Document:

exv10w6

 

Exhibit 10.6

July 10, 2006

Kevin Stroup

Buffalo Ridge Energy LLC

RE: Proposal for Services

Dear Kevin:

PlanScape Partners is very pleased to have the opportunity to explore working with your group as
you seek a site in South Dakota for a new ethanol facility. Since you have heard about us from the
folks from Fagen, you know that we have extensive experience with renewable fuels projects. We
have demonstrated to them and our joint clients our commitment to provide timely, cost effective
service and we enjoy our collaborative working relationship. We have renewable energy clients
throughout the Midwest. PlanScape Partners staff works in the public and private sector, allowing
us to know both sides of the development equation and facilitate a project that will be enhanced by
our assistance.

Matt Sederstrom provided me with limited background information about your project. Are you
building a 100 MGY dry mill corn processing plant using coal or natural gas as an energy source?
What is your time table? Is this going to be an SEC public offering or a private placement or is
there another funding stream? Have you contacted any elected officials? Are you looking at more
than one site in more that one location? Who is the decision maker for Buffalo Ridge Energy? How do
I contact you?

There are various ways to approach the negotiation process. One option is to approach both sets of
elected officials simultaneously. Once you have gathered preliminary site information and shared
it with me, I will meet with the local elected officials and other key constituents informally.
Each site may have different infrastructure needs and each county’s incentive package may vary
depending on the cost to provide the infrastructure.

I meet informally and seek to educate the elected officials about your project and your need for
financial assistance. Public hearings usually must be held which typically require a published
notification of the meeting. Then the officials can officially act on your request after we have
built a constituency of support.

PlanScape Partners would enjoy helping your group in a number of ways. Every ethanol project is
different, but various phases are usually involved with each initiative:

	 	1.	 	Initial project investigation

	 	 	 	 	 	 	 
	333 N. Washington Ave.

	 	2351 S. Lake View Dr.
	 	fax 612.349.9897
	 	 
	Suite 337

	 	Suite A8
	 	www. planscapepartners.com	 	 
	Minneapolis, MN 55401

	 	Clear Lake, IA 50428	 	 	 	 
	phone
612.349.9898

	 	phone 641.357.6344	 	 	 	 

 

 

	 	2.	 	Negotiating local incentives
	 
	 	3.	 	Assisting with property rezoning, if necessary
	 
	 	4.	 	Preparation of State and Federal program applications
	 
	 	5.	 	Follow-up document preparation/negotiation

Initial investigation

Before a project can go forward, an initial period of time and effort must be spent on
investigation and discovery of information regarding state programs, appropriate personnel to
contact, and local practices and process for development. We need to review sources of information.
Once you have optioned sites, it is important to begin collecting information on them. A copy of
the feasibility study, proformas completed by Fagen/Christensen or your accountant and maps of
sites you are investigating will be beneficial. Knowledge of the potential utility providers is
helpful.

Local incentives

Securing financial incentives from local governmental entities enhances the financial returns of
the project. Each state offers slightly different possibilities. State grants and loans often
require sponsorship by a governmental entity. Building on the relationships we start with key
people will add to the success of your project. We must engage the elected officials and generate
public support from area residents in this initiative. Preparation of materials to support this
effort and attendance at negotiation and approval meetings are part of the required tasks.

Rezoning

Many development projects require rezoning of the property from agriculture to industrial.
Attendance at meetings of the County Board and Planning and Zoning Commissions, if required, as
well as document preparation and a general Power Point presentation explaining the project are
usual steps. This is not included in this proposal but could be added.

State and federal programs

Grants and low interest loan options exist at the state and federal level. The USDA has competitive
grants for FY 2006 to help producers enter value added activities with annual application
deadlines. The next round of funding is in spring 2007.

Rural electric cooperatives often have funding sources Once the site is selected and local
incentives are known, PlanScape Partners would explore other funding sources. In each case, the
tasks performed by the PlanScape team include meetings with review agencies, preparation of
applications, narrative explanation and support documentation, coordination of submittals, tracking
the approval process, and providing follow-up coordination and documentation services. This is a
complete and methodical process that has resulted in the firm’s outstanding grant and loan approval
rating.

2

 

Follow up documentation and negotiation

If tax incentives and/or a loan are approved, a development agreement may be needed. It would be a
good public relations move to pay all the costs associated with documentation for financial
incentives but you can make that decision later.

The steps included within the proposal at this time are the initial investigation and local
incentive negotiations. The specific tasks include:

	 	•	 	Preparation of materials for presentations
	 
	 	•	 	Contacts and one-on-one visits to the local elected officials for up to two site.
	 
	 	•	 	Up to three additional meetings with the elected officials.
	 
	 	•	 	Negotiation and documentation of incentives

Range of $20,500 to $25,500

PlanScape Partners proposes to provide the services on a not-to-exceed, hourly rate basis. Our fees
for 2006 are $130 per hour for principal partners, $75 for administrative assistant’s time and $50
per hour for clerical support. Prints, copies, delivery fees, travel expenses, and other
reimbursable expenses will be billed at cost plus a 10% administrative fee and are in addition to
the above fees. We bill monthly.

We would be happy to discuss the completion of the other listed project steps at the appropriate
time in the project. There are often other ways that PlanScape Partners can assist you and we have
built strong relationships with your renewable fuel clients. We are a small firm, committed to
quality work with creative thinking. Our values statement is “Do Good Work — Add Value — Have Fun
—Make A Difference.” We believe in building long-term relationships and our marketing is through
word of mouth from our satisfied clients.

If you have questions, Kevin, please call. We look forward to working with you.

Sincerely,

PLANSCAPE PARTNERS

/s/ Kathy Showalter

Kathy Showalter

Authorization

I have reviewed the proposal and agree with its terms. I hereby authorize PlanScape Partners to
proceed with the work described herein.

3

 

	 	 	 	 	 
	 

	 	 	 	8/2/06
	/s/ Greg Van Zanten
 

	 	 	 	7-19-06            
	Authorized Signature

	 	 	 	Date

Terms of Payments

All amounts due PlanScape Partners for professional services hereunder shall be paid in full not
later than 30 days following completion of those services. Thereafter, interest at the amount of
one and one half percent (1/2 %) shall be charged against and paid on all amounts unpaid. PlanScape
Partners also retains the right to file liens on all accounts not paid within 90 days of completion
of work.

4exv10w7

 

Exhibit 10.7

	 	 	 	 	 
	 

	 	 	 	 
	July 24, 2006

	 	 	Terracon

Consulting Engineers & Scientists	 
	 
	 	 	 	 
	Buffalo
Ridge Energy LLC
c/o
Fagen, Inc.

Mr.
Matt Sederstrom

P.O.
Box 159
501
West Highway 212
Granite Falls, Minnesota 56241

	 	 	Terracon Consultants, Inc.	 
	 	 	2830 Highway 75 North	 
	 	 	Sioux City, IA 51105	 
	 	 	Phone 712.233.5492	 
	 	 	Fax 712.233.5493	 
	 	 	www.terracon.com	 
	 

	 	 	 	 

			
	Re:	 	Preliminary Proposal for Geotechnical and Environmental Services

Proposed Ethanol Production Facility

Northwestern Iowa

Terracon Proposal No. 2706163

Dear Mr. Sederstrom:

Terracon is pleased to submit this preliminary proposal for the referenced project. This proposal
outlines our understanding of the proposed project, our proposed scope of services, schedules,
estimated fees, and Agreement for Services.

Please note that this proposal is being prepared without the benefit of site location and plant
layout information. Therefore, we have made some assumptions based on our experience with similar
plants and our experience with Fagen. After the site is chosen and the plant layout is known, the
plant layout on the chosen site should be provided to Terracon prior to starting our services. At
that time, we will be happy to review our scope of services outlined below, and recommend any
adjustments

A. PROJECT INFORMATION

We understand the project will include constructing new facilities associated with a 50mgpy ethanol
production facility. The site has not been chosen yet, but we understand a site in either
northwestern Iowa or southwestern Minnesota is planned.

Plant layout is not available at the time of this proposal. Typical major plant structures include
entry and access roads, additional railroad spur lines, storage silos, process building, energy
center, beer well / fermentation / storage tanks, cooling tower, and storage slabs.

The extent of site grading is also not available at this time. It is our experience that the main
portion of the plant is established at the same elevation as the adjacent rail.

 

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa

Proposal No. 2706163

July 24, 2006
	 	Terracon

B. SCOPE OF SERVICES

PHASE I
ENVIRONMENTAL SITE ASSESSMENT — SCOPE OF WORK

Base Phase I ESA Services — The ESA will be performed consistent with the procedures of ASTM E
1527-00, an interim standard and practice for “all appropriate inquiry” under 40 CFR Part 312. The
purpose of this ESA is to assist the client in developing information to identify recognized
environmental conditions (RECs) in connection with the site as reflected by the scope of this
proposal.

Physical Setting — The physical setting for the site will be described based on a review of the
applicable USGS topographic quadrangle map, FEMA flood map, USDA soil survey and selected geologic
reference information.

Historical Use Information — A review of selected historical sources, where reasonably
ascertainable and readily available, will be conducted in an attempt to document obvious past land
use of the site and adjoining properties back to 1940 or when the site was initially developed,
whichever is earlier. One or more of the following selected references, depending on applicability
and likely usefulness, will be reviewed. Prior reports and land title records including
environmental liens and activity and land use limitations will be reviewed, if provided by the
client.

	 	•	 	USGS topographic maps
	 
	 	•	 	Aerial photographs (approximate 10 to 15 year intervals)
	 
	 	•	 	City directories (approximate 5 year intervals)
	 
	 	•	 	Fire (Sanborn) insurance maps
	 
	 	•	 	Prior reports (to be provided by the client)
	 
	 	•	 	Site tax assessor data
	 
	 	•	 	Site land title records (to be provided by the client)
	 
	 	•	 	Zoning records

If the client is unable to provide land title records, but would prefer that land title records are
reviewed, Terracon must be informed and an additional fee for historic land ownership records will
be negotiated. Note, however, unless specifically requested within three days of project
commencement, Terracon will rely on the client to provide land title records. A review of building
department records is excluded from the scope of services for this ESA.

Regulatory Records Review — Consistent with ASTM E 1527-00, outlined below are the following
federal and state databases, where applicable, which are typically reviewed for indications of
RECs, and the approximate minimum search distance of the review from the nearest property boundary.
A database firm will be subcontracted to access governmental

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	Proposed Ethanol Production Facility 

Northwestern Iowa

Proposal No. 2706163

July 24, 2006
	 	Terracon

records used in this portion of the assessment. Determining the location of unmapped facilities is
beyond the scope of this assessment.

	 	 	 
	Governmental Records	 	Search Distance
	Federal NPL Site List
	 	1.0 mile
	Federal CERCLIS List
	 	0.5 mile
	Federal RCRA Corrective Actions (CORRACTS)/TSD
	 	1.0 mile
	Federal RCRA Non-CORRACTS/TSD Facilities List
	 	0.5 mile
	Federal RCRA Generators List
	 	0.1 mile
	Federal ERNS List
	 	Site Only
	State Lists of State Equivalent NPL Facilities
	 	1.0 mile
	State Equivalent CERCLIS Facilities
	 	0.5 mile
	State Landfill and/or Solid Waste Facilities
	 	0.5 mile
	State Leaking UST Lists
	 	0.5 mile
	State Registered UST Lists
	 	0.1 mile
	State VCP Site Lists
	 	0.5 mile

In addition to the database review, a reasonable attempt will be made to interview at least
one staff member of the local fire department, the local health agency or the local environmental
agency. As an alternative, a written request for information may be submitted to the local agency.

If the results of the regulatory records review/local agency inquiry appear to warrant a review of
applicable regulatory agency files, a cost estimate will be provided to the client for
pre-approval. Please note that all requested files may not be available from regulatory agencies
within the client’s requested project schedule.

Site and Adjoining/Surrounding Property Reconnaissance — A site reconnaissance will be conducted to
identify RECs. The reconnaissance will consist of visual observations of the site from the
boundaries and selected interior portions of the site. The site reconnaissance will include, where
applicable, an interview with site personnel who the client has identified as having knowledge of
the uses and physical characteristics of the site. Pertinent observations from the site
reconnaissance will be documented including:

	 	•	 	Site description (including a description of occupants)
	 
	 	•	 	General site operations
	 
	 	•	 	Aboveground chemical or waste storage
	 
	 	•	 	Visible underground chemical or waste storage, drainage or collection systems
	 
	 	•	 	Electrical transformers
	 
	 	•	 	Obvious evidence of releases (i.e., hazardous substances, petroleum products)

The adjoining property reconnaissance will consist of visual observations of the
adjoining/surrounding properties from the site boundaries and accessible public right-of-ways.

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	Proposed Ethanol Production Facility 

Northwestern Iowa

Proposal No. 2706163

July 24, 2006
	 	Terracon

Report Preparation – Separate reports will be provided for each individual site. Two final copies
of each report will be submitted that presents the results of this assessment, based upon the scope
of services and limitations described herein. Recommendations will be developed as part of the
Phase I ESA scope of services.

Additional Services beyond Base ESA — No additional services have been requested by you to conduct
during the performance of the ESA.

Additional Services Not Included — The following services, although not specifically required by
ASTM E 1527-00, may also be performed concurrently with ESAs and may be beneficial for the
evaluation of environmental conditions and/or an evaluation of specific business environmental
risks at the site. At your direction, these services have not been included as part of the scope
of services for this ESA. Please note that this list is not all-inclusive. If you seek additional
services, please contact us for a supplemental proposal and cost estimate.

	 	•	 	Limited Radon Testing
	 
	 	•	 	Limited Radon Records Review
	 
	 	•	 	Limited Wetland Review
	 
	 	•	 	Limited Asbestos Sampling
	 
	 	•	 	Limited Visual Asbestos Evaluation
	 
	 	•	 	Asbestos Survey (prior to renovation/demolition)
	 
	 	•	 	Limited Lead Based Paint Sampling
	 
	 	•	 	Limited Lead in Drinking Water Sampling
	 
	 	•	 	Limited Visual Observations for Mold
	 
	 	•	 	Limited Threatened/Endangered Species Review
	 
	 	•	 	Limited Historic Properties/Archaeological Resources Review

At your request, Terracon can also provide proposals for facility engineering services including
property condition assessments, roofing inspections, curtain wall evaluations, structural surveys
and mechanical surveys.

Schedule — Services will be initiated upon receipt of the written notice to proceed. The final
report will be submitted within about three (3) calendar weeks of your written notice to proceed.
In order to comply with the proposed schedule, the following items are required to be provided by
the client at the time of notification to proceed in order to meet the project completion date.

	 	•	 	Right of entry to conduct the assessment, including access to building interiors
	 
	 	•	 	Notification of any restrictions or special requirements (such as confidentiality)
regarding accessing the site
	 
	 	•	 	An accurate, legal description and a diagram of the site such as a surveyor’s plat map
or scaled architect’s drawing (if such diagrams exist)

4

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa

Proposal No. 2706163

July 24, 2006
	 	Terracon

	 	•	 	Current site owner, property manager, occupant information (including tenant list), and
contact information for persons knowledgeable about the site history including current and
historical use of hazardous substances and petroleum products on site (e.g., names, phone
numbers, etc.)
	 
	 	•	 	Copies of any environmental or geotechnical reports that were previously prepared for
the site
	 
	 	•	 	Any information relating to known or suspect environmental conditions at the site
	 
	 	•	 	Information about environmental liens and activity and use limitations for the site, if any
	 
	 	•	 	Specialized knowledge or experience that is material to RECs in connection with the
site, if any
	 
	 	•	 	Any knowledge that the purchase price of the site is significantly less than the
purchase price of comparable properties
	 
	 	•	 	Land title records (optional)
	 
	 	•	 	A signed Agreement for Services evidencing acceptance of this scope of services

Please note that requested regulatory files or other information may not be provided to Terracon by
the issuance date of the report. Consideration of information not received by the issuance date of
the report is beyond the scope of this ESA.

Reliance — The ESA report will be prepared for the exclusive use and reliance of Buffalo Ridge
Energy LLC. Reliance by any other party is prohibited without the written authorization of the
client and Terracon.

If the client is aware of additional parties that will require reliance on the ESA report, the
names, addresses and relationship of these parties should be provided for Terracon approval prior
to the time of authorization to proceed. Terracon will grant reliance on the ESA report to those
approved parties upon receipt of a fully executed Reliance Agreement (available upon request). If,
in the future, the client and Terracon consent to reliance on the ESA by a third party, Terracon
will grant reliance upon receipt of a fully executed Reliance Agreement and receipt of an
additional fee of $250.00 per relying party.

Reliance on the ESA by the client and all authorized parties will be subject to the terms,
conditions and limitations stated in the Agreement (and sections of this proposal incorporated
therein), the Reliance Agreement, and ESA Report.

Scope and Report Limitations — The findings and conclusions presented in the final report will be
based on the site’s current utilization and the information collected as discussed in this
proposal. Please note that we do not warrant database or third party information (such as
interviewees) or regulatory agency information used in the compilation of reports.

Phase I environmental site assessments, such as the one proposed for this site, are of limited
scope, are noninvasive and cannot eliminate the potential that hazardous, toxic or petroleum
substances are present or have been released at the site beyond what is identified by the

5

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

limited scope of this ESA. In conducting the limited scope of services described herein, certain
sources of information and public records will not be reviewed. It should be recognized that
environmental concerns may be documented in public records that are not reviewed. This ESA does
not include subsurface or other invasive assessments, business environmental risk evaluations or
other services not particularly identified and discussed herein. No environmental site assessment
can wholly eliminate uncertainty regarding the potential for RECs. The limitations herein must be
considered when the user of this report formulates opinions as to risks associated with the site.
No warranties, express or implied, are intended or made.

WETLAND DELINEATION — SCOPE OF WORK

Our proposed Scope of Work for the Wetland Delineation has been developed as follows:

Task 1 — Task Management and Limited Wetland Determination

	 	•	 	Gather and review National Wetland Inventory (NWI) maps, topographic information, aerial
photographs, and soil survey information. This information will be used to supplement
field observation data discussed below.
	 
	 	 	 	Key Understandings: Terracon understands the site is approximately 320 acres. Limits of
construction, locations of any borrow or spoil areas, and final limits for the Project will
be provided by the Client.
	 
	 	 	 	If the area is currently in agricultural use, the FSA Methodology will be followed for
cropped areas in an effort to identify potential wetlands in agricultural environments. The
U.S. Department of Agriculture has a procedure for FSA determinations that includes
utilizing annual aerial photography of cropped areas representing a range of measurable
precipitation (normal, wet, dry). Each aerial photograph will be viewed for an indication of
wetland signatures. Wetland signatures include no crops, inundation, color tone difference,
and potential hydrologic manipulation. The area of the wetland signatures will be determined
and mapped.
	 
	 	 	 	Task Deliverables: None.

B.2 Additional Services Beyond Base Services

The following tasks (Tasks 2 through 4) are provisional and dependant on the wetland determination
results and the area selected during the site selection process. The level of effort for Tasks 2
through 4 is not known at this time but will be known better after the final site selection and
subsequent determination (Task 1). The client will be informed of the level of effort for the
additional services immediately after the determination (Task 1) has been completed.

6

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

Task 2 — Field Observation and Documentation

	 	•	 	Evaluate the areas within the Project limits, including borrow/spoil locations, for the
presence of Clean Water Act jurisdictional waters (waters of the U.S.). Wetland
delineations will be performed using the Field Guide for Wetland Delineation 1987 Corps of
Engineers Manual (1987 Manual); vegetation, hydrology, and soils criteria will be
evaluated. Wetland boundaries, data points, and photo points will be manually recorded.
Approximate locations of wetland areas will be documented on aerial photography.
	 
	 	•	 	Document the presence, size, and location of wetlands and other waters of the U.S.
present on the site. If wetlands exist, conduct boundary staking of the
wetland/non-wetland interface of jurisdictional areas.
	 
	 	Key Understandings: A team of two degreed biologists will perform the wetland delineation. Cost
estimates for this project are based on a visual assessment of aerial photographs containing the
site area and approximately 320 acres of land included in the area of potential construction.
Terracon anticipates roughly two days will be necessary for the field work (includes travel
time).
	 
	 	The client must provide surveying services or retain the services of a surveying firm to
indicate flagging location information at the site referenced to a local datum. Terracon will
retain the services of a surveying firm, if requested. Cost for these services are not included
in this proposal, but can be provided to the client.
	 
	 	Task Deliverables: None

Task 3 — Delineation Report Preparation

	 	•	 	Prepare a wetland delineation report, which will include wetland jurisdictional
rationale, 1985 Food Security Act methodology for farmed wetland areas, if necessary,
discussion of applicable data, field observations and results, and recommendations.
Attachments to the report will include a site location map using a USGS Topographic map,
site map showing wetland delineation areas (if they exist), National Wetland Inventory Map,
ground photographs, aerial photographs with survey point and wetland locations, and field
data sheets. The report will be suitable for submittal to the USACE.

Key Understandings: Acreage of wetland areas and proposed impacts to the wetland will be derived
from a professionally surveyed, scaled site map. Terracon will collaborate with

7

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

the client or client’s survey firm so that wetland interface boundaries can be plotted on a
scaled site map. The scaled site map should subsequently be provided to Terracon by the client
or client’s survey firm. Terracon prefers flagging location information using an electronic
AutoCAD file.

Task Deliverables: Final wetland delineation report (2 copies). An electronic PDF copy is
available by request for no additional charge.

Schedule

Services will be initiated upon receipt of the written notice to proceed. For classification, the
wetland delineation should be performed when vegetation is actively growing (May-October). If the
wetland delineation is performed outside of the normal growing season, a follow-up site visit may
be necessary in the vegetative growing season to confirm plant species. Please note that the
wetland delineation cannot be performed when the ground is covered with snow or when frozen ground
conditions exist.

The subsequent report would be completed within about one month of the date of the field study.
This time frame assumes there will be no delays in the client’s ability to supply the limits of
construction (AutoCAD file), survey, and mapping information discussed above.

Conditions

This proposal also includes limited follow-up conversations with the regulatory agencies involved
to obtain information on the status of their review progress. The fees in this proposal do not
include additional meetings or data collection/evaluation that may be required by the COE. Fees do
not include preparing a wetland mitigation plan or 404 Permit Application, locating and evaluating
potential off-site mitigation areas, or the survey of wetland areas flagged during the delineation.

The following are not included in this Scope of Services, but can be performed as additional
services by Terracon as needed or as requested by the client.

	 	1.	 	Section 404 Permit Application for impacts to wetland or other waters of the US.

2. Wetland Mitigation Plan or site design for wetland loss.
	 
	 	3.	 	Early coordination with the US Fish and Wildlife Service (USFWS) and state fish and
game department soliciting comments they may have regarding the Project and assessing
concerns with threatened and endangered species.
	 
	 	4.	 	An environmental assessment or environmental impact statement, per the Council on
Environmental Quality (CEQ) and National Environmental Policy Act (NEPA) regulations.

8

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

	 	5.	 	Cultural resources literature review and evaluation or subsequent investigations
required by the State Historical Preservation Office (SHPO).
	 
	 	6.	 	Storm water related services.

In addition to specific items listed under each task, items to be provided by the client include
the right-of-entry to conduct the assessment. If there are any restrictions, special requirements,
or other pertinent information regarding the site or assessment (e.g. scheduling considerations,
site safety requirements, access issues, confidentiality issues, etc.), these should be made known
to us prior to commencing the work.

Scope and Report Limitations

The findings and conclusions presented in the delineation report (a separate report will be
provided for each site) will be based on the site’s current utilization and the information
collected as discussed in this proposal. Please note that we do not warrant database or third
party information or regulatory agency information used in the compilation of plans or reports. No
warranties, express or implied, are intended or made.

PRELIMINARY GEOTECHNICAL EXPLORATION — SCOPE OF WORK

As requested, since the site and plant layout are not determined at this time, this proposal
describes preliminary geotechnical services. Similarly, our scope is based on a typical site and
plant layout, without potential future expansion areas. The plant layout on the chosen site should
be provided to Terracon prior to starting the field exploration. At that time, we will be happy to
review our subsurface exploration program, recommend any adjustments that may be necessary, and
provide a more reliable schedule and cost.

The purpose of this exploration is to obtain information on the subsurface conditions that can be
used for foundation support evaluations.

Field Exploration — Terracon has based this proposal on a total of 35 soil borings and 5 soil
borings. The boring depths and locations are described in the following table:

	 	 	 
	Boring Depth, ft	 	Boring Location
	2 @ 115 ft

	 	Grain Storage Silos
	1 @ 75

	 	Beer Well
	1 @ 30

	 	Receiving Pit
	1 @ 60

	 	Fermentation Tank
	1 @ 30

	 	DDG Storage Building
	2 @ 60

	 	Tank Farm
	1 @ 30

	 	Wet Cake Storage Pad
	1 @ 60, 3 @ 30

	 	Process Building
	1 @ 60

	 	Exterior Process Tanks

9

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

	 	 	 
	Boring Depth, ft	 	Boring Location
	1 @ 60, 3 @ 30

	 	Energy Center
	1 @ 60

	 	Firewater Tank
	1 @ 30

	 	Cooling Tower
	1 @ 30

	 	Water Treatment Building
	1 @ 15

	 	Office / Admin Building
	1 @ 15

	 	Truck Scale
	2 @ 30

	 	Possible Detention Pond

or Borrow Area
	10 @ 15, as needed

	 	Proposed Roadways and
Railroad Spur Lines / Sidings

We recommend the electronic cone soundings depths and locations be established as described in
the following table:

	 	 	 
	Cone Sounding Depth, ft	 	Cone Sounding Location
	1 @ 40

	 	DDG Storage Building
	1 @ 40

	 	Fermentation Tank
	1 @ 40

	 	Tank Farm
	1 @ 40

	 	Wet Cake Storage Pad
	1 @ 40

	 	Process Building

Borings and electronic cone soundings will be terminated upon practical refusal (e.g, in
bedrock) if practical refusal is reached shallower than the depths listed above. Actual drilling
depths will be invoiced using the unit prices on the attached fee schedule. Coring of the bedrock
is not included in our scope for field exploration.

Sampling of the borings would consist of obtaining thin-walled tubes from soft to stiff consistency
clays. Otherwise, the sampling will be performed with a split-barrel sampler. Five samples will
be obtained in the upper 15 feet of each boring, with one sample every 5 feet thereafter.
Subsurface conditions may be encountered which merit revisions of the field boring and/or sampling
programs described above, and we would discuss these conditions with you and obtain your approval
prior to initiating any additional work.

Where convenient, overnight groundwater levels will be obtained in the boreholes, after which the
boreholes will be backfilled with soil cuttings. Boreholes will be backfilled in accordance with
Minnesota Department of Health (MDH) requirements. Based upon MDH requirements, we anticipate that
it will be necessary to seal borings and CPT soundings deeper than 25 feet with high-solids
bentonite grout after completion. Sand or hole plug could be used to backfill the borings for an
additional fee. The client should understand that some settlement of the borehole fill might occur.
No future maintenance or filling of the holes is included in our fee.

Our Fee assumes that the field exploration can be performed without the need for personal
protective equipment. If evidence of contamination is encountered in any of the borings, the

10

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

exploration at that location will be terminated and our findings discussed with you. Should
personal protective equipment or special borehole sealing procedures become necessary, our fee will
be discussed with you prior to commencing further drilling.

The cone penetrometer test (CPT) device is a cone-tipped sounding unit that is pushed into the
ground using steel rods with flush joint couplings. The sounding unit has electronic strain gauges
that measure tip resistance and friction on a 6-inch long sleeve located just above the tip. The
strain gauges are connected to an electronic readout device with an electronic cable strung inside
of the rods. A depth encoder device monitors penetration as the rods are pushed slowly into the
ground. The encoder automatically provides a readout of resistance values at about 21/2-inch
intervals. The resistance to penetration can be correlated with soil strength and density
properties and changes in soil type. Results of the cone penetrometer testing provide valuable
additional information on in-situ soil characteristics and stratigraphy for bearing capacity and
settlement analyses.

Laboratory Evaluations - In the laboratory, water content tests will be performed on the samples
obtained from the borings. When possible, dry unit weights and unconfined compressive strengths
will be measured on intact, thin-walled tube samples. The consistency of clay soils may also be
estimated with a hand penetrometer. Atterberg limit tests and grain size evaluations will be
performed on representative samples to help classify the soils and provide input for our analyses.
Organic content tests may be performed if organic soils are suspected below the topsoil. A
consolidation test will be performed on compressible clay soils. A suite of suite of chemical
tests (pH, resistivity, soluble sulfate, soluble chloride, redox potential) will be performed on
two selected samples. Soil samples will be visually classified in accordance with the Unified Soil
Classification System (USCS).

Site Access and Boring Locations — Items to be provided by the client include the right of entry
to conduct the exploration and an awareness and/or location of any public or private subsurface
utilities existing in the area. Also, if there are any other restrictions or special requirements
regarding these sites or exploration, these should also be provided to us prior to our commencing
field work.

Terracon agrees to call the Iowa or Minnesota One Call Hotline and request location and markings
for all utilities that Iowa or Minnesota One Call is responsible for, prior to commencing drilling
at the sites. If there are public or private utilities not included in the Iowa or Minnesota One
Call request, locating of those will be the client’s responsibility. Client agrees to make
arrangements with a private utility company or provide Terracon with detailed as-built information,
regarding the location of any other public and private utilities. Terracon will be responsible to
the extent they drill in an area where a utility has been properly located and marked. Terracon is
not responsible to the extent any loss, damage, or injury is caused by the failure to locate a
utility properly, or inaccurate and/or incomplete information provided by others.

11

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

This cost is based on the client staking the boring locations prior to our arrival, and also
providing ground elevations at the boring locations, or hiring a professional surveyor for these
tasks. Our cost also assumes that the sites are accessible to truck-mounted equipment.

It should be noted that during the field exploration, some property damage may result, such as crop
damages. We will take reasonable measures to prevent this damage; however, restoration from any
damage that occurs is not part of our scope of service.

Engineering Evaluation and Report Preparation - After completing the field exploration and
laboratory testing, a report containing recommendations will be prepared under the supervision of a
licensed professional engineer. Terracon will provide recommendations for the items on the
standard RFP provided by Fagen. A list of items required which will be included in the final
geotechnical report are included on the form “Typical Geotechnical Report Contents for Ethanol
Production Facilities” which is attached to this proposal.

Performance Schedule — We plan to start the field exploration about 2 weeks of receiving written
authorization to proceed, weather and/or site conditions permitting. Our preliminary findings
(boring logs and preliminary recommendations) would be available about 1 week after completion of
the field and laboratory work. We would discuss our preliminary findings with the owner and Fagen
in a conference call at this time. Our completed report would be provided about 3 to 4 weeks after
the conference call.

C. FEES

Phase I Environmental Site Assessment

	 	 	 
	BASE PHASE I ESA SERVICES — LUMP SUM
	 	 
	(Including physical setting, historical use information,
records review and site and adjoining/surrounding property
reconnaissance, as detailed in Section B. Also includes
mobilization and mileage to and from the site. The cost to
contract an abstract firm to develop a chain of title is not
included in this cost)
	 	$2,400.00 Each site
	Additional Services
	 	 
	Service
	 	Subtotal
	Limited Radon Testing
	 	*
	Limited Radon Records Review
	 	*
	Limited Wetland Review
	 	*
	Limited Asbestos Sampling
	 	*
	Limited Visual Asbestos Evaluation
	 	*
	Asbestos Survey (prior to renovation/demolition)
	 	*
	Limited Lead Based Paint Sampling
	 	*
	Limited Lead in Drinking Water Sampling
	 	*
	Limited Visual Observations for Mold
	 	*
	Limited Threatened/Endangered Species Review
	 	*
	Limited Historic Properties/Archaeological Resources Review
	 	*

12

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

	 	 	 
	Additional Report Copies ($50 per copy)
	 	*
	ADDITIONAL SERVICES — SUBTOTAL
	 	$0.00
	LUMP SUM TOTAL
	 	$2,400.00

 

			
	*	 	Not requested by the client to be part of the scope of services.

     The fee is valid for ninety (90) days from the date of this proposal and is based on the assumption
that all field services will be performed under safety Level D personal protective procedures and
that only one (1) site visit will be made by Terracon personnel. The lump sum fee is based on the
assumptions and conditions provided at the time of the proposal. If these assumptions are not
valid, there may be additional charges.

Wetland Services

Based on the proposed Scope of Work, our estimated fees FOR EACH SITE are listed below:

Task Management and Limited Wetland Determination — PER SITE

	 	 	 	 	 	 	 	 	 
	Site Data Review and Determination
	 	 	 	 	 	$	1,500	 
	 
	 	Subtotal	 	$	1,500	 
	Wetland Delineation — PER SITE
	 	 	 	 	 	 	 	 
	
Field Assessment and Wetland Delineation
	 	 	 	 	 	$	2,500	 
	Wetland Delineation Report
	 	 	 	 	 	$	4,000	 
	Directs and Mileage
	 	 	 	 	 	$	500	 
	 
	 	Subtotal	 	$	7,000	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Per Site	 	$	8,500	 

The fee presented is based on performing only the services discussed in this proposal. Any changes
beyond the Scope of Work of this proposal, including possible time spent for meetings with
regulators or the client will be charged in accordance with our current unit fee schedule rates.

Geotechnical Exploration

Based on the above scope of services and attached Budget Estimate, we believe we can complete these
services for an estimated fee of $46,000 to $50,000. Our price assumes that all borings and cone
soundings will be performed during the same mobilization. If separate mobilization is required,
our fee would increase. Should subsurface conditions be encountered which require major revisions
in the subsurface exploration program and additional fees, we will

13

 

			
	Proposed Ethanol Production Facility 

Northwestern Iowa 

Proposal No. 2706163

July 24, 2006
	 	Terracon

contact you prior to initiating these services. Requested services performed beyond the scope of
this proposal will be charged according to Terracon’s Standard Unit Fee Schedule.

D. AUTHORIZATION

The attached Agreement for Services is considered a part of this proposal and is incorporated by
reference into our scope of services. To execute the above scope of services, please sign and
return one copy of the Agreement for Services to our office at the above address.

Thank you for considering Terracon for your geotechnical and environmental engineering services and
giving us the opportunity to be of service to you. We look forward to assisting you on this
project. If you have any questions regarding the enclosed information, please contact us.

Sincerely,

TERRACON CONSULTANTS, INC.

	 	 	 
	/s/ Michael D. Ringler

	 	/s/ Stacey L. Froscheiser
	 
	 	 
	Michael D. Ringler, P.E.

	 	Stacey L. Froscheiser
	Geotechnical Engineer

	 	Wetland Biologist/NEPA Scientist

MDR/ARS:slf/cae

Attachments

Copies to: Addressee (3)

14

 

Typical Geotechnical Report Contents

For Ethanol Production Facilities

	 	•	 	Computer generated boring logs with soil stratification based on visual soil
classification.
	 
	 	•	 	Site water levels observed during and after drilling.
	 
	 	•	 	Boring elevations.
	 
	 	•	 	Boring location plan.
	 
	 	•	 	General project description.
	 
	 	•	 	Subsurface exploration procedures.
	 
	 	•	 	Site description
	 
	 	•	 	Site conditions (existing).
	 
	 	•	 	Soil conditions (existing).
	 
	 	•	 	Discussion of foundation alternatives, with recommendations for the most appropriate
foundation alternative for each structure.
	 
	 	•	 	Assessment of allowable bearing capacity for recommended foundation alternatives.
	 
	 	•	 	Assessment of anticipated total settlement for recommended foundation alternatives.
	 
	 	•	 	Assessment of anticipated differential settlement for recommended foundation
alternatives.
	 
	 	•	 	Minimum footing sizes and embedment.
	 
	 	•	 	Frost depth
	 
	 	•	 	Differential vertical movement or PVR
	 
	 	•	 	Slab vapor barrier or capillary break requirement
	 
	 	•	 	Subgrade reaction modulus, for design of floor slabs and mat foundations
	 
	 	•	 	Concrete cement type for reaction with soils, if required
	 
	 	•	 	Subgrade preparation and surfacing recommendations for both temporary roads (e.g.,
access roads, laydown areas, contractor parking) and permanent surfacing (e.g., ACC or
PCC, 100 trucks per day, 10 yr and 20 yr life)
	 
	 	•	 	General site preparation/earthwork recommendations.
	 
	 	•	 	Lateral earth pressures and drainage.
	 
	 	•	 	Construction considerations.
	 
	 	•	 	Seismic site classification

Not included in current scope, but can be added if needed:

	 	•	 	Lateral pile loading/deflection evaluations (L-Pile)

15

 

 

TERRACON

7/24/2006

BUDGET ESTIMATE

COMPLETE SUBSURFACE EXPLORATION

Proposed 50 mgpy Ethanol Production Facility

Northwestern Iowa / Southwestern Minnesota

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	UNIT	 	 	 	 
	DESCRIPTION	 	QUANTITY	 	 	UNIT	 	 	PRICES	 	 	TOTAL COST	 
	FIELD SERVICES
	(anticipate a total of 35 soil borings, 1270 ft, and 5 cone soundings, 200 ft)
	Mobilization/Demobilization (Truck)
	 	 	2.0	 	 	 	—	 	 	 	2.0	 	 	 	L.S.	 	 	$	1,000.00	 	 	$	2,000.00	 	 	 	—	 	 	 	2000.00	 
	Mobilization/Demobilization (ATV)
	 	 	1	 	 	 	—	 	 	 	1	 	 	 	L.S.	 	 	$	2,000.00	 	 	$	2,000.00	 	 	 	—	 	 	 	2000.00	 
	All-Terrain Drill Rig
	 	 	5	 	 	 	—	 	 	 	5	 	 	day	 	$	375.00	 	 	$	1875.00	 	 	 	—	 	 	 	1875.00	 
	Per Diem
	 	 	30	 	 	 	—	 	 	 	30	 	 	man/day	 	$	75.00	 	 	$	2250.00	 	 	 	—	 	 	 	2250.00	 
	Auger Drilling & Sampling (0-20ft.)
	 	 	640	 	 	 	—	 	 	 	650	 	 	foot	 	$	10.75	 	 	$	6880.00	 	 	 	—	 	 	 	6987.50	 
	Auger Drilling & Sampling (20-40ft.)
	 	 	330	 	 	 	—	 	 	 	350	 	 	foot	 	$	12.00	 	 	$	3960.00	 	 	 	—	 	 	 	4200.00	 
	Auger Drilling & Sampling (40-60ft.)
	 	 	200	 	 	 	—	 	 	 	200	 	 	foot	 	$	13.50	 	 	$	2700.00	 	 	 	—	 	 	 	2700.00	 
	Auger Drilling & Sampling (60-100ft.)
	 	 	70	 	 	 	—	 	 	 	70	 	 	foot	 	$	17.00	 	 	$	1190.00	 	 	 	—	 	 	 	1190.00	 
	Grouting of Boreholes
	 	 	1240	 	 	 	—	 	 	 	1270	 	 	foot	 	$	4.00	 	 	$	4960.00	 	 	 	—	 	 	 	5080.00	 
	Mobilization of Electronic Cone
	 	 	1	 	 	 	—	 	 	 	1	 	 	 	L.S.	 	 	$	1,000.00	 	 	$	1000.00	 	 	 	—	 	 	 	1000.00	 
	Electronic Cone Soundings
	 	 	200	 	 	 	—	 	 	 	200	 	 	foot	 	$	7.00	 	 	$	1400.00	 	 	 	—	 	 	 	1400.00	 
	Vane Shear Tests
	 	 	6	 	 	 	—	 	 	 	10	 	 	each	 	$	75.00	 	 	$	450.00	 	 	 	—	 	 	 	750.00	 
	Location and Elevation of Borings *
	 	 	0.0	 	 	 	—	 	 	 	0.0	 	 	hour	 	$	115.00	 	 	$	—	 	 	 	—	 	 	 	0.00	 
	Drilling Supervisor
	 	 	4.0	 	 	 	—	 	 	 	5.0	 	 	hour	 	$	74.00	 	 	$	296.00	 	 	 	—	 	 	 	370.00	 
	* Assumes borings staked by client
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Total	 	$	30,961	 	 	 	—	 	 	 	31,803	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ESTIMATED FIELD SERVICES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	31,000	 	 	to	 	$	31,800	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LABORATORY SERVICES          (Anticipate obtaining about 340 to 360 samples)
	Stratification of Borings / Cones
	 	 	35	 	 	 	—	 	 	 	40	 	 	hour	 	$	74.00	 	 	$	2,590.00	 	 	 	—	 	 	 	2960.00	 
	Moisture Content
	 	 	340	 	 	 	—	 	 	 	360	 	 	each	 	$	5.00	 	 	$	1700.00	 	 	 	—	 	 	 	1800.00	 
	Dry Density
	 	 	200	 	 	 	—	 	 	 	250	 	 	each	 	$	7.00	 	 	$	1400.00	 	 	 	—	 	 	 	1750.00	 
	Unconfined Compression
	 	 	150	 	 	 	—	 	 	 	175	 	 	each	 	$	16.00	 	 	$	2400.00	 	 	 	—	 	 	 	2800.00	 
	Hand Penetrometer
	 	 	250	 	 	 	—	 	 	 	300	 	 	each	 	$	3.00	 	 	$	750.00	 	 	 	—	 	 	 	900.00	 
	Atterberg Limits
	 	 	5	 	 	 	—	 	 	 	7	 	 	each	 	$	45.00	 	 	$	225.00	 	 	 	—	 	 	 	315.00	 
	Sand Content (-#200 wash)
	 	 	2	 	 	 	—	 	 	 	3	 	 	each	 	$	45.00	 	 	$	90.00	 	 	 	—	 	 	 	135.00	 
	Organic Content Test
	 	 	1	 	 	 	—	 	 	 	2	 	 	each	 	$	40.00	 	 	$	40.00	 	 	 	—	 	 	 	80.00	 
	Consolidation Test
	 	 	2	 	 	 	—	 	 	 	2	 	 	each	 	$	400.00	 	 	$	800.00	 	 	 	—	 	 	 	800.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Total	 	$	9,995	 	 	 	—	 	 	 	11,540	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ESTIMATED LABORATORY SERVICES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	10,000	 	 	to	 	$	11,500	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ENGINEERING SERVICES
	Project Direction, Coordination, Data Reduction, Engineering Evaluation, Report Preparation)
	Principal Engineer
	 	 	4	 	 	 	—	 	 	 	5	 	 	hour	 	$	99.00	 	 	$	396.00	 	 	 	—	 	 	 	495.00	 
	Senior Project Engineer
	 	 	30	 	 	 	—	 	 	 	30	 	 	hour	 	$	89.00	 	 	$	2,670.00	 	 	 	—	 	 	 	2670.00	 
	Project Manager
	 	 	30	 	 	 	—	 	 	 	45	 	 	hour	 	$	79.00	 	 	$	2,370.00	 	 	 	—	 	 	 	3555.00	 
	Draftsman
	 	 	4	 	 	 	—	 	 	 	5	 	 	hour	 	$	45.00	 	 	$	180.00	 	 	 	—	 	 	 	225.00	 
	Secretarial Services
	 	 	0	 	 	 	—	 	 	 	0	 	 	hour	 	No Charge	 	 	—	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Total	 	$	5,616	 	 	 	—	 	 	 	6,945	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ESTIMATED ENGINEERING SERVICES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	5,600	 	 	to	 	$	6,900	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL ESTIMATED SERVICES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	46,600	 	 	to	 	$	50,200	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

AGREEMENT FOR SERVICES

This AGREEMENT is between Buffalo Ridge Ethanol, LLC “Client”) and Terracon
Consultants, Inc. (“Consultant”) for Services to be provided by Consultant for Client on the
Proposed Ethanol Production Facility, Northwestern Iowa project (“Project), as described in
the Project Information section of Consultant’s Proposal dated July 24, 2006 (“Proposal”)
unless the Project is otherwise described in Exhibit A to this Agreement (which section or Exhibit
is incorporated into this Agreement).

	1.	 	Scope of Services. The scope of Consultant’s services is described in the Scope of Services
section of the Proposal (“Services”), unless Services are otherwise described in Exhibit B to
this Agreement (which section or exhibit is incorporated into this Agreement). Portions of the
Services may be subcontracted. Consultant’s Services do not include the investigation or
detection of, nor do recommendations in Consultant’s reports address the presence or
prevention of biological pollutants (e.g., mold, fungi, bacteria, viruses or their byproducts)
or occupant safety issues, such as vulnerability to natural disasters, terrorism, or violence.
If Services include purchase of software, Client will execute a separate software license
agreement. Consultant’s findings, opinions, and recommendations are based solely upon data and
information obtained by and furnished to Consultant at the time of the Services.

	2.	 	Acceptance. Client agrees that execution of this Agreement is a material element of the
consideration Consultant requires to execute the Services, and if Services are initiated by
Consultant prior to execution of this Agreement as an accommodation for Client at Client’s
request, both parties shall consider that commencement of Services constitutes formal
acceptance of all terms and conditions of this Agreement. Additional terms and conditions may
be added or changed only by written amendment to this Agreement signed by both parties. In the
event Client uses a purchase order or other form to administer this Agreement, the use of such
form shall be for convenience purposes only and any additional or conflicting terms it
contains are stricken. This Agreement shall not be assigned by either party without prior
written consent of the other party.

	3.	 	Change Orders. Client may request changes to the scope of Services by altering or adding to
the Services to be performed. If Client so requests, Consultant will return to Client a
statement (or supplemental proposal) of the change setting forth an adjustment to the Services
and fees for the requested changes. Following Client’s review, Client shall provide written
acceptance. If Client does not follow these procedures, but instead directs, authorizes, or
permits Consultant to perform changed or additional work, the Services are changed accordingly
and Consultant will be paid for this work according to the fees stated or its current fee
schedule. If project conditions change materially from those observed at the site or described
to Consultant at the time of proposal, Consultant is entitled to a change order equitably
adjusting its Services and fee.

	4.	 	Compensation and Terms of Payment. Client shall pay compensation for the Services performed
at the fees stated in the Compensation section of the Proposal unless fees are otherwise
stated in Exhibit C to this Agreement (which section or Exhibit is incorporated into this
Agreement). If not stated in either, fees will be according to Consultant’s current fee
schedule. Fee schedules are valid for the calendar year in which they are issued. Consultant
may invoice Client at least monthly and payment is due upon receipt of invoice. Client shall
notify Consultant in writing, at the address below, within 15 days of the date of the invoice
if Client objects to any portion of the charges on the invoice, and shall promptly pay the
undisputed portion. Client shall pay a finance fee of 1.5% per month, but not exceeding the
maximum rate allowed by law, for all unpaid amounts 30 days or older. Client agrees to pay all
collection-related costs that Consultant incurs, including attorney fees. Consultant may
suspend Services for lack of timely payment.

	5.	 	Third Party Reliance. This Agreement and the Services provided are for Consultant and
Client’s sole benefit and exclusive use with no third party beneficiaries intended. Reliance
upon the Services and any work product is limited to Client, and is not intended for third
parties. For a limited time period not to exceed three months from the date of the report,
Consultant will issue additional reports to others agreed upon with Client, however Client
understands that such reliance will not be granted until those parties sign and return
Consultant’s reliance agreement and Consultant receives the agreed-upon reliance fee.

	6.	 	LIMITATION OF LIABILITY. CLIENT AND CONSULTANT HAVE EVALUATED THE RISKS AND REWARDS
ASSOCIATED WITH THIS PROJECT, INCLUDING CONSULTANT’S FEE RELATIVE TO THE RISKS ASSUMED, AND
AGREE TO ALLOCATE CERTAIN OF THE RISKS SO, TO THE FULLEST EXTENT PERMITTED BY LAW, THE TOTAL
AGGREGATE LIABILITY OF CONSULTANT (AND ITS RELATED CORPORATIONS AND EMPLOYEES) TO CLIENT AND
THIRD PARTIES GRANTED RELIANCE IS LIMITED TO THE GREATER OF $50,000 OR ITS FEE FOR ANY AND ALL
INJURIES, DAMAGES, CLAIMS, LOSSES, OR EXPENSES (INCLUDING ATTORNEY AND EXPERT FEES) ARISING
OUT OF CONSULTANT’S SERVICES OR THIS AGREEMENT REGARDLESS OF CAUSE(S) OR THE THEORY OF
LIABILITY, INCLUDING NEGLIGENCE, INDEMNITY, OR OTHER RECOVERY. THIS LIMITATION SHALL NOT APPLY
TO THE EXTENT THE DAMAGE IS PAID UNDER CONSULTANT’S COMMERCIAL GENERAL LIABILITY POLICY.

	7.	 	Indemnity/Statute of Limitations. Consultant and Client shall defend, indemnify, and hold
harmless the other, their agents, and employees, from and against legal liability for all
claims, losses, damages, and expenses to the extent such claims, losses, damages, or expenses
are caused by their negligent acts, errors, or omissions. In the event such claims, losses,
damages, or expenses are caused by the joint or concurrent negligence of Consultant and
Client, they shall be borne by each party in proportion to its own negligence under
comparative fault principles.
Causes of action arising out of Consultant’s services or this Agreement regardless of cause(s)
or the theory of liability, including negligence, indemnity or other recovery shall be deemed
to have accrued and the applicable statute of limitations shall commence to run not later than
the date of Consultant’s substantial completion of services on the project.

	8.	 	Warranty. Consultant will perform the Services in a manner consistent with that level of care
and skill ordinarily exercised by members of the profession currently practicing under similar
conditions in the same locale. CONSULTANT MAKES NO WARRANTIES OR GUARANTEES, EXPRESS OR
IMPLIED, RELATING TO CONSULTANT’S SERVICES AND CONSULTANT DISCLAIMS ANY IMPLIED WARRANTIES OR
WARRANTIES IMPOSED BY LAW, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

	9.	 	Insurance. Consultant represents that it now carries, and will continue to carry: (i)
workers’ compensation insurance in accordance with the laws of the states having jurisdiction
over Consultant’s employees who are engaged in the Services, and employer’s liability
insurance ($1,000,000); (ii) commercial general liability insurance ($1,000,000 occ /
$2,000,000 agg); (iii) automobile liability insurance ($1,000,000 B.I. and P.D. combined
single limit); and (iv) professional liability insurance ($1,000,000 claim / agg).
Certificates of insurance will be provided upon request. Client and Consultant shall waive
subrogation against the other party on all general liability and property coverage.

Agreement Reference Number (Terracon Proposal or Project Number): 2706163

Page 1 of 2

 

	10.	 	CONSEQUENTIAL DAMAGES. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR LOSS OF PROFITS OR
REVENUE; LOSS OF USE OR OPPORTUNITY; LOSS OF GOOD WILL; COST OF SUBSTITUTE FACILITIES, GOODS,
OR SERVICES; COST OF CAPITAL; OR FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, PUNITIVE, OR
EXEMPLARY DAMAGES.

	11.	 	Dispute Resolution. Client shall not be entitled to assert a Claim against Consultant based
on any theory of professional negligence unless and until Client has obtained the written
opinion from a registered, independent, and reputable engineer, architect, or geologist that
Consultant has violated the standard of care applicable to Consultant’s performance of the
Services. Client shall provide this opinion to Consultant and the parties shall endeavor to
resolve the dispute within 30 days, after which Client may pursue its remedies at law. This
Agreement shall be governed by and construed according to Kansas law.

	12.	 	Subsurface Explorations. Subsurface conditions throughout the site may vary from those
depicted on logs of discrete borings, test pits, or other exploratory services. Client
understands Consultant’s layout of boring and test locations is approximate and that
Consultant may deviate a reasonable distance from those locations. Consultant will take
reasonable precautions to reduce damage to the site when performing Services; however, Client
accepts that invasive services such as drilling or sampling may damage or alter the site. Site
restoration is not provided unless specifically included in the Services.

	13.	 	Testing and Observations. Client understands that testing and observation are discrete
sampling procedures, and that such procedures indicate conditions only at the depths,
locations, and times the procedures were performed. Consultant will provide test results and
opinions based on tests and field observations only for the work tested. Client understands
that testing and observation are not continuous or exhaustive, and are conducted to reduce -
not eliminate - project risk. Client agrees to the level or amount of testing performed and
the associated risk. Client is responsible (even if delegated to contractor) for notifying and
scheduling Consultant so Consultant can perform these Services. Consultant shall not be
responsible for the quality and completeness of contractor’s work or their adherence to the
project documents, and Consultant’s performance of testing and observation services shall not
relieve contractor in any way from its responsibility for defects discovered in its work, or
create a warranty or guarantee. Consultant will not supervise or direct the work performed by
contractor or its subcontractors and is not responsible for their means and methods.

	14.	 	Sample Disposition, Affected Materials, and Indemnity. Samples are consumed in testing or
disposed of upon completion of tests (unless stated otherwise in the Services). Client shall
furnish or cause to be furnished to Consultant all documents and information known or
available to Client that relate to the identity, location, quantity, nature, or characteristic
of any hazardous waste, toxic, radioactive, or contaminated materials (“Affected Materials”)
at or near the site, and shall immediately transmit new, updated, or revised information as it
becomes available. Client agrees that Consultant is not responsible for the disposition of
Affected Material unless specifically provided in the Services, and that Client is responsible
for directing such disposition. In the event that test samples obtained during the performance
of Services (i) contain substances hazardous to health, safety, or the environment, or (ii)
equipment used during the Services cannot reasonably be decontaminated, Client shall sign
documentation (if necessary) required to ensure the equipment and/or samples are transported
and disposed of properly, and agrees to pay Consultant the fair market value of this equipment
and reasonable disposal costs. In no event shall Consultant be required to sign a hazardous
waste manifest or take title to any Affected Materials. Client shall have the obligation to
make all spill or release notifications to appropriate governmental agencies. The Client
agrees that Consultant neither created nor contributed to the creation or existence of any
Affected Materials conditions at the site. Accordingly, Client waives any claim against
Consultant and agrees to indemnify and save Consultant, its agents, employees, and related
companies harmless from any claim, liability or defense cost, including attorney and expert
fees, for injury or loss sustained by any party from such exposures allegedly arising out of
Consultant’s non-negligent performance of services hereunder, or for any claims against
Consultant as a generator, disposer, or arranger of Affected Materials under federal, state,
or local law or ordinance.

	15.	 	Ownership of Documents. Work product, such as reports, logs, data, notes, or calculations,
prepared by Consultant shall remain Consultant’s property. Proprietary concepts, systems, and
ideas developed during performance of the Services shall remain the sole property of
Consultant. Files shall be maintained in general accordance with Consultant’s document
retention policies and practices.

	16.	 	Utilities. Client shall provide the location and/or arrange for the marking of private
utilities and subterranean structures. Consultant shall take reasonable precautions to avoid
damage or injury to subterranean structures or utilities. Consultant shall not be responsible
for damage to subterranean structures or utilities that are not called to Consultant’s
attention, are not correctly marked, including by a utility locate service, or are incorrectly
shown on the plans furnished to Consultant.

	17.	 	Site Access and Safety. Client shall secure all necessary site related approvals, permits,
licenses, and consents necessary to commence and complete the Services and will execute any
necessary site access agreement. Consultant will be responsible for supervision and site
safety measures for its own employees, but shall not be responsible for the supervision or
health and safety precautions for any other parties, including Client, Client’s contractors,
subcontractors, or other parties present at the site.

	18.	 	Termination. Either party may terminate this Agreement or the Services upon written notice to
the other. In such case, Consultant shall be paid costs incurred and fees earned to the date
of termination plus reasonable costs of closing the project.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Consultant: Terracon Consultants, Inc.	 	 	 	 	 	Client: Buffalo Ridge Ethanol, LLC	 	 
	By:

	/s/ Michael D. Ringler	 	 	Date: 7/24/2006
	   	 	By:
	 	/s/ Gregory Van Zanten	 	
	 	Date: 8/2/06
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name/Title:	Michael D. Ringler, P.E., Sr. Project Engineer	 	 	Name/Title:	 	Chairman	 	 	 	 
	Address:	1516 E. Richland Avenue	 	 	Address:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Storm Lake, Iowa 50588	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Phone:

	712.732.1803	  Fax:	712.732.0822	 	 	 	 	 	 	 	 	Phone:
	 	 	 	 	Fax:	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 

Agreement Reference Number (Terracon Proposal or Project Number): 2706163

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