Document:

exv10w11

 

Exhibit 10.11

AGREEMENT FOR FIELD SERVICES

	 	 	 
	DATE:
	 	 
	 
	 	 
	PARTIES:
	 	 
	 
	 	 
	Owner:

	 	MinnErgy, LLC (MNE)
	 

	 	P.O. Box 186
	 

	 	Winons, MN 55987
	 

	 	Attn: Mr. Chris Arnold
	 

	 	507-858-0003 — Phone
	 

	 	507-458-5216 — Call
	 

	 	chrisarnold@minnergy.com
	 
	 	 
	Consultant:

	 	Natural Resource Group
	 

	 	1000 IDS Center
	 

	 	80 South Eighth Street
	 

	 	Minneapolis, MN 55402
	 

	 	Attn: Mr. Mark S. Mason, P.G.
	 

	 	612-215-6082
	 

	 	612-347-6780 — Fax
	 

	 	612-804-1664 — Cell
	 

	 	msmason@nrginc.com
	 
	 	 
	Drilling Contractor:

	 	Thein Well Company
	 

	 	7025 North Highway 63
	 

	 	Rochester, Minnesota 66906
	 

	 	Attn: Mr. Mark Thein
	 

	 	507-288-5554
	 

	 	507-288-3224 — Fax
	 

	 	TheinBomb@aol.com

A corporation organized under and pursuant to the laws of the State of Minnesota. Thein Well
Company, hereinafter “Contractor”.

RECITALS:

     MNE wishes to employ Contractor to perform well drilling and pump test services.

AGREEMENTS:

     Pursuant to the foregoing recitals, and in consideration of the mutual covenants and
agreements hereinafter contained, and intending to be bound legally thereby, it is agreed as
follows:

     1. Services. Contractor agrees to provide drilling and pumping test field services
(hereinafter “Services”) at the request of MNE and their Consultant. During the

 

 

term of this Agreement, Contractor will provide Services pursuant to work orders (hereinafter
“Order”) if singular and “Orders” if plural) from MNE, which will cumulatively become part of this
Agreement as Exhibit A. Each Order, generally telephonic with a written Order following, will
identify MNE and the project, set forth specifically the assignments requested by the contractor
for completion of the work. The assignment of Orders will be made to the Contractor solely at the
discretion of MNE or their Consultant. All work shall be performed as specific or indicated in the
Contract Documents for the bid price and in accordance with the terms and conditions of the
Contract Documents.

     Any and all Geographic Information System (GIS), Computer Aided Design (CAD), Global
Positioning System (GPS), or other digital information, including databases and digital imagery
(collectively “Digital Information”) collected and/or developed by Contractor or any subcontractor
of Contractor or any subcontractor of Contractor shall be furnished to MNE at the completion of
Order or as agreed upon. All Digital Information will be collected, archived and delivered to the
Consultant. Upon request by MNE and if commercially reasonable, all information and materials
provided by MNE by Contractor shall be on an electronic medium as designed by MNE or the
Consultant.

     Contractor will be responsible for obtaining any local, township, state or federal licenses or
permits needed to conduct the Services under this Agreement. Contractor shall be obligated to
ensure that landowner permission has been obtained prior to entering private property as needed to
complete the Services under this Agreement.

     Unless directed otherwise, materials specifically required by regulatory agencies will be
submitted by the Contractor to MNE or their Consultant for review prior to submitting the materials
to the appropriate regulatory agency.

     2. No Assignment. No part of this Agreement shall be assigned or Services subcontracted
without the written approval of MNE or the Consultant. All approved subcontractors will be
required to abide by the same terms and conditions as the contractor and carry the required
insurance.

     3. Term; Termination. The term of this Agreement shall be from 9/20/06 to
12/31/06. This Agreement may be terminated by agreement of the parties, or by MNE upon
seven (7) days written notice to the Contractor. Upon such termination, MNE shall pay Contractor
in accordance with Section 4 herein for all Services performed hereunder up to the date of such
termination. In the event that this Agreement is terminated by either party, MNE may require
Contractor to continue any or all activities as described in the Work Order to allow for a
reasonable transition period. This work would be conducted under the terms of this Agreement,
which will remain in force until the transition period is completed.

     4. Method of Payment. Payment will be made by MNE to Contractor pursuant to monthly invoices
itemizing the Services performed according to the Contractors bid document. Invoices shall be
submitted to MNE with a copy of the Consultant upon a project completion or on a monthly basis.
All Contractor invoices will be paid within 30 days following receipt of a Consultant approved
invoice.

     5. Audit. Contractor shall maintain and shall require its subcontractors to maintain adequate
books and records according to generally accepted accounting principles consistently applied which
reflects all costs, labor, hours, equipment, time and

 

 

other expenses of whatever nature incurred by Contractor in accordance with this Agreement. MNE
shall be entitled during the performance of work under each Order and for a period of three (3)
years after completion of the work under each Order, to audit the books and records so maintained.

     6. Notices. All notices given with respect to this Agreement shall be in writing to the
parties at their respective addresses shown in this Agreement.

     7. General Report Requirements. Contractor will submit progress reports as required by each
Order currently in progress. Progress reports will include information describing:

	 	•	 	The status of work
	 
	 	•	 	The work accomplished during the period
	 
	 	•	 	Estimated and completion dates for field work, report, etc., within the
next invoice period
	 
	 	•	 	Any noteworthy information pertaining to the work

     8. Contractor’s Insurance. Contractor shall purchase from and maintain a company or companies
lawfully authorized to do business in the jurisdiction in which the project is located such
insurance as is appropriate for the Services being performed and furnished and as will provide
protection from claims which may arise out of or result from the Contractor’s performance and
furnishing of the services and other obligations of Contractor under this Agreement and for which
the Contractor may be legally liable, whether such operations by Contractor or Contractor’s
employees, Subcontractor or anyone for whose acts any of them may be liable.

     The insurance required by this Paragraph (8) shall include the specific coverages and be
written for not less than the limits of liability and coverages as hereinafter provided or required
by law, whichever is greater.

Workers Compensation insurance shall be written for not less than the statutory lmits and
include Employers Liability Coverage B with limits of $1,000,000. Bodily injury each
accident; $1,000,000. Bodily Injury by Disease — Policy Limit and $1,000,000. Bodily
Injury by Disease — Each Employee.

Commercial General Liability shall provide at a minimum the following coverages:
operations of the contractor; operations of subcontractor (contingent liability); usual
personal injury liability coverage; employees as additional insured; property damage
hazards of explosion, collapse and underground; contractual liability products/completed
operations and shall be maintained with limits of not less than $1,000,000 for each
occurrence, $2,000,000 general aggregate, $2,000,000 products/completed operations
aggregate.

Comprehensive Automobile Liability Insurance shall be maintained with a combined single
limit of $1,000,000 for bodily injury and property damages and shall provide coverage for
all owned, hired and non-owned automobiles.

 

 

Umbrella Liability Coverage shall be maintained with limits of $2,000,000. Each Occurrence
and $2,000,000 Aggregate. The umbrella liability policy shall provide excess limits over
and above the employers liability, commercial general liability and comprehensive
automobile liability limits as stated in this article.

     All of the policies of insurance so required to be purchased and maintained (or the
certificates or other evidence thereof) shall contain a provision or an endorsement that the
coverage afforded will not be canceled, limits reduced by endorsement, or renewal refused until at
least thirty (30) days prior written notice has been given to MNE by certified mail. All such
insurance shall remain in effect for two years after substantial completion. The Contractor’s
general liability and automobile liability policies shall name MNE as an additional insured.
Contractor shall provide a certificate of insurance to MNE prior to commencement of services under
this Agreement.

     9. Indemnification. Contractor agrees to defend, indemnify, and hold harmless MNE, its
Consultant, officers and employees against and from all claims, losses, demands, judgments, and
expenses related thereto caused by or arising out of Contractor’s negligent acts in performance of
the Services or by its failure to perform its Services.

     10. Hazardous Substances/Hazardous Waste. MNE represents that if MNE knows or has reason to
suspect that hazardous substances or pollution may exist at the project site, MNE has fully
informed Contractor. In the event Contractor encounters hazardous substances or contamination
significantly beyond that originally represented by MNE, Contractor may suspend its Services and
enter into good faith negotiation of this Agreement. MNE acknowledges that Contractor has no
responsibility as a generator, treater, storer, or disposer of hazardous or toxic substances found
or identified at a site and MNE agrees to indemnify and hold harmless Contractor from any claim or
liability arising out of Contractor’s performance of the word under this Agreement and made or
brought against contractor for any actual or threatened environmental pollution or contamination
except to the extent that Contractor has intentionally or negligently caused or contributed to any
such pollution or contamination.

     11. Sample Ownership. All samples are the property of the Owner. Absent direction from MNE,
Contractor may return all samples to the site.

     12. Buried Utilities. In those situations where Contractor performs subsurface exploration,
MNE, to the extent of its knowledge, will furnish to Contractor information identifying the type
and location of utilities and other man-made objects beneath the surface of the project site.
Contractor will be responsible for contacting appropriate entities for clearing public underground
utilities. Contractor will take reasonable precautions to avoid damaging these utilities or
objects. Prior to penetrating the site’s surface, Contractor will furnish MNE with documentation
that reasonable precaution have been taking to avoid the penetration of utilities.

     13. Health and Safety. Contractor must development and implement a health and safety plan
(Plan) for its employees, and will be responsible for the actions of its employees by ensuring that
employees are properly trained and follow the safety procedures outlined in its Plan. The Plan
must be relevant to the services being performed and must comply with applicable local, state and
federal health and safety regulations.

 

 

     14. Standard of Care. Contractor agrees that all work performed under the terms of this
Agreement will meet or exceed the standard of care and skill exercised by reputable members of its
profession practicing under similar conditions and in the same location.

     15. Confidentiality. During the term of this Agreement and for a period of five years
thereafter, Contractor agrees that all information related to the Orders and the Services pursuant
to this Agreement will remain confidential. Contractor shall not divulge to anyone communication
(or part or substance therof) received from or given to MNE in connection with Contractor’s
Services pursuant to this Agreement, except:

(a) At the express and specific direction of MNE; or

(b) In compliance with the final order of a court of appropriate jurisdiction or of an
administrative body of appropriate jurisdiction; or

(c) Information that is or later becomes generally available to the public by use,
publication or the like, through no action or omission of the Contractor; or

(d) Information that is obtained on a non-confidential basis from a third party who
lawfully disclosed the same to Contractor; or

(e) Information that Contractor already possesses, as evidenced by its written records,
predating receipt thereof from MNE.

Upon termination of this Agreement, Contractor agrees, if requested, to return to MNE all
maps, books, or other information or materials supplied by MNE.

     16. Use of Data. Contractor transfers ownership of all documents and reports to MNE.
Contractor grants MNE a perpetual, royalty free license to use, distribute and prepare derivative
works of all Digital Information.

     17. Headings. The various headings in this Agreement are inserted for convenience only and
shall not affect the meaning or interpretation of this Agreement or any section or provision
thereof.

     18. Attorneys’ Fees. In the event either party shall be successful in any suit for damages
for breach of this Agreement, including nonpayment of invoices, or to enforce this Agreement or to
enjoin the other party from violating this Agreement, such party shall be entitled to recover as
part of its damages its reasonable legal costs and expenses for bringing and maintaining such
action.

     19. Waiver of Terms and Conditions. The failure of either party in any one or more instances
to enforce one or more of the terms or conditions of this Agreement or to exercise any right or
privilege in this Agreement, or the waiver by either party of any breach of the of the terms or
conditions of this Agreement shall not be construed as thereafter waiving any such terms,
conditions, rights, or privileges, and the same shall continue and remain in force and effect as if
no such failure to enforce had occurred.

     20. Governing Law. This Agreement shall be deemed to be an Agreement made under the laws of
the State of Minnesota, and for all purposes it, plus any related or supplemental exhibits,
schedules, documents, or notices, shall be construed in accordance with and governed by the laws of
such state.

     21. Construction. Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this
Agreement or any related document shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such

 

 

prohibition or invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement or such related document.

     22. Survival of Representations and Warranties. All the representations, warranties,
covenants and Agreement contained in this Agreement shall survive the termination of this Agreement
and Contractor’s completion of the Services contemplated herein.

     23. Entire Agreement. This Agreement constitutes and expresses the entire Agreement and
understanding between the parties hereto, and all previous discussions, promises, representations,
and understandings between the parties hereto are merged herein.

     The parties hereto have caused this Agreement to be appropriately executed as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MinnErgy, LLC	 	 	 	Thein Well Company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Daniel H. Arnold	 	 	 	By:	 	/s/ Mark Thein	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Its:
	 	Chairman
	 	 	 	 	 	Its:
	 	Vice President	 	 
	 
	Date:	 	9/20/06	 	 	 	Date:	 	9/21/06exv10w12

 

Exhibit 10.12

YAGGY

COLBY 

October 25, 2006

Mr. Ron Scherbring

MinnErgy, LLC

18084 Middle Valley Road

Minnesota City, MN 55959

	RE:	 	Proposal for Professional Services

Ethanol Plant

Eyota, MN

Dear Mr. Scherbring:

Yaggy Colby Associates is pleased to respond to your request for a proposal for the following
services on the Ethanol Plate site development project in Eyota, Minnesota. This proposal is
within and limited to the boundary of the property (see attached map) and to assist MinnErgy with
its budget process. Per the attached 2006 Compensation Schedule, the firm will provide the
following services at an hourly fee for the anticipated plan layout:

	 	 	 	 	 
	•   Annexation & Zone Change (if required)

	 	$	1,200	 
	•   Construction Plans & Specifications (Water Main/Streets/Parking)

	 	$	14,000	 
	•   Grading Plan

	 	$	17,500	 
	•   Drainage Report

	 	$	2,500	 
	•   On-site Septic Design (domestic only)

	 	$	5,000	 
	 
	 	 	 
	Total
	 	$	40,200	 

We will need the plant layout plans and elevations to begin the civil and Site Work Grading
Plan(s). The proposed fees may be revised based on these plans and if City, County, or Township
staff/town board modifies current standards or requirements. Permitting fees/services and railroad
track designs are not included in this proposal and will need to be contracted with a specialized
firm. Other services that are not included above, but may be needed can be provided by Yaggy Colby
Associates at hourly rates if requested are:

	•	 	Meetings and Hearings not mentioned above

	•	 	Architecture

	•	 	Landscape Architecture

	•	 	Urban & Regional Planning

	•	 	General Development Plan (includes predevelopment meeting with City)

	•	 	Feasibility & Analysis (Cost Estimate & Development Analysis)

	•	 	Land Use Plan Amendment (LUPA)

	•	 	Traffic Impact Study

	•	 	Flood Study

	•	 	Geotechnical Boring & Report

	•	 	Project Observation

	•	 	Construction Staking

	•	 	Wetland Delineation, Survey, Exemption, Design, & Replacement

	•	 	Environmental Assessment

	•	 	Storm Water Pollution Prevention Plan

	•	 	Wetland Evaluation & Research

	•	 	Platting, ALTA Survey, & Certificate of Survey

 

 

Mr. Ron Scherbring

October 25, 2006

Page 2

	•	 	Phase I Audit

	•	 	Substantial Land Alteration Permit

	•	 	Marketing Graphics & Tools

	•	 	Easement Description Preparation (electric service, water main, etc.)

	•	 	Utility Coordination

	•	 	Township Roadway Improvements Design & Coordination

	•	 	Municipal Water Main Improvements Design & Coordination

If additional services are required, further fees may be necessary and your approval will be
required to proceed. In additional to the estimated fees, all expenses incurred shall be
reimbursed in accordance with our customary reimbursable expenses shown on the compensation
schedule. Work will stop when invoices are more than 60 days delinquent. Yaggy Colby Associates
looks forward to providing services to you on this project. If you have any questions or concerns,
please call.

The attached Terms and Conditions shall be considered a part of this proposal. This proposal is
being submitted in duplicate. If you accept this proposal and wish to proceed with the work,
please have an authorized person sign both Authorized blocks, retain one proposal for your records
and return one proposal to Yaggy Colby Associates. Your signed authorization will initiate the
described services. Yaggy Colby Associates wants to provide you the professional assistance
required on your Ethanol Plant site development and looks forward to the successful completion of
this project.

	 	 	 	 	 
	Sincerely,

YAGGY COLBY ASSOCIATES

 	 	 
	/s/ Wade Neubauer
 	 	 
	Wade Neubauer, EI 	 	 
	 	 	 

WEN

PR1449

Attachments

AUTHORIZATION

I have reviewed the above proposal and agree with its terms. I hereby authorize Yaggy Colby
Associates to proceed with the work described herein.

	 	 	 	 	 	 	 
	/s/ Daniel H. Arnold
 

Authorized Signature

	 	  
	 	10/31/06 

Date
	 	   
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Daniel H. Arnold

Printed Name

	 	 
	 	Billing Address (if different than above)
 
	 	   
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 

 

 

YAGGY COLBY ASSOCIATES

2006 COMPENSATION SCHEDULE

HOURLY LABOR RATES

 

	 	 	 	 	 
	Senior Principal
	 	$135/hour
	Prinicpal Engineer, Architect, Planner, Surveyor, Landscape Architect
	 	$125/hour
	Senior Associate Engineer, Architect, Planner, Surveyor, Landscape Architect
	 	$115/hour
	Senior Project Engineer, Architect, Planner, Surveyor, Landscape Architect
	 	$105/hour
	Project Engineer, Architect, Planner, Surveyor, Landscape Architect
	 	$95/hour
	Design Engineer, Architect, Planner, Surveyor, Landscape Architect
	 	$85/hour
	Assistant Engineer, Architect, Planner, Surveyor, Landscape Architect
	 	$75/hour
	Intern Engineer, Planner, Surveyor
	 	$65/hour
	Senior Technician Design, Survey, Clerical
	 	$75/hour
	Technician I Design, Survey, Clerical
	 	$68/hour
	Technician II Design, Survey, Clerical
	 	$61/hour
	Technician III Design, Survey, Clerical
	 	$53/hour
	Technician IV Design, Survey, Clerical
	 	$46/hour
	Technician V Design, Survey, Clerical
	 	$39/hour
	Technician VI Design, Survey, Clerical
	 	$34/hour

REIMBURSABLE EXPENSES

 

	 	 	 	 	 
	Mailings, Plots, Prints, Copies
	 	Cost + 10%
	 
	 	 	 	 
	Mileage: Personal Vehicle
	 	$0.50/mile
	 
	 	 	 	 
	Survey and Inspection Vehicles
	 	$0.60/mile
	 
	 	 	 	 
	Field Equipment and Materials
	 	 	 	 
	 
	 	 	 	 
	Robotic Total Station
	 	$37.00/hour
	G.P.S. Equipment
	 	$37.00/hour
	G.P.S. Rover
	 	$25.00/hour
	Total Station/Data Collector
	 	$10.00/hour
	Stakes, Pipe, Lath, Survey Materials
	 	Cost + 10%
	 
	 	 	 	 
	Outside Services, Project Fees, or Permits
	 	Cost + 10%
	 
	 	 	 	 
	Additional Expenses
	 	Cost + 10%

 

 

YAGGY COLBY ASSOCIATES (YCA)

TERMS AND CONDITIONS

ARTICLE 1 —PAYMENT TO YCA

1.01 Other Provisions Concerning Payments

A. Preparation of Invoices. Invoices will be prepared monthly in accordance with YAGGY COLBY
ASSOCIATES’ standard invoicing practices and will be submitted to OWNER by YCA, unless otherwise
agreed. The amount billed in each invoice will be calculated as set forth in Proposal.

B. Payment of Invoices. Invoices are due and payable upon receipt. If OWNER fails to make any
payment due YCA for services and expenses within 30 days after receipt of their invoice therefore,
the amounts due YCA will be increased at the rate of 1.5% per month (or the maximum rate of
interest permitted by law, if less.) In addition, YCA may after giving seven days written notice
to OWNER, suspend services under this Agreement until YCA has been paid in full all amounts due for
services, expenses, and other related charges. Design professionals shall not have any liability
whatsoever to the client for any costs or damages as a result of such suspension caused by any
breach of this Agreement by the Client. Payments will be credited first to interest and then to
principal.

C. As required by the Construction Lien Law, YCA hereby notifies Owner that persons or companies
furnishing labor or materials for the construction on Owner’s land may have lien rights on Owner’s
land and buildings if not paid.

D. Disputed Invoices. If the Client objects to any portion of an invoice, the Client shall so
notify the Design Professional in writing within 30 calendar days of receipt of the invoice. The
Client shall identify the specific cause of the disagreement and shall pay when due that portion of
the invoice not in dispute. Interest as stated shall be paid by the client on all disputed
invoiced amounts resolved in the Design Professional’s favor and unpaid for more than 30 calendar
days after date of submission.

E. Payments Upon Termination. In the event of any termination under Paragraph 2.04, YCA will be
entitled to invoice OWNER and will be paid in accordance with Proposal for all services performed
or furnished and all Reimbursable Expenses incurred through the effective date of termination.

ARTICLE 2 — GENERAL CONSIDERATIONS

2.01 Standards of Performance

A. The standard of care for all professional services and related services performed or furnished
by YAGGY COLBY ASSOCIATES under this Agreement will be the care and skill ordinarily used by
members of their profession practicing under similar circumstances at the same time and in the same
locality. YCA makes no warranties, expressed or implied, under this Agreement or otherwise, in
connection with their services.

B. YCA shall perform or furnish professional services and related services in phases of the Project
to which this Agreement applies. YCA shall serve as OWNER’s prime professional for the Project.
YCA may employ such Subconsultants as they deems necessary to assist in the performance or
furnishing of the services. YCA shall not be required to employ any Subconsultant unacceptable to
them.

C. YCA and OWNER will endeavor to comply with applicable Laws or regulations. This Agreement is
based on these requirements as of its Effective Date. Changes to these requirements after the
Effective Date of this Agreement may be the basis for modifications to OWNER’s responsibilities or
to YCA’s scope of services, times of performance, or compensation.

D. OWNER shall be responsible for, and YCA may rely upon, the accuracy and completeness of all
requirements, programs, instructions, reports, data, and other information furnished by OWNER to
YCA pursuant to this Agreement. YCA may use such requirements, reports, data, and information in
performing or furnishing services under this Agreement.

E. OWNER shall make decisions and carry out its other responsibilities in a timely manner and shall
bare all costs incident thereto so as not to delay the services of YCA.

2.02 Use of Documents

A. All Documents are instruments of service in respect to this Project, and YAGGY COLBY ASSOCIATES
shall retain an ownership and property interest therein (including the right of reuse at the
discretion of YCA) whether or not the Project is completed.

B. Copies of Documents that may be relied upon by OWNER are limited to the printed copies (also
known as hard copies) that are signed or sealed by YCA. Files in electronic media format of text,
data, graphics, or of other types that are furnished by YCA or OWNER are only for convenience of
OWNER. Any conclusion or information obtained or derived from such electronic files will be at the
user’s sole risk.

C. OWNER may make, and retain, and reuse copies of Documents for information and reference
in connection with use on the Project by OWNER with written permission from YCA. Such Documents
are not intended or represented to be suitable for reuse by OWNER or others on extensions of
Project or on any other project. Any such reuse or modification without written verification or
adaptation by YCA, as appropriate for the specific purpose intended, will be at OWNER’s sole risk
and without liability or legal exposure to YCA or to its Subconsultants. OWNER shall indemnify and
hold harmless YCA and its Subconsultants from all claims, damages, losses, and expenses, including
attorneys’ fees arising out of or resulting therefrom.

D. If there is a discrepancy between the electronic files and the hard copies, the hard copies
govern.

 

 

2.03 Insurance

A. YAGGY COLBY ASSOCIATES shall procure and maintain Professional Liability, General Liability,
Workers Compensation, and Automotive Liability which are applicable to the Project.

B. OWNER shall procure and maintain General Liability or Property Insurance policies which are
applicable to the Project.

2.04 Termination

A. The obligation to provide further services under this Agreement may be terminated.

1. For cause, by either party upon 30 days written notice in the event of substantial failure by
the other party to perform in accordance with the terms hereof through no fault of the terminating
party.

2. For convenience, by OWNER effective upon the receipt of notice by YCA.

2.05 Dispute Resolution

A. OWNER and YAGGY COLBY ASSOCIATES agree to negotiate all disputes between them in good faith for
a period of 30 days from the date of notice, prior to exercising their rights under provisions of
this Agreement, or under law.

B. Mediation — In an effort to resolve any conflicts that arise during the design or construction
of the project or following the completion of the project, the Client and the Design Professional
agree that all disputes between them arising out of or relating to this Agreement shall be
submitted to nonbonding mediation unless the parties mutually agree otherwise. The Client and the
Design Professional further agree to include a similar mediation provision in all agreements with
independent contractors and consultants retained for the project and to require all independent
contractors and consultants also to include a similar mediation provision in all agreements with
subcontractors, subconsultants, suppliers or fabricators so retained, thereby providing mediation
as the primary method for dispute resolution between the parties to those agreements.

2.06 Hazardous Environmental Condition

A. OWNER represents to YAGGY COLBY ASSOCIATES that to the best of its knowledge, a Hazardous
Environmental Condition does not exist.

B. OWNER has disclosed to the best of its knowledge to YCA the existence of all Asbestos, PCB’s
Petroleum, Hazardous Waste, or Radioactive Material located at or near the Project site, including
type, quantity, and location.

C. It is acknowledged by both parties that YCA’s scope of services does not include any services
related to asbestos or hazardous or toxic materials. In the event the Design Professional or any
other party encounters asbestos or hazardous or toxic materials at the jobsite, or should it become
known in any way that such materials may be present at the jobsite or any adjacent areas that may
affect the performance of the Design Professional’s services, the Design Professional may, at his
or her option and without liability for consequential or any other damages, suspend performance of
services on the project until the Client retains appropriate specialist consultants or contractors
to identify, abate and/or remove the asbestos or hazardous toxic materials, and warrant that the
jobsite is in full compliance with applicable laws and regulations.

D. The Client agrees, notwithstanding any other provision of this Agreement, to the fullest extent
permitted by law, defend, to indemnify and hold harmless the Design Professional, his or her
officers, partners, employees, agents and consultants from and against any and all claims, suits,
demands, liabilities, losses, or costs, including reasonable attorneys’ fees and defense costs,
resulting or accruing to any and all persons, firms, and any other legal entity, caused by, arising
out of or in any way connected with the detection, presence, handling, removal, abatement, or
disposal of any asbestos or hazardous toxic substances, products or materials that exist on, about
or adjacent to the jobsite, whether liability arises under breach of contract or warranty, tort,
including negligence, strict liability or statutory liability or any other cause of action.

2.07 Allocation of Risk

A. Indemnification

1. To the fullest extent permitted by law, YAGGY COLBY ASSOCIATES shall indemnify and hold harmless
OWNER, OWNER’s officers, directors, partners, and employees from and against any and all costs,
losses, and damages (including but not limited to all fees and charges of engineers, architects,
attorneys, and other professions, and all court or arbitration or other dispute resolution costs)
caused solely by the negligent acts or omissions of YCA or its officers, directors, partners,
employees in the performance and furnishing of YCA’s services under this Agreement.

2. To the fullest extent permitted by law, OWNER shall indemnify and hold harmless YCA, its
officers, directors, partners, employees, and Subconsultants from and against any and all costs,
losses, and damages (including but not limited to all fees and charges of engineers, architects,
attorneys, and other professionals, and all court or arbitration or other dispute resolution costs)
caused solely by the negligent acts or omissions of OWNER or OWNER’s officers, directors, partners,
employees, and OWNER’s Consultants with respect to this Agreement or the Project.

3. To the fullest extent permitted by law, YCA’s total liability to OWNER and anyone claiming by,
through, or under OWNER for any cost, loss, or damages caused in part by the negligence of YCA and
in part by the negligence of OWNER or any other negligent entity or individual, shall not exceed
the percentage share that YCA’s negligence bears to the total negligence of OWNER, YCA, and all
other negligent entities and individuals.

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