Document:

exv10w1

 

EXHIBIT 10.01

LETTER OF INTENT

	 	 	 
	Date:

	 	December 2, 2005
	 
	 	 
	Parties:

	 	Fagen, Inc., a Minnesota Corporation, of Granite Falls, MN (“Fagen”)
and One Earth Energy, LLC of Gibson City, Illinois (“Owner”)

WHEREAS,
Owner is an entity organized to facility the development and building of either a 50 MGY or
a 100 MGY gas-fired fuel ethanol plant to be located near Gibson City, Illinois (the “Facility” or
“Project”); and

WHEREAS, Fagen is an engineering and construction firm capable of providing development assistance,
as well as designing and constructing the Facility being considered by Owner; and

NOW, THEREFORE, in consideration of the promises and mutual covenants set forth herein, Owner and
Fagen agree to use best efforts in jointly developing this Project under the following terms:

     1. Owner agrees that Fagen will Design-Build the Facility if determined by Owner to be
feasible and if adequate financing is obtained. Should Owner choose to develop or pursue a
relationship with a company other than Fagen to provide the preliminary engineering or
design-build services for the project, then Owner shall reimburse Fagen for all expenses
Fagen has incurred in connection with the Project based upon Fagen’s standard rate schedule
plus all third party costs incurred from the date of this Letter of Intent. Such expenses
include, but are not limited to, labor rates and reimbursable expenses such as legal
charges for document review and preparation, travel expenses, reproduction costs, long
distance phone costs, and postage. In the event Fagen’s services are terminated by Owner,
title to the technical data, which may include preliminary engineering drawings and layouts
and proprietary process related information, shall remain with Fagen; however, Owner shall,
upon payment of the foregoing expenses, have the limited license to use the above described
technical data, excluding proprietary process related information, for completing
documentation required for construction, operation, repair and maintenance of the Project,
at Owner’s sole risk.

     Owner acknowledges that the technical data provided by Fagen under this Letter of
Intent shall be preliminary and may not be suitable for construction and agrees that any
use of such technical data without Fagen’s involvement shall be at Owner’s sole risk.

     If Fagen intentionally or by gross negligence fails or refuses to comply with its
commitments contained in this Letter of Intent, Fagen shall absorb all of its own expenses,
and Owner shall have the right to terminate the Letter of Intent

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immediately upon written notice to Fagen, and Owner shall be released from its
obligations to pay or reimburse Fagen as described above.

     2. Fagen will provide Owner with assistance in evaluating, from both a technical and
business perspective:

	 	•	 	Owner organizational options;
	 
	 	•	 	The appropriate location of the proposed Facility; and
	 
	 	•	 	Business plan development.

Fagen assumes no risk or liability of representation or advice to Owner by assisting in
evaluating the above. All decisions made regarding feasibility, financing, and business
risks are the Owner’s sole responsibility and liability. In addition, Owner shall utilize
project consultants recommended by Fagen and obtain traditional financing from financial
institutions recommended by Fagen that have successfully financed previous Fagen projects.

     3. Fagen agrees to Design-Build the Facility, utilizing ICM, Inc. technology in the
plant process, for a Lump Sum Price as follows:

	 	a)	 	$61,240,000.00 for a 50 MGY gas-fired Facility; or

	 
	 	b)	 	$105,997,000.00 for a 100 MGY gas-fired Facility.

If, as of the date a Notice to Proceed is given, the Construction Cost Index published by
Engineering News-Record Magazine (“CCI”) for the month in which the Notice to Proceed is
issued, has increased over the CCI published in the Engineering New Record for September
2005 (CCI as of September 2005 = 7540.38), the Lump Sum Prices referred to above will be
increased by an equal percentage amount.

     In addition, the Lump Sum Prices referred to above assumes the use of non-union labor.
Owner acknowledges that it has taken no action which would impose a union labor or
prevailing wage requirement on Fagen, Owner or the Project. The parties acknowledge and
agree that if after the date hereof, a change in applicable law, or a governmental
authority acting pursuant to a change in applicable law, or an action by the Owner shall
require Fagen to employ union labor or compensate labor at prevailing wages, the Lump Sum
Price shall be adjusted upwards to include any increased costs associated with such labor
or wages.

     4. Fagen will assist Owner in locating appropriate management for the Facility.

     5. Fagen requires representation of 10 counties, at a minimum, located within Illinois
on the Board of Directors, and Owner shall provide to Fagen a list of the names, addresses
(residential), and phone numbers of such Directors.

Page 2 0f 4

 

 

     6. Fagen will assist Owner in presenting information to potential investors, potential
lenders, and various entities or agencies that may provide project development assistance,
so long as the Project has 5% or less dilution. In addition, pro forma projections shall
be greater than 20% ROI by year five.

     7. During the term of this Letter of Intent the Owner agrees that Fagen will be the
exclusive Developer and Design-Builder for the Owner in connection with matters covered by
this Letter of Intent, and Owner shall not disclose any information related to this Letter
of Intent to a competitor or prospective competition of Fagen.

     8. This Letter of Intent shall terminate on December 31, 2007 unless the basic size
and design of the Facility have been determined and mutually agreed upon, and a specific
site or sites have been determined and mutually agreed upon, and at least 10% of the
necessary equity has been raised. Furthermore, this Letter of Intent shall terminate on
December 31, 2008 unless financing for the Facility has been secured. Either of the
aforementioned dates may be extended upon mutual written agreement of the Parties.

     9. Fagen and Owner agree to negotiate in good faith and enter into a definitive lump
sum design-build agreement, including exhibits thereto, (“Transaction Documents”)
acceptable to the Parties. This Letter of Intent shall terminate upon execution of the
Transaction Documents.

     10. The Parties will jointly agree on the timing and content of any public disclosure,
including, but not limited to, press releases, relating to Fagen’s involvement in Owner’s
Project, and no such disclosure shall be made without mutual consent and approval, except
as may be required by applicable law.

     11. Fagen agrees to commence construction by April, 2007, so long as the Owner has
fulfilled its prerequisite “Owner Responsibilities,” which include the following: (a) Fagen
has delivered a written notice to Owner informing Owner that Fagen is ready to accept a
Notice to Proceed and to commence Work; (b) Owner has title to the real estate on which the
project will be constructed; (c) the Phase I and Phase II Site work required of Owner is
completed along with redline drawings and such Phase I and Phase II Site work and redline
drawings have been reviewed and deemed adequate by Fagen; (d) the air permit(s) and/or
other applicable local, state or federal permits necessary so that construction can begin
have been obtained; (e) Owner has obtained Financial Closing; (f) if applicable, Owner has
executed a sales tax exemption certificate and provide same to Fagen; and (g) Owner has
provided the name of its property/all-risk insurance carrier and the specific requirements
for fire protection.

     12. The Parties agree that this Letter of Intent may be modified only by written
agreement by the Parties.

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     13. The Letter of Intent may be executed in one or more counterparts, each of which
when so executed and delivered shall be deemed an original, but all of which taken together
constitute one and the same instrument. Signatures which have been affixed and transmitted
by facsimile shall be binding to the same extent as an original signature, although the
Parties contemplate that a fully executed counterpart with original signatures will be
delivered to each Party.

	 	 	 	 	 	 	 	 	 	 	 
	One Earth Energy, LLC	 	 	 	Fagen, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/Steven Kelly
	 	 	 	By:
	 	/s/O. Wayne Mitchell	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Its:

	 	President
	 	 	 	Its:
	 	Sr VP	 	 

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EXHIBIT 10.2

PHASE I AND PHASE II

ENGINEERING SERVICES AGREEMENT

BETWEEN

ONE EARTH ENERGY, LLC

AND

FAGEN ENGINEERING, LLC

December 13, 2005

 

			
	*       Portions omitted pursuant to a request for confidential treatment and filed separately with
the Securities and Exchange Commission.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	Page	 
	Article 1 Definitions; Rules of Interpretation
	 	 	1	 
	 
	 	 	 	 
	1.1 Rules of Construction
	 	 	1	 
	1.2 Defined Terms
	 	 	2	 
	 
	 	 	 	 
	Article 2 Retention of Agent
	 	 	4	 
	 
	 	 	 	 
	2.1 Retention of Services
	 	 	4	 
	 
	 	 	 	 
	Article 3 Engineer Responsibilities
	 	 	4	 
	 
	 	 	 	 
	3.1 Services
	 	 	4	 
	3.2 Phase I Design Package
	 	 	4	 
	3.3 Delivery of Phase I Design Package
	 	 	4	 
	3.4 The Phase II Design Package
	 	 	4	 
	3.5 Delivery of Phase II Design Package
	 	 	5	 
	3.6 Delays
	 	 	5	 
	3.7 Utility Routing and Design Services Limited
	 	 	5	 
	 
	 	 	 	 
	Article 4 Client Responsibilities
	 	 	5	 
	 
	 	 	 	 
	4.1 Client’s Representative
	 	 	5	 
	4.2 Client’s Requirements
	 	 	6	 
	4.3 Other Information
	 	 	6	 
	4.4 Access to Property
	 	 	6	 
	4.5 Review of Documents
	 	 	6	 
	4.6 Consents, Approvals, Licenses, and Permits
	 	 	6	 
	4.7 Bids
	 	 	6	 
	4.8 Other Services
	 	 	6	 
	4.9 Services Outside Scope of Engineer’s Services
	 	 	6	 
	4.10 Deviation from Design
	 	 	6	 
	4.11 Developments Affecting Scope or Timing of Services
	 	 	7	 
	 
	 	 	 	 
	Article 5 Compensation And Payment
	 	 	7	 
	 
	 	 	 	 
	5.1 Compensation
	 	 	7	 
	5.2 Reimbursement of Engineer Expenses
	 	 	7	 
	5.3 Reimbursement of Subcontractor Expenses
	 	 	7	 
	5.4 Fees for Work Outside Scope of Services
	 	 	7	 
	5.5 Collection of Unpaid Amounts
	 	 	7	 
	5.6 Reimbursement Schedules Subject to Change
	 	 	7	 
	5.7 Invoices
	 	 	8	 
	5.8 Payment
	 	 	8	 
	5.9 Late Payment and Interest
	 	 	8	 
	5.10 Suspension for Failure to Pay
	 	 	8	 

					
	 	 	 	 	 
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Table of Contents
(continued)

	 	 	 	 	 
	 	 	 	Page	 
	5.11 Payment
	 	 	8	 
	5.12 Withholding Payments
	 	 	8	 
	5.13 Purchase Orders
	 	 	8	 
	5.14 Changes in Project
	 	 	8	 
	 
	 	 	 	 
	Article 6 Construction Cost And Cost Estimates 
	 	 	8	 
	 
	 	 	 	 
	6.1 Cost Estimates 
	 	 	8	 
	 
	 	 	 	 
	Article 7 Termination 
	 	 	9	 
	 
	 	 	 	 
	7.1 Termination Upon Default 
	 	 	9	 
	7.2 Termination Upon Abandonment of Plant 
	 	 	9	 
	 
	 	 	 	 
	Article 8 Ownership of Work Product 
	 	 	9	 
	 
	 	 	 	 
	8.1 Work Product 
	 	 	9	 
	8.2 Copies Provided to Client 
	 	 	9	 
	8.3 Prohibited Use of Work Product 
	 	 	9	 
	8.4 Derogation of Engineer’s Rights to Work Product 
	 	 	9	 
	 
	 	 	 	 
	Article 9 Successors and Assigns 
	 	 	10	 
	 
	 	 	 	 
	9.1 Successors 
	 	 	10	 
	9.2 Written Consent Required 
	 	 	10	 
	9.3 No Third-Party Beneficiaries 
	 	 	10	 
	 
	 	 	 	 
	Article 10 Warranty 
	 	 	10	 
	 
	 	 	 	 
	10.1 No Warranty Extended 
	 	 	10	 
	10.2 No Responsibility for Construction 
	 	 	10	 
	 
	 	 	 	 
	Article 11 Indemnification 
	 	 	10	 
	 
	 	 	 	 
	11.1 Engineer’s Indemnification 
	 	 	10	 
	11.2 Client’s Indemnification 
	 	 	11	 
	11.3 Hazardous Materials Indemnification 
	 	 	11	 
	 
	 	 	 	 
	Article 12 Dispute Resolution 
	 	 	11	 
	 
	 	 	 	 
	12.1 Arbitration 
	 	 	11	 
	 
	 	 	 	 
	Article 13 Confidentiality 
	 	 	12	 
	 
	 	 	 	 
	13.1 Non-Disclosure Obligation 
	 	 	12	 
	13.2 Publicity and Advertising 
	 	 	12	 
	13.3 Term of Obligation 
	 	 	12	 
	 
	 	 	 	 
	Article 14 Miscellaneous 
	 	 	12	 
	 
	 	 	 	 
	14.1 Governing Law 
	 	 	12	 
	14.2 Severability 
	 	 	12	 
	14.3 No Waiver 
	 	 	13	 

					
	 	 	 	 	 
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Table of Contents
(continued)

	 	 	 	 	 
	 	 	 	Page	 
	14.4 Captions and Headings 
	 	 	13	 
	14.5 Engineer’s Accounting Records 
	 	 	13	 
	14.6 Counterparts 
	 	 	13	 
	14.7 Survival 
	 	 	13	 
	14.8 Period of Response 
	 	 	13	 
	14.9 No Privity with Client’s Contractors 
	 	 	13	 
	14.10 Amendments 
	 	 	13	 
	14.11 Entire Agreement 13
14.12 Notice 
	 	 	13	 
	14.13 Extent of Agreement 
	 	 	14	 
	14.14 Subrogation Waiver 
	 	 	14	 
	 
	 	 	 	 
	EXHIBIT A Fee Schedule 
	 	 	16	 
	 
	 	 	 	 
	EXHIBIT B Reimbursable Expense Schedule 
	 	 	17	 
	 
	 	 	 	 
	EXHIBIT C Client’s Deliverable Site Obligations 
	 	 	18	 

					
	 	 	 	 	 
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PHASE I AND PHASE II

ENGINEERING SERVICES AGREEMENT

     THIS PHASE I AND PHASE II ENGINEERING SERVICES AGREEMENT (the “Agreement”) is made as
of December 13, 2005, (the “Effective Date”) by and between One Earth Energy, LLC, an
Illinois Limited Liability Company (the “Client") and Fagen Engineering, LLC a
Minnesota Limited Liability Company (the “Engineer"). Each of the Client and
Engineer are referred to herein individually as a “Party" and collectively as
the “Parties.”

RECITALS

     WHEREAS, Client is developing a 100 million gallons per year dry grind ethanol production
facility to be located in Gibson City, IL (the “Plant”) to be owned and operated by Client;
and

     WHEREAS, Client and Fagen, Inc. (“Design-Builder”) intend to enter into that certain Lump-Sum
Design-Build Agreement (“Design-Build Agreement") under which the Fagen, Inc.,
an affiliate of Engineer, will serve as the design-builder for the Plant and provide design,
engineering, procurement and construction services for the development and construction of the
Plant; and

     WHEREAS, Client wishes to retain an entity in advance of entering into the Design-Build
Agreement to perform certain engineering and design work that will be required under the
Design-Build Agreement on the terms and conditions set forth in this Agreement, and Engineer
desires to act as such entity upon the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound by this Agreement, the parties do hereby agree as follows:

Article 1

Definitions; Rules of Interpretation

     1.1 Rules of Construction.

     The capitalized terms listed in this Article 1 shall have the meanings set forth herein
whenever the terms appear in this Agreement, whether in the singular or the plural or in the
present or past tense. Other terms used in this Agreement but not listed in this Article shall have
meanings as commonly used in the English language and, where applicable, in generally accepted
construction and design-build industry standards. Words not otherwise defined herein that have well
known and generally accepted technical or trade meanings are used herein in accordance with such
recognized meanings. In addition, the following rules of interpretation shall apply:

	(a)	 	The masculine shall include the feminine and neuter.

					
	 	 	 	 	 
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	 	(b)	 	References to “Articles,” “Sections,” “Schedules,” or “Exhibits” shall be to
Articles, Sections, Schedules or Exhibits of this Agreement.
	 
	 	(c)	 	This Agreement was negotiated and prepared by each of the Parties with the
advice and participation of counsel. The Parties have agreed to the wording of this
Agreement and none of the provisions hereof shall be construed against one Party on the
ground that such Party is the author of this Agreement or any part hereof. The
following definitions will apply in this Agreement:

1.2 Defined Terms.

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

Agreement will have the meaning given to such term in the Preamble to this Agreement.

Applicable Law means

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

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

Client will have the meaning given to such term in the Preamble to this Agreement.

Client’s Representative will have the meaning given to such term in Section 4.1

Design-Build Agreement will have the meaning given to such term in the Recitals to this Agreement.

Effective Date will have the meaning given to such term in the Preamble to this Agreement.

Engineer will have the meaning given to such term in the Preamble to this Agreement.

Engineer Responsible Parties will have the meaning given to such term in Section 4.10.

					
	 	 	 	 	 
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Governmental Approvals will mean any material authorizations or permissions issued or granted by
any Governmental Authority to the Project, the Client, the Engineer, subcontractors and their
affiliates in connection with any activity related to the Services.

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

Monthly Invoice will have the meaning given to such term in Section 5.7.

Party or Parties will have the meaning given to such term in the Preamble to this Agreement.

Phase I Deliverables will mean the Client’s deliverable obligations pursuant to Exhibit C attached
to this Agreement.

Phase I Design Package will have the meaning given to such term in Section 3.2.

Phase II Deliverables will mean the Client’s deliverable obligations pursuant to Exhibit C

Phase II Design Package will have the meaning given to such term in Section 3.4 attached to this
Agreement.

Plant will have the meaning given to such term in the Recitals to this Agreement.

Project will mean the Plant, together with all equipment, labor, services and materials furnished
under the Design-Build Agreement.

Services will have the meaning given to such term in Section 3.1.

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

Subcontractor will mean any person or entity, including but not limited to independent engineers,
associates, and consultants, retained by Engineer, or by any person or entity retained directly or
indirectly by Engineer, in each case as an independent contractor, to perform a portion of the
Services.

Work Product will have the meaning given to such term in Section 8.1.

					
	 	 	 	 	 
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Article 2

Retention of the Agent

     2.1 Retention of Services. On the terms and subject to the conditions hereinafter set forth,
Client hereby retains Engineer to perform, and Engineer hereby agrees to perform, the Services.
Engineer will provide such Services solely pursuant to the terms and conditions set forth herein
including any indemnifications and limitations on liability.

Article 3 (Rev: 12/14/06)

Engineer Responsibilities

     3.1 Services. Engineer shall perform the Phase I Design Package and Phase II Design Package
engineering services necessary to facilitate Client’s completion of the Phase I and Phase II Site
work required of Client prior to the issuance of a Notice to Proceed pursuant to the Design-Build
Agreement (collectively, the “Services”).

     3.2 Phase I Design Package. (Grading and Drainage). The Phase I Design Package to be provided
by Engineer shall consist of the engineering and design of the Plant Site and shall include the
following drawings

	 	a)	 	Cover Sheet
	 
	 	b)	 	Property Layout Drawing
	 
	 	c)	 	Grading, Drainage and Erosion Control Plan Drawing (Multiple Drawings
if Required)

	 	i.	 	Used for Land Disturbance Permitting
	 
	 	ii.	 	Site grading is held 6-inches low for topsoil and seeding

	 	d)	 	Roadway Alignment Drawing
	 
	 	e)	 	Culvert Cross Sections and Details (Multiple Drawings)
	 
	 	f)	 	Seeding and Landscaping (If Required)

Plan sets along with a Bid Tabulation Sheet will be supplied to the Client so all contractors bid
the same quantities. A telephone conference call for a Phase I pre-bid meeting will be provided
upon Client’s request.

     3.3 Delivery of Phase I Design Package. Engineer shall deliver the completed Phase I Design
Package no later than 60 days after the receipt of all Phase I Deliverables, however, this will be
no sooner than January 29, 2007.

     3.4 Phase II Design Package. The Phase II Design Package to be provided by Engineer shall
provide the engineering and design of Site work and utilities for the Plant, all within the
property line of Plant, and shall consist of the following:

	 	a)	 	Cover Sheet
	 
	 	b)	 	Property Layout Drawing

					
	 	 	 	 	 
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	 	c)	 	Site Grading and Drainage Drawing (Final Interior Plant Grading)
	 
	 	d)	 	Roadway Alignment
	 
	 	e)	 	Utility Layout (Fire Loop)
	 
	 	f)	 	Utility Layout (Potable Water)
	 
	 	g)	 	Utility Layout (Well Water) if using on-site wells
	 
	 	h)	 	Utility Layout (Sanitary Sewer)
	 
	 	i)	 	Utility Layout (Utility Water Blowdown)
	 
	 	j)	 	Utility Layout (Natural Gas)

	 	i.	 	Fagen Engineering provides a preferred routing through the Site, line size and pipe
specifications are typically provided by the gas supplier.

	 	k)	 	Geometric Layout (For Project Control Verification)
	 
	 	l)	 	Site Utility Piping Tables Drawing
	 
	 	m)	 	Tank Farm Layout Drawing
	 
	 	n)	 	Tank Farm Details Drawing
	 
	 	o)	 	 Sections and Details Drawing (If required)
	 
	 	p)	 	Miscellaneous Details Drawing (If required)

A telephone conference call for a Phase 2 pre-bid meeting will be provided upon Client’s request.

     3.5 Delivery of Phase II Design Package. Engineer shall deliver the completed Phase II Design
Package no later than 60 days after the receipt of all Phase II Deliverables.

     3.6 Delays. The Parties agree that Engineer shall not be responsible for delays in providing
the Services under this Agreement due to factors beyond Engineer’s control.

     3.7 Utility Routing and Design Services Limited. The Parties agree that Engineer shall provide
the routing and design for the utilities necessary for the Plant only within the Plant property
line and up to the Plant property line, and that, for purposes of this Agreement, Engineer assumes
a tie-in point to a city utility. The Parties agree that, if there is no city tie-in point,
Engineer will route the utilities to the Plant property line and stop. Any special tie-in
requirements necessary to connect the utilities at the Plant property line are not included in the
compensation or the scope of this Agreement and shall only be designed and engineered by Engineer
as change in the Project which affects the Services hereunder.

Article 4

Client Responsibilities

     4.1 Client’s Representative. Client shall, prior to the commencement of Services by Engineer,
name a representative (“Client’s Representative") with authority to receive
information and transmit instructions for Client. Client’s Representative shall be vested with
authority to act on behalf of Client and Engineer shall be entitled to rely on Client’s
Representative’s communications with regard to the Services.

     4.2 Client’s Requirements. Client shall, prior to the commencement of Services by

					
	 	 	 	 	 
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	December 13, 2006
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Engineer, provide Engineer with Client’s requirements for the Project, including objectives
and constraints, design and construction standards, bonding and insurance requirements, and
contract forms.

     4.3 Other Information. Prior to the commencement of Services by Engineer, Client shall
provide Engineer with all other information available to Client and pertinent to the Project and
the Services including, but not limited to, all items required pursuant to Exhibit C. The items
required by Client pursuant to this Section 4.3 shall be furnished at Client’s expense, and
Engineer shall be entitled to rely upon the accuracy and completeness thereof.

     4.4 Access to Property. Prior to the commencement of Services and as necessary during the
performance of Services, Client shall arrange for access by Engineer upon public and private
property, as required for the performance of the Services under this
Agreement.

     4.5 Review of Documents. As related to the performance of Services hereunder, Client shall
examine documents presented by Engineer, obtain legal and other advice as Client deems
appropriate, and render written decisions within reasonable time. The items required by Client
pursuant to this Section 4.5 shall be furnished at Client’s expense, and Engineer shall be
entitled to rely upon the accuracy and completeness thereof.

     4.6 Consents, Approvals, Licenses and Permits. Prior to the commencement of Services and as
necessary during the performance of the Services, Client shall obtain all consents, approvals,
licenses, permits, and other Governmental Approvals necessary for the Project and for the
performance of the Services. The items required by Client pursuant to this Section 4.6 shall be
furnished at Client’s expense, and Engineer shall be entitled to rely upon the accuracy and
completeness thereof.

     4.7 Bids. Client shall advertise for and open bids when scheduled.

     4.8 Other Services. Client shall furnish all legal, accounting and insurance counseling
services as may be necessary at any time for the Services, including auditing services the Client
may require to verify the monthly invoices or to ascertain how or for what purposes the Engineer
and/or Subcontractors have used the money paid by or on behalf of the Client.

     4.9 Service Outside Scope of Engineer’s Services. Client shall, at its own expense, as
necessary for the performance and completions of the Services, provide any additional services
necessary for the Project that are outside scope of the Services provided by Engineer under this
Agreement. Engineer shall be entitled to rely upon, as applicable, the completeness and accuracy
of such additional services.

     4.10 Deviation from Design. Client shall indemnify and hold harmless Engineer, its
employees, its agents, its affiliates, and any other persons or entities within its control or for
whom Engineer would otherwise be responsible (“Engineer Responsible Parties”) against
claims arising out of Engineer’s design, if there has been, in the completion of the Phase I and
the Phase II Site work required of Client prior to the issuance of a Notice to Proceed pursuant to
the Design-Build Agreement, a failure to follow Engineer’s recommendation and such deviation or

					
	 	 	 	 	 
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	December 13, 2006
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failure caused the claims.

     4.11 Developments Affecting Scope or Timing of Services. Client shall promptly notify
Engineer, in writing, when Client learns of contractor error or any development that affects the
scope or timing of Engineer’s Services.

Article 5

Compensation and Payment

     5.1 Compensation. In consideration of its performance of the Services, Client shall pay
Engineer for Engineer’s time in the performance of the Services at a fixed fee of [*] (“Fixed
Fee”) as compensation. Engineer’s compensation under this Section 5.1 shall be pursuant to the
Fee schedule attached hereto as Exhibit A, as such schedule may be modified from time to time.
The full amount of compensation paid by Client under this Section 5.1 shall be included in and
credited to the Design-Build Agreement’s contract price if entered into upon payment in full by
Client.

     5.2 Reimbursement of Engineer Expenses. In addition to the fixed fee in 5.1, Client shall
reimburse Engineer for its expenses related to the performance of the Services in accordance with
Engineer’s current reimbursable expense schedule attached hereto Exhibit B.

     5.3 Reimbursement of Subcontractor Expenses.

          5.3.1 Subcontractor charges related to time spent in the performance of the Services shall
not be marked-up by Engineer. Client shall reimburse Engineer for costs related to Subcontractors’
time in accordance with the Subcontractors’ invoices for the work.

          5.3.2 Subcontractor reimbursable expenses will be marked up in accordance with the current
reimbursable expense schedule attached hereto as Exhibit B.

     5.4 Fees for Work Outside Scope of Services. Fees for all work outside the scope of
Engineer’s responsibilities described in Article 3, including change order work, shall be computed
in accordance with Engineer’s current fee schedules, attached hereto as Exhibits A and B, as such
schedules may be revised form time to time, unless otherwise agreed to in writing.

     5.5 Collection of Unpaid Amounts. If any amount due is not paid in accordance with this
Agreement and Engineer must collect that amount, Engineer shall be entitled to recover, in
addition to the amount due, the cost of collection, including reasonable attorney’s fees in
connection with those collection efforts.

     5.6 Reimbursement Schedules Subject to Change. Engineer’s reimbursement schedule and
reimbursable expense schedule attached hereto as Exhibits A and B are subject to change on
January 1 of each year.

 

			
	*	 	Portion omitted pursuant to a request for confidential treatment and filed separately with the
Securities and Exchange Commission.

					
	 	 	 	 	 
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     5.7 Invoices. Engineer shall submit a monthly invoice (“Monthly Invoice”) for
Services provided and for reimbursable expenses incurred by Engineer and any Subcontractors.

     5.8 Payment. Within thirty (30) days after Client’s receipt of each Monthly Invoice,
Client shall pay Engineer all amounts due.

     5.9 Late Payment and Interest. If Client fails to make payment within thirty (30) days
after receipt of Monthly Invoice, interest at maximum legal rate or at an annual rate of 18%,
whichever is less, shall accrue

     5.10 Suspension for Failure to Pay. If Client fails to make payment within thirty (30) days
after receipt of Monthly Invoice, Engineer may, at its option, after giving seven (7) days’ written
notice, suspend Services until it all amounts due to Engineer by Client have been paid in full.

     5.11 Payments from Lawful Sources. Client shall provide for payment from one or more lawful
source of all sums to be paid Engineer.

     5.12 Withholding Payments. Engineer’s compensation shall not be reduced on account of any
amounts withheld from payment to Subcontractors.

     5.13 Purchase Orders. If Client issues a purchase order or other document to initiate the
commencement of Services hereunder, it is expressly agreed that any terms and conditions appearing
thereon shall have no application and only the provisions of this Agreement shall apply.

     5.14 Changes in Project. If Client requests changes in the Project which affect the Services,
compensation for and time of performance of Engineer’s services shall be adjusted appropriately.

Article 6

Construction Cost and Cost Estimates

     6.1 Cost Estimates. Client and Engineer acknowledge that Engineer has no control over cost of
labor, materials, equipment of services furnished by others, over contractors’ methods of
determining prices, or other competitive bidding or market conditions and that Engineer’s estimates
of Project construction cost will be made on the basis of its employees‘ experience and
qualifications and will represent Engineer’s employees‘ best judgment as experienced and
qualified professionals, familiar with the construction industry. Engineer does not guarantee that
proposal, bids, or actual construction cost will not vary from its estimates of Project cost and
Client acknowledges the same.

					
	 	 	 	 	 
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Article 7

Termination

     7.1 Termination Upon Default. Either party may terminate this Agreement upon twenty (20)
days’ written notice if the non-terminating party has defaulted through no fault of the
terminating party.

     7.2 Termination Upon Abandonment of Plant. Client may terminate Engineer’s obligation to
provide further services upon twenty (20) days’ written notice if Client abandons development of
the Plant. In such event, all past due amounts for services rendered (including Subcontractor’s
fees, if any) and any unpaid reimbursable expenses shall be immediately due and payable by Client.

Article 8

Ownership of Work Product

     8.1 Work Product. All tangible items prepared by Engineer, including but not limited to all
drawings, specifications, calculations, data, notes and other materials and documents, including
electronic data furnished by Engineer to Client and to Subcontractors under this Agreement
(“Work Product”) shall be instruments of service, and Engineer shall retain the ownership
and property interests therein, including the copyrights thereto.

     8.2 Copies Provided to Client. Client may retain copies of Work Product for reference;
provided, however, that Client may not make copies of the Work Product available without
Engineer’s written permission, and, granted such permission, may only do so to the extent the use
of such copies of the Work Product directly pertains to the Services, the Plant, or the
construction thereof. Pursuant to Section 8.1 of this Agreement, Engineer retains ownership of and
property interests in any Work Product made available and/or copied.

     8.3 Prohibited Use of Work Product. Reuse of the Work Product on any another Project without
Engineer’s written consent is prohibited. Client shall indemnify and hold harmless Engineer
Responsible Parties against claims resulting from such prohibited reuse. Said items are not
intended to be suitable for completion of this Project by others.

     8.4 Derogation of Engineer’s Rights to Work Product. Submittal or distribution of Work
Product in connection with the performance and completion of the Services and the construction
of the Project does not constitute publication in derogation of Engineer’s rights and does not
in any way diminish Engineer’s Work Product rights established herein.

					
	 	 	 	 	 
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	December 13, 2006
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Article 9

Successors and Assigns

     9.1 Successors. The Parties intend that the provisions of this Agreement are binding upon
the Parties, their employees, agents, heirs, successors and assigns.

     9.2 Written Consent Required. Neither party shall assign, sublet, or transfer any interest in
this Agreement without written consent of the other; provided, however, that Engineer may employ
such Subcontractors as it may deem appropriate and may transfer or assign any interest in this
Agreement or the Work Product to Design-Builder without consent of Client.

     9.3 No Third-Party Beneficiaries. None of the provisions of this Agreement will be for the
benefit of or enforceable by any person other than the Parties hereto, their successors and
permitted assigns and legal representatives

Article 10

Warranty

     10.1 No Warranty Extended. Engineer shall use reasonable care to reflect requirements of
all Applicable Laws, rules, or regulations of which Engineer has knowledge or about which Client
specifically advises in writing, which are in effect on the date of this Agreement. ENGINEER
INTENDS TO RENDER SERVICES IN ACCORDANCE WITH GENERALLY ACCEPTED PROFESSIONAL STANDARDS, BUT NO
OTHER WARRANTY IS EXTENDED, EITHER EXPRESS OR IMPLIED, IN CONNECTION WITH SUCH SERVICES. Client’s
rights and remedies in this Agreement are exclusive.

     10.2 No Responsibility for Construction. Engineer shall not be responsible for construction
of the Plant, contractors’ construction means, methods, techniques, sequences, or procedures, or
for contractors’ safety precautions and programs, or for contractors’ failure according to
contract documents.

Article 11

Indemnification

     11.1 Engineer’s Indemnification. To the fullest extent permitted by law, Engineer shall
indemnify and hold harmless Client, Client’s officers, directors, partners, employees, and agents
from and against any and all claims for bodily injury and for damage to tangible property caused
solely by the negligent acts or omissions of Engineer or Engineer Responsible Parties and
Engineer’s Engineers in the performance and furnishing of Engineer’s services under this
Agreement. Any indemnification shall be limited to the terms and amounts of coverage of the
Engineer’s insurance policies.

					
	 	 	 	 	 
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     11.2 Client’s Indemnification. To the fullest extent permitted by law, Client shall
indemnify and hold harmless Engineer, Engineer’s officers, directors, partners, employees, and
agents and Engineer’s Engineers from and against any and all claims for bodily injury and for
damage to tangible property caused solely by the negligent acts of omission of Client or
Client’s officers, directors, partners, employees, agents, and Client’s Engineers with respect
to this Agreement or the Project.

     11.3 Hazardous Materials Indemnification. In addition to the indemnity provided under this
section, and to the fullest extent permitted by law, Client shall indemnify and hold harmless
Engineer and its officers, directors, partners, employees, and agents and Engineer’s Engineers
from and against all claims, costs, losses, and damages (including but not limited to all fees and
charges of engineers, architects, attorneys, and other professionals and all court or arbitration
or other dispute resolution costs) caused by, arising out of, or relating to the presence,
discharge, release, or escape of asbestos, PCBs, petroleum, hazardous waste, or radioactive
materials at, on, under, or from the Site.

Article 12

Dispute Resolution

     12.1 Arbitration. In an effort to resolve any conflicts that arise out of or relate to this
Agreement, the Client and the Engineer agree that all disputes shall be submitted first to
nonbinding mediation. If mediation does not resolve the conflicts, the controversy shall be
decided by final and binding arbitration conducted in Minneapolis, Minnesota in accordance with
the Construction Industry Arbitration Rules of the American Arbitration Association then in
effect, unless the Parties mutually agree otherwise.

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

Engineer and Client expressly agree that any arbitration pursuant to this Section 12.1 may be
joined or consolidated with any arbitration involving any other person or entity (i) necessary to
resolve the claim, dispute or controversy, or (ii) substantially involved in or affected by such
claim, dispute or controversy. Both Engineer and Client will include appropriate provisions in all
contracts they execute with other parties in connection with the Services to require such joinder
or consolidation.

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

					
	 	 	 	 	 
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	December 13, 2006
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Article 13

Confidentiality

     13.1 Non-Disclosure Obligation. Except as required by court order, subpoena, or Applicable
Law, neither Party shall disclose to third parties any confidential or proprietary information
regarding the other Party’s business affairs, finances, technology, processes, plans or
installations, product information, know-how, or other information that is received from the other
Party pursuant to this Agreement or the Parties’ relationship prior thereto or is developed
pursuant to this Agreement, without the express written consent of the other Party, which consent
shall not be unreasonably withheld. The Parties shall at all times use their respective reasonable
efforts to keep all information regarding the terms and conditions of this Agreement confidential
and shall disclose such information to third Persons only as reasonably required for the
permitting of the Project; financing the development, construction, ownership, operation and
maintenance of the Plant; or as reasonably required by either Party for performing its obligations
hereunder and if prior to such disclosure, the disclosing Party informs such third Persons of the
existence of this confidentiality obligation and only if such third Persons agree to maintain the
confidentiality of any information received. This Article 13 shall not apply to information that
was already in the possession of one Party prior to receipt from the other, that is now or
hereafter becomes a part of the public domain through no fault of the Party wishing to disclose,
or that corresponds in substance to information heretofore or hereafter furnished by third parties
without restriction on disclosure.

     13.2 Publicity and Advertising. Neither Client nor Engineer shall make or permit any of their
subcontractors, agents, or vendors to make any external announcement or publication, release any
photographs or information concerning the Project or any part thereof, or make any other type of
communication to any member of the public, press, business entity, or any official body which
names the other Party unless prior written consent is obtained from the other Party, which consent
shall not be unreasonably withheld.

     13.3 Term of Obligation. The confidentiality obligations of the Parties pursuant to this
Article 13 shall survive the expiration or other termination of this Agreement.

Article 14

Miscellaneous

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

     14.2 Severability. If any provision or any part of a provision of the Agreement shall be
finally determined to be superseded, invalid, illegal, or otherwise unenforceable pursuant to

					
	 	 	 	 	 
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any applicable Legal Requirements, such determination shall not impair or otherwise affect the
validity, legality, or enforceability of the remaining provision or parts of the provision of the

Agreement, which shall remain in full force and effect as if the unenforceable provision or part
were deleted.

     14.3 No Waiver. The failure of either Engineer or Client to insist, in any one or more
instances, on the performance of any of the obligations required by the other under this Agreement
shall not be construed as a waiver or relinquishment of such obligation or right with respect to
future performance.

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

     14.5 Engineer’s Accounting Records. Records of Engineer’s personnel time, reimbursable
expenses, and accounts between parties shall be maintained on a generally recognized accounting
basis.

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

     14.7 Survival. Notwithstanding any provisions herein to the contrary, the Work Product
provisions set forth in Article 8 and the indemnity obligations set forth herein shall survive (in
full force) the expiration or termination of this Agreement, and shall continue to apply to the
Parties to this Agreement even after termination of this Agreement or the transfer of such Party’s
interest in this Agreement.

     14.8 No Privity with Client’s Contractors. Nothing in this Agreement is intended or deemed to
create any legal or contractual relationship between Engineer and any Client contractor or
subcontractor retained to perform the Phase I and Phase II Site work required of Client prior to
the issuance of a Notice to Proceed pursuant to the Design-Build Agreement.

     14.9 Amendments. This Agreement may not be changed, altered, or amended in any way except in
writing signed by a duly authorized representative of each Party.

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

     14.11 Notice. Whenever the Agreement requires that notice be provided to a Party, notice
shall be delivered in writing to such party at the address listed below. Notice will be

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

     If to Engineer, to:

Fagen Engineering LLC 501

W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: John Austgen

Fax: (320) 564-4861

     with a copy to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Bruce Langseth

Fax: (320) 564-3278

     If to Client, to:

Mr. Steve Kelly

One Earth Energy, LLC

1306 West 8th Street

Gibson City, IL 60936

     14.12 Extent of Agreement. This Agreement and the Exhibits incorporated therein represent the
entire agreement between the Parties and may be amended only by written instrument signed by both
parties.

     14.13 Subrogation Waiver. The Parties waive all rights against each other, and against
contractors, Engineers, agents, and employees of the other for damages covered by any property
insurance during construction, and each shall require similar waivers from their contractors,
Engineers, and agents.

					
	 	 	 	 	 
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	December 13, 2006
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IN WITNESS WHEREOF, the Parties hereto have caused their names to be hereunto subscribed by their
officers thereunto duly authorized, intending thereby that this Agreement shall be effective as of
this December 13, 2005.

	 	 	 	 	 	 	 	 	 	 	 
	ONE EARTH ENERGY, LLC	 	 	 	FAGEN ENGINEERING LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steven Kelly
	 	 	 	By:
	 	/s/John R. Austgen	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title: President	 	 	 	Title: Sr. Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address for giving notices:	 	 	 	Address for giving notices:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1306 West 8th Street	 	 	 	501 West Highway 212	 	 
	Gibson City, IL 60936	 	 	 	PO Box 159

Granite Falls, MN 56241	 	 

					
	 	 	 	 	 
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	Phase I and Phase II Engineering Agreement	 	 
	December 13, 2006
	 	 	 	 

15

 

EXHIBIT A

FAGEN ENGINEERING LLC

Fee Schedule FY 2005

CONFIDENTIAL

	 	 	 	 	 
	TYPICAL ASSIGNMENT	 	BILLING CLASS	 	BILLING RATE
	Clerical / CADD Operator
	 	1	 	[*]
	Clerical / CADD Operator
	 	2	 	[*]
	CADD Operator / Designer
	 	3	 	[*]
	CADD Operator / Designer / Engineer
	 	4	 	[*]
	Designer / Engineer / PM
	 	5	 	[*]
	Engineer / Senior Engineer / PM
	 	6	 	[*]
	Senior Engineer / PM
	 	7	 	[*]
	Senior Engineer / PM
	 	8	 	[*]
	Senior Engineer / PM / Principal
	 	9	 	[*]
	PM / Principal
	 	10	 	[*]
	Principal
	 	11	 	[*]
	Principal
	 	12	 	[*]
	Principal
	 	13	 	[*]

Subject to Revision January 1, 2006

 

			
	[*]	 	Portion omitted pursuant to a request for confidential treatment and filed separately with the
Securities and Exchange Commission.

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December 13, 2006

16

 

EXHIBIT B

Fagen Engineering LLC

Reimbursable Expense Billing Schedule

Effective January 1, 2005

CONFIDENTIAL

	 	 	 	 	 	 	 
	Expense Code	 	Expense Description	 	Billing Rate	 
	BCA
	 	Blackline Print Copy – A	 	 	[*]	 
	BCB
	 	Blackline Print Copy – B	 	 	[*]	 
	BCC
	 	Blackline Print Copy – C	 	 	[*]	 
	BCD
	 	Blackline Print Copy – D	 	 	[*]	 
	BCE
	 	Blackline Print Copy – E	 	 	[*]	 
	BOA
	 	Paper Print Original – A	 	 	[*]	 
	BOB
	 	Paper Print Original – B	 	 	[*]	 
	BOC
	 	Paper Print Original – C	 	 	[*]	 
	BOD
	 	Paper Print Original – D	 	 	[*]	 
	BOE
	 	Paper Print Original – E	 	 	[*]	 
	DISK
	 	Floppy Disk 3 1/2” /ea	 	 	[*]	 
	FAX
	 	Fax Machine Usage/Page	 	 	[*]	 
	LD
	 	Long Distance Phone Calls	 	 	[*]	 
	LODGING
	 	Lodging	 	 	[*]	 
	MEALS
	 	Meal Expense	 	 	[*]	 
	MILEAGE
	 	Mileage/Mile	 	 	[*]	 
	PC1
	 	Photocopies 81/2 x11 (<1OO)/ea	 	 	[*]	 
	PC2
	 	Photocopies 11 x 17/ea	 	 	[*]	 
	PC3
	 	Photocopies (>100)/ea	 	 	[*]	 
	PO
	 	Postage	 	 	[*]	 
	PROSVC
	 	Outside Professional Services	 	 	[*]	 
	PROSVCEXP
	 	Outside Professional Services Expenses	 	 	[*]	 
	FLM
	 	Film & Developing	 	 	[*]	 
	SPECCOV
	 	Specification Book–Cover Binder/ea	 	 	[*]	 
	TRANS
	 	Transportation	 	 	[*]	 
	UPS
	 	Delivery Service Charges	 	 	[*]	 
	VELLUM
	 	Original Print/square foot	 	 	[*]	 

Subject to Revision January 1, 2006

 

			
	[*]	 	Portion omitted pursuant to a request for confidential treatment and filed separately
with the Securities and Exchange Commission.

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Phase I and Phase II Engineering Agreement

December 13, 2006

17

 

EXHIBIT C

Client Deliverable Site Obligations

Phase I Deliverables

          Prior to Engineer’s commencement of the Phase I Design Package work, the Client shall provide
Engineer with the following Phase I Deliverables:

	 	1.	 	A legal description of the Site
	 
	 	2.	 	Temporary and permanent easements, zoning, and other requirements and encumbrances
affecting land use or necessary to permit the proper design and construction of the Project
and enable Design-Builder to perform the Work
	 
	 	3.	 	To the extent available, as-built and record drawings of any existing structures at the
Site
	 
	 	4.	 	Environmental studies, reports and impact statements describing the environmental
conditions, including Hazardous conditions, in existence at the Site
	 
	 	5.	 	Preliminary approval from Client’s Rail service provider of rail design as prepared by
Client’s Rail Designer.
	 
	 	6.	 	Client’s written approval of final site layout including rail design and environmental
permitting emission points.
	 
	 	7.	 	Review, comment, and written approval of Client’s air permit application.
	 
	 	8.	 	Topographic Survey to one (1) foot contours including property boundaries and at least
two (2) benchmarks including existing service and utility lines.
	 
	 	9.	 	Soil borings logs for all soil borings complete at Engineer’s specified locations.
	 
	 	10.	 	Geotechnical Report regarding subsurface conditions with Client’s Geotechnical
Engineer’s recommendations from Engineer approved Geotechnical Engineer (Terracon is
preferred) including soil borings, and any other surveys or information available
describing other latent or concealed physical conditions at the Site.
	 
	 	11.	 	On-site location for Storm Water discharge.
	 
	 	12.	 	Preliminary NPDES discharge location for water discharges from utility discharges
including, but not limited to the water pre-treatment system, water softeners, and cooling
tower blowdown.
	 
	 	13.	 	Preliminary indication of source, analysis, and location of Client’s water supply.
	 
	 	14.	 	Client’s risk insurance provider’s specific requirements for fire protection or
approval to design fire protection to Liberty Insurance standards.
	 
	 	15.	 	Any special sizing or other requirements for ethanol storage tank farm.

	 
	 	16.	 	Preliminary location and design of administration building.

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Phase II Deliverables

          Prior to Engineer’s commencement of the Phase II Design Package work, the Client shall provide
Engineer with the following Phase II Deliverables:

	 	1.	 	Final location, source and quality of Client’s water supply.
	 
	 	2.	 	Off-site utility tie-in locations at or near the property lines (this includes, but is
not limited to, gas supply, electrical supply, water supply if no on-site wells, on-site or
off-site sanitary sewer)
	 
	 	3.	 	Final NPDES discharge location for Utility Water Blowdown.
	 
	 	4.	 	An insurance provider to allow the proper positioning and number of required hydrants
and hydrants with monitors.
	 
	 	5.	 	Written approval of final rail design form the Client’s rail service provider.
	 
	 	6.	 	Final location and design (general arrangement) of the Client’s administration
building.
	 
	 	7.	 	Final water pre-treatment design and operating parameters.

	 
	 	8.	 	Design and location of sanitary sewer discharge point of septic system.

One Earth Energy, LLC

Phase I and Phase II Engineering Agreement

December 13, 2006

19

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