Document:

Confidential Treatment Requested.
Confidential portions of this document have been redacted and have been separately filed
with the Commission. 

	

	
 

	
Exhibit 10.6 

	
 

	 

	
 

	
STANDARD
 FORM OF 

 DESIGN-BUILD
 AGREEMENT 

 AND GENERAL CONDITIONS 

 BETWEEN
 OWNER 

 AND
 CONTRACTOR

	
 

	
(Where the Basis of
 Compensation is the Cost of the Work with a Fee, with a Guaranteed 
Maximum
 Price Option)

	
 

	 

AGREEMENT made this 20th day of June in
the year of Two Thousand and Seven BETWEEN SOY
ENERGY LLC, the Owner, and THE KEN
BRATNEY COMPANY at 3400 109th Street, Des Moines, IA 50322, the
Contractor. For services in connection with the following described Project:
(Include complete project and scope)

The Owner and the Contractor agree as set forth below:

	
 

	
Page 1 of 23

	
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INDEX

	
 

	
 

	
 

	
 

	
ARTICLE

	
PAGE

	
 

	
 

	
 

	
 

	
1

	
The Construction Team and Extent of Agreement

	
 

	
3

	
2

	
Contractor’s Responsibilities

	
 

	
3

	
3

	
Owner’s Responsibilities

	
 

	
7

	
4

	
Subcontracts

	
 

	
9

	
5

	
Contract Time Schedule

	
 

	
9

	
6

	
Guaranteed Maximum Price

	
 

	
10

	
7

	
Contractor’s Fee

	
 

	
10

	
8

	
Cost of the Project

	
 

	
11

	
9

	
Changes in the Project

	
 

	
13

	
10

	
Payments to the Contractor

	
 

	
15

	
11

	
Insurance, Indemnity and Waiver of Subrogation

	
 

	
16

	
12

	
Termination of the Agreement and Owner’s Right to Perform
 Contractor’s Obligations

	
 

	
19

	
13

	
Assignment and Governing Law

	
 

	
20

	
14

	
Mediation

	
 

	
22

	
 

	
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ARTICLE 1

The Construction
Team and Extent of Agreement

THE CONTRACTOR accepts the relationship of trust and confidence
established between him and the Owner by this Agreement. He agrees to furnish
the architectural, engineering and construction services set forth herein and
agrees to furnish efficient business administration and superintendent, and to
use his best efforts to complete the Project in the best and soundest way and
in the most expeditious and economical manner consistent with the interests of
the Owner.

1.1 The Construction Team: The Contractor, the
Owner, the Owner’s Representative who must be approved by Contractor, such
approval not to be unreasonably withheld, and the Architect/Engineer called the
“Construction Team” shall work from the beginning of design through
construction completion. The Ken Bratney Company shall act in the capacity of
the Contractor and the Architect/Engineer, and subsequent references to
Architect/Engineer in the Agreement shall mean the Ken Bratney Company.

1.2 Extent of Agreement: This Agreement
represents the entire agreement between the Owner and the Contractor and
supersedes all prior negotiations, representations or agreements. When the
Drawings and Specifications are complete, they shall be identified by amendment
to this Agreement. This Agreement shall not be superseded by any provisions of
the documents for construction and may be amended only by written instrument
signed by both Owner and Contractor.

1.3 Definitions: The Project is the total
construction to be designed and constructed of which the Work is part. The Work
comprises the completed construction required by the Drawings and
Specifications. The term day shall mean calendar day unless otherwise
specifically designated.

1.4 Ownership of Documents: The drawings,
specifications and other documents furnished by the Design/Builder are
instruments of service and shall not become the property of the Owner whether
or not the Project for which they are made is commenced. Drawings,
specifications and other documents furnished by the Design/Builder shall not be
used by the Owner on other projects, for additions to this Project or, unless
the Design/Builder is in default, for completion of this Project by others,
except by written agreement relating to use, liability and compensation.

1.5 Use of Documents: Submission or
distribution of documents to meet official regulatory requirements or for other
purposes in connection with the Project is not to be construed as publication
in derogation of the Design/Builder’s common law copyrights or other reserved
rights. The Owner shall own neither the documents nor the copyrights. 

	
 

	
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ARTICLE 2

Contractor’s
Responsibilities

2.1 Contractor’s
Services

2.1.1 The Contractor shall be responsible for
furnishing the Design and the Construction of the Project. The Contractor shall
develop a design and construction phase schedule and the Owner shall be
responsible for prompt decisions and approvals so as to maintain the approved
schedule. Any design, engineering, architectural, or other professional service
required to be performed under this Agreement shall be performed by duly
licensed personnel.

2.1.2 The Contractor shall perform design
services in accordance with the following phases:

	
 

	
 

	
 

	
 

	
A. Phase 1 - Schematic Design. In Phase 1, the Contractor and
 Owner shall consult concerning the Owner’s requirements for the Project.
 Based on such requirements, the Contractor shall prepare a schematic design
 study for the Project consisting of: plans, elevations, sections and rendered
 perspectives sufficient to convey the general design of the Project to the
 Owner; outline specifications in sufficient detail to indicate the general
 description of the Project, the type of structure, the kinds and quality of
 materials, mechanical and electrical systems to be installed in the Project;
 and an “Estimated Project Construction Cost - Schematic Design Phase.

	
 

	
 

	
Phase I shall be completed by November 10, 2006.

	
 

	
 

	
 

	
B. Phase II - Design Development. During this phase, the Contractor
 shall prepare design development documents which includes contract drawings
 (Revision 0 set) and other documents. The design development documents define
 the Contractor’s scope of work.

	
 

	
 

	
 

	
 

	
C. Phase III - Construction Documents. Upon the Owner’s approval
 of the design development documents and authorization to proceed, the
 Contractor shall prepare Construction Documents based on the design
 development documents. The Guaranteed Maximum Price is set out in Section
 6.1. 

	
 

	
 

	
Phase III shall be completed by December 1, 2007.

2.1.3 Prior to or during Phase 1 of the design
process, the Contractor shall prepare a projected schedule for completion of
all phases of the design process.

2.1.4 Upon completion of each phase of the
design process, the Contractor shall prepare a projected schedule for
completion of all phases of the design process.

2.1.5 All drawings, specifications and other
documents prepared by the Contractor during the design process shall be and
remain the exclusive property of the Contractor and shall not be used by the
Owner for any purpose without the express written permission of the Contractor.
The Contractor claims a copyright in all such drawings, specifications and
documents. Submissions or distribution of such items to meet official regulatory
requirements or for the review of the Owner or for any other purpose related to
the Project is not intended, and shall

	
 

	
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not be construed, as a waiver of Contractor’s copyright or of any other
of Contractor’s rights in such items.

2.1.6 During Phase III of the design process,
the Contractor shall prepare an estimated progress schedule for construction of
the Project. The Contractor shall present the proposed schedule to the Owner at
the completion of Phase III of the design process for review and approval. The
Contractor shall commence construction of the Project upon receipt of written
direction from the Owner. During the construction phase, the Contractor shall
provide the Owner with schedule updates monthly.

2.1.7 After the completion of any Phase as set
forth in Article 2.1.2, if the Project is no longer feasible from the
standpoint of the Owner, the Owner may terminate this Agreement and pay the
Contractor pursuant to Article 12.3.1.

2.1.8 The Contractor will assist the Owner in
securing permits necessary for the construction of the Project. Owner will pay
all cost associated with all permits and governmental fees (including utility
fees) necessary for the construction and occupancy of the Project.

2.2 Responsibilities
With Respect to Construction

2.2.1 The Contractor will provide all
construction supervision, inspection, labor, materials, tools, construction
equipment and subcontracted items for the execution and completion of the
Project. The Owner will, at its discretion, hire an independent inspector to
inspect the work done by the Contractor and its Subcontractors on this project.
The Contractor agrees to cooperate to the fullest extent with the inspector.

2.2.2 The Contractor has included an allowance
for sales and use tax of $1,267,000.00 related to the Work provided by the
Contractor. Any actions implemented by any taxing authority that causes taxes
to increase or decrease after January 1, 2007 that applies to this Project will
be handled by a Change Order. For any increased sales and use taxes, the Owner
shall reimburse the Contractor for only the increased costs with no additional
fee. The Contractor shall provide the Owner with an affidavit confirming total
sales tax paid and copies of invoices with sales tax charges upon completion of
the project. Any unspent sales and use tax allowance shall be credited via
Change Order, reducing the price upon final project completion. 

2.2.3 The Contractor will prepare and submit for
the Owner’s approval within two weeks of Beginning of Performance, an estimated
progress schedule for the Project. This schedule shall indicate the dates for
the starting and completion of the various stages of design and construction.
It shall be revised as required by the conditions of the Work and those
conditions and events, which are beyond the Contractor’s control.

2.2.4 The Contractor shall at all times keep the
premises free from the accumulation of waste materials or rubbish caused by his
operations. At the completion of the Work, he shall remove all of his waste
material and rubbish from and around the Project as well as all his tools,
construction equipment, machinery and surplus materials.

	
 

	
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2.2.5 The Contractor will give all notices and
comply with all laws and ordinances legally enacted at the date of execution of
the Agreement, which govern the proper execution of the Work.

2.2.6 The Contractor shall take necessary
precautions for the safety of his employees on the Work, and shall comply with
all applicable provisions of federal, state and municipal safety laws to
prevent accidents of injury to persons on, about, or adjacent to the Project
site. He shall erect and properly maintain, at all times, as required by the
conditions and progress of Work, necessary safeguards for the protection of
workmen and the public. It is understood and agreed, however, that the
Contractor shall have no responsibility for the elimination or abatement of
safety hazards created or otherwise resulting from Work at the job site carried
on by other persons or firms directly employed by the Owner as separate
contractors or by the Owner’s tenants, and the Owner agrees to cause any such
separate contractors and tenants to abide by and fully adhere to all applicable
provisions of federal, state and municipal safety laws and regulations and to
comply with all reasonable requests and directions of the Contractor for the
elimination or abatement of any such safety hazards at the job site.

2.2.7 The Contractor shall keep such full and
detailed accounts as may be necessary for proper financial management under
this Agreement. The system shall be satisfactory to the Owner, who shall be
afforded access to all the Contractor’s records books, correspondence,
instructions, drawings, receipts, vouchers, memoranda and similar data relating
to this Agreement. The Contractor shall preserve all such records for a period
of three years after the final payment or longer where required by law. 

2.3 Royalties
and Patents

2.3.1 The Contractor shall pay all royalties and
license fees for materials, methods and systems incorporated in the work. He
shall defend all suits or claims for infringement of any patent rights and
shall save the Owner harmless from loss on account thereof except when a
particular design, process or product is specified by the Owner. In such case
the Contractor shall be responsible for such loss only if he has reason to
believe that the design, process or product so specified is an infringement of
a patent, and fails to give such information promptly to the Owner. 

2.4 Warranties and
Completion

2.4.1 The Contractor warrants to the Owner that
all materials and equipment furnished under this Agreement will be new, unless
otherwise specified and agreed upon by the Owner, and that all Work will be of
good quality, free from improper workmanship and defective materials and in
conformance with the Drawings and Specifications. The Contractor agrees to
correct all Work performed by him and his Subcontractors under this Agreement
which proves to be defective in material and workmanship within a period of one
year from the Date of Operational Completion as defined in Paragraph 5.2
(except process warranty in 2.4.7). 

2.4.2 The Contractor will secure required
certificates of inspection, testing or approval and deliver them to the Owner.

	
 

	
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2.4.3 The Contractor will collect all written
warranties and equipment manuals and deliver them to the Owner.

2.4.4 The Contractor, with the assistance of the
Owner’s maintenance personnel, will direct the checkout of utilities and
operations of systems and equipment for readiness, and will assist in their
initial start-up and testing.

2.4.5 The
Contractor makes no warranty, express or implied, of merchantability or of
fitness for a particular purpose concerning any materials, equipment or
machinery incorporated in the project. Materials, equipment or machinery
will be new unless otherwise specified and agreed upon by the Owner in the
construction documents. Provided, that to the extent possible the Contractor
shall pass on to Owner any warranties made by the manufacturers of such items.
The Contractor will collect all available written warranties and equipment
manuals and deliver them to Owner.

2.4.6 The
warranties set forth in paragraphs 2.4.1 through 2.4.5 are expressly in lieu of
any other express or implied warranty including any implied warranty of
merchantability or of fitness for a particular purpose. The Contractor
shall not be liable for any consequential or incidental damages arising from
the breach of any warranty contained herein or of any other provision of this
Agreement.

2.4.7 Owner shall be provided a warranty of the
Project process capabilities as to quality and quantity. This warranty is
provided by Westfalia Separator, Inc., and Cimbria Sket GmbH, subcontractors to
Contractor, directly to the Owner. Owner understands and acknowledges that it
will look solely to Westfalia Separator, Inc. and Cimbria Sket GmbH for any
process warranty claims and not to Contractor. This warranty is limited to and
defined by warranties between the Owner and Westfalia Separator, Inc. and
between Owner and Cimbria Sket GmbH, and attached as Addendums A-1 and A-2. The
Contractor limits any damages resulting from issues arising for warranted
performance values to the amounts offered by the applicable process
provider(s).

2.4.8 The Contractor’s warranty excludes remedy
for damage or defect caused by abuse, modifications not executed by the
Contractor, improper or insufficient maintenance, improper operation, or normal
wear and tear under normal usage.

2.4.9 Contractor agrees to assist Owner in
obtaining response and action from Cimbria Sket GmbH and/or Westfalia Separator,
Inc. for items covered in 2.4.7.

2.5 Additional
Services

2.5.1 The Contractor will provide the following
additional services upon the request of the Owner. A written agreement between
the Owner and Contractor shall define the extent of such additional services
and the amount and manner in which the Contractor will be compensated for such
additional services.

2.5.2 Services related to investigation,
appraisals or evaluations of existing conditions, facilities, or equipment, or
verification of the accuracy of existing drawings or other Owner-furnished
information.

	
 

	
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2.5.3 Services related to Owner-furnished
equipment, furniture and furnishings, which are not a part of this Agreement.

2.5.4 Services for tenant or rental spaces not a
part of this Agreement.

2.5.5 Obtaining and training maintenance
personnel or negotiating maintenance service contracts after initial start-up
and training.

ARTICLE 3

Owner’s
Responsibilities

3.1 The Owner shall provide full information
regarding his requirements for the Project. Owner has responsibilities of
reviewing and approving all progress schedules and all construction documents.
The Owner shall have input in the selection of subcontractors used on the
project.

3.2 The Owner shall designate a representative
who shall be fully acquainted with the Project, and has authority to approve
changes in the scope of the Project, render decisions promptly, and furnish
information expeditiously and in time to meet the dates set forth in
Subparagraph 2.2.3.

3.3 The Owner shall furnish for the site of
the Project all necessary surveys describing the physical characteristics,
legal limitations, utility locations, and a legal description. 

3.4 The Owner shall secure and pay for all
necessary approvals, easements, assessments and charges required for the
construction, use or occupancy of permanent structures or for permanent changes
in existing facilities.

3.5 The Owner shall furnish such legal
services as may be necessary for providing the items set forth in Paragraph
3.4, and such auditing services as he may require.

3.6 If the Owner becomes aware of any fault or
defect in the Project, or non-conformance with the Drawings or Specifications,
he shall give prompt written notice thereof to the Contractor.

3.7 The Owner shall provide the insurance for
the Project as provided in Article 11.

3.8 The Project shall be bonded with a
Performance and Payment Bond. The cost of said Bonds are NOT INCLUDED in the Guaranteed Maximum
Price stated in Article 6.1 and the cost of which shall be paid separately by
the Owner to the Contractor. Bonding may be accomplished through the use of
Bonds directly from the Contractor and dual obligee bonds from major
subcontractors that total the Contract Amount subject to Owner’s Lender’s
approval.

	
 

	
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3.9 The services and information required by
the above paragraphs shall be furnished with reasonable promptness at the
designated parties’ and the parties shall be entitled to rely upon the accuracy
and the completeness thereof.

3.10 The Owner shall furnish reasonable
evidence satisfactory to the Contractor, prior to commencing Work and at such
future times as may be required, that sufficient funds are available and committed
for the amount equal to the Guaranteed Maximum Price as described in Paragraph
6.1. Unless such reasonable evidence is furnished, the Contractor is not
required to commence or continue any Work, or may, if such evidence is not
presented within a reasonable time, stop Work upon 15 days’ notice to the
Owner. The failure of the Contractor to insist upon the providing of this
evidence at any one time shall not be a waiver of the Owner’s obligation to
make payments pursuant to this Agreement, nor shall it be a waiver of the
Contractor’s right to request or insist that such evidence be provided at a
later date.

3.11 The Owner shall have no contractual
obligation to the Contractor’s Subcontractors and shall communicate with such
Subcontractors only through the Contractor, other than process warranty in
2.4.7.

3.12 Confidentiality

3.12.1 Definitions:

          (a)
“Contractor Information” means all information (whether written, oral or in
another form) that consists of or includes the Contractor’s trade secrets
and/or confidential information. 

          (b)
“Trade Secrets” means trade secrets under applicable trade secret or other law;
and includes, however documented concepts, ideas, design, know-how, methods,
data, processes, formulas, compositions, improvements, inventions, discoveries,
production specifications, past, current, and planned research and development,
and manufacturing or distribution methods and processes related to the
construction of a biodiesel facility, list of actual or potential Owners that
may be interested in the construction of biodiesel facilities and/or suppliers,
current anticipated requirements, price lists, market studies, business plans,
computer software programs, including computer software and database
technology, systems, structures and architectures, any information from
subcontractors which have been leased and or licensed to the Contractor, and
any other information as the trade secret within the meaning of applicable
state or federal law. 

          (c)
“Confidential Information” means written or other information concerning the
Contractor, other than trade secrets, not generally known to the public; and to
the extent consistent with the foregoing definition, includes historical or
financial statement, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, and any other information
that is marked “confidential” or in some comparable manner.

3.12.2 The Owner agrees
that, during the term of this Agreement and for two (2) years following the
termination of this Agreement, it shall not solicit or entice away any
employees of K.B.C. Group, Inc. and/or its affiliates to compete with K.B.C.
Group, Inc. for the operation or construction of a Biodiesel plant.

3.13 The Owner shall
abide by all process technology licenses between themselves and the technology
owner and shall hold the Contractor harmless for any violations thereof.

	
 

	
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3.14 The Contractor
and certain technology providers will disclose key know-how to the Owner during
the construction, commissioning, and operational training of the plant. At the
signing of this agreement, the Owner declares it does not have any knowledge,
secret or otherwise, in respect to any key technologies except for the
knowledge already obtained during the pre-construction engineering phase. The
Owner shall use the obtained know-how solely for the operation of this plant.
The Owner and/or its employees may not disclose the know-how to any related companies.
In the event of violation that causes the contractor, Cimbria Sket GmbH, and/or
Westfalia Separator, Inc. damages, the Owner shall reimburse harmed parties for
any arising costs, expenses, penalties, or damages and shall indemnify the
Contractor, Cimbria Sket GmbH, and Westfalia Separator, Inc.

ARTICLE 4

Subcontracts

4.1 All portions of the Work that the
Contractor does not perform with his own forces shall be performed under
subcontracts.

4.2 A Subcontractor is a person or entity who
has a direct contact with the Contractor to perform any Work in connection with
the Project. The term Subcontractor does not include any separate contractor
employed by the Owner or the separate contractors’ subcontractors.

4.3 No contractual relationship shall exist
between the Owner and any Subcontractor, other than process warranty in 2.4.7.
The Contractor shall be responsible for the management of the Subcontractors in
the performance of their Work.

ARTICLE 5

Contract Time
Schedule

5.1 The Work to be performed under this
Agreement shall commence on or about June 1, 2007 and shall reach Final
Completion on or about November 30, 2008.   All
dates in this article are subject to Owner providing proof of financial
commitment from its lender and equity funding for the entire contract value,
entering an EPC contract with the Contractor and paying a down payment to the
Contractor by June 1, 2007. At that point, concentrated detailed engineering
work will begin by Bratney Company and Cimbria-Sket. (“Beginning of
Performance”).

Dates in this section will be adjusted earlier or later based on the
June 1, 2007 target for “Beginning of Performance”, but not necessarily on a
day-for-day basis subject to mutual agreement of both parties.

Any delay caused by Owner due
to the delay in construction or operating permit receipts or raw material and
utilities (water, Power, natural gas) availability will also extend dates in
this article and not necessarily on a day for day basis subject to mutual
agreement of both parties.

	
 

	
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5.2  The work in this Agreement will
occur and reach several milestones prior to Final Completion Status. Namely: 

	
 

	
 

	
 

	
- Mechanical
  Completion 

	
 

	
 

	
 

	
- Commissioning
  Completion 

	
 

	
 

	
 

	
- Operational
  Completion 

	
 

	
 

	
 

	
- Final Completion
  

Mechanical Completion – Contractor has
completed erection in
accordance with drawings and specifications, applicable codes, and met all
other requirements of this agreement. “Mechanical Completion” applies to
mechanical equipment, piping, electrical, instrumentation, buildings, infrastructure,
and all areas of the site. 

It is recognized that painting, paving, insulation, as well as final
clean up must be completed by Contractor before the installation is deemed
finally complete. At the time of “Mechanical Completion”, this work may not be
complete, but should be in a sufficiently advanced state of completion so as to
not unreasonably interfere with subsequent activities nor affect minimum safety
and environmental requirements. 

Commissioning Completion – The commissioning phase of work includes the
checking and preparation of units or systems for operation, the checking of
controls and automation, interlock testing, system purging and flushing,
utility unit start-ups, system adjustments, water circulation and other
activities. Commissioning prepares the units for initial charging of raw
materials, catalysts, etc. and eventual start of the chemical operations. 

Operational Completion – Operational Completion occurs when one or more
periods of not less than 48 hours in duration occur where the capacity of the
production unit has exceeded 90% of nameplate (272 mton per day Biodiesel) and
a performance warranty test has been completed. 

Final Completion – This milestone occurs when: 

	
 

	
 

	
 

	
 

	
a)

	
Plant has met
  Operational Completion status or the Contractor has agreed to pay Owners
  liquidated damages for performance deficiencies; 

	
 

	
 

	
 

	
 

	
b)

	
Contract has
  completed all work; 

	
 

	
 

	
 

	
 

	
c)

	
Contractor has
  removed all project equipment, waste and surplus materials from the site; 

	
 

	
 

	
 

	
 

	
d)

	
Contractor has delivered
  to Owners all documentation required under the agreement; 

	
 

	
 

	
 

	
 

	
e)

	
Contractor has
  completed all punch list items. 

5.3  Mechanical Completion status is expected within 15
calendar months from the date of “Beginning of Performance”. 

Operational Completion status is expected within 17 calendar months
from the date of “Beginning of Performance”. 

Final Completion is expected with 18 calendar months from the date of
“Beginning of Performance”. 

Page 11 of 23 

Guaranteed
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*** Confidential material redacted
and filed separately with the Commission. 

5.4 If the Contractor is delayed at any time in the
progress of the Project by any act or neglect of the Owner or by any separate
contractor employed by the Owner, or by changes ordered in the Project, or by
fire, unusual delay in transportation, adverse weather conditions not
reasonably anticipated, unavoidable casualties, or any causes beyond the
Contractor’s control, or a delay authorized by the Owner, then the Date for
Operational Completion shall be extended by Change Order for the period caused
by such delay. 

5.5 Failure of the Contractor to
complete the Project by the Operational Completion Date shall result in a
penalty in the amount of $7,500.00 a day for each day Contractor fails to meet
the scheduled date. 

Both parties agree to this amount since specific dollar amounts for
damages for each such violation are impossible to calculate. Any and all
penalties will be capped at $225,000.00 subject to Owner's Lender's approval. 

ARTICLE 6

Guaranteed Maximum Price

6.1 The Contractor guarantees that the maximum price to
the Owner for the Cost of the Project as set forth in Article 8, and the
Contractor’s Fee as set forth in Article 7, will not exceed forty-nine million
five hundred thousand Dollars ($49,500,000.00 ), which sum shall be called the
Guaranteed Maximum Price. 

6.2 The Guaranteed Maximum Price is based upon laws,
codes, and regulations in existence at the date of its establishment and upon
criteria, Drawings, and Specifications set forth in the Scope as Addendum B. 

6.3 The Guaranteed Maximum Price will be modified for
delays caused by the Owner and for Changes in the Project, all pursuant to
Article 9 once actual construction begins. 

6.4 Allowances included in the
Guaranteed Maximum Price are as set forth below:

	
 

	
 

	
 

	
 

	
 

	
 

	
•

	
Incoming Water
  Treatment

	
 

	
$

	
***

	
 

	
•

	
Waste Water
  Treatment

	
 

	
$

	
***

	
 

	
•

	
Lab Furnishing
  & Equipment

	
 

	
$

	
***

	
 

	
•

	
Sales Tax

	
 

	
$

	
***

	
 

	
•

	
Landscaping

	
 

	
$

	
***

	
 

	
•

	
Office

	
 

	
$

	
***

	
 

ARTICLE 7

Contractor’s Fee

7.1 In consideration of the performance of the
Agreement, the Owner agrees to pay to the Contractor in current funds as
compensation for his services a Fee as follows: 

Page 12 of 23 

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Revised 06/18/2007 

*** Confidential material redacted and filed separately with the Commission.

          ***% of cost of work not to exceed the
Guaranteed Maximum Price 

7.2 Adjustment in Fee shall be made as follows: 

7.2.1 For changes in the Project as provided in Article 9, the Contractor’s
Fee shall be increased ***% for additive changes. There will be no Fee adjustment for deductive changes. 

7.2.2 Notwithstanding anything contained elsewhere in this agreement, there
shall be an increase in the Guaranteed Maximum Price and an extension in the Contract Time Schedule for any costs incurred by the
Contractor as a result of a change made by the Owner to the scope of the Project or any delay in the progress of the project for
any cause beyond the Contractor’s control, including delay in delivery of materials or equipment. Claims arising from the
costs incurred or from the delay shall be made within a reasonable time. If the Owner and Contractor cannot agree on the amount of
the adjustment in the Guaranteed Maximum Price and the Contract Time Schedule, it shall be determined pursuant to the provisions
of Article 9. Any change in the Guaranteed Maximum Price or Contract Time Schedule resulting from such claim shall be authorized
by Change Order. 

7.2.3 In the event the Cost of the Project plus the Contractor’s Fee shall
be less than the Guaranteed Maximum Price as adjusted by Change Orders, the resulting savings will be shared by the Owner and the
Contractor as follows:

          100% Contractor with the exception of
unused sales tax allowance which will revert entirely to the Owner. 

7.2.4 The Contractor shall be paid an additional fee in the same proportion as
set forth in 7.2.1 if the Contractor is placed in charge of managing the replacement of insured or uninsured loss.

7.3 The Contractor shall be paid monthly that part of his Fee proportionate to
the percentage of Work completed, the balance, if any, to be paid at the time of final payment. 

7.4 Included in the Contractor’s Fee are the following:

7.4.1 Salaries or other compensation of the Contractor’s employees at the
principal office and branch offices, except employees listed in Subparagraph 8.2.3. 

7.4.2 General operation expenses of the Contractor’s principal and branch
offices other than the field office. 

7.4.3 Any part of the Contractor’s capital expenses, including interest on
the Contractor’s capital employed for the Project. 

7.4.4 Overhead or general expenses of any kind, except as may be expressly
included in Article 8. 

7.4.5 Costs in excess of the Guaranteed Maximum Price, as adjusted.

Page 13 of 23 

Guaranteed
Max Price 

Revised 06/18/2007 

ARTICLE 8

Cost of the Project

Article 8 is only applicable when calculating contractor's cost in
accordance with Article 12. 

8.1 The term Cost of the Project shall mean costs
necessarily incurred in the design and construction of the Project and shall
include the items set forth below in this Article. The Owner agrees to pay the
Contractor for the Cost of the Project as defined in this Article. Such payment
shall be in addition to the Contractor’s Fee stipulated in Article 7. The total
will not exceed the Gross Maximum Price. 

8.2 Cost Items 

8.2.1 All architectural, engineering, CAD
design fees and consulting fees and expenses incurred in designing, selling and
constructing the Project. 

8.2.2 Wages paid for labor in the direct
employ of the Contractor in the performance of the Work under applicable
collective bargaining agreements, or under a salary or wage schedule agreed
upon by the Owner and the Contractor, and including such welfare or benefits,
if any, as may be payable with respect thereto. 

8.2.3 Salaries of Contractor’s employees
when stationed at the field office, employees engaged on the road expediting
the production or transportation of materials and equipment and employees from
the main or branch office performing the functions listed in this Article. 

8.2.4 Cost of all employee benefits and
taxes for such items as unemployment compensation and social security, insofar
as such cost is based on wages, salaries, or other remuneration paid to
employees of the Contractor and included in the Cost of the Project under
Subparagraphs 8.2.1, 8.2.2 and 8.2.3. 

8.2.5 The cost of items included in 8.2.2,
8.2.3 and 8.2.4 shall be billed to the Project in accordance with Contractor’s
Standard Rate Schedule attached as Addendum C. 

8.2.6 Reasonable transportation,
traveling and hotel and moving expenses of the Contractor or of his officers or
employees incurred in discharge of duties connected with the Project. 

8.2.7 Cost of all materials, supplies and
construction equipment stored at or incorporated in the Project, including
costs of transportation and storage thereof. 

8.2.8 Payments made by the Contractor to
Subcontractors for Work performed pursuant to contract under this Agreement. 

8.2.9 Cost, including transportation and
maintenance, of all materials, supplies, equipment, temporary facilities and
hand tools not owned by the workmen, which are employed or consumed in the
performance of the Work, and cost less salvage value on such items used, but
not consumed, which remain the property of the Contractor. 

Page 14 of 23 

Guaranteed
Max Price

Revised 06/18/2007 

8.2.10 Rental charges of all necessary
machinery and equipment, exclusive of hand tools, used at the site of the Work,
whether rented from others or owned by the Contractor, including installations,
repairs and replacements, dismantling, removal, costs of lubrication, transportation
and delivery costs thereof, at rental charges consistent with those prevailing
in the area. 

8.2.11 Cost of the premiums for all
insurance, which the Contractor is required to procure by this Agreement or is
deemed necessary by the Contractor. 

8.2.12 Licenses, tests, royalties, damages
for infringement of patents and costs of defending suits thereof for which the
Contractor is responsible under Subparagraph 2.3.1 and deposits lost for causes
other than the Contractor’s negligence. 

8.2.13 Losses, expenses or damages to the
extent not compensated by insurance or otherwise (including settlement made
with the written approval of the Owner), and the cost of corrective work. 

8.2.14 Minor expenses such as telegrams,
long-distance telephone calls, telephone service at the site, expressage, and
similar petty cash items in connection with the Project. 

8.2.15 Cost of removal of all debris. 

8.2.16 Cost incurred due to an emergency
affecting the safety of persons and property. 

8.2.17 Cost of data processing services
required in the performance of the services outlined in Article 2. 

8.2.18 Down payments required by
manufacturers on equipment ordered for and to be incorporated into the project.

ARTICLE 9

Changes in the Project

9.1 The Owner, without invalidating this Agreement, may
order Changes in the Project within the general scope of this Agreement
consisting of additions, deletions or other revisions, the Guaranteed Maximum
Price, if established, the Contractor’s Fee, and the Contract Time Schedule being
adjusted accordingly. All such Changes in the Project shall be authorized by
Change Order. 

9.1.1 A Change Order is a written order
to the Contractor signed by the Owner or his authorized agent and issued after
the execution of this Agreement, authorizing a Change in the Project and/or an
adjustment in the Guaranteed Maximum Price, the Contractor’s Fee or the
Contract Time Schedule. Each adjustment in the Guaranteed Maximum Price
resulting from a Change Order shall clearly separate the amount attributable to
the Cost of the Project and the Contractor’s Fee. 

Page 15 of 23 

Guaranteed
Max Price 

Revised 06/18/2007 

9.1.2 The increase or decrease in the
Guaranteed Maximum Price resulting from a Change in the Project shall be
determined in one or more of the following ways: 

9.1.2.1 By mutual acceptance of a lump sum
properly itemized and supported by sufficient substantiating data to permit
evaluation; or 

9.1.2.2 By unit prices stated in this
Agreement or subsequently agreed upon; or 

9.1.2.3
By mutually agreed to costs plus Contractor's fee of 10%; or 

9.1.2.4 By method provided in Subparagraph
9.1.3. 

9.1.3 If none of the methods set forth in
Clauses 9.1.2.1 through 9.1.2.3 is agreed upon, the Contractor reserves the
right to not go forward with the change.

9.1.4 If unit prices are stated in this
Agreement or subsequently agreed upon, and if the quantities originally
contemplated are so changed in a proposed Change Order or as a result of
several Change Orders that application of the agreed unit prices to the
quantities of Work proposed will cause subsequent inequity to the Owner or the
Contractor, the applicable unit prices and the Guaranteed Maximum Price shall
be equitably adjusted by mutual consent. 

9.1.5 Should concealed conditions
encountered in the performance of the Work below the surface of the ground or
should concealed or unknown conditions in an existing structure be at variance
with the conditions indicated by the Drawings, Specifications or
Owner-furnished information or should unknown physical conditions below the
surface of the ground or should concealed or unknown conditions in an existing
structure of an unusual nature, differing materially from those ordinarily
encountered and generally recognized as inherent in work of the character provided
for in this Agreement, be encountered, the Guaranteed Maximum Price and the
Contract Time Schedule shall be equitably adjusted by Change Order upon claim
by either party made within reasonable time after the first observance of the
conditions. 

9.2 Claims for Additional Cost or Time 

9.2.1 If the Contractor wishes to make a
claim for an increase in Guaranteed Maximum Price, or increase in his Fee or an
extension in the Contract Time Schedule, he shall give the Owner written notice
thereof within a reasonable time after the occurrence of the event, giving rise
to such claim. This notice shall be given by the Contractor before proceeding
to execute the Work, except in an emergency endangering life or property in
which case the Contractor shall act, at his discretion, to prevent threatened
damage, injury or loss. Claims arising from delay shall be made within a
reasonable time after the delay. Increases based upon design and estimating
costs with respect to possible changes requested by the Owner shall be made
within a reasonable time after the decision is made not to proceed with the
change. No such claim shall be valid unless so made. If the Owner and the
Contractor cannot agree on the amount of the adjustment in the Guaranteed
Maximum Price, the Contractor’s Fee or Contract Time Schedule, it shall be
determined pursuant to mediation. Any change in the Guaranteed Maximum Price,
the Contractor’s Fee or Contract Time Schedule resulting from such claim shall
be authorized by Change Order. 

Page 16 of 23 

Guaranteed
Max Price 

Revised 06/18/2007

9.3 Minor Changes in the Project 

9.3.1 The Owner will have the authority
to order minor Changes in the Work not involving an adjustment in the
Guaranteed Maximum Price or an extension of the Contract Time Schedule and not inconsistent with the intent of the Drawings and
Specifications. Such Changes may be effective by written order and shall be
binding on the Owner and the Contractor.

9.4 Emergencies 

9.4.1 In any emergency affecting the
safety of persons or property, the Contractor shall act, at his discretion, to
prevent threatened damage, injury or loss. Any increase in the Guaranteed
Maximum Price or extension of time claimed by the Contractor on account of
emergency work shall be determined in this Article. 

ARTICLE 10

Payments to the Contractor

10.1 Payments shall be made by the Owner
to the Contractor according to the following procedure: 

10.1.1 With acceptance and signing of this
Contract, a down payment of five million four hundred fifty thousand dollars ($5,450,000),
less the one million five hundred thousand dollars ($1,500,000), is required.
As a percentage of the work is billed, a like percentage of the down-payment
will be credited to each billing. 

10.1.2 Once work has commenced,
applications for monthly payments (including approved change orders) shall be
invoiced and submitted to the Owner by the Contractor on or before the tenth
(10th) calendar day of the month following the month for which the
work has been completed (previous month). The Owner shall pay the invoice by
the fifteenth (15th) calendar day of the month application is made
via electronic transfer to the Contractor's designated bank account. Should the
Owner dispute any portion of the application, they should advise the Contractor
in writing or by electronic message no later than the fifteenth (15th)
date of the calendar month application is made. The Owner shall pay all
undisputed amounts on the fifteenth (15th) if the month as described
herein. Delinquent payments (thirty days past due date) shall bear interest at
the rate of one and one-half percent (1-1/2%) per month, retroactive to the due
date. The Owner may retain a sum equal to 5% of each payment due to the
Contractor exclusive of down payment amounts. 

10.2 The Contractor warrants and
guarantees that title to all Work, materials and equipment covered by an
Application for Payment whether incorporated in the Project or not, will pass
to the Owner upon receipt of such payment by the Contractor free and clear of
all liens, claims, security interests or encumbrances hereinafter referred to
as Liens. 

10.3 No Progress Payment nor any partial
or entire use of occupancy of the Project by the Owner shall constitute an
acceptance of any Work not in accordance with the Drawings and Specifications. 

Page 17 of 23 

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Max Price

Revised 06/18/2007

10.4 Payment of fifty percent (50%) of
the unpaid balance of the Project, including fifty percent (50%) of unpaid
retention, shall be due and payable when the Project achieves Operational
Completion or when the Owner occupies the Project, whichever event first
occurs, provided that the Project be then Operationally completed and this
Agreement substantially performed. If there should remain minor items to be
completed, the Contractor and the Owner shall list such items and the
Contractor shall deliver, in writing, his guarantee to complete such items
within a reasonable time thereafter. In addition, to the fifty percent (50%) of
the remaining retention, the Owner may retain a sum equal to 150 percent of the
estimated cost of completing any unfinished items, provided that the unfinished
items are listed separately and the estimated cost of completing any unfinished
items is likewise listed separately. Thereafter, the Owner shall pay to the
Contractor, monthly, the amount retained for incomplete items as each of said
items are completed. 

10.5 Before issuance of Final Payment,
the Owner may request satisfactory evidence that all payrolls, materials bills,
liens and other indebtedness connected with the Project have been paid or
otherwise satisfied. This shall be satisfied by providing conditional lien
waivers from all those present orientating that have statutory lien rights and
whose contract amount was greater than $10,000.00. Upon receipt of this documentation,
the Owner shall pay the Contractor the remaining unpaid balance, subject to the
plant attaining warranted performance as described in article 2.4.7. 

10.6 The making of Final Payment shall
constitute a waiver of all claims by the Owner except those rising from:
unsettled liens; improper workmanship or defective materials appearing within
one year after the Date of Operational Completion; and terms of any special
guarantees required by the Drawings and Specifications. 

10.7 The acceptance of Final Payment
shall constitute a waiver of all claims by the Contractor except those
previously made in writing and unsettled. 

ARTICLE 11

Insurance, Indemnity and Waiver
of Subrogation

11.1 Indemnity 

11.1.1 The Contractor agrees to indemnify
and hold the Owner harmless from all claims for bodily injury and property
damage (other than the Work itself and other property insured under Paragraph
11.4) that may arise from the Contractor’s operations under this Agreement. 

11.1.2 The Owner shall cause any other contractor
who may have a contract with the Owner to perform work in the areas where Work
will be performed under this Agreement, to agree to indemnify the Owner and the
Contractor and hold them harmless from all claims for bodily injury and
property damage (other than property insured under Paragraph 11.4) that may
arise from the contractor’s operations. Such provisions shall be in a form
satisfactory to the Contractor. 

Page 18 of 23 

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Max Price 

Revised 06/18/2007 

11.2 Contractor’s Liability Insurance 

11.2.1 The Contractor shall purchase and
maintain such insurance as will protect him from the claims set forth below
which may arise out of or result from the Contractor’s operations under this
Agreement whether such operations be by himself or by any Subcontractor or by
anyone directly or indirectly employed by any of them, or by anyone for whose
acts any of them may be liable: 

11.2.1.1
Claims under worker’s compensation, disability benefit and other similar
employee benefit acts, which are applicable to the Work to be performed; 

11.2.1.2 Claims for damages because of
bodily injury, occupational sickness or disease, or death of his employees
under any applicable employer’s liability law; 

11.2.1.3 Claims for damages because of
bodily injury, or death of any person other than his employees; 

11.2.1.4 Claims for damages insured by usual
personal injury liability coverage, which are sustained (1) by any person as a
result of an offense directly or indirectly related to the employment of such
person by the Contractor or (2) by any other person;

11.2.1.5 Claims for damages, other than to the Work itself,
because of injury to or destruction of tangible property, including the loss of
use therefrom; 

11.2.1.6 Claims for damages because of
bodily injury or death of any person or property damage arising out of the
ownership, maintenance or use of any motor vehicle. 

11.2.2 The Comprehensive General Liability
Insurance shall include premises-operations (including explosion, collapse and
underground coverage) elevators, independent contractors, completed operations,
and blanket contractual liability on all written contracts, all including broad
form property damage coverage.

 11.2.3 The
Contractor’s Comprehensive General and Automobile Liability Insurance, as required
by Subparagraphs 11.2.1 and 11.2.2 shall be written for not less than limits of
liability as follows: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
a. Comprehensive
  General Liability

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1. Bodily Injury

	
 

	
$

	
2,000,000

	
 

	
 

	
Each Occurrence

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(Completed Operations

	
)

	
 

	
 

	
$

	
4,000,000

	
 

	
 

	
Aggregate

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
2. Property Damage

	
 

	
$

	
2,000,000

	
 

	
 

	
Each Occurrence

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
$

	
4,000,000

	
 

	
 

	
Aggregate

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
b. Comprehensive
  Automobile Liability

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1. Bodily Injury

	
 

	
$

	
1,000,000

	
 

	
CSL

	
 

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
$

	
 

	
 

	
 

	
Each Occurrence

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
2. Property Damage

	
 

	
$

	
1,000,000

	
 

	
CSL

	
 

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
c. Umbrella

	
 

	
$

	
5,000,000

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
d. Professional
  Design Liability

	
 

	
$

	
1,000,000

	
 

	
 

	
Each Occurrence

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
$

	
2,000,000

	
 

	
 

	
Aggregate

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

Page 19 of 23 

Guaranteed
Max Price 

Revised 06/18/2007 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

11.2.4 Comprehensive General Liability
Insurance may be arranged under a single policy for the full limits required or
by a combination of underlying policies provided by an Excess or Umbrella
Liability policy. 

11.2.5 The foregoing policies shall
contain a provision that coverages afforded under the policies will not be
canceled or not renewed until at least thirty (30) days’ prior written notice
has been given to the Owner. Certificates of Insurance showing such coverages
to be in force shall be filed with the Owner prior to commencement of the Work.

11.3      Owner’s
Liability Insurance 

11.3.1 The Owner shall be responsible for
purchasing and maintaining his own liability insurance and, at his option, may
purchase and maintain such insurance as will protect him against claims, which
may arise from operations under this Agreement. 

11.4      Insurance
to Protect Project 

11.4.1 The Owner shall purchase and
maintain property insurance in a form and an amount acceptable to the
Contractor upon the entire Project for the full cost of replacement at the time
of any loss. This insurance shall include as named insureds the Owner, the
Contractor, Subcontractors and Subsubcontractors and shall insure against loss
from the perils of Fire, Extended Coverage, and shall include “All Risk”
insurance for physical loss or damage including, without duplication of
coverage, at least theft, vandalism, malicious mischief, transit, collapse, explosion,
testing, and damage resulting from defective design, workmanship or material.
All risk insurance shall include coverage during start-up and commissioning of
the project. The Owner will increase limits of coverage, if necessary, to
reflect the estimated replacement cost. The Owner will be responsible for any
co-insurance penalties or deductibles. If the Project covers an addition to or
is adjacent to an existing building, the Contractor, Subcontractors and
Subsubcontractors shall be named as additional insureds under the Owner’s
Property Insurance covering such building and its contents. 

11.4.1.1 If the Owner finds it necessary to
occupy or use a portion or portions of the Project prior to the Operational
Completion thereof, such occupancy shall not commence prior to a time mutually
agreed to by the Owner and the Contractor and to which the insurance company or
companies providing the property insurance have consented by endorsement to the
policy or policies. This insurance shall not be cancelled or lapsed on account
of such partial occupancy. Consent of the Contractor and of the insurance
company or companies to such occupancy or use shall not be reasonably withheld.

11.4.2 The Owner shall purchase and
maintain such boiler and machinery insurance as may be required or necessary.
This insurance shall include the interests of the Owner, the Contractor, the
Subcontractor and Subsubcontractors in the Work. 

Page 20 of 23

Guaranteed Max Price

Revised 06/18/2007 

11.4.3 The Owner
shall purchase and maintain such insurance as will protect the Owner and the
Contractor against loss of use of Owner’s property due to those perils insured
pursuant to Subparagraph 9.4.1. Such policy will provide coverage for expenses
of expediting materials, continuing overhead of the Owner and the Contractor,
necessary labor expense including overtime, loss of income by the Owner and
other determined exposures. Exposures of the Owner and the Contractor shall be
determined by mutual agreement and separate limits of coverage fixed for each
item. 

11.4.4 The Owner
shall file a copy of all policies with the Contractor before an exposure to
loss may occur. Copies of any subsequent endorsements will be furnished by the
Contractor. The Contractor will be given sixty (60) days notice of
cancellation, non-renewal, or any endorsements restricting or reducing
coverage. If the Owner does not intend to purchase such insurance, he shall
inform the Contractor in writing prior to the commencement of the Work. The
Contractor may then affect insurance which will protect the interest of
himself, the Subcontractors and their Subsubcontractors in the Project, the
cost of which shall be added to the Guaranteed Maximum Price by Change Order.
If the Contractor is damaged by failure of the Owner to purchase or maintain
such insurance or to so notify the Contractor, the Owner shall bear all
reasonable costs properly attributable thereto. 

11.5 Property Insurance Loss Adjustment 

11.5.1 Any insured
loss shall be adjusted with the Owner and the Contractor and made payable to
the Owner and Contractor as trustees for the insureds, as their interests may
appear, subject to any applicable mortgagee clause. 

11.5.2 Upon the
occurrence of an insured loss, monies received will be deposited in a separate
account and the trustees shall make distribution in accordance with the
agreement of the parties in interest. If the trustees are unable to agree
between themselves on the settlement of the loss, such dispute shall also be
submitted to mediation. 

11.6 Waiver of Subrogation 

11.6.1 The Owner and
Contractor waive all rights against each other, the Architect/Engineer,
Subcontractor and Subsubcontractors for damages caused by perils covered by
insurance provided under Paragraph 11.4, except such rights as they may have to
the proceeds of such insurance held by the Owner and the Contractor as
trustees. The Contractor shall require similar waivers from all Subcontractors
and Subsubcontractors. 

11.6.2 The Owner and
Contractor waive all rights against each other, the Architect/Engineer,
Subcontractor and Subsubcontractors or loss or damage to any equipment used in
connection with the Project which loss is covered by any property insurance.
The Contractor shall require similar waivers from all Subcontractors and
Subsubcontractors. 

11.6.3 The Owner
waives subrogation against the Contractor, Architect/Engineer, Subcontractor
and Subsubcontractors on all property and consequential loss policies carried
by the Owner on adjacent properties and under property and consequential loss
policies purchased for the Project after its completion. 

	
 

	
Page
 21 of 23 

	
 

	
Guaranteed Max Price 

	
Revised 06/18/2007

11.6.4 If the
policies of insurance referred to in this Paragraph require an endorsement to
provide for continued coverage where there is a waiver of subrogation, the
owners of such policies will cause them to be so endorsed. 

ARTICLE 12

Termination of the Agreement and Owner’s 

Right to Perform Contractor’s Obligations

12.1 Termination by the Contractor 

12.1.1 If the
Project is stopped for a period of thirty (30) days under an order of any court
or other public authority having jurisdiction, or as a result of an act of
government, such as a declaration of national emergency making materials
unavailable, through no act or fault of the Contractor or if the Project should
be stopped for a period of thirty (30) days by the Contractor for the Owner’s
failure to make payment
thereon, then the Contractor may, upon seven days’ written notice to the Owner,
terminate this Agreement and recover from the Owner payment for all Work
executed, the Guaranteed Maximum Price earned to date, and for any proven loss
sustained upon any materials, equipment, tools, construction equipment and
machinery, including reasonable profit and damages.

12.2 Owner’s Right to Perform Contractor’s
Obligations and Termination by the Owner for Cause 

12.2.1 If the
Contractor fails to perform any of his obligations he assumes to perform Work
with his own forces, the Owner may, after seven days’ written notice, during
which period the Contractor fails to perform such obligation, make good such
deficiencies. The Guaranteed Maximum Price, if any, shall be reduced by the
reasonable cost to the Owner of making good such deficiencies. 

12.2.2 If the
Contractor is adjudged a bankrupt, or if he makes a general assignment for the
benefit of his creditors, or if a receiver is appointed on account of his
insolvency, or if he persistently or repeatedly refuses or fails, except in
cases for which extension of time is provided, to supply enough properly
skilled workmen or proper materials, or if he fails to make proper payment to
Subcontractors or for materials or labor, or persistently disregards laws,
ordinances, rules, regulations or orders of any public authority having
jurisdiction, or otherwise is guilty of a substantial violation of a provision
of this Agreement, then the Owner may, without prejudice to any right or remedy
and after giving the Contractor and his surety, if any, thirty days’ written notice,
during which period the Contractor fails to cure the violation, terminate the
employment of the Contractor and take possession of the site and of all
materials, equipment, tools, construction equipment and machinery thereon owned
by the Contractor and may finish the Work by whatever reasonable method he may
deem expedient. In such case, the Contractor shall not be entitled to receive
payment until the Work is finished nor shall he be relieved from his
obligations assumed under Article 6. 

	
 

	
Page
 22 of 23 

	
 

	
Guaranteed Max Price 

	
Revised 06/18/2007

*** Confidential material redacted
and filed separately with the Commission. 

12.3 Termination by Owner Without Cause 

12.3.1 If the Owner
terminates the Agreement other than pursuant to 12.2.2, he shall pay the
Contractor the total of: (a.) Costs incurred by the Contractor in performing
the Project, including initial costs and preparatory expenses; (b.) Costs
incurred in settling and paying termination claims under terminated
subcontracts; (c.) Accounting, legal, clerical and other expenses incurred as a
result of termination; (d.) Storage, transportation demobilization and other
costs incurred for the preservation, protection or disposition of material and
equipment on the Project; (e.) Any other necessary and reasonable costs
incurred by the Contractor as a result of the Owner’s termination of this
Agreement; (f.) Overhead at *** percent (***%) of the total amount of (a.)
through (e.) above; profit at *** percent (***%) of the total amount of (a.)
through (f.) above, as adjusted pursuant to Articles 6 and 9. In calculating
the amount due the Contractor under this clause, a deduction shall be made for
all payments to the Contractor under this Agreement. Contractor has a fiduciary
responsibility to the Owner to minimize costs of termination and maximize
return of all down payments. 

ARTICLE 13

Assignment and Governing Law

13.1 Neither the
Owner nor the Contractor shall assign his interest in this Agreement without
the written consent of the other except as the assignment of proceeds. 

13.2 This Agreement
shall be governed by the law in effect at the location of this Project. 

ARTICLE 14

Mediation

14.1 Parties agree
to mediate any disputes they have concerning any and all Work covered under
this Agreement prior to any litigation being filed in the matter. The Parties
will jointly select a mediator to conduct the mediation. 

This Agreement
entered into as of the day and year first written above. 

	
 

	
 

	
OWNER:

	
Soy Energy,
 LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/Charles
 Sand, Chairman

	
 

	
 

	

	
 

	
 

	
CONTRACTOR:

	
KEN BRATNEY
 COMPANY

	
 

	
 

	
 

	
 

	
By:

	
/s/ J. Paul
 Bratney

	
 

	
 

	

	
 

	
Page
 23 of 23

	
 

	
Guaranteed Max Price 

	
Revised 06/18/2007

*** Confidential material redacted
and filed separately with the Commission. 

ADDENDUM A-1

GEA Westfalia Separator, Inc. 

Mechanical
Separation 

Division 

01 February
2007 

The Ken
Bratney Company

3400 109th Street 

Des Moines, Iowa 50322 

	
 

	
 

	
Subject:

	
Soy Energy
 Biodiesel Project

 (30 million gallons per year output)

Gentlemen: 

Attached on
the following pages is a summary of a number of technical, commercial and legal
points relating to the Soy Energy Biodiesel Project: 

The items
addressed are: 

	
 

	
 

	
 

	
 

	
•

	
Overall
 process specs for feed, final product, capacity and yield 

	
 

	
 

	
 

	
 

	
•

	
Utility and
 chemical usage and requirement specifications 

	
 

	
 

	
 

	
 

	
•

	
Commercial
 outline of test runs for plant acceptance 

	
 

	
 

	
 

	
 

	
•

	
Liquidated
 Damage relating to product(s), capacity, etc. 

	
 

	
 

	
 

	
 

	
•

	
Terms and Conditions
 of Sale 

In addition we
include a copy of the sub-license authorization letter from ADM Oelmuehle Leer
Connemann GmbH. Said license is usually signed and issued at completion of
process engineering work in the project timeline. 

We trust this
information satisfies your needs at this time. 

Best regards, 

Constantine
Triculis 

Biodiesel Manager 

Westfalia Separator, Inc. 

Westfalia Separator, Inc.

Addendum A-1

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
Summary –
 Soy Energy Biodiesel 

	
 

	
01 February
 2007

	
Page 2 of 12  

	 

	 

Process Specifications 

Process Line Capacity ........................ *** gallons
FAME per day (*** mtons/day) 

Feedstock

	
 

	
 

	
 

	
Type of oil

	
 

	
Soybean

	 
	 

	 

	
Temperature

	
 

	
***°F / ***°
 C

	 

	 

	 

	
FFA

	
 

	
<***%

	 

	 

	 

	
Phosphatides

	
 

	
<*** ppm P

	 

	 

	 

	
Moisture

	
 

	
<***%

	 

	 

	 

	
Impurities

	
 

	
<***%

	 

	 

	 

	
Wax

	
 

	
***

	 

	 

	 

	
Unsaponifiables

	
 

	
<***%

	 

	 

	 

	
Iodine Value

	
 

	
<***

	 

	 

	 

	
Sulfur

	
 

	
<*** ppm

	 

	 

	 

	
Oxidation

	
 

	
>*** h

	 

	 

	 

	
Stability, 110°C

	
 

	
 

	 

	 

	 

	
Soap

	
 

	
<*** ppm

Final Product Specifications 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
From ASTM 6751

	
 

	
 

	
 

	
From EN 14214

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Ester content

	
 

	
min. ***%

	
 

	
Ester content

	
 

	
min. ***%

	 

	 

	 

	 

	 

	 

	 

	
Flash point

	
 

	
min. ***°F / ***°C

	
 

	
Flash point

	
 

	
min. ***°F / ***°C

	 

	 

	 

	 

	 

	 

	 

	
Water content

	
 

	
max. *** ppm

	
 

	
Water content

	
 

	
max. *** ppm

	 

	 

	 

	 

	 

	 

	 

	
Sulphur

	
 

	
max. *** ppm

	
 

	
Sulphur

	
 

	
max. *** ppm

	 

	 

	 

	 

	 

	 

	 

	
Sulphated ash

	
 

	
max. ***%

	
 

	
Sulphated ash

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Acid number

	
 

	
max. *** mg KOH / g

	
 

	
Carbon residue (from 10%

 distillation residua.)

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Free glycerin

	
 

	
max. ***%

	
 

	
Acid number

	
 

	
max. *** mg KOH/g

	 

	 

	 

	 

	 

	 

	 

	
Total glycerin

	
 

	
max. ***%

	
 

	
Free glycerin

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Monoglycerides

	
 

	
max. ***%

	
 

	
Total glycerin

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Diglycerides

	
 

	
max. ***%

	
 

	
Monoglycerides

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Triglycerides

	
 

	
max. ***%

	
 

	
Diglycerides

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Phosphorous

	
 

	
max. *** ppm

	
 

	
Triglycerides

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Methanol

	
 

	
max. ***%

	
 

	
Phosphorous

	
 

	
max. *** ppm

	 

	 

	 

	 

	 

	 

	 

	
Total contamination

	
 

	
max. *** mg/kg

	
 

	
Methanol

	
 

	
max. ***%

	 

	 

	 

	 

	 

	 

	 

	
Oxidation

	
 

	
min. *** hours

	
 

	
Total Contamination

	
 

	
max. *** mg/kg

	 

	 

	 

	 

	 

	 

	 

	
Stability

	
 

	
***° C

	
 

	
Oxidation stability at ***° F

	
 

	
min. *** hours

	 

	 

	 

	 

	 

	 

	 

	
Sodium and potassium

	
 

	
max. *** ppm

	
 

	
Copper strip corrosion

	
 

	
Class 1

Yield 

Ton refined
oil to produce one (1) ton FAME...............*** 

Glycerin
(technical grade) 

	
 

	
 

	
 

	
Glycerol content

	
 

	
min. ***%

	 

	 

	 

	
Moisture

	
 

	
max. ***%

	 

	 

	 

	
Salt content

	
 

	
approx. *** – ***%

	 

	 

	 

	
MONG

	
 

	
approx. *** – ***%

	 

	 

	 

	
Methanol content

	
 

	
approx. ***%

Westfalia Separator, Inc.

Addendum A-1

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
Summary –
 Soy Energy Biodiesel 

	
 

	
01 February
 2007

	
Page 3 of 12  

	 

	 

Utilities and Chemicals 

Steady State Consumption 

	
 

	
 

	
 

	
 

	
 

	
Utilities

 &

 Consumables

	
 

	
 

	
 

	
Transesterification

 Methanol Rec.

 Glycerin Evap.

	 

	 

	 

	 

	 

	
H3PO4 ***%

	
 

	
(lb./1,000
 lb. FAME)

	
 

	
***

	 

	 

	 

	 

	 

	
NaOH ***%

	
 

	
(lb./1,000
 lb. FAME)

	
 

	
***

	 

	 

	 

	 

	 

	
Methanol

	
 

	
(lb./1,000
 lb. FAME)

	
 

	
***

	 

	 

	 

	 

	 

	
NaOCH3 ***%

	
 

	
(lb./1,000
 lb. FAME)

	
 

	
***

	 

	 

	 

	 

	 

	
HCI ***%ig

	
 

	
(lb./1,000
 lb. FAME)

	
 

	
***

	 

	 

	 

	 

	 

	
Water

 (make-up and discharge)

	
 

	
(gpm)

	
 

	
***

	 

	 

	 

	 

	 

	
Steam *** psi a

	
 

	
(lb./1,000
 lb. FAME)

	
 

	
***

	 

	 

	 

	 

	 

	
Instrument Air

	
 

	
(ft3/hour)

	
 

	
***

	 

	 

	 

	 

	 

	
Nitrogen

	
 

	
(ft3/hour)

	
 

	
***

	 

	 

	 

	 

	 

	
Power (consumed)

	
 

	
(kWhr/1,000
 lb. FAME)

	
 

	
***

	 

	 

	 

	 

	 

	
Tower Water, rT =
***°F

	
 

	
(gpm)

	
 

	
***

Utility Specifications 

Soft Water 

	
 

	
 

	
 

	
Sediment content

	
 

	
max. *** mg/l

	 

	 

	 

	
Particle size

	
 

	
max. *** um

	 

	 

	 

	
Hardness

	
 

	
less than *** dH

	 

	 

	 

	
Chlorine ions

	
 

	
Less than *** mg/l

	 

	 

	 

	
pH-value

	
 

	
*** – ***

	 

	 

	 

	
Free of methanol and glycerin

Cooling water 

	
 

	
 

	
 

	
Temperature in

	
 

	
max. ***°F

	 

	 

	 

	
Temperature out

	
 

	
Approx. ***° F above inlet temp.

	 

	 

	 

	
Pressure

	
 

	
*** psig

	 

	 

	 

	
Hardness

	
 

	
max. ***° dH

	 

	 

	 

	
Chlorine ions

	
 

	
max. *** ppm

	 

	 

	 

	
pH-value

	
 

	
***-***

Steam 

	
 

	
 

	
 

	
Pressure

	
 

	
*** psig (10 bar)

	 

	 

	 

	
Saturated steam free of impurities

Westfalia Separator, Inc.

Addendum A-1

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
Summary –
 Soy Energy Biodiesel 

	
 

	
01 February
 2007

	
Page 4 of 12  

	 

	 

Utilities
and Chemicals (cont’d.)

Instrument
Air

	
 

	
 

	
 

	
Pressure

	
 

	
*** psig (6 bar)

	 

	 

	 

	
Particle
size

	
 

	
max. *** mm

	 

	 

	 

	
Particle
density

	
 

	
max. *** mg/NM3

	 

	 

	 

	
Oil content

	
 

	
max. *** mg/NM3

	 

	 

	 

	
Dew point at
pressure

	
 

	
min. ***o C

Nitrogen

	
 

	
 

	
 

	
Pressure

	
 

	
*** psig

	 

	 

	 

	
Nitrogen
content

	
 

	
min. ***%

Electric

	
 

	
 

	
 

	
Voltage

	
 

	
*** V, max +/- ***%

	 

	 

	 

	
Frequency

	
 

	
*** Hz, max. +/- ***%

	 

	 

	 

	
Phases

	
 

	
***

Chemical Specifications

Catalyst

	
 

	
 

	
 

	
 

	
 

	
Sodium
 methylate solution in methanol

	 

	
Concentration

	
 

	
***% +/- ***%

	
 

	
AN-SAA0827/0868

	 

	 

	 

	 

	 

	
Na2CO3 + NaOH

	
 

	
max. ***%

	
 

	
AN-SAA 0868

Caustic soda

	
 

	
 

	
 

	
Technical
 quality according to DIN 19616

	 

	
Concentration

	
 

	
***%

Hydrochloric
acid

	
 

	
 

	
 

	
DIN 19610,
 clear and free of sediments

	 

	
Concentration

	
 

	
***%

Methanol

	
 

	
 

	
 

	
Water
content

	
 

	
max. ***%

Phosphoric acid

	
 

	
 

	
 

	
Type

	
 

	
Thermal phosphoric, clear and free of sediments

	 

	 

	 

	
Chlorine
Ions

	
 

	
max. *** ppm

	 

	 

	 

	
Fluorine
Ions

	
 

	
max. *** ppm

	 

	 

	 

	
Concentration

	
 

	
***%

Westfalia Separator, Inc.

Addendum A-1

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 5 of 12

	 

Test Run Procedures

The warranty
figures are valid for operation of the plant at nominal capacity and take into
account the relevant tolerances of
+ ***%.

The above
performance data are valid on the condition that the plant is erected according
to our instructions and start-up is conducted by Westfalia’s personnel.

If the
performance test run cannot take place during the start-up period for reasons
not imputable to Westfalia, then this obligation to demonstrate fulfillment of
warranty shall be deemed satisfied if the plant operated continuously under
warrantee conditions. The plant shall then be regarded as having been taken
over by Purchaser.

In case
Westfalia should fail to prove the aforementioned warranties for reasons solely
attributable to Westfalia, Westfalia shall at their expense make, as soon as
possible the necessary modifications to the design of the plant and supply the
equipment to modify the plant. Purchaser shall provide all facilities necessary
for carrying out such modifications.

After
completion of the modifications further performance test runs shall be carried
out under the same conditions as stated above.

If the
repeated final performance test run fails to fulfill the warranties for reasons
solely attributable to Westfalia, Westfalia shall pay liquated damages agreed
upon.

With the
payment of the liquidated damages the plant shall be considered as being
accepted by Purchaser.

If, for
reasons not imputable to Westfalia, neither the warranty test-run nor the
continuous operation under warranty conditions is performed successfully within
*** months after the mechanical completion or *** months after the coming into
force of the contract, whichever occurs earlier, the plant is considered as
being accepted. Westfalia may give support to Purchaser in attaining the
warrantee values after this period, at terms and conditions to be agreed upon
in due time.

All warranties
are valid under the condition that Purchaser’s services and supplies will be
rendered in accordance with our documentation and process requirements.

Performance
test runs shall be conducted over a *** day period by Westfalia Separator.

Westfalia Separator, Inc.

Addendum A-1

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 6 of 12

	 

Delivery Liquidated
Damages

A liquidated
damages schedule will be tied to delivery dates for major equipment.

Performance
Liquidated Damages

In the event
the performance of the Plant does not meet the performance warranties as
specified in this Contract with the Buyer using soybean as feedstock, and the
Seller is required to pay liquidated damages per section 2.2.3, of quote
67081C, dated 17 July 2006. The Seller agrees to pay Buyer or have deducted
from the Contract Price, as liquidated damages and not as a penalty, the
following amounts:

Biodiesel
Specifications

(All percentages are
absolute values based on total output from the process)

	
 

	
 

	
 

	
  Liquidated
  Damages

	
 

	
Guarantee

	 

	 

	 

	
  *** percent of the Contract
  Price

	
 

	
For each ***% total
  glycerin over the specification in A-1, provided the customer provides
  feedstock in accordance with specification A-2.

	 

	
  *** percent of the Contract
  Price

	
 

	
For each *** ppm moisture
  over the specification in A-1, provided the customer provides feedstock in
  accordance with specification A-2.

	 

	
  *** percent of the Contract
  Price

	
 

	
For each full *** percent
  deficit in yield from the yield value of section 2.2.2 of quote 67801C, dated
  19 July 2006.

	 

	
  *** percent of the Contract
  Price

	
 

	
For each full percent
  deficit in daily capacity of *** metric ton Biodiesel

	 

	
  *** percent of the Contract
  Price

	
 

	
For each *** of Methanol
  (per *** lbs. of biodiesel) over the value in section 2.3.1 of quote
  67801C, dated 19 July 2006.

	 

	
  *** percent of the Contract
  Price

	
 

	
For each *** lbs. of Sodium
  Methylate (per *** lbs. of biodiesel) over the value in section 2.3.1 of
  quote 67801C, dated 19 July 2006.

A-1 (from
European Standard EN 14214, July 2003)

	
 

	
 

	
 

	
Ester content

	
 

	
min. ***%

	 

	
Flash point

	
 

	
min. ***°C

	 

	
Water content

	
 

	
max. *** ppm

	 

	
Sulphur

	
 

	
max. *** ppm

	 

	
Sulphated ash

	
 

	
max. ***%

	 

	
Carbon residue (10% distillation)

	
 

	
max. ***%

	 

	
Acid number

	
 

	
max. *** mg KOH/g

	 

	
Free glycerin

	
 

	
max. ***%

	 

	
Total glycerin

	
 

	
max. ***%

	 

	
Monoglycerides

	
 

	
max. ***%

	 

	
Diglycerides

	
 

	
max. ***%

	 

	
Triglycerides

	
 

	
max. ***%

	 

	
Phosphorous

	
 

	
max. *** ppm

	 

	
Methanol

	
 

	
max. ***%

	 

	
Total contamination

	
 

	
max. *** mg/kg

	 

	
Oxidation stability at 230° F

	
 

	
min. *** hours

	 

	
Copper strip corrosion

	
 

	
Class 1

Westfalia Separator, Inc.

Addendum A-1

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 7 of 12

	 

Biodiesel
Specifications (cont’d:)

A-2 (Feedstock)

	
 

	
 

	
 

	
Type of oil

	
 

	
Soybean

	 

	
Temperature

	
 

	
***°F / ***° C

	 

	
FFA

	
 

	
<***%

	 

	
Phosphatides

	
 

	
<*** ppm P

	 

	
Moisture

	
 

	
<***%

	 

	
Impurities

	
 

	
<***%

	 

	
Wax

	
 

	
None

	 

	
Unsaponifiables

	
 

	
<***%

	 

	
Iodine Value

	
 

	
<***

	 

	
Sulfur

	
 

	
<*** ppm

	 

	
Oxidation Stability, 110°C

	
 

	
>*** h

	 

	
Soap

	
 

	
<*** ppm

Glycerin
Specifications

(All percentages are
absolute values based on total glycerin output from the process)

	
 

	
 

	
 

	
*** percent of the Contract Price

	
 

	
For each ***% below ***%
  glycerol content

	 

	
*** percent of the Contract Price

	
 

	
For each ***% additional salt
  content above ***%

	 

	
*** percent of the Contract Price

	
 

	
For each ***% additional MONG
  content above ***%

Limitation of
Liquidated Damages

The total
aggregate liquidated damages assessed for failure to meet Performance
Guarantees (Biodiesel and Glycerin Specifications) shall not exceed ***
percent of the Contract Price.

The total
aggregate liability of Seller with respect to liquidated damages (Delivery and
Performance) shall not exceed in total ***% of the Contract Price.

Breakdowns,
not caused by Seller supplied Equipment will not be considered a failure of the
Seller supplied portion of the Plant. Process interruptions of less than four
(4) hours caused by the Equipment shall not be considered as a failure of the
continuous performance guarantee. If the Plant fails to meet the performance
guarantees during a qualifying five (5) day performance test, Seller will have
sixty (60) days to make corrective action and repeat the performance test.

Seller will be
responsible for liquidated damages which will be the Buyer’s exclusive remedy
in each case.

Westfalia Separator, Inc.

Addendum A-1

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 8 of 12

	 

STANDARD TERMS AND CONDITIONS

1. Acceptance; Agreement. Seller
and Buyer agree to the express terms of this Purchase Order. In the event that
any provision of any invoice, acknowledgment, quotation, or other document
whatsoever provided by Seller to Buyer conflicts with the provisions in this Purchase
Order, the provisions of this Purchase Order shall control. In the event that
any provision in any invoice, acknowledgment, quotation, or other document
whatsoever provided by Seller to Buyer attempts to limit Seller’s liability or
restrict Buyer’s remedies, such provision shall be inconsistent with this
Purchase Order and shall be void and unenforceable. If any term contained in
any Order or other form used by Buyer to order goods under this Purchase Order
or in any acknowledgment or other form used by Seller is inconsistent with any
term of this Purchase Order, this Purchase Order will take precedence unless
Buyer agrees to such inconsistent term by a writing, signed by Seller and
Buyer, that specifically references this Purchase Order and specifically
acknowledges such inconsistency.

2. Termination for Convenience. Buyer,
for its convenience, may at any time terminate this order in whole or in part
upon 3 days’ written notice to Seller. Upon the receipt of such notice, Seller
immediately will stop, and will cause its suppliers and its subcontractors
immediately to stop, all work hereunder. Seller will be paid a reasonable
termination charge (including a reasonable overhead and profit for such work):
the percent of the order price reflecting the amount of the work performed
before the termination notice, plus actual direct costs resulting from the
termination. Seller will not be paid for any work done after termination nor
for any reasonably avoidable costs thereafter incurred by Seller’s or Seller’s
subcontractors.

3. Default; Remedies. If Seller
fails to perform any of the terms and conditions under this Purchase Order
(including, without limitation, breach by late shipment or performance, defects
in workmanship or materials or delivery of items which fail to conform to
samples or services which fail to conform to guarantees or warranties), Buyer,
in its sole discretion and upon seven (7) days’ written notice to Seller, may
declare Seller to be in default. If Seller does not commence to remedy all defaults
specified in the notice within the 7 days or fails to diligently complete the
cure thereafter, Buyer, with further notice may: (a) cancel, in whole or in
part, or refuse delivery in whole or in part of, any and all orders then
outstanding between Buyer and Seller, and (b) exercise any and all rights and
remedies available at law and in equity (subject to the limitations in these
Standard Terms and Conditions). If Seller proves to be solely at fault, Seller
will bear all Buyers’ attorneys’ and witnesses’ fees and litigation costs
incurred in enforcing this Purchase Order.

4. Delivery. Time is an
important consideration for both parties under this Purchase Order. Seller will
notify Buyer at once if Seller cannot fill this order or if shipment or
performance is delayed for any cause whatsoever. If delivery of terms or
services or both is not completed by the time promised, Buyer, without
liability and in addition to its other rights and remedies, may terminate this
Purchase Order by notice effective when received by Seller as to items not yet
shipped or services not yet rendered and may purchase substitute items or
services or both and charge Seller with all losses. Delivery of the equipment
or goods shall be DDP, point of delivery indicated on Purchase Order. Title
shall pass to Buyer upon delivery to the DDP delivery point. Risk of loss or
damage shall pass to Buyer only upon Buyer’s final acceptance.

5. Price Warranty. Seller
warrants that the prices for all items and services sold hereunder are as
favorable as prices currently extended to any other Buyer for similar quality
and quantities of the same or similar items or services or both. If Seller
reduces its price for such items or services or both during the term of this
Purchase Order, Seller will reduce Buyer’s Prices correspondingly. Seller
warrants that prices shown on this Purchase Order are complete, and no
additional charges of any type (including, without limitation, charges for
shipping, packaging, labeling, custom duties, taxes, storage, insurance, boxing
and crating) will be added without Buyer’s express written consent.

6. Taxes. Seller shall include
sales and use taxes in the Purchase Price of all goods and services provided to
Buyer and shall separately account for such taxes. Buyer is exempt from sales
and use taxes on the purchase of certain equipment to be incorporated into the
Project to the extent allowed by law. Buyer will provide Seller with an
exemption certificate or information which authorizes tax exempt purchases for
this Project. The Purchase Price shall be adjusted (reduced) for any such
exempt taxes.

7. Warranty. Seller warrants
that all items or services or both furnished under this Purchase Order will
conform to all samples, specifications, drawings, proposals, performance guarantees,
warranties, and appropriate standards will be free from defects in material and
workmanship. Seller warrants that all such items and services will conform to
all statements made on the containers or labels for such items or services or
both, and that all items will be adequately contained, packaged, marked and
labeled. Seller warrants that all such items when used and maintained.

In accordance with Seller’s
instructions will be safe and appropriate for the purpose for which items of
that kind are normally used. Seller warrants that such items or services or
both will be fit for the purpose set forth in this Contract. Seller’s warranty
will survive Buyer’s inspection, testing, acceptance and use. Seller’s warranty
runs to Buyer and its successors and assigns. Upon notice from Buyer, Seller
will replace or correct defects of any nonconforming items or services or both,
promptly and without expense to Buyer. If Seller fails promptly to correct
defects in, or to replace, nonconforming items or services or both, Buyer,
after reasonable notice to Seller, may make such corrections or replace such
items and services and charge Seller for the reasonable costs of doing so. All
these obligations will survive the termination of this Purchase Order.

The warranties of this
paragraph 7 will continue for a period of twelve (12) months from the date of
Buyer’s initial commercial operation or production using the Seller’s furnished
equipment but not more than eighteen (18) months from the date of delivery of
the equipment (unless Buyer elects to use Seller’s maintenance program in which
even the warranties will continue for twenty-four (24) months from initial
operation but not more than thirty (30) months from the date of delivery)
provided that:

Westfalia Separator, Inc.

Addendum A-1

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 9 of 12

	 

          (a)
the equipment is installed in accordance with Seller’s specifications and
instructions and is used and maintained normally and properly in accordance
with Seller’s instructions as to maintenance and operation, set forth in
written operation and maintenance manuals and instruction sheets furnished by
Seller;

          (b)
the equipment is used for processing feed stock consistent with the feed stock
characteristics and using the

utilities and chemicals set forth in Seller’s proposal or elsewhere in this
Contract;

          (c)
the equipment has not been changed without the prior written approval of
Seller;

          (d)
Buyer gives prompt written notice to Seller before the end of the warranty period
specifying all alleged defects in the equipment purchased; and

          (e)
Buyer preserves and turns over to Seller and permits
reasonable inspection by Seller of all allegedly

defective equipment, parts or items and access to the equipment to observe its
startup, operation and maintenance.

This warranty shall not cover
(i) any equipment furnished by Buyer or any third party (other than a
subcontractor of Seller), (ii) any defects arising from corrosion, abrasion,
use of unsuitable lubricants, or negligent attendance or faulty operation,
(iii) ordinary wear and tear, or (iv) any defects caused by errors on the part
of the Buyer in not providing suitable premises in which the equipment is to be
located, adequate foundation works, or adequate protection against influences
within or outside the premises which may affect the equipment, or its
operation. Notwithstanding the warranty set forth above, Seller shall not
warrant any equipment, where the vendor of such equipment (other than Seller
and including, without limitation, the designated Standard Equipment Vendors)
is specified by Buyer, for a period longer than warranted by the vendor.

UNLESS OTHERWISE EXPRESSLY
STATED IN ANY DOCUMENT ATTACHED TO THIS PURCHASE ORDER, THIS WARRANTY OF
MATERIAL AND WORKMANSHIP IS THE ONLY WARRANTY MADE BY SELLER AND IS IN LIEU OF
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, AND SELLER DISCLAIMS ON BEHALF OF
ITSELF, ITS SUBCONTRACTORS AND SUBSUPPLIERS ANY AND ALL IMPLIED WARRANTIES,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
SPECIFIC PURPOSE (OTHER THAN THE PURPOSE STATED IN THE BUYER’S SPECIFICATIONS
OR THIS CONTRACT), SUITABILITY OR PERFORMANCE. No other promise or affirmation
of fact (including, but not limited to, statements regarding capacity or performance
of the equipment) shall constitute a warranty of Seller or give rise to any
liability or obligation on the part of Seller.

8. Technical Support. Seller
shall provide appropriate and trained technical support throughout the Project
and the warranty period as necessary to ensure proper installation,
commissioning, and use of all equipment and materials purchased by Buyer.
Seller shall provide three sets of operator’s manual, three sets of maintenance
manual, and three sets of OEM manual, and shall provide training to Buyer’s
employees or representatives in the proper operation of the equipment or
system.

9. License. Seller warrants that
it owns or has the right to use all intellectual property, technology, and
processes, including computer software, necessary to perform its obligations
under this Purchase Order, including without limitation the manufacture,
delivery, installation, and operation of the plant, equipment, goods, or system
for use by Buyer, without conflict with the rights of others. Seller further
warrants that it has the right to sublicense all intellectual property,
technology, and processes to operate the plant, equipment, goods, or systems
and hereby assigns and transfers to Buyer the right and license to use any such
intellectual property, technology, processes and software, including
third-party software or firmware, used to operate the plant equipment, goods,
or system supplied to Buyer other than Seller’s proprietary software, which
Seller licenses Buyer to use solely for the operation and maintenance of the
equipment or system purchased from Seller under this Purchase Order.

10. Indemnification. Seller will
defend and indemnify Buyer against all damages, liabilities, claims, losses and
expenses (including attorneys’ and witnesses’ fees and litigation costs) to the
extent arising or resulting in any way from any defect in the items or services
or both purchased hereunder or from any negligent or intentional act or
omission of Seller and its agents, employees and subcontractors. This indemnification
is in addition to Seller’s warranty obligations. Buyer shall use, and shall
train and require its employees to use all safely devices, guards, and proper
safe operating and maintenance procedures as prescribed by all applicable laws,
rules, regulations, codes and standards and as set forth in operating and
maintenance manuals and instruction sheets furnished by Seller. Buyer shall not
remove or modify any safety device, guard or warning sign. If the Buyer fails
to strictly observe any of the obligations set forth in the preceding two
sentences with regard to any of Seller’s equipment, Buyer agrees to defend
Seller against, and indemnify and save Seller harmless from, any claim,
liability or obligation (including the costs and attorneys’ fees of any suit or
claims related thereto) incurred by Seller to the extent of persons being
injured or property being damaged directly or indirectly as a result of such
failure. Buyer also agrees to indemnify and save Seller harmless from, any
claim, liability or obligation incurred by Seller to the extent resulting from
persons being injured or property being damaged due to use of Seller equipment
for materials or products not specified in the Purchase Order or use of
non-original replacement parts not specifically authorized in writing by Seller
or due to changes in the Seller equipment made by Buyer without Seller’s
specific written authorization.

11. Insurance. Seller will
maintain the following insurance coverage, and agrees that such insurance will
not be terminated until the work is completed and accepted by Buyer.

          (a)
Statutory Workers’ Compensation Insurance, including Employer’s Liability
Insurance with per occurrence

coverage of at least $1,000,000.

Westfalia Separator, Inc.

Addendum A-1

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 10 of 12

	 

          (b)
Commercial General Liability Insurance, including Contractor’s Protective and
Completed Operations, covering bodily injury and property damage with a
combined single limit of $1,000,000.

          (c)
Commercial Automobile Personal Injury Liability and Property Damage Liability
Insurance covering owned and non-owned vehicles with a combined single limit of
$1,000,000.

          (d)
Excess/Umbrella Insurance, with a limit of $25,000,000 per occurrence and
aggregate.

          (e)
All-Risk insurance. Seller shall obtain and provide, at its sole cost, all-risk
insurance with insurers acceptable to Buyer in the amount of the Total Purchase
Price, naming the Buyer as an additional insured and a loss payee, and
providing for payment to the Seller and Buyer as their respective interests may
appear. The insurance shall protect against all risks until transfer of title
to Buyer.

Seller will furnish upon
request Certificates of Insurance evidencing the above coverages, which shall
provide that such coverages will not be canceled or materially reduced without
thirty (30) days prior written notice to Buyer. Seller will name Buyer as an
additional insured on the Comprehensive General Liability policy. All of the
insurance to be furnished by Seller shall apply as primary insurance without
any right of contribution by any insurance that may be carried by Buyer.

12. Controlled Insurance Program.
Buyer is investigating the implementation of a controlled insurance program,
including the types and limits of insurance coverages, loss control program,
and claim procedures to receive a savings in the overall insurance cost for the
Project and other benefits from a controlled insurance program. Seller agrees
to amend this Purchase Order, including compensation, to participate in a
controlled insurance program if such a program is implemented by Buyer.

13. Patents. Seller will
indemnify and hold harmless Buyer and its agents from any patent or similar
proceedings based on items or services or both sold by Seller hereunder,
including, without limitation, claims for alleged patent or copyright
infringement and claims arising from similarity in design, trademark or
appearance of items or services or both furnished hereunder; provided, however,
that such indemnity does not include any infringement resulting from the use of
Seller’s items on Buyer’s particular products or in connection with Buyers
particular process not specified by Seller. This obligation to indemnify and
hold harmless will extend to all expenses, losses, royalties, lost profits and
damages (including, without limitation, litigation costs, attorneys’ and
witnesses’ fees and settlement payments) resulting from any such suit or
proceeding, threatened or brought. Upon receipt of notice from Buyer, Seller
promptly will assume full responsibility to defend and to resolve any such suit
or proceeding brought or threatened against Buyer and its agents. Seller will
notify Buyer in writing of the selection of counsel for any such suit or
proceeding, and will change counsel upon Sellers receipt, within 3 business
days of Buyer’s written notice specifying Buyer’s good faith reasons for
objecting. Buyer, at its option and expense, may be represented by, and
actively participate through, its own counsel in any such suit or proceeding;
Seller’s counsel will cooperate fully with Buyer’s counsel in such event. All
these obligations will survive the termination of this Purchase Order.

14. Inspection; Rejection.
Payment for the items or services or both will not constitute acceptance of the
goods or services provided by Buyer. Seller will not substitute any items or
services or both without Buyer’s prior written approval. Buyer may count, test
and inspect all items and services furnished hereunder and reject any such
items and services which are in excess of quantities ordered, defective or
nonconforming. All or part of such rejected items may be returned at Seller’s
expense, including, without limitation, all transportation and handling costs.
All or part of such rejected services may be replaced or completed at Seller’s
expense. Nothing in this Purchase Order will relieve Seller from its
obligations of testing, inspection and quality control.

15. Payment. Payment may be
withheld, in whole or in part, to protect Buyer from loss on account of the
following: a) defective equipment, materials, or work of Seller, which is not
remedied; b) claims filed by third parties relating to the Seller’s work on the
Project; or c) physical property damage to the Buyer or another person or
entity caused by Seller or Seller’s subcontractors or material suppliers.

16. Acceptance and Final Payment.
Upon final completion and acceptance of the Seller’s work, Seller shall submit
an Invoice for Final Payment, which shall be accompanied by (a) all manuals or
operations books or similar information, (b) as built drawings of Seller’s
work, and (c) properly executed final lien waiver and release from Seller.
Buyer shall make final payment to Seller within thirty days of receipt of the
Invoice for Final Payment, together will all attachments, and Buyer’s final
acceptance, including commissioning and training.

17. Confidentiality; Buyer’s Property.
Seller will consider all information furnished by Buyer to be confidential and
will not disclose any such information to any other person without Buyer’s
prior written consent. All plans, specifications, and other data furnished by
Buyer will remain the property of Buyer and will be used by Seller only in
performing this Purchase Order. These duties of confidentiality and
nondisclosure also extend to drawings, specifications, and other documents
prepared by Seller specifically in connection with this Purchase Order. Seller
will not disclose the fact of this Purchase Order or any other information relating
to it without Buyer’s prior written consent.

All drawings, notebooks,
operating data, specifications, and other information, data and material
(whether orally disclosed, printed, handwritten, typed, numerically or computer
generated, computer stored, or otherwise) furnished to Buyer by either Seller
or any of its subcontractors or subsuppliers shall remain the proprietary and
confidential property of Seller or the subcontractor or subsuppliers,
respectively, and shall be used by Buyer only with respect to the work covered
by the Purchase Order and the operation, maintenance and repair of the
equipment supplied by Seller under the Purchase Order and shall not be used by
Buyer in connection with any other project or for any other purpose. Such
proprietary and confidential information and data shall not be knowingly shown
or otherwise made available to any third party at any time without Seller’s
prior written consent, nor shall any third party be permitted to reverse
engineer, measure or otherwise technically examine or test Seller’s equipment
without Sellers prior written consent, Any such proprietary and confidential
information which Buyer determines must be disclosed to its employees or
others, shall only be disclosed to its employees or others on a need-to-know
basis for the operation, maintenance, and repair

Westfalia Separator, Inc.

Addendum A-1

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 11 of 12

	 

of the equipment provided under
the Purchase Order. Intellectual property or patent rights which may be
obtained on the basis of the information given or made available to Buyer under
the Purchase Order or with
respect to Seller’s equipment shall remain the exclusive property of Seller or
its subcontractor and/or subsupplier respectively. All these obligations will
survive the termination of this Purchase Order. Buyer shall be entitled to
specific enforcement, including injunctive relief, of this provision in any
court of competent jurisdiction.

18. Delays. Either party may
delay delivery and/or acceptance occasioned by causes beyond its control and
without its fault or negligence. At Buyer’s direction, Seller will hold items
or services or both and will deliver them when the cause effecting the delay
has been removed, and in the event of such a delay in performance at Buyer’s direction,
Buyer will be responsible only for Seller’s direct additional costs in holding
items or in delaying performance of services. Seller will not be liable to
Buyer for delays caused by any of Seller’s subcontractors and occasioned by
causes beyond the control of both Seller and its subcontractors, unless the
materials or services were obtainable elsewhere in time for Seller to meet the
delivery schedule for goods or services or both. Seller will notify Buyer in
writing within 10 days after the beginning of any such cause. Causes beyond the
control of either party will include, without limitation government action or
failure of the government to act where such action is required, strike or other
labor trouble, fire, and unusually severe weather.

19. Other Agreements. Buyer will
enter into other Purchase Orders and service agreements in connection with this
Project. Seller agrees to cooperate with and afford other vendors, suppliers,
and contractors reasonable opportunity for the execution of their work and
shall properly connect and coordinate its work and their work. Seller shall be
liable for any physical damage that it, its agents or employees may cause to
the property of any other vendor, supplier, or contractors, and shall hold
Buyer harmless from such damage.

20. Compliance with Laws. Seller
will comply with all federal, state and local laws, rules and regulations
applicable to the performance of this Purchase Order; provided that:

          (a)
if any such federal, state, local or municipal laws, rules, regulations, codes
or standards are changed, or if new laws, regulations, codes or standards or
interpretations thereof are enacted or adopted subsequent to the date of the
Purchase Order, which require a change in Seller’s equipment or work, an equitable
adjustment shall be made to the Purchase Order price, delivery schedule and
payment terms; and

          (b)
Seller does not guarantee any compliance with, nor will Seller incur any
liability for failure of the equipment or work to comply with, any federal,
state or local pollution control, effluent or utility control laws, rules,
regulations, codes or standards; provided, however, that Seller will comply
with any specific equipment emission guarantees which form part of the Purchase
Order.

21. Equal Opportunity Employer.
Seller is an Equal Opportunity Employer in compliance with Executive Order
11246; the Rehabilitation Act of 1973, Section 503, the regulations at 41
C.F.R. 60-741.4 and Executive Order 11758; the Vietnam Era Veterans
Readjustment Assistance Act of 1974, Section 402 and the regulations at 41
C.F.R. 60-250.4; and Title 38 of the United States Code, Section 2012, and
Executive Order 11701; all as amended. Unless this Purchase Order is exempted
under Section 201 of Executive Order 11246, as amended, paragraphs (1) through
(7) of the Equal Opportunity Clause in Section 202 of Executive Order 11246, as
amended, are incorporated herein by reference. Seller shall comply with all
similar requirements and obligations imposed by Iowa law.

22. Changes. Buyer, by a signed
written order, may notify Seller of changes in the terms of purchase of the
items or services or both purchased hereunder. If any such changes increase or
decrease Seller’s costs under this Purchase Order or change the date of delivery,
the price or the delivery date or both will be adjusted accordingly, and this
Purchase Order will be so modified in writing. All other modifications to this
Purchase Order may be made only in a writing signed by both parties.

23. Remedies. The rights and
remedies reserved in this Purchase Order are cumulative and additional to all
other or further rights and remedies provided at law, in equity or in this
Purchase Order, but are expressly subject to the limitations and disclaimers of
these Standard Terms and Conditions.

24, Insolvency. If any proceeding
is started by or against Seller in bankruptcy, reorganization or insolvency or
for the appointment of a receiver or for any assignment for the benefit of
creditors, Buyer may terminate this Purchase Order without further liability
except for conforming deliveries previously made.

25. Integration. The terms and
conditions of this Purchase Order and all other documents referenced on its
face constitute the entire agreement between the parties.

26. Independent Contractor.
Seller, its subcontractors, employees or agents are independent contractors for
all purposes and at all times. Buyer will incur no responsibility or obligation
to employees, agents, subcontractors or other parties used by Seller to perform
this Purchase Order. Such person or parties will, at all times, remain
employees, agents or subcontractors (whichever is applicable) of Seller. Seller
is solely responsible for payment of wages, salaries, fringe benefits and other
compensation of, or claimed by, Seller’s employees and is responsible for all
payroll taxes. Seller is also solely responsible for compliance with applicable
Workers’ Compensation laws with respect to maintenance of workers’ compensation
coverages on Seller’s employees. Seller will indemnify and defend Buyer from
all claims by any person, government or agency relating to payment of taxes and
benefits, including without limitation, any penalties and interest which may be
assessed against Buyer. 

Westfalia Separator, Inc.

Addendum A-1

	
 

	
 

	
Summary –
  Soy Energy Biodiesel

	
 

	
01 February
  2007

	
Page 12 of
  12

	 

	 

Seller will similarly
indemnify and defend Buyer from all claims by any person or governmental agency
which arise directly or indirectly from any failure by Seller to comply with
applicable Workers’ Compensation laws with respect to maintenance of Workers’
Compensation coverage on Seller’s employees.

27. General Conditions. The terms
and conditions of this Purchase Order bind Buyer and Seller and their
respective successors and assigns; provided, however, Seller may not assign
this Purchase Order or any moneys due or becoming due to Seller hereunder
without the prior written consent of Buyer. Buyer’s waiver of any term or
condition will not constitute a waiver of any other term or condition or
breach. If any part of this Purchase Order is invalid, the remaining terms and
conditions will continue in full force and effect.

28. Negotiation. The parties will
attempt in good faith to resolve through negotiation any dispute, claim or
controversy arising out of or relating to this Purchase Order. Either party may
initiate negotiations by providing written notice in letter form to the either
party, setting forth the subject of the dispute and the relief requested. The
recipient of such notice will respond in writing within ten days with a
statement of its position on and recommended solution to the dispute. If the
dispute is not resolved by this exchange of correspondence, then
representatives of each party with full settlement authority shall meet at
mutually agreeable time and place within twenty days of the date of the initial
notice in order to exchange relevant information and to attempt to resolve the
dispute. Seller shall continue to perform in accordance with the terms and
conditions of this Purchase Order during the pendency of any dispute, including
arbitration.

29. Binding Arbitration. All
claims or disputes between Buyer and Seller arising out of or relating to this
Purchase Order or a breach of this Purchase Order, shall be decided by arbitration
in accordance with the Construction Industry Arbitration Rules of the American
Arbitration Association. The parties designate New York, New York as the
Hearing locale. Any arbitration arising out of or relating to this Purchase
Order may include, by consolidation, joinder or in any other manner, an
additional person or entity not a party to this Purchase Order, so long as such
additional person or entity is an architect/engineer, contractor/subcontractor,
construction manager, supplier or laborer, or any agent paid directly by Buyer,
or is a party to a contract to furnish goods or perform work or services on the
Project or at the site. Buyer shall be entitled to a court order staying any
legal proceedings brought by Seller to enforce any rights or remedies Seller
may have under federal or state law, including but not limited to state
mechanic’s lien laws, pending the final completion of any arbitration
proceeding. The Arbitrator’s decision, judgment, or award shall be consistent
with the remedies provided herein; provided, however, the Arbitrator may not
award punitive damages. The award rendered by the arbitrator shall be final and
binding, and judgment may be entered upon it in accordance with applicable law
in any Court having jurisdiction. This agreement to arbitrate shall be
specifically enforceable in accordance with applicable law in any court having
jurisdiction.

31. Notices. Any notices or formal
communications required by this Purchase Order to be sent to the addresses
below (or such other address as either party may designate in a written notice
to the other party):

	
 

	
 

	
Buyer:

	
 

	
 

	
Seller:

	
The address on the front of
  the Purchase Order.

All notices shall be sent
certified mail, return receipt requested, or sent via a nationally recognized
delivery service that obtains a signature upon delivery (UPS, Federal Express,
etc.).

32. Governing Law. Iowa STATE
LAW WILL GOVERN THIS PURCHASE ORDER, except to the extent such laws
would require the application of the laws of a jurisdiction other than the State
of Iowa.

33. Damages. Notwithstanding any
other provision of this Purchase Order to the contrary:

          (a) Seller’s
and its subcontractors’ and subsuppliers’ aggregate responsibility and
liability, whether arising out of contract or tort or any other legal context
or theory, including negligence and strict liability, under the Purchase Order,
including, but not limited to all claims for breach of any warranty or
guarantee, failure of performance or delay in performance by Seller or performance
or non-performance of the purchased equipment shall not exceed 100% of the
Purchase Order price for the purchased equipment provided however, that this
limitation of liability does not apply to any liability of Seller for (i)
direct damages claimed by Buyer for accidental physical property damage to
Buyer’s property (other than damage to equipment supplied by Seller) or damage
to any product resulting from Seller’s negligence or willful misconduct, or
(ii) damages claimed by third parties for personal injury or accidental
physical property damage caused by Seller’s negligent acts or omissions for all
of which (i) and (ii) Seller will be liable in the aggregate for not more than
$5,000,000.

          (b) In
no event shall either party, or its subcontractors or subsuppliers be liable in
contract or in tort or under any other legal context or theory, including
negligence and strict liability, for any special, indirect, incidental or
consequential damages of any kind or character, including, but not limited to,
loss of use of productive facilities or equipment, costs of product recall,
plant downtime, damage to or loss of product, chemicals, catalysts, feedstock
or other raw materials, loss of revenues or profits or loss under purchases or
contracts made in reliance on the performance or non-performance of the
purchased equipment, whether suffered by Buyer or Seller or any third party, or
for any loss or damage to the extent arising out of the negligence of the other
party, its employees or agents or any third party.

This limitation shall not
apply to restrict or limit any available insurance.

Westfalia Separator, Inc.

Addendum A-1

Addendum
A-2

Performance Warranty & Testing

Pretreatment Section - Soy Energy

March
12, 2007

The following
information forms the basis for performance testing and certifying the
pretreatment section of the Soy Energy facility.

This
information does not apply to the testing and certification of the Biodiesel
section of the facility. For that section, Addendum A-1 is included in the EPC
contract.

In this
document, the term contract value refers to the financial value of the
equipment purchase between Cimbria SKET and Bratney Co.

In the
following, “SELLER” is defined as Cimbria SKET working in conjunction with
its U.S. agent, Bratney Company. Conversely, “BUYER” refers to the Soy
Energy owner/Board of Directors organization.

Performance Testing

As condition
for a handing over/taking over of the plant, the SELLER has to carry out a
performance test of the pretreatment unit.

For such a
performance test, the BUYER has to provide continuously all
necessary raw materials and utilities as listed in sufficient quality and
quantity as to enable the SELLER to carry out the start-up and
commissioning of the pretreatment unit.

The Performance
Test Run has to be carried out over a period of 48 hours during continuous
operation of the unit under the direction of the SELLER’s engineers and the
presence and assistance of the BUYER’s operators and staff.

The detailed
conditions for the Performance Test Run will be agreed to between both BUYER
and SELLER
three (3) days in advance and will be recorded in a separate protocol.

If the
quality, quantity and consumption figures mentioned below are achieved during
the 48 hours continuous operation, the Performance Test will be declared as
fulfilled and both BUYER and SELLER will sign the
Acceptance Certification within five (5) working days.

If the
Performance test will not meet the requirements under the fault of the SELLER,
the SELLER
has the right to repeat the test.

The time to
repeat such a test and other conditions shall be mutually agreed upon between
the BUYER
and the SELLER
under consideration of the actual situation at the plant site.

The SELLER
is obliged to take all necessary measures to repeat such a Performance Test as
quickly as possible and the BUYER has to give his support as being
necessary for the performance test.

Performance Warranty
and Penalties

The SELLER
shall be liable for the processing capacity of the unit, the quality of the final
products as well as for the consumption of utilities (total electrical power,
total process steam, total water consumption, total phosphoric consumption,
total consumption of sodium hydroxide) according to listing below under the
condition that the BUYER provide sufficient quantity and
quality of vegetable oil and utilities as specified below.

The
Performance Warranty is only valid in connection with the conditions as
mentioned below.

Should,
however, the quality of final products, the processing capacity and the
consumption of utilities not attain required levels, and the SELLER
is responsible for that, the SELLER is obliged to repair or replace at
his choice those parts of the unit which cause the insufficient character of
the unit.

Should the plant not reach the
contracted and guaranteed parameters the SELLER has to pay liquidated damages
(penalties) as follows:

	
 

	
 

	
1.

	
Quality of the final products

	
 

	
 

	
If the Plant
  does not reach the contracted quality of the final products (technically
  refined vegetable oil; degummed and deacidified) under responsibility of the SELLER,
  the SELLER
  is obliged to take immediately all necessary measures to bring the unit into
  successful operation.

	
 

	
 

	
 

	
The SELLER
  is obliged to repair or replace at his choice those parts of the Plant which
  cause the insufficient quality of the contracted final product.

	
 

	
 

	
 

	
The SELLER
  has to bear all costs for the necessary modifications and the SELLER
  will not get the Acceptance Certificate from BUYER before reaching the
  contracted final oil quality.

	
 

	
 

	
 

	
Should the
  Plant not be able to produce technically refined vegetable oil according to
  the contracted and specified quality as mentioned therein, and the SELLER
  is responsible for that fault, then the BUYER shall have the right to negotiate with
  the SELLER
  the conditions to hire a third company to bring the plant into proper
  operation.

	
 

	
 

	
 

	
Note: Liquidated
  damages payment may be a final recourse.

Page - 2 of 9

ADDENDUM A-2

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
2.

	
Deficiency in processing capacity for
  refining

	
 

	
 

	
 

	
Liquidated
  damage to be paid by the SELLER for non-achievement of the
  guaranteed processing capacity of ***
  (accepted tolerance ***% means minimum acceptable processing capacity is
  *** tpd) feedstock to the unit shall be ***% of the total contract price of
  the plant for each ton of not achieved processing capacity less than *** tpd
  up to a maximum amount of ***% of the total contract value.

	
 

	
 

	
 

	
Should under
  responsibility of the SELLER the processing capacity of the
  Unit being less than *** tpd, then the SELLER is obliged to repair or to replace
  within *** months the equipment or the process line which cause the
  problem. The SELLER shall bear the costs for such measures.

	
 

	
 

	
3.

	
Utility consumption

	
 

	
 

	
 

	
Should
  during the performance test run (*** hours) the plant does not reach the
  contracted and guaranteed parameters for consumption of the following,

	
 

	
 

	
 

	
 

	
–

	
Total
  electrical power

	
 

	
 

	
–

	
Total
  process water

	
 

	
 

	
–

	
Total
  process steam

	
 

	
 

	
–

	
Total
  phosphoric acid

	
 

	
 

	
–

	
Total sodium
  hydroxide

	
 

	
 

	
 

	
the SELLER
  has to pay liquidated damages (penalties) as follows:

	
 

	
 

	
 

	
In case of
  higher consumption figures for the above mentioned utilities over a tolerance
  of ***% (valid for each of the above mentioned utilities), and as stated
  below, the SELLER shall pay to the BUYER liquidated damages.

	
 

	
 

	
 

	
The value of
  these liquidated damages shall be calculated as the absolute total extra
  costs related to one year operation.

	
 

	
 

	
 

	
The
  liquidated damages shall be paid as one single payment only. 

	
 

	
 

	
 

	
If the
  consumption figures in aggregate are favorable to the BUYER, then SELLER
  will be paid ***% of this annual savings as a “Performance Bonus”

	
 

	
 

	
 

	
The costs for
  increased consumption and the profit for decreased consumption of the above
  listed utilities shall be balanced against each other. The cost of these
  individual materials and utilities on a per unit basis will be agreed to by
  both SELLER
  and BUYER
  prior to the test. 

Page - 3 of 9

ADDENDUM A-2

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
 

	
Only when
  this balance calculation results in extra costs, the BUYER shall have the right
  to claim from the SELLER the payment of those extra costs
  related to one year of operation as liquidated damages.

	
 

	
 

	
 

	
In order to
  calculate the costs, the actual market prices for the utilities on the day of
  the performance test shall be used.

	
 

	
 

	
 

	
The costs
  for increased consumption and the profit for decreased consumption of
  utilities or a higher production rate of refined oil can be balanced against
  each other.

	
 

	
 

	
 

	
The total
  amount of liquidated damages to be paid by the SELLER to the BUYER
  for deficiency in processing capacity and in utility consumption is limited
  to a maximum amount of ***% of the total contract price.

	
 

	
 

	
 

	
If the SELLER
  has paid liquidated damages according to this Addendum to the BUYER,
  or in case a successful Performance Test Run should not be possible due to
  reasons not attributable to the SELLER within *** months after the
  completion of erection, latest however within *** months after the Beginning
  of Performance of the Contract, the plant shall be considered as accepted and
  the Acceptance Certificate shall be issued.

	
 

	
 

	
 

	
The
  Acceptance Certificate will have to be signed in all of before mentioned
  cases within *** days.

Conditions for the
Validity of the Performance Warranty

The Performance Warranty as
given by the SELLER for the unit is only valid when all of the below
mentioned conditions have been fulfilled:

	
 

	
 

	
A)

	
The
  equipment for the process line has been supplied by the SELLER. The locally
  supplied portion of the unit and the side systems to be delivered under the
  responsibility of the BUYER has been checked by the SELLER
  and has been found in conformity with the conditions and stipulations in this
  contract.

	
 

	
 

	
B)

	
The quality
  and quantity of the feed material meets all of the below mentioned parameters
  of the crude oil specification listed below and enables a continuous and
  uninterrupted operation of the unit.

	
 

	
 

	
C)

	
The quality
  and quantity of the utilities meets the specification listed below and
  enables a continuous and uninterrupted operation of the unit.

	
 

	
 

	
D)

	
The erection
  works of the unit have been supervised by the specialized engineers of the SELLER.

	
 

	
 

	
E)

	
The
  direction of commissioning of the erected unit has been carried out by the
  engineers of the SELLER and with support of educated and
  experienced staff of the BUYER. The staff
  of

Page - 4 of 9

ADDENDUM A-2

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
 

	
the BUYER
  has to follow and carry out all instructions as given by the specialists of
  the SELLER.

	
 

	
 

	
F)

	
The project
  conditions at the time of signing the contract have not been changed or the BUYER
  has informed the SELLER about changes/modifications with
  the acceptance of the SELLER.

The
Performance Warranty (quality, capacity, consumption of electrical power,
process water, process steam, sodium hydroxide, phosphoric acid) becomes
automatically null and void if one of the above mentioned conditions have not
been fulfilled and the BUYER is responsible for that.

In principle,
the operation of the plant with other types of crude vegetable oils and
utilities not in conformity with the types mentioned in this contract is
possible, but only under the condition that the SELLER will not be held
responsible for any faults or damages of the unit.

Specification of Feed
Materials used for Performance Tests

The unit
design allows the processing of max. *** tpd of crude soybean oil 

Crude/water degummed soybean oil (usual in
trade) quality

As basis for process guarantee and plant performance testing

	
 

	
 

	
Temperature

	
Above ***° C

  (***° F)

	 

	
Pressure

	
*** - *** bar g

	 

	
Free fatty
  acids

	
max. ***%

	 

	
Phosphatides

	
max. *** ppm
  (as P)

	 

	
MIU

	
max. ***%

	 

	
Polymere
  content

	
max. ***%

	 

	
Solvent
  content (hexane)

	
max. *** ppm
  (measured as flash point)

	 

	
Closed up
  flash point

	
up to ***°C
  (Pensky-Martin method)

	 

	
Filterable
  solid matter

	
max. ***%
  (by weight)

	 

	
Total
  sulphur content

	
£ *** ppm

	 

	
Soap content

	
£ *** ppm

	 

	
Wax content

	
non
  detectible

	 

	
Peroxide
  value

	
max. *** meq/l

	 

	
Oxidation
  stability

	
min. *** h

	 

	
Liquid at
  ***°C

	
 

	 

Page - 5 of 9

ADDENDUM A-2

*** Confidential material redacted
and filed separately with the Commission. 

Fatty Acid Composition (typical for soybean
oil with a tolerance of +/- 5% related to each content)

	
 

	
 

	
 

	
C 16:0

	
 

	
*** - ***%

	 

	 

	 

	
C 18:0

	
 

	
*** - ***%

	 

	 

	 

	
C 18:1

	
 

	
*** - ***%

	 

	 

	 

	
C 18:2

	
 

	
*** - ***%

	 

	 

	 

	
C 18:3

	
 

	
*** - ***%

	 

	 

	 

	
C 20:0

	
 

	
*** - ***%

	 

	 

	 

	
C 20:1

	
 

	
*** - ***%

Animal fats (such as tallow) may be processed
successfully by the unit (not used as a basis for performance testing or
process warranty certification). Acceptable quality limits of such materials
are:

	
 

	
 

	
 

	
Temperature

	
 

	
above ***°C
 (***°F)

	 

	 

	 

	
Pressure

	
 

	
*** - *** bar g

	 

	 

	 

	
Free fatty
 acids (ffa-content)

	
 

	
£ ***%

	 

	 

	 

	
Phosphatides

	
 

	
£ *** ppm (as P)

	 

	 

	 

	
Insoluble
 impurities

	
 

	
*** - ***%

	 

	 

	 

	
Moisture and
 volatile matters

	
 

	
*** - ***%

	 

	 

	 

	
Unsaponifiables

	
 

	
*** - ***%

	 

	 

	 

	
Total sulfate
 content

	
 

	
£ ***% (by weight)

	 

	 

	 

	
Soap
 content:

	
 

	
£ *** ppm

	 

	 

	 

	
Polymere
 content

	
 

	
£ ***%

	 

	 

	 

	
Filterable
 solid matter

	
 

	
£ ***% (by weight)

	 

	 

	 

	
Total
 sulphur content

	
 

	
£ *** ppm

	 

	 

	 

	
Peroxide
 value

	
 

	
£ *** meq/l

	 

	 

	 

	
Iodine value

	
 

	
*** -***

	 

	 

	 

	
Oxidation
 stability

	
 

	
3 *** h

Typical fatty acid composition (for tallow
with a tolerance of +/- 5% related to each content)

	
 

	
 

	
 

	
 

	
 

	
- C-14-0

	
 

	
(Myristic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-14-1

	
 

	
(Myristoleic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-16-0

	
 

	
(Palmitic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-16-1

	
 

	
(Palmitoleic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-17

	
 

	
(Margaric)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-18-0

	
 

	
(Stearic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-18-1

	
 

	
(Oleic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-18-2

	
 

	
(Linoleic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-18-3

	
 

	
(Linolenic)

	
 

	
***%

	 

	 

	 

	 

	 

	
- C-20-0

	
 

	
(Arachidic)

	
 

	
***%

	 

	 

	 

	 

	 

	
-
 unsaturated/saturated ratio

	
 

	
 

	
 

	
***%

Page - 6 of 9

ADDENDUM A-2

*** Confidential material redacted
and filed separately with the Commission. 

The processing of other types of oil is
possible but in this case the specification of the degummed oil and the
consumption of utilities will change.

Final Products - Final Vegetable Oil Quality

The refining
unit is capable of producing in regular continuous operation degummed and
deacidified oils/fats in a quality as listed below

	
 

	
 

	
 

	
 

	
 

	
- ffa
 content

	
 

	
max ***%

	
 

	
 

	
-
 phosphatides

	
 

	
max. *** ppm
 (as P)

	
 

	
 

	
- moisture

	
 

	
max. ***%

	
 

	
- peroxide
 value

	
 

	
max. *** meq/kg

	
 

	
- impurities

	
 

	
max. ***%

	
 

The quality
 analysis has to be carried out by an official laboratory and according to the
 official AOCS methods; otherwise the result of the analysis is not acceptable
 and not binding for the process guarantee. SELLER is able to
use certified labs outside the provided process unit lab as needed.

This ‘refined’
oil is thus suitable for use as a feedstock into the Biodiesel unit.

Utilities Specifications

Proper
operation of the pretreatment unit is contingent on utilities as listed below
being supplied by SELLER and BUYER (in the case of steam) in the
required quality and quantities.

	
 

	
 

	
 

	
 

	
 

	
Steam (saturated, dry)

	
 

	
pressure

 pressure 

 to be free from solid matter

	
 

	
*** bar g for
 vacuum systems

 *** bar g for process steam

	 

	 

	 

	 

	 

	
Electric power

	
 

	
3 phase AC 

 service voltage: 

 admissible variations:

	
 

	

***

 voltage: ***% 

 frequency ***%

	 

	 

	 

	 

	 

	
Treated water

	
 

	
fresh water
 (city water) 

 degree of hardness:

 pH value:

 pressure:

	
 

	

max. ***° dH (hardness stabilized)

*** - ***

*** bar (abs.)

	 

	 

	 

	 

	 

	
Cooling water

	
 

	
temperature
 (to Plant)

 temperature (from Plant)

 temperature increase

 supply pressure

 carbonate hardness

 

 total salt content

 chloride content

 pH value

 clean, without contamination, free from solid matter and sediments

	
 

	
***° F (max.
 ***° F)

***° F (max. ***° F)

*** K

 min. *** bar

 < ***° dH equal to

 < *** mg ***

 < *** mg/l

 < *** mg/l

 *** - ***

Page - 7 of 9

ADDENDUM A-2

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
 

	
 

	
 

	
Softened water

	
 

	
Total
 hardness

 pH value

 temperature

 pressure

 to be free from solid matter

	
 

	
max. ***° dH

 neutral

 approx. ***° F

 min. *** bar

	 

	 

	 

	 

	 

	
Instrument air

	
 

	
pressure

 particle size

 particle density

 oil content

 dew point

	
 

	
min. *** bar

 max. *** μm

 max *** mg/Nm3

 max *** mg/Nm3

 ***° F

	 

	 

	 

	 

	 

	
Sodium hydroxide

	
 

	
Technical
 quality, liquid

	
 

	
*** - ***
 weight % to dosing system

	 

	 

	 

	 

	 

	
Phosphoric acid

	
 

	
Technical
 quality, liquid

	
 

	
*** or ***
 weight % to dosing system

	 

	 

	 

	 

	 

	
Citric acid

	
 

	
Technical
 quality, liquid

	
 

	
*** - ***
 weight % to dosing system

	 

	 

	 

	 

	 

	
Thermal oil

	
 

	
Type:
 Marlotherm or equivalent

	
 

	
 

Consumption of Utilities

All
consumption figures of utilities have to be understood as average values
(tolerance +/- ***%) at continuous uninterrupted operation of the plant with one
and the same feedstock and constant and equal supply of the utilities.

The
specification of feedstock and utilities has to meet the characteristics as
mentioned in this Addendum.

Higher and
lower actual feedstock and utility consumption figures may be offset each other
in terms of value.

Trouble and/or
adverse effects incurred because of BUYER’s
failure to supply feedstock and utilities to the specifications as given
therein shall not be covered by suppliers’ warranty.

Crude Oil Pre-treatment Plant/Refining Plant (max. ***
tpd crude oil)
Consumption
figures of utilities referred to *** mton of crude oil 

	
 

	
 

	
 

	
FLEX Degumming Unit (Water and Acid Degumming and Drying)

	 

	
-steam (4
 bar)

	
 

	
max. *** kg

	 

	 

	 

	
-phosphoric
 acid (85%)

	
 

	
max. *** -
 *** kg

	 

	 

	 

	
-caustic
 soda (50%)

  (in case of partial neutralization only)

	
 

	
max. *** -
 *** kg

	 

	 

	 

	
-caustic
 soda (50%)

  (in case of complete neutralization only)

	
 

	
max. *** kg

	 

	 

	 

	
-citric acid
 (50%)

	
 

	
max. *** kg

	 

	 

	 

	
-process
 water (softened water)

	
 

	
max. *** kg

	 

	 

	 

	
-wash water
 (softened water)

	
 

	
max. *** kg

	 

	 

	 

	
-control
 water (softened water)

	
 

	
max. *** kg

	 

	 

	 

	
-electric
 power

	
 

	
approx. ***
 kWh

Page - 8 of 9

ADDENDUM A-2

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
 

	
Distillative Deacidification and Deodorizing (Physical Refining)

	 

	
-steam
 (stripping steam)

	
 

	
max. *** kg

	 

	 

	 

	
-electric
 power

	
 

	
approx. ***
 kWh

	 

	 

	 

	
 

	
 

	
 

	
Vacuum plant

	
 

	
 

	 

	 

	 

	
- steam for
 booster section for deacidification

	
 

	
max. *** kg

	 

	 

	 

	
-electric
 power

	
 

	
approx. ***
 kWh

	 

	 

	 

Page - 9 of 9

ADDENDUM A-2

Addendum
B

Soy
Energy, LLC

Marcus, Iowa

Project Scope

June 8, 2007

1.
Overview:

	
 

	
 

	
 

	
The Ken Bratney Company of Des Moines will construct
  a 30 Million gallon per year Biodiesel facility near Marcus, IA, for Soy
  Energy, LLC. Working in conjunction with The Ken Bratney Company, will be
  technology and equipment providers Cimbria-SKET of Magdeburg, Germany, and
  the Westfalia Separator Companies of Northvale, NJ, and The Baker Group of
  Des Moines. This facility will be fed unrefined and refined vegetable oils,
  and will produce a Biodiesel product for sales. The facility will produce
  several saleable co-products such as glycerine, acid oil, and recovered FFA.
  The Soy Energy organization has elected to contract with another provider for
  a pellet fired steam boiler for the facility. The building structure will be
  installed by The Ken Bratney Company. The Ken Bratney Company project scope
  will be performed as EPC (Engineer, Procure, Construct). 

2.
Location:

	
 

	
 

	
 

	
The facility will be constructed East of Marcus,
  Iowa north of State Highway 3 and north of the Canadian National rail line.
  The site is currently being farmed as agricultural land.

3. Plant
Functionality:

	
 

	
 

	
 

	
The facility will be designed to produce 30 Million
  gallons per year of B100 Biodiesel meeting ASTM 6751 and EU14214 quality
  specifications utilizing soybean oil, canola oil, palm oil, corn oil, or
  animal fat (with specific characteristics). Designed production from the
  facility is based upon operation of the plant for a minimum of 330 days per
  year. 

4. The
process will consist of the following process units:

	
 

	
 

	
 

	
 

	
-

	
CD Plus process (Transesterification)

	
 

	
 

	
 

	
 

	
-

	
Glycerin Water Treatment

	
 

	
 

	
 

	
 

	
-

	
Methanol recovery

	
 

	
 

	
 

	
 

	
-

	
Glycerin Evaporation (Concentration of glycerin to
  80+% purity)

	
 

	
 

	
Soy Energy, LLC

	
06/19/2007

	
Page 2 of 10

	
Revision #01

	
 

	
 

	
 

	
 

	
-

	
Process Water Circulation System

	
 

	
 

	
 

	
 

	
-

	
Feed stock pretreatment (de-gumming and
  deacidification) 

	
 

	
 

	
 

	
 

	
Two outside tank farms will serve the process and
  these tank farms will have earthen and concrete containment to contain the
  liquids in the event of a tank spill. The two tank farms are separated into
  tank farm #1, which will contain methanol and sodium methylate and tank farm
  #2, which will contain feed stock oil, in-process materials, glycerin and
  finished Biodiesel.

5. Site
Logistics:

	
 

	
 

	
 

	
The Ken Bratney Company will do final engineering
  for the site. This will include the overall site development engineering, the
  rail siding engineering, paving design, and location of all buildings on the
  site. The Ken Bratney Company will do the final engineering for the
  wastewater system as an allowance. Separation of the final documents into bid
  packages for bidding and contract award will be the responsibility of The Ken
  Bratney Company.

	
 

	
 

	
 

	
Materials will move in and out of this site by truck
  and rail. Rail un-loading will occur at one spot and rail loading will occur
  at one spot. Truck loading will occur at one spot and truck unloading will
  occur at two spots with a separate unloading spot for chemicals in a remote
  location.

	
 

	
 

	
 

	
Methanol will be unloaded by rail on the
  rail-unloading spur at a single spot, or by truck at a remote location with
  self-pumping capabilities. Methanol will be pumped from these areas to the
  methanol tank farm.

	
 

	
 

	
 

	
Process chemicals (acids, bases) will be unloaded
  from trucks immediately adjacent to the chemical storage area located in tank
  farm #2.

	
 

	
 

	
 

	
Animal fat and other vegetables will be stored in
  large diameter storage tanks prior to being fed to the process and converted
  to Biodiesel.

	
 

	
 

	
 

	
Several of the tanks will require heating, which
  will be done by steam coils inside the tank. 

6.
Utilities required:

	
 

	
 

	
 

	
The Ken Bratney Company will perform final
  engineering for the site utilities. Installation of site utilities to within
  5’-0” of the facility entrance point will be by Soy Energy. The Ken Bratney
  Company will furnish and install underground utilities from the entrance
  point provided by the owner to the appropriate building.

	
 

	
 

	
 

	
This site will need the following utilities as
  inputs:

	
 

	
 

	
 

	
-

	
Natural gas 

	
 

	
 

	
Soy Energy, LLC

	
06/19/2007

	
Page 3 of 10

	
Revision #01

	
 

	
 

	
 

	
 

	
-

	
Electricity 

	
 

	
 

	
 

	
 

	
-

	
Water 

	
 

	
 

	
 

	
The local gas Companies will provide natural gas
  connection complete with meter to within 5’-0” of the boiler room.

	
 

	
 

	
 

	
Soy Energy is
  responsible for electrical primary service to the primary transformer,
  including the transformer pad in locations noted by The Ken Bratney Company.
  Multiple transformers will service the plant and a separate transformer will
  service the fire pump. The fire pump transformer must have a separate
  electric service with direct connection to the utility.

	
 

	
 

	
 

	
Electrical supply to the site requires 3 phase, 60
  cycle, 480 volt secondary from the main transformer furnished by the local
  utility company. The electrical contractor (The Ken Bratney Company’s
  responsibility) will provide underground service from a high voltage switch
  (supplied by The Ken Bratney Co.) to the primary side of the transformers and
  from the secondary side of the transformers to the motor control center
  switch panels. This will further include power switching gear, motor control
  center and a backup power (UPS) system as required for the operation of the
  control system. Electrical service for the office will come from the main MCC
  switch panel and go underground to the office (by The Ken Bratney Company).

	
 

	
 

	
 

	
The rural water district will supply potable water
  to within 5’-0” of the Boiler Building. Extension of the water service from
  the entrance point to the water treatment system will be the responsibility
  of The Ken Bratney Company.

7. Facility Structures:

	
 

	
 

	
 

	
The
  Facility Structures are to include all necessary foundations for the
  respective buildings.

	
 

	
 

	
 

	
Process Building (by The Ken
  Bratney Company)

	
 

	
 

	
 

	
The base process building will house the Biodiesel
  Process. This building is a structural steel framed structure (hot dip
  galvanized) with insulated sandwich wall panels, pre-engineered roof purlins
  and wall girts fabricated from galvanized sheet stock, metal sheeting and
  vinyl-reinforced insulation in the roof. The structure is approximately 50’
  wide x 95’ long x 80’ tall. The grade level will be concrete on grade with
  the intermediate levels structural steel with bar grating. The structure
  under the separators will be a concrete over steel framing. This building
  will have fire sprinklers at each level. Two fire exit stairwells will
  provide access to each level of the structure with exits at grade direct to
  the outside.

	
 

	
 

	
 

	
The process building will housing the refining
  (de-gumming and deacidification) process and the Biodiesel process (equipment
  handling methanol), is a structural steel framed structure (hot dip
  galvanized) with insulated sandwich wall panels, pre-engineered purlins 

	
 

	
 

	
Soy Energy, LLC

	
06/19/2007

	
Page 4 of 10

	
Revision #01

	
 

	
 

	
 

	
and wall girts fabricated from galvanized sheet
  stock, metal sheeting and vinyl-reinforced insulation in the roof. The entire
  process building will be designed per “explosion proof” construction and
  electrical codes.

	
 

	
 

	
 

	
The building will include all lighting to meet
  applicable construction codes.

	
 

	
 

	
 

	
The building will be equipped with sensors for
  methanol detection at grade level floor of the process building or as
  required by applicable codes. These sensors will indicate/alarm in the
  control room and will cause the plant computer control system to make
  preventative measures, up to shutting down the plant.

	
 

	
 

	
 

	
The process building will have the perimeter walls
  raised above the grade level floor to allow any spill or water to be
  contained inside of the building.

	
 

	
 

	
 

	
The building will be equipped with a fire alarm
  system. A variance will be required from the State Fire Marshall for the
  height of the building. The inclusion of the Fire Alarm System should help
  with approval of this variance.

	
 

	
 

	
 

	
Process Control Office/Main MCC
  Building (by The Ken Bratney Company) will be a two-story building, 50’
  wide x 50’ long x 36’(approximate) short side eave, will house the electrical
  motor control center and switch gear room on the ground floor and the control
  room, employee restroom, laboratory including laboratory equipment and
  utility space on the second floor. 

	
 

	
 

	
 

	
The floor at grade will be concrete slab on grade.
  The second level floor will be a concrete floor on structural steel support
  grid and metal deck.

	
 

	
 

	
 

	
Boiler Building (by The Ken Bratney
  Company) will be a
  single story, pre-engineered metal building approximately 102’ wide x
  107’ long x 40’ (approximate) low side eave and will have a full height
  concrete block 4-hour rated divider wall between the boiler room and the
  process building. The grade level floor will be concrete. Below grade the
  biomass boiler feed system will utilize trenches. This building may be
  separated away from the process building by 15’ for constructability and code
  purposes. The Ken Bratney Company will require final engineered drawings
  showing the biomass feed system as well as the biomass boiler layout prior to
  engineering of this building.

	
 

	
 

	
 

	
Truck receiving/Load out Building
  (by The Ken Bratney Company) will be an open sided, three bay wide, pre-engineered building 30’
  wide x 83’ long x 24’ (approximate) short side eave. This building will cover
  the truck loading and unloading operations.

	
 

	
 

	
 

	
Truck and Rail Control Room/MCC
  Room (by The Ken Bratney Company) will be a concrete block building 13’ wide x 35’ long x 12’ tall
(approximate). The floor at grade will be concrete and
  the roof will be a concrete roof on a structural support grid. This MCC room
  will also serve the tank farm.

	
 

	
 

	
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Page 5 of 10

	
Revision #01

	
 

	
 

	
 

	
The Fire Pump House (by The Ken
  Bratney Company)
  will be a pre-engineered metal building 16’ wide x 20’ long x 12’ (approximate)
  low side eave. The floor at grade
  will be concrete. The pump house will enclose an electric powered fire water
  pump.

	
 

	
 

	
 

	
Administration Office / Maintenance
  Building (by The Ken Bratney Company) will be approximately
  5,400 square foot single story, pre-engineered building. This structure will
  be at grade and will have a concrete floor. The office may include:

	
 

	
 

	
 

	
 

	
•

	
Reception area 

	
 

	
 

	
 

	
 

	
•

	
Men and women’s locker rooms

	
 

	
 

	
 

	
 

	
•

	
Offices

	
 

	
 

	
 

	
 

	
•

	
Break room

	
 

	
 

	
 

	
 

	
•

	
Conference room

	
 

	
 

	
 

	
 

	
•

	
Equipment room

8.
Process Equipment:

	
 

	
 

	
 

	
The Ken Bratney Company, Cimbria Sket and Westfalia
  will provide the process equipment.

	
 

	
 

	
 

	
The Ken Bratney Company will erect all equipment in
  the process structure.

	
 

	
 

	
 

	
Piping of the process equipment and utilities,
  instrumentation mounting and wiring will be the responsibility of the Baker
  Group of Des Moines, IA, a strategic partner of The Ken Bratney Company.

	
 

	
 

	
 

	
Tanks located in the tank farms will be provided and
  installed by The Ken Bratney Company. These tanks will include appropriate
  foundations, piping, pipe insulation, tank insulation and painting as
  required. Tanks will be constructed of stainless steel and carbon steel to
  meet API 650 Code. Non-insulated stainless steel tanks will not be painted.
  Tanks that are heated will also be insulated. Pipe racks will be furnished as
  required from the rail loading and un-loading to the tank farm and from the
  tank farm into the process building. Pipe racks will also service the truck
  loading and unloading area as required and pipe racks will be sized for
  future four (4) 6” lines.

	
 

	
 

	
 

	
The Ken Bratney Company will construct the tank farm
  containment for the tanks. Containment will include the earthen berms, the
  containment walls, stabilized containment floors, finished surface gravel
  inside the containment dikes and final grading after erection of the field built
  tanks. One end of the containment dike will be left open to grade for access
  to construct the field build tanks. Tank foundations (by The Ken Bratney
  Company) will be constructed after the tank farm containment is completed.

	
 

	
 

	
 

	
All pressure vessels will be constructed to meet
  ASME as a minimum. Some vessels will be constructed in Germany per comparable
  German code and the ASME code.

	
 

	
 

	
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Page 6 of 10

	
Revision #01

	
 

	
 

	
 

	
As many of the pumps, valves, fittings, and
  instruments as possible will be purchased in the U.S. of performance quality
  equal to, or better than, comparable products available in Germany.

	
 

	
 

	
 

	
All equipment and construction will have a minimum
  of a one-year mechanical warranty in force. 

	
 

	
 

	
 

	
Process piping will be specified, procured,
  installed and tested per ANSI B31-1 or ANSI B31-3 codes.

9.
Electrical / Instrumentation / Plant Control Features:

	
 

	
 

	
 

	
Electrical equipment for the Biodiesel process
  building will be specified and installed in accordance with the National
  Electric code (NEC), Class 1, Division 2. (explosion proof)

	
 

	
 

	
 

	
All equipment will be electrically grounded and
  bonded.

	
 

	
 

	
 

	
Motor control centers (MCC’s) and I/O-PCL rooms will
  be climate controlled and equipped with smoke detectors.

	
 

	
 

	
 

	
The PLC software and graphics will be Allen-Bradley
  based.

10. Fire
Prevention:

	
 

	
 

	
 

	
This facility is governed by fire codes (NFPA) and
  building codes (i.e. State of Iowa). Engineered, stamped final drawings will
  be required to be submitted to the State Fire Marshall for review prior to
  installation of the fire protection system. Fire protection design will be
  the responsibility of The Ken Bratney Company and will utilize the demand
  requirements for all buildings in the system design. The Ken Bratney Company
  will provide fire sprinklers required within the structures. 

	
 

	
 

	
 

	
A preconstruction design review will be made with
  the owner’s representative, Soy Energy’s insurance representative, the fire
  protection engineering and/or construction firm and The Ken Bratney Company.

	
 

	
 

	
 

	
The facility will be equipped with a fire water
  supply tank, pump, underground fire loop and distribution system to all the
  buildings with the exception of the process control room and the electrical
  room. The electrically powered fire pump will supply firewater to the system
  from the on-site water storage tank. 

	
 

	
 

	
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06/19/2007

	
Page 7 of 10

	
Revision #01

11.
Project Support:

	
 

	
 

	
 

	
 

	
The Ken Bratney Company expects to provide the
  following construction and start-up support for the process equipment to the
  project:

	
 

	
 

	
 

	
 

	
-

	
Full time on-site construction superintendent and
  Construction Manager

	
 

	
 

	
 

	
 

	
-

	
Site safety coordinator 

	
 

	
 

	
 

	
 

	
-

	
Construction and start-up support by Westfalia staff
  (on site)

	
 

	
 

	
 

	
 

	
-

	
Assist owner in training of plant staff in process
  and safety systems 

	
 

	
 

	
 

	
 

	
-

	
Providing the client a documented quality system
  (BQ-9000) that will initiate quality control from start-up

	
 

	
 

	
 

	
 

	
-

	
Assist plant staff in commissioning all equipment
  and initiating production (The Ken Bratney Company, Cimbria-Sket and
  Westfalia Process Engineers)

12.
Plant Auxiliary systems: 

	
 

	
 

	
 

	
The Baker Group will furnish and install the boiler
  steam piping from the steam header supplied by Soy Energy (located in the
  boiler room) to the process.

	
 

	
 

	
 

	
A boiler system complete through to the steam header
  will be provided by Soy Energy in a building constructed by The Ken Bratney
  Company.

	
 

	
 

	
 

	
Condensate return piping from the process users back
  to a receiver in the boiler building will be made by Baker Group and the
  receiver will be furnished by Soy Energy. 

	
 

	
 

	
 

	
Cooling tower and circulating water systems (pumps
  and piping) for the process (by Baker Group).

	
 

	
 

	
 

	
Air compressor(s) and associated air dryers to
  provide “working air” and “instrument air for plant use (by Baker Group).

	
 

	
 

	
 

	
Liquid nitrogen storage tank, vaporizer and liquid
  nitrogen supply (by Soy Energy). The Ken Bratney Company will furnish
  foundations for the nitrogen tank and the nitrogen vaporizer.

	
 

	
 

	
 

	
Liquid nitrogen distribution piping from the
  nitrogen vaporizer to the process equipment and to the tank farm (by Baker
  Group).

13.
Drawings for Contract Include:

	
 

	
 

	
 

	
 

	
FD- 001.0

	
Index Flow Diagram

	
 

	
C - 001.0

	
Overall Site Plan and Tank Schedule

	
 

	
GA-201.0

	
Truck Receiving Grade Level Plan

	
 

	
GA-202.0

	
Truck Receiving Sections

	
 

	
GA-251.0

	
Rail Load and Unload Grade Level Plan

	
 

	
 

	
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Page 8 of 10

	
Revision #01

	
 

	
 

	
 

	
 

	
GA-255.0

	
Rail Load and Unload Sections

	
 

	
GA-271.0

	
Rail Methanol Unload Grade Level Plan

	
 

	
GA-301.0

	
North Half Tank Farm Grade Level Plan

	
 

	
GA-302.0

	
South Half Tank Farm Grade Level Plan

	
 

	
GA-303.0

	
Methanol Tank Farm Grade Level Plan

	
 

	
GA-401.0

	
Process Building Grade Level Plan

	
 

	
GA-402.0

	
Process Building Second Level Plan

	
 

	
GA-403.0

	
Process Building Third Level Plan

	
 

	
GA-404.0

	
Process Building Fourth Level Plan

	
 

	
GA-411.0

	
Process Building South Stair Section

	
 

	
GA-412.0

	
Process Building Section

	
 

	
GA-413.0

	
 

	
 

	
GA-414.0

	
 

	
 

	
GA-415.0

	
Process Building North Stair Section

	
 

	
GA-416.0

	
Process Building and Control Section

	
 

	
GA-501.0

	
Control Building Plans

	
 

	
GA-601.0

	
Bio-Mass Boiler Building Lower Level Plan

	
 

	
GA-602.0

	
Bio-Mass Boiler Building Grade Level Plan

	
 

	
GA-611.0

	
Bio-Mass Boiler Building Section

	
 

	
GA-612.0

	
Bio-Mass Boiler Building Section

	
 

	
GA-613.0

	
Bio-Mass Boiler Building Section

	
 

	
GA-614.0

	
Bio-Mass Boiler Building Section

	
 

	
GA-615.0

	
 

	
 

	
GA-616.0

	
Bio-Mass Boiler Building Section

	
 

	
GA-617.0

	
Bio-Mass Boiler Building Section

	
 

	
GA-618.0

	
Bio-Mass Boiler Building Section

	
 

	
GA-619.0

	
Bio-Mass Boiler Building Section

Items furnished by The Ken Bratney Company that may not be
listed above will include:

	
 

	
 

	
 

	
 

	
1.

	
Piping & valving (material and labor) in the Process
  Plant

	
 

	
 

	
 

	
 

	
2.

	
Instrument wiring in the Process Plant

	
 

	
 

	
 

	
 

	
3.

	
Pump setting and wiring in Process Plant

	
 

	
 

	
 

	
 

	
4.

	
Insulation of piping and vessels as required in the
  Process Plant

	
 

	
 

	
 

	
 

	
5.

	
Utility (water, air, steam, nitrogen) process design
  information

	
 

	
 

	
 

	
 

	
6.

	
Inventory record keeping, freight, and unloading of
  Bratney furnished materials and equipment.

	
 

	
 

	
 

	
 

	
7.

	
Engineer, supply and install the in-bound water
  treatment for use in the process, cooling tower and the boiler system. The
  Ken Bratney Company will be responsible for connection from the treated water
  supply to within 5’ of the boiler system. Space will be required in the
  boiler building for the treatment system.

	
 

	
 

	
 

	
 

	
8.

	
The Building Fire alarm system design. Installation
  of the fire alarm system within the buildings furnished by The Ken Bratney
  Company.

	
 

	
 

	
 

	
 

	
9.

	
Rail design and final engineering including
  submittal to the railroad for final approval. 

*** Confidential material redacted
and filed separately with the Commission. 

	
 

	
 

	
Soy Energy, LLC

	
06/19/2007

	
Page 9 of 10

	
Revision #01

	
 

	
 

	
 

	
 

	
10.

	
Fire pump system for the complete site including: the fire pump house, fire water storage tank, underground fire
loop, system design, submittal to the state Fire Marshall to make this a complete and approved system. 

	
 

	
 

	
 

	
 

	
11.

	
Final site landscaping, seeding and sodding is included as an allowance of ***.

	
 

	
 

	
 

	
 

	
12.

	
Rail spur procurement and construction.

	
 

	
 

	
 

	
 

	
13.

	
Truck scale complete (truck scale will be a full pit design), which includes: approaches, deck, foundations,
control system and installation. This will further include any printers in the office, remote printers, traffic control measures,
proximity switches at the ends of the scale, rodent protection for cables, electrical connections from the load cells to junction
boxes and from the junction boxes to the office, freight of all components to the job site, unloading of the components.

	
 

	
 

	
 

	
 

	
14.

	
Office building / shop / showers / restroom and employee facilities located inside of the office. (Building
included is estimated at 5,400 SF total with an allowance to design and construct of ***). Final design and submittal to the
Building official and the state Fire Marshall for final approval prior to construction.

	
 

	
 

	
 

	
 

	
15.

	
Paving and lot striping

	
 

	
 

	
 

	
 

	
16.

	
Site fence (permanent and temporary construction
  site fence)

	
 

	
 

	
 

	
 

	
17.

	
Overall project construction schedule. 

	
 

	
 

	
 

	
 

	
18.

	
Cost of gravel and installation of gravel surface
  around and inside tank farm to complete grading including additional gravel
  as required for use during construction.

	
 

	
 

	
 

	
 

	
19.

	
Site preparation including: grading, tank farm
  containment, (concrete and earthen berm), lay-down areas for materials and
  process equipment, building pads.

	
 

	
 

	
 

	
 

	
20.

	
Site safety coordination during construction.

Items furnished by Soy Energy that may not be listed above
will include:

	
 

	
 

	
 

	
 

	
1.

	
Building permit procurement and costs associated
  with the building permit. The Ken Bratney Company will submit drawings for
  their portion of the work direct to the building official and Fire Marshall
  as required.

	
 

	
 

	
 

	
 

	
2.

	
Steam generation up through and including the steam
  header located above the (2) boilers located in the boiler building. The
  Baker Group will furnish and install a steam line off the header to the
  process.

	
 

	
 

	
 

	
 

	
3.

	
Condensate return receiver in the boiler room. Bratney
  (Baker) will pipe to this receiver.

	
 

	
 

	
 

	
 

	
4.

	
Process Wastewater treatment system is included as
  an allowance. 

	
 

	
 

	
 

	
 

	
5.

	
Site lighting beyond furnishing of light packs on
  buildings for general exterior lighting.

	
 

	
 

	
 

	
 

	
6.

	
In-coming high voltage from the power company will
  go to a power pole at the northeast corner of the property. Ken Bratney
  Co./Baker will furnish and install the main switch and underground conduit
  from the power pole to the main switch. The power company will install high
  voltage power cable from the power pole to the main switch.

	
 

	
 

	
 

	
 

	
 

	
Ken Bratney Co./Baker will install underground
  conduit from the power pole to the fire pump transformer. The power company
  will install high voltage power cable from the power pole to the fire pump
  transformer.

	
 

	
 

	
Soy Energy, LLC

	
06/19/2007

	
Page 10 of 10

	
Revision #01

	
 

	
 

	
 

	
 

	
 

	
The power company will furnish and install all
  transformers on Ken Bratney Co. furnished pads.

	
 

	
 

	
 

	
 

	
 

	
Ken Bratney Co./Baker will provide all conduit and
  power wire from the main switch to the individual transformers.

	
 

	
 

	
 

	
 

	
 

	
Ken Bratney Co./Baker will provide conduit and power
  cable from the transformers to the MCC selections.

	
 

	
 

	
 

	
 

	
7.

	
Natural gas will be delivered to within 5’ of the
  boiler building including the meter as required. Soy Energy may elect to
  install a back-up fuel oil system for the back-up boiler. This boiler will be
  capable of using natural gas or fuel oil.

	
 

	
 

	
 

	
 

	
8.

	
Biomass Pellet Boiler – complete design including
  biomass feed system final engineering design requirements (prior to
  engineering of foundations and metal building), biomass boiler and stand-by
  natural gas fired boiler, steam headers, condensate tank, condensate receiver
  system and biomass feeder system, electric static precipitator, stacks and
  ash load out.

	
 

	
 

	
 

	
 

	
9.

	
Nitrogen tank, vaporizer, nitrogen supply and
  interconnecting piping between the tank and vaporizer. Bratney (Baker Group)
  will furnish piping from the connection at the vaporizer to the process and
  to the methanol tanks as required.

	
 

	
 

	
 

	
 

	
10.

	
Facility lightning protection.

	
 

	
 

	
 

	
 

	
11.

	
Overall final plant security system.

	
 

	
 

	
 

	
 

	
12.

	
Overall final site safety maintenance after
  construction.

	
 

	
 

	
 

	
 

	
13.

	
Inventory record keeping, freight and unloading of
  owner furnished materials and equipment.

	
 

	
 

	
 

	
 

	
14.

	
All furnishings, fixtures and equipment within the
  buildings, including telephone systems, including any record keeping,
  receiving, unloading or installation, unless specifically includedExhibit 10.7  

CHEROKEE COUNTY
RURAL WATER DISTRICT No. ONE

WATER USER’S
AGREEMENT FOR NEW MEMBER

                    This
AGREEMENT is made and entered into between Cherokee County Rural Water District
No. One, an Iowa corporation, hereinafter referred to as “CORPORATION,” and Soy
Energy LLC, a new Member hereinafter referred to as “MEMBER.”

                    WHEREAS,
the Member desires to purchase water from the Corporation and to enter into an
agreement in conformity with the by-laws of the Corporation, the parties hereby
agree as follows:

	
 

	
 

	
 

	
 

	
1. WATER FURNISHED. The Corporation agrees to
 furnish, subject to the limitations set out in its by-laws and policies now
 enforced or as may be later amended or adopted, water at the Member’s
 premises described as follows: 

NE1⁄4, Section 1, Amherst Township,
Cherokee County.

	
 

	
 

	
 

	
 

	
2. NECESSARY EASEMENTS. If the owner of the
 premises, the Member agrees to grant to the Corporation, its successors and
 assigns, a perpetual easement in, over, under and upon the above described
 land and all other land now owned or later owned by the Member, within the
 boundaries of the Corporation, with the right to erect, construct, install
 and lay, and thereafter use, operate, inspect, repair, maintain, replace and
 remove water pipelines and appurtenant facilities, together with the right to
 use adjoining lands belonging to Member for the purpose of ingress to and
 egress from the above described land. If Member is a tenant and not the owner
 of the above described premises, Member agrees that the provision of water by
 Corporation shall be subject to the Corporation acquiring all necessary
 easements for the installation and maintenance of a water pipeline to service
 the above described land.

	
 

	
 

	
 

	
 

	
3. MEMBER SERVICE LINE. The Member shall be
 responsible for installing and maintaining at the Member’s sole expense a
 service line which shall begin at the meter pit installation and extend to
 the dwelling or other place of use. The service line shall connect with the
 Corporation’s 

1

	
 

	
 

	
 

	
 

	
distribution system at a place designated by the
 Corporation. The Corporation shall have the final authority in any question
 of location. The Corporation shall have no obligation to inspect for or
 correct leaks or defects in the Member’s service line, and the Corporation shall
 assume no responsibility for the location, installation or material used in
 the service line of the Member. All leaks that occur on the Member’s side of the
 meter or curb stop shall be treated as water purchased.

	
 

	
 

	
 

	
 

	
4. MEMBER COMPLIANCE WITH RULES AND POLICIES. The
 Member agrees to comply with and be bound by the Articles of Incorporation,
 By-laws and Policies of the Corporation, now in force or to be in force, or
 as hereinafter duly supplemented or amended. The Member agrees to pay for
 water at the rates, times and places as shall be determined by the
 Corporation, and agrees to the imposition of such penalties for
 noncompliance, finance charges, and imposition of monthly minimum charges, as
 are now set out in the By-laws and Policies of the Corporation or which may
 hereafter be adopted and imposed by the Corporation. The Member
 acknowledges that the Member has read the Policies attached to this agreement
 as exhibit “A” and agrees to abide by those Policies and all later adopted
 amendments and policies of the Corporation.

	
 

	
 

	
 

	
 

	
5. MEMBERSHIP FEE. The Member agrees to pay the
 amount of $10.00, which is the established membership fee, payable at the
 time of payment of the hook-up fee. In the event service to the Member is
 terminated the membership fee shall be held and applied by the Corporation to
 any unpaid balance on the Member’s account. In the event the Member’s account
 is paid in full, the remaining balance of the membership fee shall be
 refunded to the Member within a reasonable time after a request for refund.

	
 

	
 

	
 

	
 

	
6. HOOK-UP FEE. Member shall pay at the time of
 execution of this agreement the amount of $240.00, which is Member’s assigned
 portion of expansion costs. In the event that Corporation, in its sole
 discretion, elects not to construct water service to the above premises,
 Corporation agrees to refund Member the hook-up fee.

2

	
 

	
 

	
 

	
 

	
7. CUTOFF VALVE/METER. The Corporation shall
 purchase and install a cutoff valve and water meter at each service. The
 Corporation shall have exclusive right of ingress and egress to use the
 cutoff valve and to service, inspect or remove the water meter installation.

	
 

	
 

	
 

	
 

	
8. WATER ALLOCATION. The Member shall be entitled to
 draw up to 20,000 gallons per month at a flow rate that does not
 disrupt service to other Corporation Members. The Corporation shall determine
 the allocation of water to the Member in the event of a water shortage for
 any reason, and may shut off water to a Member who allows a connection or
 extension to be made to the Member’s service line for the purpose of
 supplying water to another user or location. In the event the water supply
 shall be insufficient to meet all of the needs of the Members, or in the
 event there is a shortage of water, the Corporation may prorate the water
 available among the various members on such basis as is deemed equitable by
 the Board of Directors, which shall have the exclusive right and authority to
 such allocation.

	
 

	
 

	
 

	
 

	
9. CONSEQUENTIAL DAMAGES. The parties agree that in
 the event the Corporation is unable for any reason to supply sufficient water
 to the Member to service the needs of the Member, the Member agrees to
 procure such water from other sources as the Member deems advisable and that
 the Corporation shall have no liability for incidental or consequential damages
 of any kind relating to reduction or interruption of water service.

	
 

	
 

	
 

	
 

	
10. PHYSICAL DISCONNECT. The Member agrees that no
 other water source will be connected to any water line served by the
 Corporation’s water line. Member shall physically disconnect the Member’s
 system from the present water supply prior to connecting the Corporation’s
 distribution line. Any Member with a cross connection shall be
 responsible for all damages associated therewith whether incurred by Member,
 the Corporation, or any other user of water supplied by the distribution
 system of the Corporation.

	
 

	
 

	
 

	
 

	
11. MEMBER CONNECTION. Water charges to the Member
 shall commence on the date water service is made available to the Member’s
 premises. The Member agrees that a minimum charge shall apply in the

3

	
 

	
 

	
 

	
 

	
amount determined by the Board of Directors
 from and after the date water service is made available.

	
 

	
 

	
 

	
 

	
12. TERM OF AGREEMENT. This agreement shall be
 applicable to all water service provided the above described property by the
 Corporation from and after the date of this agreement or the date that water
 service is first provided, whichever first occurs. This agreement shall
 continue to govern the relationship of the parties for so long as the
 Corporation makes available water to the above described property.

	
 

	
 

	
 

	
 

	
13. MONTHLY CHARGES. The Member agrees that the
 monthly minimum shall be the present rate in effect for 5,000 gallons or one
 fourth of the gallons the Member request in item #8, which ever is greater.
 At such time that the Member desires more water than is set forth in item #8,
 the Member shall inform the Corporation in writing of its desire. The
 Corporation shall make a determination if Members desire can be met. In the
 event the request for more water than is set forth at item #8 is approved by
 the Board of Directors, the Board shall specify the duration and amount of
 the monthly minimum required for the water service requested.

	
 

	
 

	
 

	
 

	
14. FAILURE TO PAY CHARGES. The failure of Member to
 pay water charges, monthly minimum charges, late payment penalties or
 penalties for disconnection of service, shall result in the automatic
 imposition of the following agreed charges:

	
 

	
a.

	
nonpayment by the 10th of each month will
 be subject to a penalty of 10% of the delinquent amount.

	
 

	
 

	
 

	
 

	
b.

	
nonpayment by the end of the month shall authorize
 the Corporation to shut off the Member’s water.

	
 

	
 

	
 

	
 

	
c.

	
in the event it becomes necessary for the
 Corporation to shut off the Member’s water, the Member agrees to further pay
 a fee established by the Corporation for later reconnection of the service.

	
 

	
 

	
 

	
 

	
d.

	
nonpayment of a water bill within 60 days shall
 authorize the Corporation to declare the remaining monthly minimums, as set 

4

	
 

	
 

	
 

	
 

	
 

	
forth in paragraph 13 of this agreement, immediately
 due and payable and to terminate the membership of the Member.

	
 

	
 

	
 

	
 

	
e.

	
Corporation shall have the right to exercise such
 other legal and equitable remedies as are allowed by law.

	
 

	
 

	
 

	
 

	
f.

	
where the premises to which water service is
 provided is owned by more than one person or entity, or is in the possession
 of one or more tenants, the Member agrees that all owners and tenants shall
 be jointly and severally liable for all charges for water and all other
 charges authorized by this agreement, the By-laws and Policies of the
 Corporation.

	
 

	
 

	
 

	
 

	
15. CONSTRUCTION DAMAGES. Member represents that all
 necessary easements will be provided with regard to Member’s affected
 premises to enable installation and maintenance of Corporation’s water
 service. Corporation will pay a reasonable allowance for crop damages that
 are related to construction of Corporation’s water pipeline. The amounts paid
 for crop damages shall be set from time to time by the Board of Directors of
 Corporation.

                    IN
WITNESS WHEREOF, we have executed this agreement this 26th day
of December, 2007. 

CHEROKEE RURAL WATER DISTRICT NO. ONE

	
 

	
 

	
 

	
 

	
BY

	
Soy
 Energy

	
 

	
/s/ Richard Davis, Manager

	
 

	 

	
 

	 

	
Corporation

	
 

	
Member

5

Cherokee Rural Water

Member
Policies

11-08-06
Water
User’s Agreement Exhibit “A”

The following list of policies has been adopted by the
Cherokee Rural Water Board of Directors:

	
 

	
 

	
 

	
 

	
 

	
1.

	
All users must sign a “Water Users Agreement” which
 governs the relationship between the Corporation and Member.

	
 

	
 

	
 

	
 

	
2.

	
Cherokee Rural Water (CRW) will read your meter on
 the first (due date) of each month and send a postcard bill. The payment is
 due upon receipt and payable by the tenth. CRW will make every effort to mail
 the bills on the 1st. This may vary due to weekends and holidays.

	
 

	
 

	
 

	
 

	
3.

	
Any water that has gone through the meter is your
 responsibility. Cherokee Rural Water (CRW) does not repair or maintain
 individual water systems after the meter.

	
 

	
 

	
 

	
 

	
4.

	
Non-payment by the tenth of the month is subject to
 a penalty of ten percent of the delinquent account.

	
 

	
 

	
 

	
 

	
5.

	
In the event it becomes necessary for CRW to shut
 off the water from a member’s property for non-payment, a fee of $75.00 will
 be charged for a reconnection of service. Reconnection will be made only
 during normal business hours.

	
 

	
 

	
 

	
 

	
6.

	
CRW may charge a deposit for a new user.

	
 

	
 

	
 

	
 

	
7.

	
There will be a $30.00 handling charge for
 insufficient checks.

	
 

	
 

	
 

	
 

	
8.

	
There is a $24.15 minimum charge, plus sales tax,
 whether you use any water or not. (Your minimum could vary from this figure
 if so provided in your Water User’s Agreement.) Service is available to you
 and company obligations must be met.

	
 

	
 

	
 

	
 

	
9.

	
You are responsible for all water bills until the
 CRW office is notified that the property has been sold or that the user has
 moved off the property. Upon notification, CRW will final read the meter and
 send the final bill to the appropriate individual. The new responsible party
 shall pay a $25.00 fee for transfer of office records.

	
 

	
 

	
 

	
 

	
10.

	
If you have a billing problem, contact the office
 and get it resolved. There will be an hourly charge for extensive study on
 billing history.

	
 

	
 

	
 

	
 

	
11.

	
Please call 225-6193 or (toll free) 1-877-470-6193
 for the following reasons:

	
 

	
 

	
 

	
 

	
To report a leak in the rural water system.

	
 

	
 

	
 

	
To report vandalism or suspicion of theft or
 tampering with CRW property.

	
 

	
 

	
 

	
To report or inquire about an outage.

6

	
 

	
 

	
 

	
 

	
12.

	
For after-hours emergency call 712-229-0773.

	
 

	
 

	
 

	
 

	
13.

	
If you see or suspect a leak (on CRW side of meter)
 notify CRW immediately. $10.00 reward for the first verified tip.

	
 

	
 

	
 

	
 

	
14.

	
Any tampering with CRW property will result in a
 $200.00 assessment plus all actual damages incurred.

	
 

	
 

	
 

	
 

	
15.

	
The service charge for weekend or emergency service
 calls is $80.00. There is no charge for system related service calls. There
 is also no charge for the first scheduled service call during regular
 business hours. The repeat scheduled service call rate is $40.00.

	
 

	
 

	
 

	
 

	
16.

	
Landlords beware! Landlords are responsible for
 delinquent water bills of tenants if a tenant fails to pay. If you have a
 high tenant turnover you may wish to collect an adequate deposit.

	
 

	
 

	
 

	
 

	
17.

	
Forty eight hour notice is required for locating CRW
 lines. If you are planning to tile or dig your own water lines, please call
 ahead and inform Iowa One Call at 1-800-292-8989.

	
 

	
 

	
 

	
 

	
18.

	
The serviceman will not always stop at the house
 when they service your meter. If you have any questions, please call the
 office.

	
 

	
 

	
 

	
 

	
19.

	
Any damage to read-out posts, meter pits, or valves
 will be billed to the user.

	
 

	
 

	
 

	
 

	
20.

	
The customer is encouraged to protect the meter pit
 from freezing.

	
 

	
 

	
 

	
 

	
21.

	
Your property may experience negative pressure
 during a water outage that could cause a backflow condition. CRW encourages
 you to have an anti backflow device installed to prevent possible damage to
 your facilities and distribution system. Call the CRW office for more
 information.

	
 

	
 

	
 

	
 

	
22.

	
If CRW finds that a member is not properly using
 their visual disconnect or it the member does not have a visual disconnect,
 CRW will notify the member in writing to immediately have a visual disconnect
 installed or water will be shut off. For the safety of other members, CRW
 will not tolerate a cross connection!!

	
 

	
 

	
 

	
 

	
23.

	
All users must provide CRW with easements for all
 the ground they own within the boundaries of the system. Failure to do so
 will result in termination of their membership and service.

	
 

	
 

	
 

	
 

	
24.

	
All users must sign a “Water Usage Statement” which
 determines the amount of sales tax charged. You must promptly notify CRW if
 there is a change in your sales tax status of water usage.

	
 

	
 

	
 

	
 

	
25.

	
In the event that CRW extends a pipeline within five
 years of original construction that an Add-on Member has paid a portion of,
 CRW will reimburse the Add-On Member an appropriate percentage of the
 original construction cost based on percentage of pipeline 

7

	
 

	
 

	
 

	
 

	
 

	
capacity. After five years, no reimbursement will be
 made.

	
 

	
 

	
 

	
 

	
26.

	
During system maintenance, CRW will not be
 responsible for damage or replacement of ornamental decorations or shrubs
 planted around meter pit, end-line clean-out and valves.

	
 

	
 

	
 

	
 

	
27.

	
CRW will not be responsible for damage to equipment,
 appliances, clothing or any other personal property that comes into contact
 with water provided.

	
 

	
 

	
 

	
 

	
 

	
Date:

	
12-26-07

	
 

	
Signature: 

	
/s/ Richard
 Davis

	
 

	 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

8

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