, as specified
under Section 1.1.1 above, throughout the entire PLANT during all
PERFORMANCE TESTS.

 

1.2.3
DELTA-T shall direct its and Owner’s personnel in the operation of the PLANT in
a manner consistent with the operating parameters provided in the Operations
Manual.

 

1.3           Conducting
the Test

 

1.3.1  The
DELTA-T Test Coordinator shall be provided with operating data by the OWNER
sufficient to verify that the PLANT is operating at a condition suitable for
initiation of the PERFORMANCE TEST.  At
the scheduled start time of the PERFORMANCE TEST, the DELTA-T Test Coordinator
will signal that the test has formally begun and will direct operators to take
the initial test measurements.  The test
will be conducted over a three-day (72 hour) period of operation.  During the Test period, the PLANT shall be
operated by the OWNER in compliance with the instructions of DELTA-T and the
Delta-T Operations Manual and instructions provided by DELTA-T, including,
without limitation, adjustments in temperatures, pressures, feedstock rates,
steam flow, and other process control inputs, provided these adjustments do not
result in unsafe operating conditions. 
PLANT operators will monitor and record operating data according to
standard procedures and in addition will record the supplemental data specified
in this protocol on data sheets in the form to be provided by DELTA-T.  Records will be developed from permanent
plant equipment that is calibrated immediately prior to test.  All test measurements will be reviewed by the
Test Coordinator (or a designated representative).  If the Test Coordinator believes that there
might be a problem with the measurement method or reading, the.  reading will be retaken and verified by the
Test Coordinator and OWNER’S Representative. 
Immediately upon the conclusion of the PERFORMANCE TEST, the Test
Coordinator will meet with representatives of OWNER to review the test
results.  DELTA-T and OWNER shall each be
given a copy of the test results.  If the
Performance Guarantees have been met, then OWNER shall promptly issue a notice
to DELTA-T to such’ effect.  If the
PERFORMANCE TESTS have not been met, then OWNER shall issue a written notice to
DELTA-T within one (1) day of completion of the PERFORMANCE TESTS
indicating in what manner such Performance Guarantees have not been
successfully completed.

 

C-2

 

1.3.2  If
the 72-hour test period is interrupted for any reason within DELTA-T’s control
or OWNER’S control, a new three-day test period-Will resume after the cause for
the interruption has been corrected and the PLANT has achieved an acceptable
operating capacity at substantially the same rate immediately prior to the
interruption.  DELTA-T and OWNER shall
stop the PERFORMANCE TEST if it becomes obvious that it cannot be carried to a
satisfactory conclusion in the current attempt. 
If the PERFORMANCE TEST has been interrupted for reasons not
attributable to DELTA-T or other persons or factors within its control, and
continues to be interrupted such that DELTA-T has spent a cumulative period of
ten (10) calendar days on site since the commencement of the test, then
OWNER shall compensate DELTA-T for the personnel that DELTA-T has on site.  This compensation period shall begin on the
cumulative 11th day on site, and will continue until the completion of the
PERFORMANCE TEST.  This compensation will
cease should the inability to complete the PERFORMANCE TEST be the fault of
DELTA-T or other persons or factors within its control.  Compensation rates are provided in Exhibit B.1.

 

2.             Analytical/Calculation
Protocols

 

2.1           Undenatured
Fuel Ethanol Quality

 

	
  METHOD:

  	
  Analyze
  samples according to DELTA-T provided procedures.  The last test result before emptying day
  tank into main storage tank shall determine the quality for the batch.  The average of all batch test results over
  the test period shall be used in determining the quality for the PEFORMANCE
  TEST.

  
	
   

  	
   

  
	
   

  	
  If
  the fuel ethanol in the day tank does not meet the quality specifications of
  Exhibit D, section 1.2.1, DELTA-T has the discretion to send it on to
  the main storage tank (on the theory that the blended product in the main
  storage tank will meet the quality specifications) the average of all batch
  test results shall be used to establish the blended quality.  If the blended fuel ethanol does not meet
  quality specifications as a result of below quality product measured in one
  or more day tank batches the volume of the batch(s) shall not be
  included in ethanol production “rate” quantities used in calculating
  liquidated damages.

  
	
   

  	
   

  
	
  SAMPLE
  POINT:

  	
  Undenatured
  Fuel Ethanol Day Tank Storage

  
	
   

  	
   

  
	
  SAMPLE
  SIZE:

  	
  250
  mls.

  
	
   

  	
   

  
	
  SAMPLE
  CONTAINER:

  	
  Nalgene

  
	
   

  	
   

  
	
  FREQUENCY:

  	
  Once
  per two (2) hours

  
	
   

  	
   

  
	
  SAMPLES
  RETAINED:

  	
  All

  

 

C-3

 

	
  PREPARATION:

  	
  Standardize
  test reagents.  Clean glassware and
  sample containers.  Assure that
  reagents are of sufficient quality.

  
	
   

  	
   

  
	
  DOCUMENTATION:

  	
  Log
  results on a PERFORMANCE TEST Data Sheet.

  

 

2.2                             Undenatured Fuel Ethanol Production Rate

 

	
  METHOD:

  	
  The
  day tank will be manually measured every eight (8) hours to serve as the
  principal method of measurement of production volume, along with a final
  measurement of the day tank before the contents are sent to the main storage
  tank(s).  In addition, flow totalizer
  readings will be taken from product meter or other measuring device mutually
  agreed upon between OWNER and DELTA-T at regular intervals as backup
  verification of the manual measurements. 
  The total volume from the test meters will be adjusted to a volume
  equivalent 99.50wt% ethanol at 60°F. 
  Divide by the total number of test hours to determine the average rate
  over the test period.  Multiply result
  by 1.05 to calculate Denatured Fuel Ethanol Rate.

  
	
   

  	
   

  
	
  SAMPLE
  POINT:

  	
  Product
  volumetric totalizing meter (with computer monitoring) after Product
  Receiver.

  
	
   

  	
   

  
	
  SAMPLE
  SIZE:

  	
  N/A

  
	
   

  	
   

  
	
  SAMPLE
  CONTAINER:

  	
  N/A

  
	
   

  	
   

  
	
  FREQUENCY:

  	
  Once
  per two (2) hours and at the end of each Day Tank batch.

  
	
   

  	
   

  
	
  SAMPLES
  RETAINED:

  	
  N/A

  
	
   

  	
   

  
	
  PREPARATION:

  	
  Certify
  that the flow meter is properly calibrated.

  
	
   

  	
   

  
	
  DOCUMENTATION:

  	
  Log
  results on a PERFORMANCE TEST Data Sheet and sign off by the OWNER and
  DELTA-T.

  

 

2.3                             Undenatured Fuel Ethanol Yield

 

	
  BASIS:

  	
  56
  lb. per bushel corn containing 14.5% moisture and 72% dry starch and of 1%
  foreign material (by weight).

  
	
   

  	
   

  
	
  METHOD:

  	
  Record
  corn weigh belt totalizer readings to measure the accumulated meal
  weight.  Measure the sample moisture  and starch content.  Convert total undenatured ethanol volume
  from the Rate Test to weight at 60°F. 
  Divide the calculated mass quantity of undenatured ethanol by the

  

 

C-4

 

	
   

  	
  calculated
  corn mass quantity of total starch fed over the time period to determine
  yield.  In addition, this weigh belt
  total should be cross checked by totaling all corn receipts, subtracting all
  foreign material content, and taking into account the current corn bin
  volumes.

  
	
   

  	
   

  
	
  TEST
  POINT:

  	
  Corn
  weigh belt

  
	
   

  	
   

  
	
  FREQUENCY:

  	
  Once
  per two hours

  
	
   

  	
   

  
	
  PREPARATION:

  	
  Certify
  that the weigh belt is properly calibrated

  
	
   

  	
   

  
	
  DOCUMENTATION:

  	
  Log
  results on “PERFORMANCE TEST Data Sheet”

  

 

2.4                             Process Electrical Consumption

 

	
  METHOD:

  	
  Record
  electric meter readings at beginning of test and at the required frequency
  thereafter. Divide total Kwh for test period by total volume of undenatured
  ethanol produced to determine average Kwh per gallon. Average results of all
  calculations for test periods to determine the process electrical power
  consumption value for PERFORMANCE TEST.

  
	
   

  	
   

  
	
  TEST
  POINT:

  	
  Electric
  power meter types and locations as established by Delta-T, and as necessary
  to isolate process consumption.

  
	
   

  	
   

  
	
  FREQUENCY:

  	
  Once
  per 24 hours

  
	
   

  	
   

  
	
  PREPARATION:

  	
  Isolate
  process electrical consumption activities during test period.

  
	
   

  	
   

  
	
  DOCUMENTATION:

  	
  Log
  results on a PERFORMANCE TEST Data Sheet

  

 

2.5                             Natural Gas Consumption

 

	
  METHOD

  	
  Record
  plant natural gas meter totalizer readings in MCF over test period. Obtain higher
  heating value specification for gas over the test period and calculate the
  BTU over the test period. Divide this value by the amount of undenatured
  ethanol produced during the test period to determine BTU per gallon of
  undenatured ethanol produced during the test period. Quantities of natural
  gas will be adjusted to 1,000 btu/ft3 (70° F, 1 atm) and 10% DDGS moisture
  respectively before the calculation is made. Average results of all
  calculations for test period to determine natural gas consumption value for
  Acceptance Test.

  

 

C-5

 

	
  TEST
  POINT:

  	
  Plant
  gas meter

  
	
   

  	
   

  
	
  FREQUENCY:

  	
  Once
  per two (2) hours

  
	
   

  	
   

  
	
  PREPARATION:

  	
  Certify
  gas meter is properly calibrated and suspend all non-process use of natural
  gas.

  
	
   

  	
   

  
	
  DOCUMENTATION:

  	
  Log
  results on an “Acceptance Test Data Sheet.”

  

 

2.6                             CALCULATION PROTOCOL

 

All
calculations will be based on actual measured data taken during the test
period.  For any given sample period, the
average value during that period will be determined by the average of the
measured data points for that sample period. 
The liquidated damages, if any, will be determined using the data
collected for each individual sample period and averaged over the PERFORMANCE
TEST period.  All samples shall be taken
in duplicate and OWNER and DELTA-T shall each retain one sample.  OWNER shall analyze one of the duplicates;
the second shall be reserved for use in case of a disagreement.  OWNER shall cause such analyses to be
conducted at the Plant during the PERFORMANCE TEST period and in the presence
of the Test Coordinator or such coordinators designee, and Owner and Lender’s
Independent Engineer if they are present. 
In case of disagreement, a referee laboratory shall be selected by
agreement between OWNER and DELTA-T, and the cost of such referee laboratory
shall be paid by the party or parties not substantiated by the referee.  The findings of this referee laboratory shall
be accepted as final.

 

C-6

 

Exhibit D Performance Guarantees

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

 

EXHIBIT D

PERFORMANCE GUARANTEES

 

1.  Performance
Guarantee Figures

 

Plant
is guaranteed at the name-plate 55 MGPY undenatured ethanol plant to be
constructed for Owner under the Contract. 
Performance guarantees are subject to the PERFORMANCE TEST PROTOCOL set
forth in Exhibit C being adhered to, raw material, chemicals, and
utilities being provided in conformance with quality and quantity requirements
established by Delta-T; and equipment being operated and maintained in
accordance with manufacturers’ recommendations and the DELTA-T Operations
Manual.

 

1.1 Definitions

The
term “guarantee” as used herein shall have the same meaning as “warranty.”

 

1.2 Process Guarantees

All
quantities set forth below are based on average quantities over the period of
the applicable PERFORMANCE TEST.

 

1.2.1 Anhydrous Undenatured Ethanol Production
Guarantee

 

	
  Anhydrous
  Fuel Ethanol Production Rate:

  	
  Minimum
  6548 US un-denatured gallons per hour (average) based on a minimum feedstock
  specification of 56 lb/bushel test weight corn containing a maximum of 14.5%
  moisture (by weight), a minimum of 72% dry fermentable starch (by weight) and
  a maximum of 1% foreign material (by weight).

  Un-denatured ethanol will meet specifications for fuel ethanol per ASTM
  D4806-04.

  
	
   

  	
   

  
	
  Anhydrous
  Fuel Ethanol Yield:

  	
  Minimum
  0.515 pounds un-denatured fuel ethanol per pound of fermentable starch
  (average) in corn feed based on a minimum feedstock specification of 56
  lb/bushel test weight No. 2 Yellow Dent corn containing a maximum of
  14.5% moisture (wgt), minimum 72% thy, trash-free starch, maximum 1% (wgt)
  foreign material.

  

 

1.2.2 Utility Consumption Guarantees

 

	
  Natural
  Gas Consumption:

  	
  Maximum
  36,000 BTU per gallon (average) of un-denatured fuel ethanol produced for
  gas-fired boiler and gas fired rotary drum dryer based on natural gas
  provided at a minimum gas quality of 
  939 BTU per standard cubic foot (1 atm, 70° F), 10% maximum (weight)
  DDGS moisture content, and minimum boiler thermal efficiency of 84%.  This guarantee is only in effect if the
  plant design DOES include a DDGS dryer

  

 

D-1

 

	
  Process
  Electrical Consumption:

  	
  Maximum
  1.000 kWh per gallon (average) of un-denatured fuel ethanol produced when
  operating at the nameplate capacity based on electric service with 0.85 power
  factor.  This number includes process
  equipment components in mash preparation, liquefaction, yeast mix and
  propagation, fermentation, distillation, dehydration and acid reduction,
  evaporation, separation and stillage, process condensate, chemical storage,
  CO2 scrubbing, compressed air, WDGS transfer and handling, ethanol storage
  and load-out, cooling tower including cooling water circulation, condensate
  return, process sumps, and heat tracing. The indicated consumption does not
  include grain receiving and storage, milling, boiler, chiller, RTO, water
  supply or treatment, and CO2 transmission or recovery.

  
	
   

  	
   

  
	
  Process
  Steam Consumption:

  	
  Maximum
  24,000 actual steam BTUs per gallon (average) (without dryer) of un-denatured
  fuel ethanol produced (as calculated in Section 2.5 of
  Exhibit B).  This number includes
  the steam to all process components. 
  This guarantee is only in effect if the plant design does NOT include
  a DDGS dryer

  

 

D-2

 

2.  Conditions to
Process Guarantees

 

	
   

  	
  2.1

  	
  To
  the extent Delta T’s warranty or guarantee may be directly and causally
  affected, DELTA-T shall be relieved of its warranty or guarantee obligations
  arising from:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1.1

  	
  The
  feedstock to be provided by Owner, does not comply with the conditions
  described herein.

  
	
   

  	
   

  	
  2.1.2

  	
  Contamination
  of feedstock or other materials to which the Equipment is exposed.

  
	
   

  	
   

  	
  2.1.3

  	
  Abuse,
  or poor maintenance, of the Equipment.

  
	
   

  	
   

  	
  2.1.4

  	
  OWNER’S
  failure to supply utilities required to meet the guaranteed production rates
  as set forth at Section 1.2.2 of Exhibit C.

  
	
   

  	
   

  	
  2.1.5

  	
  OWNER’S
  failure to fulfill any of its obligations, which individually or in the
  aggregate are material, under the PERFORMANCE TEST protocols set forth at
  Exhibit C above.

  
	
   

  	
   

  	
  2.1.6

  	
  OWNER’S
  failure, in any material way, to operate the PLANT in accordance with the
  operating manuals and instructions provided by DELTA-T.

  
	
   

  	
   

  	
  2.1.7

  	
  If
  OWNER designs or procures equipment and systems that fail to meet DELTA-T’S
  BASIC PROCESS DESIGN specifications for energy efficiency.

  
	
   

  	
   

  	
  2.1.8

  	
  Owner
  fails to provide electrical service with a 0.85 power factor.

  

 

D-3

 

Exhibit E Mechanical Completion, Commissioning, Startup

EPC Fixed Price Contract

Otter Tail Ag Enterprises, LLC

 

 

EXHIBIT E

MECHANICAL COMPLETION, COMMISSIONING, STARTUP

 

Definitions:

 

Mechanical Completion:  The completion of construction
activities essential to the safe and proper operation of the plant, as more
fully listed below.

 

Commissioning:  The checking and preparation of the plant for
operation, functional control loop checking, interlock testing, system purging
and utility system startups, as more fully listed below.  In general, the tasks required taking the
plant from mechanical completion and making it ready for start-up.

 

Ready for Startup:  When the activities listed for
Mechanical Completion and Commissioning have occurred and the Plant is ready to
mill corn at the hammer mills.  At that
time, Harris Mechanical will notify OWNER that the Plant is Ready for Startup.

 

Startup:  Startup begins with the initial feed of raw
material to the plant, filling of Equipment with operating material, startup
and operation of individual process stages, adjustment and optimization of
operating conditions, optimization of control loops, verification of startup,
shutdown and partial load operations. 
Utility system startups (unless integrated with the processing portions
of the plant) are a part of the Commissioning Phase.

 

These
events may not occur at the same point in time for all parts of the plant.  Utility systems needed for operation of the
rest of the plant may reach Mechanical Completion, Commissioning and Startup
before the main process parts of the plant. 
Some processing areas of the plant or sub-systems of operating areas may
reach Mechanical Completion and be Commissioned and Started up before other
parts of the plant, for example, grain receiving and storage may be completed
and into operation, i.e., filled with grain, prior to other parts of the
facility.

 

The following lists indicate the activities or events, which
take place in each of the phases described.

 

Mechanical Completion

 

·                  Inspection of all equipment to check that
erected facilities conform to construction drawings and Contract
specifications.

·                  Non-operating field leak tests or field
pressure tests on piping and field-fabricated equipment as required by the
Contract specifications, disposing of test media on site at a location
specified by Owner, and removal of test blinds and restoring systems to “ready
for operation” condition.

·                  Removal of all temporary supports, bracing or
other foreign objects.

·                  Inspection of all columns to ensure proper
installation of all internals.

·                  Field inspection-of-all shop-fabricated
equipment.

·                  Line flushing as part of hydrotesting.

 

E-1

 

·                  Check to ensure that all baseplates and
soleplates are level and properly grouted.

·                  Check pipe hangers, supports, guides and pipe
specialties, and remove all shipping and erection bracing.

·                  Check alignment of all piping fit-up with
equipment to avoid excessive nozzle loading and pipe stresses.

·                  Insulation for process purposes.

·                  Install Lubricants.

·                  Check rotating machinery for correct
direction of rotation and for freedom of moving parts.

·                  Check cold alignments on rotating equipment.

·                  Schedule the services of factory
representatives for equipment or other items as required.

·                  Electrical and Instrumentation installed.

·                  Irrespective of the foregoing, Mechanical
Completion shall be deem achieved once feedstock is introduced into the process
and ethanol has been produced

 

Commissioning

 

·                  Test burners.

·                  Dry out castables, refractory and brickwork
according to the manufacturer’s instructions (if not yet completed).

·                  Regenerate media as required.

·                  Test refrigeration systems and
low-temperature units in cold condition.

·                  Check thermal expansions.

·                  Check safety valves; re-adjust if required.

·                  Check supports, suspensions and flexibility
for thermal expansion.

·                  Verify start-up strainers removed, or in
place as required.

·                  Check flange connections for tightness.

·                  Clean y-strainers and condensate drains.

·                  Start-up measuring and control loops, check
interaction of indicators and control loops.

·                  Start-up analyzers.

·                  Report and adjust limit values for alarm and
control systems.

·                  Coordinate punch list work.

·                  Check calibration.

·                  Check fuse size.

 

Startup

 

·                  Observe all safety procedures including
personnel protective gear, work permits and entry permits.

·                  Start-up in accordance with operating manuals
and manufacturer’s instructions

·                  Verify sealing fluid flow.

·                  Observe operation to be sure lubrication is maintained.

·                  Observe operation to be sure alignment is
maintained.

·                  Make operating noise measurements.

·                  Verify operating capacities.

·                  Check supports, stops, spring hangers and
expansion joints for hot operation.

·                  Check flanges for tightness and make hot
pull-ups, as required.

 

E-2

 

·                  Blow down y-strainers and condensate drains
regularly.

·                  Verify amperage on critical units.

·                  Optimize control loop parameters.

·                  Adjust and calibrate on-line analyzers such as
conductivity and pH.

·                  Owner, Delta T and Harris Mechanical have run
the Plant continuously for seven (7) days.

 

E-3

 

EXHIBIT F

PROJECT SCHEDULE

 

1.  PROJECT SCHEDULE

 

The
Project Schedule is based on a Notice To Proceed received not later than ten (10) days
after November 1, 2006.  Mechanical
Completion is scheduled for February 29, 2008, with Substantial Completion
to be the sooner to occur of April 1, 2008 or thirty (30) days after
Mechanical Completion.

 

The
attached Exhibit F bar chart labeled “Otter Tail Ag Enterprises, LLC
Summary Project Schedule dated October 24, 2006” provides a Summary
Project Schedule which is incorporated into and made part of this Exhibit by
reference.

 

	
  

  	
  ID Task Name Duration Start Finish
  Predecessors Notes Resource Names

  1 Delta T - Issued for Construction
  & Previous Model Drawings 0 days Mon 1/1/07 Mon 1/1/07

  2

  3 DD&E Building 303 days Wed
  11/1/06 Fri 12/28/07

  4 Excavation & Civil Work 1 wk Mon
  4/2/07 Fri 4/6/07 Alt. - Fall Cnstr KCC

  5 Underslab Utilities 2 wks Mon 4/9/07
  Fri 4/20/07 4 Alt. - Fall Cnstr KCC / HMCC

  6 Foundation 3 wks Mon 4/23/07 Fri
  5/11/07 5 Alt. - Fall Cnstr KCC

  7 Floors 3 wks Mon 5/14/07 Fri 6/1/07
  6

  8 Structural Steel 183 days Wed 11/1/06
  Fri 7/13/07

  9 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 FT

  10 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 9 FT

  11 Fabrication and Delivery 20 wks Wed
  1/3/07 Tue 5/22/07 10 FT

  12 Installation of Structural Steel 4
  wks Mon 6/4/07 Fri 6/29/07 11,6,7 FT

  13 Installation of Pipe Rack 3 wks Mon
  6/25/07 Fri 7/13/07 12FS-1 wk FT / HMCC

  14

  15 Building Envelope 20 days Mon
  7/16/07 Fri 8/10/07 13 FT

  16 Equipment 220 days Wed 11/1/06 Tue
  9/4/07

  17 HX's (E-4101, 4504, 7201) 200 days
  Wed 11/1/06 Tue 8/7/07

  18 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  19 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 18 Delta T

  20 Fabrication and Delivery 28 wks Wed
  1/3/07 Tue 7/17/07 19 Delta T

  21 Equipment Installation 3 wks Wed 7/18/07
  Tue 8/7/07 20 HMCC

  22 Evaporators 220 days Wed 11/1/06
  Tue 9/4/07

  23 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  24 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 23 Delta T

  25 Fabrication and Delivery 32 wks Wed
  1/3/07 Tue 8/14/07 24 Delta T

  26 Equipment Installation 3 wks Wed
  8/15/07 Tue 9/4/07 25 HMCC

  27 Columns (C-4101, 4201,2) 220 days
  Wed 11/1/06 Tue 9/4/07

  28 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  29 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 28 Delta T

  30 Fabrication and Delivery 32 wks Wed
  1/3/07 Tue 8/14/07 29 Delta T

  31 Equipment Installation 3 wks Wed
  8/15/07 Tue 9/4/07 30 HMCC

  32 Pumps (PC-4101A,B, 4102, 4201,2,
  4303, 4501,2,3,5,6,7, 7103, 7201) 208 days Wed 11/1/06 Fri 8/17/07

  33 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  34 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 33 HMCC

  35 Fabrication and Delivery 20 wks Mon
  3/12/07 Fri 7/27/07 34,15FF-10 days HMCC

  36 Equipment Installation 3 wks Mon
  7/30/07 Fri 8/17/07 35 HMCC

  37 Process Piping 263 days Wed 11/1/06
  Fri 11/2/07

  38 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  39 Engineering and Modeling 60 days
  Mon 1/1/07 Fri 3/23/07 1 HMCC

  40 Fabrication and Delivery 16 wks Mon
  3/26/07 Fri 7/13/07 39,15FF-20 days HMCC

  41 Installation - Large Bore (piping,
  insulation & controls) 40 days Mon 7/16/07 Fri 9/7/07 40,21FF,26FF,31FF
  HMCC

  42 Installation - Small Bore (piping,
  insulation & controls) 40 days Mon 9/10/07 Fri 11/2/07 41,26,31,21 HMCC

  43 Process Electrical 303 days Wed
  11/1/06 Fri 12/28/07

  44 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  45 Engineering & Procurement 4
  mons Mon 1/1/07 Fri 4/20/07 1 IE

  46 Fabrication and Delivery 16 wks Mon
  4/23/07 Fri 8/10/07 15FF,45 IE

  47 Installation 80 days Mon 9/10/07
  Fri 12/28/07 46,41 IE

  48 HVAC 263 days Wed 11/1/06 Fri
  11/2/07

  49 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  50 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 49 HMCC

  51 Fabrication and Delivery 20 wks Mon
  3/26/07 Fri 8/10/07 15FF HMCC

  52 Equipment Installation 60 days Mon
  8/13/07 Fri 11/2/07 51 HMCC

  53 Lighting & Electrical 243 days
  Wed 11/1/06 Fri 10/5/07

  54 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  1/1

  KCC

  KCC / HMCC

  KCC

  11/1

  FT

  FT

  FT

  FT / HMCC

  FT

  11/1

  Delta T

  Delta T

  HMCC

  11/1

  Delta T

  Delta T

  HMCC

  11/1

  Delta T

  Delta T

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  HMCC

  11/1

  IE

  IE

  IE

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  Oct Nov Dec Jan Feb Mar Apr May Jun
  Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

  Qtr 4, 2006 Qtr 1, 2007 Qtr 2, 2007
  Qtr 3, 2007 Qtr 4, 2007 Qtr 1, 2008 Qtr 2, 2008

  Task

  Split

  Progress

  Milestone

  Summary

  Project Summary

  External Tasks

  External Milestone

  Deadline

  Page 1

  Project: Otter Tail Ag Schedule

  Date: Fri 10/20/06

  

	
  

  	
  ID Task Name Duration Start Finish
  Predecessors Notes Resource Names

  55 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 54 IE

  56 Fabrication and Delivery 20 wks Mon
  3/26/07 Fri 8/10/07 15FF IE

  57 Equipment Installation 40 days Mon
  8/13/07 Fri 10/5/07 56 IE

  58

  59 Main Processing Building 285 days
  Wed 11/1/06 Tue 12/4/07

  60 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  61 Underslab Utilities 2 wks Mon
  4/9/07 Fri 4/20/07 60 Alt. - Fall Cnstr

  62 Foudations 3 wks Mon 4/2/07 Fri
  4/20/07 Alt. - Fall Cnstr KCC

  63 Floors and Tank Pads 3 wks Mon
  4/23/07 Fri 5/11/07 62

  64 Structural Steel 175 days Wed
  11/1/06 Tue 7/3/07

  65 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  66 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 65 FT

  67 Fabrication and Delivery 20 wks Wed
  1/3/07 Tue 5/22/07 66 FT

  68 Installation of Structural Steel 4
  wks Wed 5/23/07 Tue 6/19/07 67,62,63 FT

  69 Installation of Pipe Rack 3 wks Wed
  6/13/07 Tue 7/3/07 68FS-1 wk FT

  70 Building Envelope 2 mons Wed 7/4/07
  Tue 8/28/07 69

  71 Equipment 225 days Wed 11/1/06 Tue
  9/11/07

  72 Chiller (CHR-7102) 195 days Wed
  11/1/06 Tue 7/31/07

  73 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  74 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 73 HMCC

  75 Fabrication and Delivery 22 wks Wed
  1/3/07 Tue 6/5/07 74 HMCC

  76 Equipment Installation 30 days Wed
  6/20/07 Tue 7/31/07 75,68 HMCC

  77 Centrifuges - 1,2,3,4 (CF-5101,
  5102, 5103, 5104) 225 days Wed 11/1/06 Tue 9/11/07

  78 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  79 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 78 Delta T

  80 Fabrication and Delivery 30 wks Wed
  1/3/07 Tue 7/31/07 79 Delta T

  81 Equipment Installation 30 days Wed
  8/1/07 Tue 9/11/07 80,68 HMCC

  82 Deaerator (Z-7202) 180 days Wed
  11/1/06 Tue 7/10/07

  83 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  84 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 83 HMCC

  85 Fabrication and Delivery 20 wks Wed
  1/3/07 Tue 5/22/07 84 HMCC

  86 Equipment Installation 15 days Wed
  6/20/07 Tue 7/10/07 85,68 HMCC

  87 Tanks (TK-2201, 3101, 5101, 7301,2,
  7602, 7701,2,4,5,6,7) 195 days Wed 11/1/06 Tue 7/31/07

  88 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  89 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 88 HMCC

  90 Fabrication and Delivery 20 wks Wed
  1/3/07 Tue 5/22/07 89 HMCC

  91 Equipment Installation 30 days Wed
  6/20/07 Tue 7/31/07 90,68 HMCC

  92 Pumps (P-7905, PC-2201, 2301,2,
  3101, 5101, 7102A,B, 7301,2, 7602,3, 7901,6) 195 days Wed 11/1/06 Tue 7/31/07

  93 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  94 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 93 HMCC

  95 Fabrication and Delivery 20 wks Wed
  1/3/07 Tue 5/22/07 94 HMCC

  96 Equipment Installation 30 days Wed
  6/20/07 Tue 7/31/07 95,68 HMCC

  97 Water Treatment (Z-7301A,B) 195
  days Wed 11/1/06 Tue 7/31/07

  98 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  99 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 98 HMCC

  100 Fabrication and Delivery 24 wks
  Wed 1/3/07 Tue 6/19/07 99 HMCC

  101 Equipment Installation 30 days Wed
  6/20/07 Tue 7/31/07 100,68 HMCC

  102 Process Piping 265 days Wed
  11/1/06 Tue 11/6/07

  103 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  104 Engineering and Modeling 60 days
  Mon 1/1/07 Fri 3/23/07 1 HMCC

  105 Fabrication and Delivery 16 wks
  Mon 3/26/07 Fri 7/13/07 95FF,104 HMCC

  106 Installation - Large Bore (piping,
  insulation & controls) 40 days Wed 7/18/07 Tue 9/11/07
  105,76FF,81FF,86FF,91FF HMCC

  107 Installation - Small Bore (piping,
  insulation & controls) 40 days Wed 9/12/07 Tue 11/6/07 106,81,86,91,76

  108 Process Electrical 285 days Wed
  11/1/06 Tue 12/4/07

  IE

  IE

  IE

  KCC

  11/1

  FT

  FT

  FT

  FT

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  Delta T

  Delta T

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  Oct Nov Dec Jan Feb Mar Apr May Jun
  Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

  Qtr 4, 2006 Qtr 1, 2007 Qtr 2, 2007
  Qtr 3, 2007 Qtr 4, 2007 Qtr 1, 2008 Qtr 2, 2008

  Task

  Split

  Progress

  Milestone

  Summary

  Project Summary

  External Tasks

  External Milestone

  Deadline

  Page 2

  Project: Otter Tail Ag Schedule

  Date: Fri 10/20/06

  

	
  

  	
  ID Task Name Duration Start Finish
  Predecessors Notes Resource Names

  109 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  110 Engineering and Procurement 4 mins
  Mon 1/1/07 Mon 1/1/07 1

  111 Fabrication and Delivery 20 wks
  Wed 4/11/07 Tue 8/28/07 70FF,110 IE

  112 Installation 60 days Wed 9/12/07
  Tue 12/4/07 111,106 IE

  113 Conduit and Wire Installation 4
  mons Wed 8/15/07 Tue 12/4/07 112FF IE

  114 HVAC 255 days Wed 11/1/06 Tue
  10/23/07

  115 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  116 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 115 HMCC

  117 Fabrication and Delivery 20 wks
  Wed 4/11/07 Tue 8/28/07 70FF,116 HMCC

  118 Equipment Installation 40 days Wed
  8/29/07 Tue 10/23/07 117 HMCC

  119 Lighting & Electrical 255 days
  Wed 11/1/06 Tue 10/23/07

  120 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  121 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 120 IE

  122 Fabrication and Delivery 20 wks
  Wed 4/11/07 Tue 8/28/07 70FF,120 IE

  123 Equipment Installation 40 days Wed
  8/29/07 Tue 10/23/07 122 IE

  124

  125 Maintenance Building 60 days Mon
  4/16/07 Fri 7/6/07

  126 Building Construction 3 mons Mon
  4/16/07 Fri 7/6/07 KCC

  127

  128 Fermentation Building 305 days Wed
  11/1/06 Tue 1/1/08

  129 Excavation and Civil Work 1 wk Mon
  4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  130 Foudations 3 wks Mon 4/9/07 Fri
  4/27/07 129 Alt. - Fall Cnstr KCC

  131 Floors and Tanks 3 wks Mon 4/30/07
  Fri 5/18/07 130

  132 Structural Steel 175 days Wed
  11/1/06 Tue 7/3/07

  133 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  134 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 FT

  135 Fabrication and Delivery 20 wks
  Wed 1/3/07 Tue 5/22/07 134 FT

  136 Installation of Structural Steel 4
  wks Wed 5/23/07 Tue 6/19/07 135,131 FT

  137 Installation of Pipe Rack 3 wks
  Wed 6/13/07 Tue 7/3/07 136FS-1 wk FT

  138 Building Envelope 2 mons Wed
  7/4/07 Tue 8/28/07 137 KCC

  139 Equipment 295 days Wed 11/1/06 Tue
  12/18/07

  140 Heat Exchangers 215 days Wed
  11/1/06 Tue 8/28/07

  141 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  142 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 141 Delta T

  143 Fabrication and Delivery 28 wks
  Wed 1/3/07 Tue 7/17/07 142 Delta T

  144 Equipment Installation 30 days Wed
  7/18/07 Tue 8/28/07 143 HMCC

  145 Pumps 225 days Wed 11/1/06 Tue
  9/11/07

  146 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  147 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 146 HMCC

  148 Fabrication and Delivery 20 wks
  Wed 3/28/07 Tue 8/14/07 147,138FF-10 days HMCC

  149 Equipment Installation 20 days Wed
  8/15/07 Tue 9/11/07 148 HMCC

  150 Field Fabricated Tanks 120 days
  Wed 7/4/07 Tue 12/18/07

  151 Material Procurement and Delivery
  8 wks Wed 7/4/07 Tue 8/28/07 138FF HMCC

  152 Tank Erection 16 wks Wed 8/29/07
  Tue 12/18/07 151 HMCC

  153 Process Piping 275 days Wed
  11/1/06 Tue 11/20/07

  154 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  155 Engineering and Modeling 60 days
  Mon 1/1/07 Fri 3/23/07 1 HMCC

  156 Fabrication and Delivery 16 wks
  Wed 5/9/07 Tue 8/28/07 155,144FF HMCC

  157 Installation - Large Bore (piping,
  insulation & controls) 30 days Wed 8/29/07 Tue 10/9/07 156,144FF HMCC

  158 Installation - Small Bore (piping,
  insulation & controls) 30 days Wed 10/10/07 Tue 11/20/07 157,144

  159 Process Electrical 305 days Wed
  11/1/06 Tue 1/1/08

  160 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  161 Engineering and Procurement 4 mons
  Mon 1/1/07 Fri 4/20/07 1

  162 Fabrication and Delivery 16 wks
  Wed 5/9/07 Tue 8/28/07 138FF,161 IE

  11/1

  IE

  IE

  IE

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  IE

  IE

  IE

  KCC

  KCC

  11/1

  FT

  FT

  FT

  FT

  KCC

  11/1

  Delta T

  Delta T

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  IE

  Oct Nov Dec Jan Feb Mar Apr May Jun
  Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

  Qtr 4, 2006 Qtr 1, 2007 Qtr 2, 2007
  Qtr 3, 2007 Qtr 4, 2007 Qtr 1, 2008 Qtr 2, 2008

  Task

  Split

  Progress

  Milestone

  Summary

  Project Summary

  External Tasks

  External Milestone

  Deadline

  Page 3

  Project: Otter Tail Ag Schedule

  Date: Fri 10/20/06

  

	
  

  	
  ID Task Name Duration Start Finish
  Predecessors Notes Resource Names

  163 Installation 60 days Wed 10/10/07
  Tue 1/1/08 162,157 IE

  164 HVAC 245 days Wed 11/1/06 Tue
  10/9/07

  165 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  166 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 165 HMCC

  167 Fabrication and Delivery 20 wks
  Wed 4/11/07 Tue 8/28/07 138FF HMCC

  168 Equipment Installation 30 days Wed
  8/29/07 Tue 10/9/07 167 HMCC

  169 Lighting & Electrical 255 days
  Wed 11/1/06 Tue 10/23/07

  170 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  171 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 170 IE

  172 Fabrication and Delivery 20 wks
  Wed 4/11/07 Tue 8/28/07 138FF IE

  173 Equipment Installation 40 days Wed
  8/29/07 Tue 10/23/07 172 IE

  174

  175 Cooling Tower Pump Building 345
  days Wed 11/1/06 Tue 2/26/08

  176 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  177 Foundation 2 wks Mon 4/9/07 Fri
  4/20/07 176 Alt. - Fall Cnstr KCC

  178 Floors 2 wks Mon 4/23/07 Fri
  5/4/07 177

  179 Structural Steel 150 days Wed
  11/1/06 Tue 5/29/07

  180 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  181 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 FT

  182 Fabrication and Delivery 20 wks
  Wed 1/3/07 Tue 5/22/07 181 FT

  183 Installation of Structural Steel 1
  wk Wed 5/23/07 Tue 5/29/07 182,177 FT

  184 Building Envelope 10 days Wed
  5/30/07 Tue 6/12/07 183 KCC

  185 Equipment 218 days Wed 11/1/06 Fri
  8/31/07

  186 Cooling Towers 218 days Wed
  11/1/06 Fri 8/31/07

  187 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  188 Engineering & Procurement 45
  days Mon 1/1/07 Fri 3/2/07 187,1 HMCC

  189 Fabrication and Delivery 20 wks
  Mon 3/5/07 Fri 7/20/07 188 HMCC

  190 Equipment Installation 30 days Mon
  7/23/07 Fri 8/31/07 189 HMCC

  191 Pumps 218 days Wed 11/1/06 Fri
  8/31/07

  192 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  193 Engineering & Procurement 45
  days Mon 1/1/07 Fri 3/2/07 192,1 HMCC

  194 Fabrication and Delivery 20 wks
  Mon 3/5/07 Fri 7/20/07 193 HMCC

  195 Equipment Installation 30 days Mon
  7/23/07 Fri 8/31/07 194 HMCC

  196 Process Piping 305 days Wed
  11/1/06 Tue 1/1/08

  197 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  198 Engineering and Modeling 60 days
  Mon 1/1/07 Fri 3/23/07 1 HMCC

  199 Fabrication and Delivery 16 wks
  Mon 3/26/07 Fri 7/13/07 198 HMCC

  200 Installation - Large Bore (piping,
  insulation & controls) 40 days Wed 10/10/07 Tue 12/4/07 199,190FF,157
  HMCC

  201 Installation - Small Bore (piping,
  insulation & controls) 20 days Wed 12/5/07 Tue 1/1/08 200

  202 Process Electrical 345 days Wed
  11/1/06 Tue 2/26/08

  203 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  204 Engineering and Procurement 4 mons
  Mon 1/1/07 Fri 4/20/07 1

  205 Fabrication and Delivery 16 wks
  Mon 4/23/07 Fri 8/10/07 184FF,204 IE

  206 Installation 60 days Wed 12/5/07
  Tue 2/26/08 200,205 IE

  207

  208 Motor Control Center Building 273
  days Wed 11/1/06 Fri 11/16/07

  209 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  210 Underslab Utilities 2 wks Mon
  4/9/07 Fri 4/20/07 209 Alt. - Fall Cnstr

  211 Foundation 2 wks Mon 4/23/07 Fri
  5/4/07 210 Alt. - Fall Cnstr KCC

  212 Floors 2 wks Mon 5/7/07 Fri
  5/18/07 211

  213 Building Erection 20 days Mon
  5/21/07 Fri 6/15/07 212 KCC

  214 Building Envelope 20 days Mon
  6/18/07 Fri 7/13/07 213 KCC

  215 Electric Switch Gear 243 days Wed
  11/1/06 Fri 10/5/07

  216 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  IE

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  IE

  IE

  IE

  KCC

  11/1

  FT

  FT

  FT

  KCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  IE

  IE

  KCC

  KCC

  KCC

  11/1

  Oct Nov Dec Jan Feb Mar Apr May Jun
  Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

  Qtr 4, 2006 Qtr 1, 2007 Qtr 2, 2007
  Qtr 3, 2007 Qtr 4, 2007 Qtr 1, 2008 Qtr 2, 2008

  Task

  Split

  Progress

  Milestone

  Summary

  Project Summary

  External Tasks

  External Milestone

  Deadline

  Page 4

  Project: Otter Tail Ag Schedule

  Date: Fri 10/20/06

  

	
  

  	
  ID Task Name Duration Start Finish
  Predecessors Notes Resource Names

  217 Engineering & Procurement 45
  days Mon 1/1/07 Fri 3/2/07 216,1 IE

  218 Fabrication and Delivery 28 wks
  Mon 3/5/07 Fri 9/14/07 217 IE

  219 Equipment Installation 3 wks Mon
  9/17/07 Fri 10/5/07 218 IE

  220 Wire Switch Gear 6 wks Mon 10/8/07
  Fri 11/16/07 219 IE

  221

  222 Boiler Building 315 days Wed
  11/1/06 Tue 1/15/08

  223 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  224 Foundation 2 wks Tue 5/1/07 Mon
  5/14/07 223 Alt. - Fall Cnstr KCC

  225 Floors 2 wks Tue 5/15/07 Mon
  5/28/07 224

  226 Structural Steel 175 days Wed
  11/1/06 Tue 7/3/07

  227 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  228 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 FT

  229 Fabrication and Delivery 20 wks
  Wed 1/3/07 Tue 5/22/07 228 FT

  230 Installation of Structural Steel 4
  wks Wed 5/23/07 Tue 6/19/07 229,224 FT

  231 Installation of Pipe Rack 3 wks
  Wed 6/13/07 Tue 7/3/07 230FS-1 wk FT

  232 Building Envelope 20 days Wed
  7/4/07 Tue 7/31/07 226 KCC

  233 Boiler 243 days Wed 11/1/06 Fri
  10/5/07

  234 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  235 Engineering & Procurement 45
  days Mon 1/1/07 Fri 3/2/07 234,1 HMCC

  236 Fabrication and Delivery 28 wks
  Mon 3/5/07 Fri 9/14/07 235 HMCC

  237 Equipment Installation 3 wks Mon
  9/17/07 Fri 10/5/07 236,230 HMCC

  238 Steam Piping 285 days Wed 11/1/06
  Tue 12/4/07

  239 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  240 Engineering and Modeling 60 days
  Mon 1/1/07 Fri 3/23/07 1 HMCC

  241 Fabrication and Delivery 16 wks
  Mon 3/26/07 Fri 7/13/07 240 HMCC

  242 Installation - Large Bore (piping,
  insulation & controls) 30 days Wed 9/12/07 Tue 10/23/07 241,106,237FF
  HMCC

  243 Installation - Small Bore (piping,
  insulation & controls) 30 days Wed 10/24/07 Tue 12/4/07 242

  244 Process Electrical 315 days Wed
  11/1/06 Tue 1/15/08

  245 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  246 Engineering and Procurement 4 mons
  Mon 1/1/07 Fri 4/20/07 1

  247 Fabrication and Delivery 16 wks
  Mon 4/23/07 Fri 8/10/07 232FF,246 IE

  248 Installation 60 days Wed 10/24/07
  Tue 1/15/08 242,247 IE

  249

  250 Administration Building 80 days
  Mon 4/2/07 Fri 7/20/07

  251 Building Construction 80 days Mon
  4/2/07 Fri 7/20/07 KCC

  252

  253 DDGS Building 80 days Mon 4/2/07
  Fri 7/20/07

  254 Building Construction 80 days Mon
  4/2/07 Fri 7/20/07 KCC

  255

  256 Fire Suppression Building 204
  days? Wed 11/1/06 Mon 8/13/07

  257 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  258 Foundation & Tank Foundation 2
  wks Mon 4/9/07 Fri 4/20/07 257 Alt. - Fall Cnstr KCC

  259 Floors and Tank Pad 1 day? Mon
  4/23/07 Mon 4/23/07 258

  260 Building Erection 20 days Tue
  4/24/07 Mon 5/21/07 259 KCC

  261 Building Envelope 20 days Tue
  5/22/07 Mon 6/18/07 260 KCC

  262 Tank 165 days Wed 11/1/06 Tue
  6/19/07

  263 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  264 Enginneering and Procurement 45
  days Wed 11/1/06 Tue 1/2/07 263 HMCC

  265 Fabrication and Delivery 20 wks Wed
  1/3/07 Tue 5/22/07 264 HMCC

  266 Tank Erection 4 wks Wed 5/23/07
  Tue 6/19/07 258,265,259 HMCC

  267 Process Water 60 days Tue 5/22/07
  Mon 8/13/07 260 HMCC

  268

  269 WDGS Building 29 days Mon 4/2/07
  Thu 5/10/07

  270 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  IE

  IE

  IE

  IE

  KCC

  11/1

  FT

  FT

  FT

  FT

  KCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  IE

  IE

  KCC

  KCC

  KCC

  KCC

  KCC

  11/1

  HMCC

  HMCC

  HMCC

  HMCC

  Oct Nov Dec Jan Feb Mar Apr May Jun
  Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

  Qtr 4, 2006 Qtr 1, 2007 Qtr 2, 2007
  Qtr 3, 2007 Qtr 4, 2007 Qtr 1, 2008 Qtr 2, 2008

  Task

  Split

  Progress

  Milestone

  Summary

  Project Summary

  External Tasks

  External Milestone

  Deadline

  Page 5

  Project: Otter Tail Ag Schedule

  Date: Fri 10/20/06

  

	
  

  	
  ID Task Name Duration Start Finish
  Predecessors Notes Resource Names

  271 Foundation 1.5 wks Mon 4/9/07 Wed
  4/18/07 270 Alt. - Fall Cnstr KCC

  272 Floor 1.3 wks Wed 4/18/07 Thu
  4/26/07 271

  273 Building Structure and Envelope 2
  wks Fri 4/27/07 Thu 5/10/07 272 KCC

  274

  275 Dryer Building 345 days Wed
  11/1/06 Tue 2/26/08

  276 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  277 Foundation 3 wks Mon 4/9/07 Fri
  4/27/07 276 Alt. - Fall Cnstr KCC

  278 Floors 3 wks Mon 4/30/07 Fri
  5/18/07 277

  279 Structural Steel 175 days Wed
  11/1/06 Tue 7/3/07

  280 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  281 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 280 FT

  282 Fabrication and Delivery 20 wks
  Wed 1/3/07 Tue 5/22/07 281 FT

  283 Installation of Structural Steel 4
  wks Wed 5/23/07 Tue 6/19/07 282,277,278 FT

  284 Installation of Pipe Rack 3 wks
  Wed 6/13/07 Tue 7/3/07 283FS-1 wk FT

  285 Building Envelope 20 days Wed
  6/27/07 Tue 7/24/07 283,284FS-1 wk KCC

  286 Equipment 310 days Wed 11/1/06 Tue
  1/8/08

  287 Dryer & Drum 295 days Wed
  11/1/06 Tue 12/18/07

  288 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  289 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 288 HMCC

  290 Fabrication and Delivery 44 wks
  Wed 1/3/07 Tue 11/6/07 289 HMCC

  291 Equipment Installation 30 days Wed
  11/7/07 Tue 12/18/07 290,278 HMCC

  292 Duct and Cyclone 310 days Wed
  11/1/06 Tue 1/8/08

  293 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  294 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 293 HMCC

  295 Fabrication and Delivery 44 wks
  Wed 1/3/07 Tue 11/6/07 294 HMCC

  296 Equipment Installation 30 days Wed
  11/28/07 Tue 1/8/08 295,291FS-15 days,278 HMCC

  297 Fan 175 days Wed 11/1/06 Tue
  7/3/07

  298 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  299 Engineering & Procurement 45
  days Wed 11/1/06 Tue 1/2/07 298 HMCC

  300 Fabrication and Delivery 20 wks
  Wed 1/3/07 Tue 5/22/07 299 HMCC

  301 Equipment Installation 30 days Wed
  5/23/07 Tue 7/3/07 300,278 HMCC

  302 Process Piping 295 days Wed
  11/1/06 Tue 12/18/07

  303 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  304 Engineering and Modeling 60 days
  Mon 1/1/07 Fri 3/23/07 1 HMCC

  305 Fabrication and Delivery 16 wks
  Mon 3/26/07 Fri 7/13/07 304 HMCC

  306 Installation (piping, insulation
  & controls) 20 days Wed 11/21/07 Tue 12/18/07 305,291FF HMCC

  307 Process Electrical 345 days Wed
  11/1/06 Tue 2/26/08

  308 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 IE

  309 Engineering and Procurement 4 mons
  Mon 1/1/07 Fri 4/20/07 1

  310 Fabrication and Delivery 16 wks
  Mon 4/23/07 Fri 8/10/07 309 IE

  311 Installation 60 days Wed 12/5/07
  Tue 2/26/08 306FS-10 days,310 IE

  312

  313 Regenerator (RTO) 205 days Wed
  11/1/06 Tue 8/14/07

  314 Excavation & Civil Work 1 wk
  Mon 4/2/07 Fri 4/6/07 Alt. - Fall Cnstr

  315 Foundation 3 wks Mon 4/9/07 Fri 4/27/07
  314 Alt. - Fall Cnstr KCC

  316 Floor 3 wks Mon 4/30/07 Fri
  5/18/07 315

  317 Notice to Proceed (NTP) 0 days Wed
  11/1/06 Wed 11/1/06 HMCC

  318 Enginneering and Procurement 45
  days Wed 11/1/06 Tue 1/2/07 317 HMCC

  319 Pressure Vessel Lead Time 32 wks
  Wed 1/3/07 Tue 8/14/07 318 HMCC

  320 RTO Lead Time 26 wks Wed 1/3/07
  Tue 7/3/07 318 HMCC

  321

  322 General Site Work 215 days Mon
  4/30/07 Fri 2/22/08

  323 Railroad 80 days Mon 4/30/07 Fri
  8/17/07 KCC

  324 Pipe Rack 150 days Mon 4/30/07 Fri
  11/23/07

  KCC

  KCC

  KCC

  11/1

  FT

  FT

  FT

  FT

  KCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  HMCC

  HMCC

  HMCC

  11/1

  IE

  IE

  KCC

  11/1

  HMCC

  HMCC

  HMCC

  KCC

  Oct Nov Dec Jan Feb Mar Apr May Jun
  Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

  Qtr 4, 2006 Qtr 1, 2007 Qtr 2, 2007
  Qtr 3, 2007 Qtr 4, 2007 Qtr 1, 2008 Qtr 2, 2008

  Task

  Split

  Progress

  Milestone

  Summary

  Project Summary

  External Tasks

  External Milestone

  Deadline

  Page 6

  Project: Otter Tail Ag Schedule

  Date: Fri 10/20/06

  

	
  

  	
  ID Task Name Duration Start Finish
  Predecessors Notes Resource Names

  325 Pipe Rack Concrete 30 days Mon
  4/30/07 Fri 6/8/07 KCC

  326 Pipe Rack Structural Steel 40 days
  Mon 6/11/07 Fri 8/3/07 325 FT

  327 Pipe Rack Pipe 80 days Mon 8/6/07
  Fri 11/23/07 326 HMCC

  328 Pipe Rack Conduit 70 days Mon
  8/6/07 Fri 11/9/07 326 IE

  329 Site Paving and Surfacing 40 days
  Mon 9/3/07 Fri 10/26/07 KCC

  330 Fences, Signs, etc. 40 days Mon
  12/31/07 Fri 2/22/08 KCC

  331 Site Lighting 40 days Mon 12/31/07
  Fri 2/22/08 IE

  332 Site Telcom, Fire Alarm, Security
  30 days Mon 4/30/07 Fri 6/8/07 IE

  333 Site Utilities 40 days Mon 4/30/07
  Fri 6/22/07

  334 Fire Loop 40 days Mon 4/30/07 Fri
  6/22/07 HMCC

  335 Electrical Distribution 30 days
  Mon 4/30/07 Fri 6/8/07 IE

  336 Sanitary Sewer 30 days Mon 4/30/07
  Fri 6/8/07 HMCC

  337 Storm Drainage 30 days Mon 4/30/07
  Fri 6/8/07 HMCC

  338 Domestic Water 30 days Mon 4/30/07
  Fri 6/8/07 HMCC

  339 Natural Gas 20 days Mon 4/30/07
  Fri 5/25/07 HMCC

  340

  341 Misc. Equipment Lead Time 130 days
  Fri 12/1/06 Thu 5/31/07

  342 Manual Valves Lead Time 14 wks Fri
  12/1/06 Thu 3/8/07 HMCC

  343 Automated Valves Lead Time 20 wks
  Fri 12/1/06 Thu 4/19/07 HMCC

  344 Centrifugal Pumps Lead Time 20 wks
  Fri 12/1/06 Thu 4/19/07 HMCC

  345 Tanks (SS) Lead Time 20 wks Fri
  12/1/06 Thu 4/19/07 HMCC

  346 Tanks (CS) Lead Time 14 wks Fri
  12/1/06 Thu 3/8/07 HMCC

  347 Agitators Lead Time 16 wks Fri
  12/1/06 Thu 3/22/07 HMCC

  348 Air Compressor Lead Time 20 wks
  Fri 12/1/06 Thu 4/19/07 HMCC

  349 Plate & Frame HX Lead Time 26
  wks Fri 12/1/06 Thu 5/31/07 HMCC

  350

  351 General Project 91 days Mon
  11/26/07 Mon 3/31/08

  352 Identify Possible Changes to
  Package A 0 days Mon 11/26/07 Mon 11/26/07 OTAE/HMCC

  353 Contract - 12.7.5: Equip. Man.,
  Diagrams, Parts List, etc. 0 days Wed 1/16/08 Wed 1/16/08 366FS-40 days HMCC

  354

  355 Loop Check 4 wks Wed 1/2/08 Tue
  1/29/08 47,112,163 HMCC

  356 Commissioning 4 wks Wed 1/30/08
  Tue 2/26/08 355

  357 Joint Inspection (Owner &
  HMCC) 0 days Fri 2/22/08 Fri 2/22/08 360FS-5 days

  358 Punchlist from Joint Inspection 0
  days Thu 2/28/08 Thu 2/28/08 357FS+5 days

  359 Notice of Mechanical Completion to
  Owner 0 days Tue 2/26/08 Tue 2/26/08 360FS-3 days

  360 Mechanical Completion 0 days Fri
  2/29/08 Fri 2/29/08 356 HMCC

  361 Mechanical Completion (After which
  LD's begin) 0 days Fri 3/14/08 Fri 3/14/08 360FS+11 days HMCC

  362 Start-Up (mimimum required) 6 days
  Mon 3/3/08 Mon 3/10/08 360 HMCC/Delta T

  363 Start-Up (maximum before LD's) 16
  days Mon 3/3/08 Mon 3/24/08 360FS+1 day HMCC/Delta T

  364

  365 Notice of Substantial Completion /
  Present Certificate 0 days Tue 3/11/08 Tue 3/11/08 366 varies HMCC/Delta T

  366 Substantial Completion (Best Case)
  0 days Tue 3/11/08 Tue 3/11/08 362FS+1 day HMCC/Delta T

  367 Substantial Completion (After
  which LD' begin) 0 days Mon 3/31/08 Mon 3/31/08 362FS+15 days Delta T

  368 Substantial Completion (Before
  which, the bonus begins) 0 days Tue 2/19/08 Tue 2/19/08 362FS-15 days
  HMCC/Delta T

  369

  370 Transfer of Control to Owner 0
  days Thu 3/13/08 Thu 3/13/08 366FS+1 day HMCC/Delta T

  371 Owner Training 2 wks Mon 3/3/08
  Fri 3/14/08 360 HMCC/Delta T

  KCC

  FT

  HMCC

  IE

  KCC

  KCC

  IE

  IE

  HMCC

  IE

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  HMCC

  11/26

  1/16

  HMCC

  2/22

  2/28

  2/26

  2/29

  3/14

  HMCC/Delta T

  HMCC/Delta T

  3/11

  3/11

  3/31

  2/19

  3/13

  HMCC/Delta T

  Oct Nov Dec Jan Feb Mar Apr May Jun
  Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

  Qtr 4, 2006 Qtr 1, 2007 Qtr 2, 2007
  Qtr 3, 2007 Qtr 4, 2007 Qtr 1, 2008 Qtr 2, 2008

  Task

  Split

  Progress

  Milestone

  Summary

  Project Summary

  External Tasks

  External Milestone

  Deadline

  Page 7

  Project: Otter Tail Ag Schedule

  Date: Fri 10/20/06Exhibit 10.10

 

LICENSE OF TECHNOLOGY

BETWEEN

DELTA-T CORPORATION

AND

OTTER TAIL AG ENTERPRISES, LLC*

 

 

THIS AGREEMENT (hereinafter called LICENSE OF TECHNOLOGY
or this “License”) made this
24th day of October, 2006 by and between Delta-T Corporation, a Virginia
corporation, (“Delta-T”), and Otter Tail Ag Enterprises, LLC, a Minnesota limited liability company,
( “Owner”), each of which may be referred to individually as a “Party,”
or jointly as the “Parties.”

 

WITNESSETH:

 

WHEREAS, Owner is building a 55 million gallon per year undenatured fuel
ethanol plant using corn feedstock to be located in the State of Minnesota,
County of Otter Tail, near the City of Fergus Falls, (the “Plant”), and

 

WHEREAS, Owner and Harris Mechanical Contracting Company, (“Prime Contractor”),
have entered into an equipment, procurement and construction contract for
construction of the Plant (the “Prime Contract”), and

 

WHEREAS, Delta-T has agreed to provide engineering and services related to
construction of the Plant based on Delta-T’s proprietary technology under a
subcontract with Prime Contractor (the “Subcontract”), but only on the
condition that Owner enter into a license agreement with Delta-T for the use of
the technology embodied therein, on the terms and conditions set forth herein,

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained
herein, the Parties agree as follows:

 

1.  DELTA-T TECHNOLOGY

 

As
used in this License, “Delta-T Technology” shall mean all data,
technical information, trade secrets, inventions (whether patented or not and
whether issued before or after the date of this License), know-how, procedures,
processes, drawings, designs, methodology, models, inventions, specifications,
Plant or equipment test and/or operating data, or other technical information
and copyrights  embodied in the Plant,
used in the operation of the Plant, in equipment or in drawings, or included in
any documents, drawings or other materials delivered electronically or
otherwise by Delta-T to Prime Contractor or Owner under this License Agreement
or the Subcontract.  Delta-T Technology
also includes, specifically but without limitation, the items listed on Exhibit A.

 

	
  *

  	
   

  	
  PORTIONS OF LICENSE OF TECHNOLOGY HAVE BEEN
  OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

  

 

1

 

2.  GRANT OF LICENSE

 

2.1  License Grant:  Owner
acknowledges that Delta-T is and shall remain the sole owner of the Delta-T
Technology.  Delta-T hereby grants to
Owner, subject to the conditions of this License, a non-exclusive, paid-up,
non-transferable right to use in perpetuity the Delta-T Technology, without
right to grant such rights to others except as otherwise set forth herein,
solely for the purposes of:

 

A.            construction and operation of the Plant, and

 

B.            maintenance
and optimization or enhancement of the Plant.

 

Owner
agrees that it shall not use the Delta-T Technology for any other purpose.
Optimization and enhancement (“Modification”), for this purpose, shall
include de-bottlenecking, but shall not include expanding the physical
dimensions of the distillation columns or molsieve vessels included in the
Delta-T Technology, or adding to the original number of distillation columns or
molsieve vessels specified in such design. Owner may not disclose any of the
Delta-T Technology to (i) any third party that is listed on Exhibit B,
or (ii) to any individual, group or company that is in the business
of designing alcohol plants or parts thereof and that is not listed on Exhibit B
(“Designers”), for the purpose of making any Modification, except that Owner may make such disclosure
to any Designer to the extent, and only to the extent, necessary to permit such
Designer to enable a Modification that was created without the disclosure
of any Delta-T Technology by or on behalf of Owner, to interface with portions
of the Plant designed by Delta-T.

 

2.2     Restriction
on Assignment: This
License is not assignable or otherwise transferable in any way, and any attempt
to assign it in violation of this provision shall be null and void, except that
(i) Owner may assign this License to a purchaser of substantially all of
the assets of the Plant, or a sale of Owner as an entity, or of Owner’s
membership interest in connection with the sale of such Plant as a going
business, provided that Owner gives Delta-T written notice of such transfer at
least thirty (30) days prior to the date on which it becomes effective, and (ii) Owner
may pledge or grant a security interest in its interest in this License to its
lender or lenders provided that no lender shall have a right to sell or
otherwise transfer this License or any rights under it except in connection
with the sale of the Plant as a going business, and provided further that any
such lender must give Delta-T prior notice of such sale or transfer.

 

2.3  Payment:  At such time as

 

	
  (i)

  	
   

  	
  Owner
  has paid Prime Contractor all amounts due to it under the Prime Contract in
  accordance with its terms;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  the
  Prime Contract is terminated (A) due to breach by the Prime Contractor
  or bankruptcy of the Prime Contractor, or (B) due to a Force Majeure
  Event (as defined in the Prime Contract) affecting Prime Contractor; or

  

 

2

 

	
  (iii)

  	
   

  	
  the
  Prime Contract remains in effect, has not been completed for reasons other
  than the fault of the Owner so that all amounts have not yet become due under
  such contract, but the Plant is capable of operating for commercial purposes;
  or

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Owner
  has paid Delta-T’s License Fee in full;

  

 

the
license rights granted Owner under Section 2.1 above shall become
irrevocable and shall continue in full force and effect notwithstanding any
breach or default hereunder by Owner, provided that such continuation shall not
limit or preclude any remedy Delta-T may have for damages. In no case, however,
may Owner use the Delta-T Technology for any purpose unless it has first paid
Delta-T Corporation a license fee of $2,100,000.00 for the Plant, less the
amounts, if any, specifically enumerated and paid to Delta-T under the Prime
Contract for the license fee.  Furthermore, in the event of Termination of
the Prime Contract, Owner and Delta-T will cooperate reasonably to facilitate
Owner’s transition to a new prime contractor having a relationship with Delta-T
as a subcontractor similar to the Delta-T relationship with the Prime
Contractor.

 

Owner
shall pay 70% of the Technology License Fee to Delta-T within 60 days of execution
of this Agreement.  The remaining 30%
shall be paid upon the Plant successfully passing the Performance Test in
compliance with the Performance Guarantees.

 

3.  RESTRICTIONS ON
ACCESS AND CONFIDENTIALITY

 

3.1  Confidential
Information: “Confidential
Information” as used herein means (a) the Delta-T Technology; (b) either
Party’s product plans, business plans and projections; and (c) any other
information that is clearly marked as confidential or proprietary. However,
Confidential Information does not include information that the receiving Party
can demonstrate by documentary evidence falls under one of the following
exceptions:

 

a.  Was known to it prior to its receipt from the
other Party or from Prime the Contractor, without breach of an obligation of
confidentiality and was not subject to any obligation of confidentiality;

 

b.  Is, or after the date of this License
becomes, without fault of Owner, part of the public domain; or

 

c.  Is disclosed to Owner by someone other than
Delta-T who is under no obligation not to disclose it.

 

3.2          Restrictions
on Disclosure:  Owner shall not disclose any Delta-T
Technology, by Inspection or otherwise, 
to any person or entity other than (i) its employees to the extent
that such employees have a need to have access to such information to perform
their obligations, and only if they have first been advised of the
confidentiality of the information and agree to keep it confidential and not to
use or disclose it for any purpose other than fulfilling their obligations to
Owner, and (ii) third parties as needed to maintain or operate the Plant
as permitted under Section 2 above, to the extent that such third parties
have a need to have access to such information to perform their obligations,

 

3

 

and
only if they have first been advised of the confidentiality of the information
and agreed to keep it confidential and not to use or disclose it for any
purpose other than fulfilling their obligations to Owner by signing the non-disclosure
agreement attached hereto as Exhibit C, or such other form as Delta-T may
reasonably agree.  Owner shall in no event, however, disclose
any Delta-T Technology, in Inspection or otherwise, to any third party listed
on Exhibit B or to any Designer except (with respect to Designers) as
expressly permitted under Section 2 above. “Inspection” for
the purposes of this Section 3 shall mean any visual or other inspection
of any portion of the Plant containing Delta-T Technology in sufficient detail
to reveal measurements of the components, configuration of piping and
components, operating parameters, or access to software used to control such
components.  Furthermore, in no case
shall Owner permit any employee or third party to view the internal portion of
a molsieve installed at the Plant and based on the Delta-T Technology unless it
needs to do so due to malfunction of the molsieve and such third party is not
an entity listed on Exhibit B and
Owner has first used good faith efforts to notify and allow Delta-T to arrive
at the Plant and correct the problem within 72 hours.

 

3.3  Disclosure to
Prime Contractor:   The
Parties acknowledge that Prime Contractor has independent access to the Delta-T
Technology under the Subcontract. The Parties agree that (i) Prime
Contractor shall have full access to any Confidential Information in connection
with its work under the Prime Contract and (ii) neither Delta-T nor Owner
shall have any liability or obligations to the other for Prime Contractor’s
misuse of any Confidential Information disclosed as permitted under this
Agreement unless such Party directed or otherwise participated in such misuse
in such a manner that it would otherwise be liable for such misuse under law or at equity.

 

3.4  Protection;
Copies:  Owner shall take all reasonable means to
protect the confidentiality of the Delta-T Technology.  In particular, but without limitation, Owner
shall not (i) make copies of any document containing any of the Delta-T
Technology except to the extent reasonably necessary to use such technology as
permitted under this License or the Prime Contract, (ii) deliver any such
documents to any government agency for any purpose without complying with any
applicable law or regulation necessary to protect the confidentiality of the
same, or (iii) remove, obliterate or fail to reproduce on any copy of any
such document any and all copyright and confidentiality notices printed
thereon.

 

3.5  Use:  Owner
shall not use any of the Delta-T Technology except as expressly permitted under
this License or the Prime Contract.

 

3.6  Court Order or
Other Legal Process:   In the event that any subpoena, request or
demand (“Demand”) shall be served upon Owner under any court action,
administrative or dispute resolution proceeding, for delivery or disclosure of
any of the Delta-T Technology, then Owner will promptly advise Delta-T of such
Demand and deliver to Delta-T a copy of such Demand and all documentation
relating to such Demand and the proceeding in which it is made which is in the
possession of Owner and is reasonably requested by Delta-T.  The Parties shall consult with each other
concerning any such Demand and Owner shall cooperate with Delta-T, as is
reasonably necessary, to minimize the disclosure of such technology by agreed
protective order prepared and negotiated by Delta-T and the party making the
Demand, or by other means not requiring Owner to 

 

4

 

contest
or oppose the Demand.  If Delta-T is not
a party to the action or proceeding in which the Demand is served, and wishes
to have the Demand opposed, then Delta-T may intervene in such action or
proceeding for the purpose of opposing the Demand or minimizing the disclosure
of the Delta-T Technology, and such intervention shall not be objected to by
Owner.  If Owner makes a disclosure of
Delta-T Technology pursuant to a Demand after complying in all respects with
the provisions of this Section 3.5, then such disclosure shall not be
deemed a breach of this License.

 

3.7  Injunctive
Relief:  Owner agrees that any breach of this License
Agreement shall cause Delta-T irreparable harm. 
Accordingly, and in addition to any other remedies that Delta-T may have
at law or in equity, Delta-T shall be entitled to obtain injunctive relief
against Owner to prevent any continuing breach, and without posting or filing
any bond or other security.  All costs,
expenses and attorney’s fees incurred by the prevailing Party as a result of
the litigation of any claim under this License Agreement shall be paid to it by
the losing party.

 

4.  PERFORMANCE
GUARANTEES, LIMITATION OF WARRANTY AND LIABILITY

 

4.1          Delta-T guarantees that the Plant, when built
according to Delta-T’s plans and specifications, shall perform in accordance
with the performance guarantees set forth in Exhibit E.  Exhibit D shall govern conducting the
performance test.

 

4.2  Limitation of
Warranty:  The  DELTA-T
TECHNOLOGY IS PROVIDED UNDER THIS LICENSE WITH THE WARRANTIES EXPRESSED IN THIS
LICENSE. 
The only warranties made by Delta-T with respect to the
Delta-T Technology are those made in this License.

 

4.3  Limitation
of Liability:  Except for the remedies set forth in this
License, in no case shall Delta-T have any liability to Owner under this
License whether based on contract, negligence or other tort, or any other legal
theory, whether or not it had knowledge of the damages that might result.  Owner agrees that any and all right to
damages or remedies of any and every kind that Owner may have, now or in the
future, with respect to the Delta-T Technology, including, without limitation,
damages or remedies resulting from performance of the Delta-T Technology,
express or implied warranties against infringement or other warranties, are
those available to it under or by virtue of the Prime Contract and in this
License. Notwithstanding anything to the contrary in this Section 4.3, in
no event shall Delta-T’s cumulative liability under this License exceed $*.  OWNER HEREBY ACKNOWLEDGES THAT THE REMEDIES
CONTAINED IN THIS LICENSE ARE OWNER’S EXCLUSIVE REMEDIES AND ARE IN LIEU OF ANY
AND ALL OTHER REMEDIES AVAILABLE AT LAW, OR IN EQUITY.

 

5.  TERMINATION

 

5.1  Reasons for
Termination: Unless
and until this License becomes irrevocable, as provided at Section 2.3
above, at the option of Delta-T, this License shall terminate (i) upon
termination of the Prime Contract by Owner for convenience, (ii) upon
termination 

 

	
  *

  	
   

  	
  PORTIONS
  OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN
  FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

  

 

5

 

of
the Prime Contract by Owner for any reason other than a breach by Prime
Contractor resulting from a breach by Delta-T of the Subcontract, or (iii) upon
termination of the Subcontract for any reason other than breach by
Delta-T.  In the case of termination of
the Prime Contract by Owner, however, Delta-T shall negotiate in good faith
with Owner to enter into a contract to complete the services remaining to be performed
by Delta-T under the Subcontract, provided that all breaches by the Prime
Contractor are first cured, and upon entering into such a contract this License
shall continue in full force and effect.

 

5.2  Consequences of
Termination:  Upon termination of this License Agreement,
Owner shall immediately return to Delta-T all documents embodying any Delta-T
Technology and shall cease all use of the Delta-T Technology.  To the extent Delta-T Technology is embodied
in equipment delivered to Owner prior to termination, Owner may sell the same,
and display the same for sale, only upon consent of Delta-T, which consent
shall not be withheld except to the extent reasonably necessary to assure that
the Delta-T Technology is not disclosed or transferred to an entity listed on Exhibit B
and that it is not otherwise used or disclosed in a manner prohibited by this
License.

 

6.  GENERAL PROVISIONS

 

6.1          Assignment:  No Party shall assign or transfer its rights, duties or obligations
hereunder, except as expressly provided herein, without the prior written consent
of the other. This License shall be binding upon and shall inure to the benefit
of the Parties hereto and to their successors and permitted assigns.

 

6.2          Merger;
Waiver; Amendment:  This
License constitutes the full and complete agreement among the Parties with
respect to the subject matter hereof. 
There are no statements, agreements, understandings, representations or
trade customs of any kind, express or implied, concerning the subject matter hereof
which are not merged herein or superseded hereby.  A waiver of any of the terms of this License
shall not bind any Party unless signed by one of its duly authorized
representatives.  Waiver by any Party of
any default by the other hereunder shall not be deemed a waiver by such party
of any default by the other which may occur thereafter.  This License may only be modified or amended
by an agreement in writing executed by all Parties hereto.

 

6.3          Governing
Law; Venue:  The validity,
performance, construction and effect of this License shall be governed by the
laws of the State of Minnesota without regard to the choice of laws provisions
thereof.

 

6.4          Notice:  All
notices provided for herein will be considered as properly given if in writing
and delivered personally or by courier properly addressed:

 

	
  If
  to Owner, to:

  	
   

  	
  1220
  North Tower Road,

  
	
   

  	
   

  	
  Suite 201

  
	
   

  	
   

  	
  Fergus
  Falls, Minnesota 56537

  
	
   

  	
   

  	
  Attention: President

  
	
   

  	
   

  	
   

  
	
  If
  to Delta-T, to:

  	
  Delta-T
  Corporation

  
	
   

  	
   

  	
  323
  Alexander Lee Parkway

  
	
   

  	
   

  	
  Williamsburg,
  VA 23185

  
	
   

  	
   

  	
  Attn:
  Mr. Robert L. Swain, Vice President

  

 

6

 

6.5          Survival:  Owner’ obligations under the provisions of Sections 3, 4, 5.2 and 6  shall survive the termination or
expiration of this License.

 

6.6                               Severability:  In
the event any section, or any part or portion of any section of this License
shall be held to be invalid, void or otherwise unenforceable, such holding
shall not affect the remaining part or portions of that section, or any other
section hereof.

 

IN WITNESS WHEREOF, the Parties have executed this License to be effective on as of the date first set forth above.

 

 

	
  DELTA-T CORPORATION

  	
   

  	
  OTTER TAIL AG ENTERPRISES, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Mark
  Shmorhun

  	
   

  	
  By:

  	
  Jerry
  Larson

  
	
  Printed
  Name:

  	
  /s/
  Mark Shmorhun

  	
   

  	
  Printed
  Name:

  	
  /s/
  Jerry Larson

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VP
  Business Development

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  10/25/06

  	
   

  	
  Date:

  	
  10/24/06

  

 

7

 

Exhibit A

Specific
Items Included in Delta-T Technology

 

·                  Information
related to the sequence of processing steps used to convert cornmeal to mash;

·                  the design of the mix tank system,
including, without limitation, the mash recirculation, jet-mixing,
classifier/strainer and process condensate superheater components;

·                  the heat recovery system in the mash
preparation section, including, without limitation, the piping configuration;

·                  the fermentation recirculation, transfer
and cooling systems, including, without limitation, the surrounding piping

·                  the entire distillation, dehydration,
evaporation system, and de-acid system, including, without limitation, the
molsieve design and operating parameters and configuration, the multi-column
distillation configuration and the way the evaporator and molsieve are thermally
integrated for maximum energy efficiency

 

8

 

EXHIBIT B

 LIST
OF COMPETITORS

 

	
  4B Components

  East Peoria, Illinois

   

  	
   

  	
  Magnin-Interis

  Charmes, France

  
	
  Abengoa BioEnergy

  Sevilla, Spain

   

  	
   

  	
  Katzen
  International, Inc.

  Cincinnati, Ohio

   

  
	
  Agrol Biotechnologies
  Ltd.

  Guildford, Surrey
  Canada

   

  	
   

  	
  Lurgi PSI Inc.

  Memphis, TN

  
	
  Ambitech Engineering
  Corporation

  Downers Grove, Illinois

   

  	
   

  	
  Merrick &
  Company

  Aurora, Colorado

  
	
  AMG Engineering

  Cincinnati, Ohio

   

  	
   

  	
  Praj Industries

  Pune, India

  
	
  Bio-Process Innovation

  West Lafayette, Indiana

   

  	
   

  	
  Process Plus, LLC

  Cincinnati, Ohio

  
	
  Bio-Renewable Group

  Omaha, Nebraska

   

  	
   

  	
  Raphael Katzen
  Associates International

  Cincinnati, Ohio

  
	
  Broin &
  Associates, Inc.

  Aberdeen, South Dakota

   

  	
   

  	
  Ro-Tech Incorporated

  Louisville, Kentucky

   

  
	
  Burns &
  McDonnell

  Kansas City, Missouri

   

  	
   

  	
  SNC-Lavalin Group

  Toronto, Canada

  
	
  Chematur
  Engineering & Weatherly Engineering

  Atlanta, Georgia

   

  	
   

  	
  Southeastern Energy
  Development, Inc.

  Brooklyn, NY

  (Alliance with Pure
  Vision Technology)

   

  
	
  Dick Engineering Inc.

  Toronto, Ontario,
  Canada

   

  	
   

  	
  Technip

  Cedex, France

  
	
  MECS, Inc.

  St. Louis, Missouri

   

  	
   

  	
  Vogelbusch
  USA, Inc.

  Houston, TX

  (and its parent
  Vogelbusch-Austria)

   

  
	
  Fagen, Inc.

  Granite Falls, Nebraska

   

  	
   

  	
  Wave Zeal Ltd.

  Winnepeg, Manitoba
  CANADA

  
	
  Harris Group Inc.

  Seattle, WA

   

  	
   

  	
   

  
	
  ICM, Inc.

  Colwich, KS

   

  	
   

  	
  Washington Group
  International

  Boise, Idaho

  
	
   

  	
   

  	
  Any individual, group
  or company that performs, on the date of the License or during its term,
  (a) consulting or engineering related to the design of alcohol process
  technology and/or (b) design/build services for existing and prospective
  alcohol plants

  

 

9

 

EXHIBIT C

 

NON-DISCLOSURE AGREEMENT

 

This Agreement is entered into this
       day of
              ,
200    by and between
                                    ,
a corporation organized under the laws of
                          
(“Owner”), and                                                                       
a corporation organized under the laws of
                                  (“Recipient”),
each of which may be referred to herein individually as a “Party” and
collectively as “Parties.”

 

WHEREAS, Owner owns and operates an
ethanol plant which is based on technology that is confidential to Delta-T
Corporation, a Virginia corporation (“Delta-T”), or Owner is in the process of
planning and building such an ethanol plant, and Owner has, or plans to, enter
into an agreement for license of such technology from Delta-T and it has agreed
not to disclose such technology to any third party except under an agreement
containing the terms set forth in this Agreement, and

 

WHEREAS, Recipient is in the business
of supplying goods and/or services useful in the construction or maintenance of
ethanol plants, and

 

WHEREAS, in order to supply, and/or
bid on the supply of, goods or services Recipient will need to receive
confidential information of Delta-T,

 

IN CONSIDERATION of the mutual terms and
conditions of this Agreement, and other good and valuable consideration receipt
of which is hereby acknowledged, Owner and Recipient agree as follows:

 

1.   Confidential
Information:

 

1.1  Definition of Confidential Information:  “Confidential Information” shall mean (a) all
information about the business of Delta-T, including without limitation, plans,
customers or customer lists, operating costs, prices it has offered or obtained
for its products or technology, and (b) all forms and types of financial,
business, scientific, technical, economic, or engineering information,
including patterns, plans, compilations, program devices, formulas, designs,
prototypes, methods, techniques, processes, procedures, programs or codes, whether
tangible or intangible and whether or how stored, compiled or memorialized
physically, electronically, graphically, photographically, or in writing ,
which is disclosed to Recipient by Owner or by Delta-T, whether disclosed
orally, visually or in written or other tangible form.

 

1.2  Exclusions:  “Confidential Information” shall not,
however, include information, which Recipient can demonstrate by documentary
evidence:

 

a.     was in its possession prior
to receipt by Recipient under this Agreement;

b.     appears in issued patents or
printed publications in integrated form 
or is in general use in the trade without violation by Recipient of this
Agreement, or violation by any other party of an obligation not to disclose it;
or

 

10

 

c.               is disclosed to
Recipient by someone by a party other than Delta-T or Delta-T’s Customer who is
under no obligation not to disclose it.

 

2.    No Use or Disclosure:

 

2.1  General  Restrictions:  Recipient shall not, without Delta-T’s
express written permission (a) make copies of any Confidential Information
or (b) divulge, disclose or communicate any Confidential Information to
anyone other than its employees who need to have access to such information in
order to fulfill the purpose set forth above and who have been advised of the
terms of this Agreement and agreed to comply with it, or (c) use any
Confidential Information for any purpose other than the purposes set forth
above.  Recipient shall take all
reasonable steps to protect the Confidential Information from improper use or
disclosure, and shall in no case use less care to protect Confidential
Information than it uses to protect its own proprietary or confidential
information.

 

2.2  Disclosures Required by Court
Order:  If Recipient is required to
disclose any Confidential Information by applicable law, regulation or legal
process, Recipient shall provide Owner and Delta-T notice of such request or
requirement and copies of all documents relevant to the request or requirement.  Recipient shall give such notice promptly,
and in sufficient time to allow Delta-T to seek a protective order or other
remedy.  Recipient shall not disclose any
Confidential Information due to a requirement of law, regulation or legal
process unless:  (a) it has first
given the notice required by this Section 2.2 and Delta-T has either given
Recipient written permission to disclose it, or Delta-T has failed to respond
to Recipient’s notice at least 24 hours prior to the time that Recipient is
required to make such disclosure, (b) it is advised by written opinion of
its counsel that it is legally required to disclose such information, and (c) it
has used its best efforts to obtain all reasonable assurances from the party or
parties to whom the information is to be disclosed that the information will
not be used or disclosed for any purpose other than the purpose for which the
applicable law, regulation or legal process requires its disclosure.

 

2.3  Delta-T Is Third Party Beneficiary: Recipient
agrees that Delta-T is a third party beneficiary of this Agreement and that
Delta-T may enforce this Agreement against Recipient in Delta-T’s own name,
with or without the participation of Owner as a party.

 

3.   Designation of Person with Administrative
Responsibility:  Recipient shall
designate one of its employees to be responsible for administration of
Recipient’s compliance with its obligations under this Agreement and shall
advise Owner in writing of such employee’s name, title and personal address
within four business days of any change of such designation.  Until further notice, the individual so
designated is:

 

	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

4.   Term and Termination:  The term of this Agreement shall commence on
the date first written above and shall continue until terminated by notice in
writing by either Party to the other, but Recipient’s obligations under Section 2
of this Agreement shall survive with respect to all Confidential Information
disclosed hereunder until such time, if ever, that such information falls into
one or more of the exclusions set forth at Section 1.2 above.  Within thirty (30) days of 

 

11

 

termination
of this Agreement Recipient shall, without request by Owner, deliver to Owner
all of the Confidential Information that it received under this Agreement in
tangible form, and all copies thereof, shall destroy all documents, whether in
electronic or any other form, and other tangible items containing any of such
Confidential Information and shall, upon request, certify to Owner and Delta-T
in writing that it has done so.

 

5.   No License or Other Rights:  Nothing in this Agreement shall constitute or
otherwise be construed as granting to Recipient any interest or license in any
Confidential Information, or creating any obligation on the part of any of the
parties hereto to enter into any further agreement or business arrangement.

 

6.   Remedies for Breach:  Recipient agrees that any breach by it of
this Agreement shall cause Delta-T irreparable harm.  Accordingly, and in addition to any other
remedies that Delta-T may have at law or in equity, Delta-T shall be entitled
to obtain injunctive relief against Recipient to prevent any continuing breach,
and without posting or filing any bond or other security.  All costs, expenses and attorney’s fees
resulting from the litigation or arbitration of any claim under this Agreement
shall be paid by the losing party to the prevailing party.  Recipient further agrees that the rights of
Owner and Delta-T under this Agreement are in addition to any and all other
rights that either of them may have as a matter of law.

 

7.   This
Section intentionally left blank.

 

8.   Export Control:  Recipient hereby assures
Delta-T that it does not intend to, and that it will not, transmit, directly or
indirectly, any Confidential Information, any product produced directly by the
use of such information, or any product produced by a plant constructed using
such information, to any country other than the United States without Delta-T’s
prior written consent.

 

9.   General Provisions:

 

9.1  Assignment:  This Agreement may not be assigned by
Recipient to any other party.

 

9.2  Choice of
Law: This Agreement shall be governed by and construed under the laws of the
Staate of Minnesota, United States of America.

 

9.3 
Notices:  Any notice
required or permitted to be given under this Agreement shall be given in
writing and shall be addressed:

 

	
  If
  to Delta-T, to:

  	
  Delta-T
  Corporation

  	
   

  
	
   

  	
  323
  Alexander Lee Parkway

  	
   

  
	
   

  	
  Williamsburg,
  VA 23185 USA

  	
   

  
	
   

  	
  Attn:
  Vice President, Operations

  	
   

  
	
   

  	
   

  	
   

  
	
  If
  to Recipient, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
				

 

12

 

9.4 Survival of Terms:  Recipient’s obligations under Section 2
of this Agreement shall survive as provided in Section 4, and the Parties
obligations under Section 6 and 7 of this Agreement shall survive
termination of this Agreement.

 

9.5 Severability:  If for any reason a court of competent
jurisdiction or an award in arbitration finds any provision of this Agreement
to unenforceable, the Parties agree that they shall amend this Agreement to
allow for enforcement to the maximum extent enforceable and the remainder of
this Agreement shall continue in full force and effect.

 

9.6 Language:  The language of
this Agreement shall be English, and all communications and notices required to
permitted to be made hereunder, and any dispute resolution proceeding related
to a dispute resolved under Section 7 above, shall be conducted in
English.

 

9.7 Headings and Captions:  The headings and captions in this Agreement
are for convenience only and are not to be considered in construing this
Agreement.  All references to any
article, section or paragraph numbers shall be deemed to be references to an
article, section or paragraph of this Agreement unless otherwise expressly
stated.

 

9.8 Complete Agreement:  This Agreement and sets
forth the entire Agreement between the Parties with respect to the subject
matter hereof and supersedes any prior Agreement related to thereto.  No addition or amendment may be made to this
Agreement except by a writing signed by both Parties.

 

9.9 No Waiver:  Failure by any Party to enforce any provision
of this Agreement with respect to any breach thereof, shall not be deemed a
waiver of any right to enforce any other breach of this Agreement.

 

In Witness Whereof, the Parties have executed
this Agreement by their authorized representatives.

 

 

	
  Owner:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Recipient:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

13

 

EXHIBIT D

PERFORMANCE
TEST PROTOCOLS

 

1.                                      Performance Test Protocols

 

1.1                               PRE-TEST PREPARATION

 

1.1.1Prior to the PERFORMANCE TESTS, the PLANT
must have reached Mechanical Completion. 
In addition,  DELTA-T must have
run the PLANT or near design rate consistently for a period of seven (7) days,
as evidenced by plant operational data provided to Delta-T by OWNER, before the
PERFORMANCE TEST is initiated. Before commencement of PERFORMANCE TEST, DELTA-T
shall notify OWNER
in writing at least seven (7) Days
prior to planned commencement of the PERFORMANCE TEST that all pre-test
conditions have been satisfied, including the following:

 

·      Adequate
and competent supervision, personnel and resources for effective operation,
maintenance and performance analysis of the PLANT, including laboratory
analysis, temporary meters or other measuring devices and instrumentation
specified as to accuracy and reproducibility by DELTA-T in advance of the
PERFORMANCE TEST required to conduct and evaluate the PERFORMANCE TEST shall have
been furnished.  The PLANT shall be
operated and maintained in accordance with the technical advice and instruction
from the DELTA-T Operations Manual and on-site directives from DELTA-T, and
otherwise within generally accepted practices within the fuel ethanol industry.

 

·      The PLANT, its machinery, equipment,
instrumentation and piping, shall all be clean lubricated where appropriate,
leak tight, and ready to operate according to design specifications.  All systems and appropriate checkouts and
calibrations shall have been completed and documented by responsible PLANT
technicians, contractors, and/or vendors. 
Analytical and any special test equipment and reagents will have been
calibrated and made accurate.

 

·      Cleaning
(CIP) of the process equipment has been accomplished seven (7) days or
less before the PERFORMANCE TEST per DELTA-T direction and standard procedures
set out in the DELTA-T Operations Manual. 
All ingredients and supplies required to complete the test are on hand.  This includes, but is not limited to,
feedstock of corn (meeting specifications listed in Exhibit D Section 1.2)
supplied in stable quantities sufficient to support PLANT operation at a rate
up to 120% of the guaranteed fuel ethanol production rate, as well as
sufficient steam and other utilities, enzymes, chemicals, and other ingredients
of the type specified by DELTA-T in the Operations Manual and supplies to
support PLANT operation at a rate up to 120% of the guaranteed fuel ethanol
production rate.

 

·      Adequate
operation, analytical, and maintenance support shall be scheduled for the test
period.

 

14

 

1.2          COORDINATION

 

1.2.1 DELTA-T
shall coordinate the PERFORMANCE
TEST with OWNER and Prime Contractor during the 24
hour/day around the clock PERFORMANCE
TEST period.  This
coordination of the PERFORMANCE
TEST activities will be handled by a DELTA-T
representative designated to serve as DELTA-T’s Test Coordinator (“Test
Coordinator”).  The Test Coordinator will
work with an individual designated by the OWNER to be its representative for
the PERFORMANCE TEST to
set the test schedule and to coordinate operations during the test period.
DELTA-T will also assign DELTA-T Shift Coordinators to support the operation
during the test period.

 

1.2.2 OWNER shall
supply, or cause to be supplied, all feedstock, utilities and other supplies
and services required to conduct the PERFORMANCE TEST, as specified under Section 1.1.1
above, throughout the entire PLANT during all PERFORMANCE TESTS.

 

1.2.3 DELTA-T
shall direct its and Owner’s personnel in the operation of the PLANT in a
manner consistent with the operating parameters provided in the Operations
Manual.

 

1.3          CONDUCTING THE TEST

 

1.3.1        The DELTA-T Test Coordinator shall be
provided with operating data by the OWNER sufficient to verify that the PLANT
is operating at a condition suitable for initiation of the PERFORMANCE
TEST.  At the scheduled start time of the
PERFORMANCE TEST,
the DELTA-T Test Coordinator will signal that the test has formally begun and
will direct operators to take the initial test measurements. The test will be
conducted over a three-day (72 hour) period of operation.  During the Test period, the PLANT shall be
operated by the OWNER in compliance with the instructions of DELTA-T and the
Delta-T Operations Manual and instructions provided by DELTA-T, including,
without limitation, adjustments in temperatures, pressures, feedstock rates,
steam flow, and other process control inputs, provided these adjustments do not
result in unsafe operating conditions. 
PLANT operators will monitor and record operating data according to
standard procedures and in addition will record the supplemental data specified
in this protocol on data sheets in the form to be provided by DELTA-T.  Records will be developed from permanent
plant equipment that is calibrated immediately prior to test.  All test measurements will be reviewed by the
Test Coordinator (or a designated representative).  If the Test Coordinator believes that there
might be a problem with the measurement method or reading, the reading will be
retaken and verified by the Test Coordinator and OWNER’S Representative.
Immediately upon the conclusion of the PERFORMANCE
TEST, the Test Coordinator will meet with representatives
of OWNER to review the test results. 
DELTA-T and OWNER shall each be given a copy of the test results.  If the Performance Guarantees have been met,
then OWNER shall promptly issue a notice to DELTA-T to such effect.  If the PERFORMANCE TESTS have not been met,
then OWNER shall issue a written notice to DELTA-T within one (1) day of
completion of the PERFORMANCE TESTS indicating in what manner such Performance
Guarantees have not been successfully completed.

 

1.3.2        If the 72-hour test period is
interrupted for any reason within DELTA-T’s control or OWNER’S control, a new
three-day test period will resume after the cause for the interruption has been
corrected and the PLANT has achieved an acceptable operating capacity at
substantially the same rate immediately prior to the interruption.  DELTA-T and OWNER shall stop the PERFORMANCE
TEST if it becomes obvious that it cannot be carried to a satisfactory
conclusion in the current attempt.  If
the PERFORMANCE TEST has been interrupted for reasons not attributable to

 

15

 

DELTA-T or other
persons or factors within its control, and continues to be interrupted such
that DELTA-T has spent a cumulative period of ten (10) calendar days on
site since the commencement of the test, then OWNER shall compensate DELTA-T
for the personnel that DELTA-T has on site. 
This compensation period shall begin on the cumulative 11th
day on site, and will continue until the completion of the PERFORMANCE
TEST.  This compensation will cease
should the inability to complete the PERFORMANCE TEST be the fault of DELTA-T
or other persons or factors within its control. 
Compensation rates are provided in Exhibit B.1.

 

2.                                       Analytical/Calculation Protocols

 

2.1                                UNDENATURED FUEL ETHANOL QUALITY

 

	
  METHOD:

  	
   

  	
  Analyze samples
  according to DELTA-T provided procedures. The last test result before
  emptying day tank into main storage tank shall determine the quality for the
  batch. The average of all batch test results over the test period shall be
  used in determining the quality for the PEFORMANCE TEST.

   

  If the fuel ethanol in
  the day tank does not meet the quality specifications of Exhibit D,
  section 1.2.1, DELTA-T has the discretion to send it on to the main storage
  tank (on the theory that the blended product in the main storage tank will
  meet the quality specifications) the average of all batch test results shall
  be used to establish the blended quality. If the blended fuel ethanol does
  not meet quality specifications as a result of below quality product measured
  in one or more day tank batches the volume of the batch(s) shall not be
  included in ethanol production “rate” quantities used in calculating
  liquidated damages.

   

  
	
  SAMPLE POINT:

  	
   

  	
  Undenatured Fuel
  Ethanol Day Tank Storage

   

  
	
  SAMPLE SIZE:

  	
   

  	
  250 mls.

   

  
	
  SAMPLE CONTAINER:

  	
   

  	
  Nalgene

   

  
	
  FREQUENCY:

  	
   

  	
  Once per two
  (2) hours

   

  
	
  SAMPLES RETAINED:

  	
   

  	
  All

   

  
	
  PREPARATION:

  	
   

  	
  Standardize test
  reagents. Clean glassware and sample containers. Assure that reagents are of
  sufficient quality.

   

  
	
  DOCUMENTATION:

  	
   

  	
  Log results on a
  PERFORMANCE TEST Data Sheet.

  

 

2.2         Undenatured Fuel Ethanol Production Rate

 

	
  METHOD:

  	
   

  	
  The day tank
  will be manually measured every eight (8) hours to serve as the
  principal method of measurement of 

  

 

16

 

	
   

  	
   

  	
  production
  volume, along with a final measurement of the day tank before the contents
  are sent to the main storage tank(s). 
  In addition, flow totalizer readings will be taken from product meter
  or other measuring device mutually agreed upon between OWNER and DELTA-T at
  regular intervals as backup verification of the manual measurements.  The total volume from the test meters will
  be adjusted to a volume equivalent 99.50wt% ethanol at 60oF.
  Divide by the total number of test hours to determine the average rate over
  the test period.  Multiply result by
  1.05 to calculate Denatured Fuel Ethanol Rate.

   

  
	
  SAMPLE POINT:

  	
   

  	
  Product
  volumetric totalizing meter (with computer monitoring) after Product
  Receiver.

   

  
	
  SAMPLE SIZE:

  	
   

  	
  N/A

   

  
	
  SAMPLE CONTAINER:

  	
   

  	
  N/A

   

  
	
   

  	
   

  	
   

  
	
  FREQUENCY:

  	
   

  	
  Once per two (2) hours
  and at the end of each Day Tank batch.

   

  
	
  SAMPLES RETAINED:

  	
   

  	
  N/A

   

  
	
  PREPARATION:

  	
   

  	
  Certify that the
  flow meter is properly calibrated.

   

  
	
  DOCUMENTATION:

  	
   

  	
  Log results on a
  PERFORMANCE TEST Data Sheet and sign off by the OWNER and DELTA-T.

  

 

2.3             Undenatured
Fuel Ethanol Yield

 

	
  BASIS:

  	
   

  	
  56 lb. per bushel corn
  containing 14.5% moisture and 72% dry starch and of 1% foreign material (by
  weight).

   

  
	
  METHOD:

  	
   

  	
  Record corn weigh belt
  totalizer readings to measure the accumulated meal weight. Measure the sample
  moisture and starch content. Convert total undenatured ethanol volume from
  the Rate Test to weight at 60oF. Divide the calculated mass
  quantity of undenatured ethanol by the calculated corn mass quantity of total
  starch fed over the time period to determine yield. In addition, this weigh
  belt total should be cross checked by totaling all corn receipts, subtracting
  all foreign material content, and taking into account the current corn bin
  volumes.

   

  
	
  TEST POINT:

  	
   

  	
  Corn weigh belt

   

  
	
  FREQUENCY:

  	
   

  	
  Once per two hours

  

 

17

 

	
  PREPARATION:

  	
   

  	
  Certify that the weigh
  belt is properly calibrated

   

  
	
  DOCUMENTATION:

  	
   

  	
  Log results on
  “PERFORMANCE TEST Data Sheet”

  

 

2.4 Process
Electrical Consumption

 

	
  METHOD:

  	
   

  	
  Record electric meter
  readings at beginning of test and at the required frequency thereafter.
  Divide total Kwh for test period by total volume of undenatured ethanol
  produced to determine average Kwh per gallon. Average results of all
  calculations for test periods to determine the process electrical power
  consumption value for PERFORMANCE TEST.

   

  
	
  TEST POINT:

  	
   

  	
  Electric power meter
  types and locations as established by Delta-T, and as necessary to isolate
  process consumption.

   

  
	
  FREQUENCY:

  	
   

  	
  Once per 24 hours

   

  
	
  PREPARATION:

  	
   

  	
  Isolate process
  electrical consumption activities during test period.

   

  
	
  DOCUMENTATION:

  	
   

  	
  Log results on a
  PERFORMANCE TEST Data Sheet

  

 

2.5 NATURAL GAS CONSUMPTION

 

	
  METHOD:

  	
   

  	
  Record plant natural
  gas meter totalizer readings in MCF over test period. Obtain higher heating value
  specification for gas over the test period and calculate the BTU over the
  test period. Divide this value by the amount of undenatured ethanol produced
  during the test period to determine BTU per gallon of undenatured ethanol
  produced during the test period. Quantities of natural gas will be adjusted
  to 1,000 btu/ft3 (70° F, 1 atm) and 10% DDGS moisture
  respectively before the calculation is made. Average results of all
  calculations for test period to determine natural gas consumption value for
  Acceptance Test.

   

  
	
  TEST POINT:

  	
   

  	
  Plant gas meter

   

  
	
  FREQUENCY:

  	
   

  	
  Once per two
  (2) hours

   

  
	
  PREPARATION:

  	
   

  	
  Certify gas meter is
  properly calibrated and suspend all non-process use of natural gas.

   

  
	
  DOCUMENTATION:

  	
   

  	
  Log results on an
  “Acceptance Test Data Sheet.”

  

 

18

 

2.6          CALCULATION PROTOCOL

 

All calculations will be based on actual measured
data taken during the test period.  For
any given sample period, the average value during that period will be
determined by the average of the measured data points for that sample
period.  The liquidated damages, if any,
will be determined using the data collected for each individual sample period
and averaged over the PERFORMANCE TEST period. All samples shall be taken in
duplicate and OWNER and DELTA-T shall each retain one sample.  OWNER shall analyze one of the duplicates;
the second shall be reserved for use in case of a disagreement.  OWNER shall cause such analyses to be
conducted at the Plant during the PERFORMANCE TEST period and in the presence
of the Test Coordinator or such coordinator’s designee, and Owner and Lender’s
Independent Engineer if they are present. 
In case of disagreement, a referee laboratory shall be selected by
agreement between OWNER and DELTA-T, and the cost of such referee laboratory
shall be paid by the party or parties not substantiated by the referee.  The findings of this referee laboratory shall
be accepted as final.

 

19

 

EXHIBIT E

PERFORMANCE
GUARANTEES

 

1.     Performance Guarantee Figures

 

Performance guarantees are subject to the PERFORMANCE TEST PROTOCOL set
forth in Exhibit C being adhered to, raw material, chemicals, and
utilities being provided in conformance with quality and quantity requirements
established by Delta-T; and equipment being operated and maintained in
accordance with manufacturers’ recommendations and the DELTA-T Operations
Manual.

 

1.1
Definitions

The term “guarantee”
as used herein shall have the same meaning as “warranty.”

 

1.2
Process Guarantees

All quantities set
forth below are based on average quantities over the period of the applicable
PERFORMANCE TEST.

 

1.2.1       Anhydrous Undenatured
Ethanol Production Guarantee

 

	
  Anhydrous Fuel Ethanol Production Rate:

  	
   

  	
  Minimum
  6548 US un-denatured gallons per hour (average) based on a minimum feedstock
  specification of 56 lb/bushel test weight corn containing a maximum of 14.5%
  moisture (by weight), a minimum of 72% dry fermentable starch (by weight) and
  a maximum of 1% foreign material (by weight).

  Un-denatured
  ethanol will meet specifications for fuel ethanol per ASTM D4806-04.

  
	
   

  	
   

  	
   

  
	
  Anhydrous  Fuel Ethanol Yield:

  	
   

  	
  Minimum 0.515 pounds
  un-denatured fuel ethanol per pound of fermentable starch (average) in corn
  feed based on a minimum feedstock specification of 56 lb/bushel test weight
  No. 2 Yellow Dent corn containing a maximum of 14.5% moisture (wgt),
  minimum 72% dry, trash-free starch, maximum 1% (wgt) foreign material.

  

 

1.2.2       Utility
Consumption Guarantees

 

	
  Natural Gas Consumption:

  	
   

  	
  Maximum 36,000 BTU per
  gallon (average) of un-denatured fuel ethanol produced for gas-fired boiler
  and gas fired rotary drum dryer based on natural gas provided at a
  minimum gas quality of 939 BTU per standard cubic foot (1atm, 70° F), 10%
  maximum (weight) DDGS moisture content, and minimum boiler thermal efficiency
  of 84%. This guarantee is only in effect if the
  plant design DOES include a DDGS dryer

  
	
   

  	
   

  	
   

  
	
  Process Electrical Consumption:

  	
   

  	
  Maximum 1.000 kWh per gallon  (average) of un-denatured fuel
  ethanol produced when operating at the nameplate capacity based on electric
  service with 0.85 power factor. This number includes process equipment
  components in mash preparation, liquefaction, 

  

 

20

 

	
   

  	
   

  	
  yeast mix and propagation, fermentation, distillation,
  dehydration and acid reduction, evaporation, separation and stillage, process
  condensate, chemical storage, CO2 scrubbing, compressed air, WDGS
  transfer and handling, ethanol storage and load-out, cooling tower including
  cooling water circulation, condensate return, process sumps, and heat
  tracing. The indicated consumption does not include grain receiving and
  storage, milling, boiler, chiller, RTO, water supply or treatment, and CO2
  transmission or recovery.

  
	
   

  	
   

  	
   

  
	
  Process Steam Consumption:

  	
   

  	
  Maximum
  24,000 actual steam BTUs per gallon (average) (without dryer) of un-denatured
  fuel ethanol produced (as calculated in Section 2.5 of Exhibit B).
  This number includes the steam to all process components. This guarantee is only in effect if the plant
  design does NOT include a DDGS dryer

  

 

2.     Right to Cure; Limitation on
Liquidated Damage Claim

 

In the event that one or more of the performance criteria set forth in Section 1.2
above are not satisfied, DELTA-T shall have the right at its expense to require
a test of the degree of accuracy of the testing equipment and testing methods
and procedures.  If the variation from
the guaranteed rates is less than or equal to the demonstrated margin of error
of the relevant PERFORMANCE TEST, then OWNER shall have the right (but not the
obligation) to make improvements in the testing equipment, at OWNER’S cost
provided the variations are not attributable to DELTA-T, and require that
DELTA-T repeat the relevant PERFORMANCE TEST. 
If OWNER does not make such improvements, then   DELTA-T shall have the right to do so and
OWNER shall reimburse DELTA-T for the cost of making the required improvements.  If the performance criteria set forth in Exhibit D,
Section 1.1 are not satisfied for reasons not attributable to DELTA-T or
other persons or factors within DELTA-T’s control, then OWNER may, at its
option, remedy the defect or deficiency and have the PERFORMANCE TESTS re-run
at any time within three (3) months of the date of commencement of the
first ACCEPTANCE TEST, or pay to DELTA-T the remaining unpaid portion of the
Fee.

 

Within
said three (3) month period, DELTA-T shall take whatever action is
reasonably necessary and consistent with sound engineering and construction practices
to cause the PLANT to satisfy the performance guarantees in Section 1.2.  Within said three (3) month period,
DELTA-T may re-run the PERFORMANCE TEST one or more times before paying
liquidated damages as set forth in Section 3.1 below as a result of
failing to meet the guarantees set forth in Section 1.2 above.  Any claims for liquidated damages must be in
writing and shall be submitted to Delta-T no later than thirty (30) days from
the date of completion of the last PERFORMANCE TEST, which requires the payment
of liquidated damages.

 

The
Parties acknowledge and agree that the terms of this Contract with respect to
liquidated damages, including those payable under this Exhibit D, are fair
and reasonable considering the damage Owner would sustain in the event of
DELTA-T’s failure to perform as required under this Contract, that such damages
have been agreed upon and fixed as liquidated damages because of the difficulty
of ascertaining as of the date hereof the exact damages that would be sustained
by Owner, and that such liquidated damages provisions shall be applicable
regardless of the actual amount of damages sustained.  All amounts shall be paid as liquidated
damages and not as penalty.

 

21

 

3.     Liquidated Damages and Maximum
Damages for Process Guarantees

 

3.1  Amount
of Damages:

 

If
a defect in the BASIC PROCESS DESIGN or the Delta-T Technology causes the PLANT
to fail one or more of the process performance guarantees set forth in
Section1.2 above during a PERFORMANCE TEST as provided herein, and DELTA-T has
not been able to correct the defect and pass all components of the PERFORMANCE
TESTS within the time set forth at Section 2 above, then OWNER shall be
entitled to liquidated damages based on the net amount due as allocated below
up to a maximum cumulative amount of $*.

 

The sum of the countervailing factors, determined as set forth under Section 3.2
below, shall be deducted from the sum of the damages determined
thereunder.  In no case, however, shall
OWNER have any obligation to pay DELTA-T as a result of such calculation.  If the countervailing factors are greater
than the damages the calculation the liquidated damages shall be deemed to be
zero and neither Party shall have any obligation to the other as a result of
the PERFORMANCE TEST.

 

3.2
Amount of Damages and Countervailing Factors

 

	
  Fuel
  Ethanol Yield:

  	
   

  	
  * per 0.01 lb
  of anhydrous un-denatured ethanol per lb of convertible starch that the
  PERFORMANCE TEST results show lower or higher than the guaranteed ethanol
  yield listed in Paragraph 1.2 above. To the extent the yield is lower the
  resulting number shall constitute damages. To the extent that it is higher
  the resulting amount shall be a countervailing factor.  For example,
  if the PERFORMANCE TEST average ethanol yield is 0.505 pounds of un-denatured
  anhydrous ethanol per pound of starch, the amount included in the liquidated
  damages calculation for this component would be ((0.510 – 0.515) = -.005/.01
  = -.05 < |1| = 0 x $*) = $0

  This
  example illustrates the fact that only full increments of positive or
  negative variances count towards the liquidated damages financial
  calculation. Anything less than this numerical increment is considered to be
  too close to the tolerance of measurement to be meaningful. An increment of
  .005 is less than .01, so it is rounded down to zero. As another example, an
  increment of .015 would be rounded down to .01.

  
	
   

  	
   

  	
   

  
	
  Fuel
  Ethanol Production Rate:

  	
   

  	
  $*
  per 10 US gallons per hour of un-denatured ethanol that the PERFORMANCE TEST
  results show lower or higher than the guarantee ethanol production rate
  listed in Paragraph 1.2 above. To the extent the rate is lower the resulting
  number shall constitute damages. To the extent that it is higher the
  resulting amount shall be a countervailing factor.

  For
  example, if the PERFORMANCE TEST average ethanol production rate is 10 US
  gallons per hour over the guarantee rate, the amount included in the
  liquidated damages calculation for this component would be (10gph) = 10/10 =
  1.0 x $* =*

  

 

	
  *

  	
  PORTIONS
  OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

  

 

 

22

 

	
  NATURAL GAS CONSUMPTION:

  	
   

  	
  * per
  each 100 BTU per US gallon of un-denatured ethanol that the PERFORMANCE TEST
  results show higher or lower than guaranteed natural gas consumed for the
  boiler and DDGS dryer listed in Paragraph 1.2 above. To the extent the
  consumption is higher the resulting number shall constitute damages. To the
  extent that it is lower the resulting amount shall be a countervailing
  factor.  For example, if the PERFORMANCE TEST average natural gas consumption
  is 37,000 BTU per gallon of un-denatured ethanol, then the amount included in
  the liquidated damages calculation for this component would be (36,000 –
  37,000) = -1,000/100 = (-10 x $*=*. a penalty.

  
	
   

  	
   

  	
   

  
	
  Process
  Electrical Consumption:

  	
   

  	
  * per each
  0.01 kWh per US gallon of un-denatured ethanol that the PERFORMANCE TEST
  results show higher or lower than the guaranteed power consumption production
  rate listed in Paragraph 1.2 above. To the extent the consumption is higher
  the resulting number shall constitute damages. To the extent that it is lower
  the resulting amount shall be a countervailing factor.

  For example, if the PERFORMANCE TEST average
  electric process power consumption excluding utilities is 0.98 kwh per gallon
  of un-denatured ethanol produced, then the amount included in the liquidated
  damages calculation for this component would be (1.0 – 0.98) = 0.02/0.01 = 2
  x $*=*, a countervailing factor.

  

 

If we assume the example performance numbers set forth above to
illustrate a theoretical liquidated damage calculation, there would be no
liquidated damages paid because the cumulative sum of all the performance
calculations is positive, as shown below:

 

	
   

  	
   

  	
  Production Rate Deviation

  	
  $*

  	
  Countervailing Factor

  	
   

  
	
   

  	
   

  	
  Ethanol Yield Deviation

  	
  $

  	
  0

  	
   

  	
   

  
	
   

  	
   

  	
  Natural Gas
  Consumption Deviation

  	
  (*)

  	
  Damages

  	
   

  
	
   

  	
   

  	
  Electric Power
  Consumption Deviation

  	
  $*

  	
  Countervailing Factor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Subtotal

  	
  $*

  	
  Net Positive Sum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Liquidated Damages

  	
  -0-

  	
   

  	
   

  	
   

  

 

3.3
Damages Reasonable

 

The Parties
acknowledge and agree that the terms of this Agreement with respect to
liquidated damages, including those payable under this Exhibit D, are fair
and reasonable considering the damage OWNER would sustain in the event of the
failure of the Plant to meet the performance guarantees set forth above, that
such damages have been agreed upon and fixed as liquidated damages because of
the difficulty of ascertaining as of the date hereof the exact damages that
would be sustained by OWNER, and that such liquidated damages provisions shall
be applicable regardless of the actual amount of damages sustained.  All amounts shall be paid as liquidated damages
and not as a penalty.

 

	
  * 

  	
  PORTIONS OMITTED
  PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

  

 

 

23

 

4.     Conditions to Process
Guarantees

 

4.1   DELTA-T shall have no
obligation or liability for any claimed breach of warranty or guarantee under
this Exhibit D to the extent DELTA-T has been relieved from its full
warranty as provided at Article 12 of the Prime Contract.  In addition, to the extent such warranty or
guarantee may be directly and causally affected, DELTA-T shall be relieved of
its warranty or guarantee obligations arising from:

 

4.1.1                     The feedstock provided by OWNER to be
provided by Owner, does not comply with the conditions described herein.

4.1.2                     Contamination of feedstock or other
materials to which the Equipment is exposed.

4.1.3                     Abuse, or poor maintenance, of the
Equipment.

4.1.4                     OWNER’S failure to supply utilities
required to meet the guaranteed production rates as set forth at Section 1.2.2
of Exhibit C.

4.1.5                     OWNER’S failure to fulfill any of its
obligations, which individually or in the aggregate are material, under the
PERFORMANCE TEST protocols set forth at Exhibit C above.

4.1.6                     OWNER’S failure, in any material way, to
operate the PLANT in accordance with the operating manuals and instructions
provided by DELTA-T.

4.1.7                     If OWNER designs or procures equipment
and systems that fail to meet DELTA-T’S BASIC PROCESS DESIGN specifications for
energy efficiency.

4.1.8                     Owner fails to provide electrical service
with a 0.85 power factor

 

5.             Performance Bonus

 

Upon Final Completion and
Delta-T successfully passing the Second Performance Test in compliance with the
guarantees set forth in Section 1.2 above, Delta-T and Owner shall
cooperate during a bonus period of operation.  Owner agrees to pay to
Delta-T a bonus of $(*) for each 1% above nameplate plus 10%, capped at
20% above nameplate or $200,000.  Delta-T has three (3) months from
Final Completion to achieve this bonus.  The bonus nameplate plus 10% to
20% capacities must be achieved over a consecutive two (2) week period
without interruption to normal production, with permanent equipment operating
within design parameters and with no undue wear and tear or increased fouling
or maintenance.  Bonus shall be payable thirty (30) days after achieving
these bonus criteria.

 

	
  * 

  	
  PORTIONS OMITTED PURSUANT TO A
  REQUEST FOR CONFIDENTIAL TREATMENT WHICH   HAS BEEN FILED
  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

  

 

 

24

 

Definitions:

 

Mechanical
Completion:  The
completion of construction activities essential to the safe and proper
operation of the plant, as more fully listed below.

 

Commissioning:  The checking and preparation of the plant for
operation, functional control loop checking, interlock testing, system purging
and utility system startups, as more fully listed below.  In general, the tasks required taking the
plant from mechanical completion and making it ready for start-up.

 

Ready for Startup:  When the activities listed for Mechanical
Completion and Commissioning have occurred and the Plant is ready to mill corn
at the hammer mills.  At that time,
DELTA-T will notify OWNER that the Plant is Ready for Startup.

 

Startup:  Startup begins with the initial feed of raw
material to the plant, filling of Equipment with operating material, startup
and operation of individual process stages, adjustment and optimization of
operating conditions, optimization of control loops, verification of startup,
shutdown and partial load operations. 
Utility system startups (unless integrated with the processing portions
of the plant) are a part of the Commissioning Phase.

 

These events may not
occur at the same point in time for all parts of the plant.  Utility systems needed for operation of the
rest of the plant may reach Mechanical Completion, Commissioning and Startup
before the main process parts of the plant. 
Some processing areas of the plant or sub-systems of operating areas may
reach Mechanical Completion and be Commissioned and Started up before other
parts of the plant, for example, grain receiving and storage may be completed
and into operation, i.e., filled with grain, prior to other parts of the
facility.

 

The following lists indicate the
activities or events, which take place in each of the phases described.

 

Mechanical Completion

 

·      Inspection of
all equipment to check that erected facilities conform to construction drawings
and Contract specifications.

·      Non-operating
field leak tests or field pressure tests on piping and field-fabricated
equipment as required by the Contract specifications, disposing of test media
on site at a location specified by Owner, and removal of test blinds and
restoring systems to “ready for operation” condition.

·      Removal of all temporary
supports, bracing or other foreign objects.

·      Inspection of all columns to
ensure proper installation of all internals.

·      Field inspection of all shop fabricated
equipment.

·      Line flushing as part of hydrotesting.

·      Check to ensure that all
baseplates and soleplates are level and properly grouted.

·      Check pipe hangers,
supports, guides and pipe specialties, and remove all shipping and erection
bracing.

 

25

 

·      Check alignment of all piping
fit-up with equipment to avoid excessive nozzle loading and pipe stresses.

·      Insulation for process purposes.

·      Install Lubricants.

·      Check rotating machinery for
correct direction of rotation and for freedom of moving parts.

·      Check cold alignments on
rotating equipment.

·      Schedule the services of
factory representatives for equipment or other items as required.

·      Electrical and
Instrumentation installed.

·      Irrespective of the
foregoing,  Mechanical Completion shall
be deem achieved once feedstock is introduced into the process and ethanol has
been produced

 

Commissioning

 

·      Test burners.

·      Dry out
castables, refractory and brickwork according to the manufacturer’s
instructions (if not yet completed).

·      Regenerate media as required.

·      Test refrigeration systems
and low-temperature units in cold condition.

·      Check thermal expansions.

·      Check safety valves;
re-adjust if required.

·      Check supports, suspensions
and flexibility for thermal expansion.

·      Verify start-up strainers
removed, or in place as required.

·      Check flange connections for
tightness.

·      Clean y-strainers and
condensate drains.

·      Start-up measuring and
control loops, check interaction of indicators and control loops.

·      Start-up analyzers.

·      Report and adjust limit
values for alarm and control systems.

·      Coordinate punch list work.

·      Check calibration.

·      Check fuse size.

 

Startup

 

·      Observe all safety
procedures including personnel protective gear, work permits and entry permits.

·      Start-up in accordance with
operating manuals and manufacturer’s instructions

·      Verify sealing fluid flow.

·      Observe operation to be sure
lubrication is maintained.

·      Observe operation to be sure
alignment is maintained.

·      Make operating noise
measurements.

·      Verify operating capacities.

·      Check supports, stops, spring
hangers and expansion joints for hot operation.

·      Check flanges for tightness
and make hot pull-ups, as required.

·      Blow down y-strainers and
condensate drains regularly.

·      Verify amperage on critical
units.

·      Optimize control loop
parameters.

·      Adjust and calibrate on-line
analyzers such as conductivity and pH.

 

26

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