Document:

exv10w3

 

Exhibit 10.3

AGREEMENT

     This
agreement dated January 15th, 2006 is made by and between Ed Recker of
Cascade, Iowa and Western Dubuque Biodiesel of Farley, Iowa.

     WHEREAS, Western Dubuque Biodisel is desirous of retaining the services of Ed Recker;

     WHEREAS, Ed Recker is desirous of performing services of Western Dubuque Biodiesel;

     NOW THEREFORE, the parties agree as follows:

	 	1.	 	Ed Recker will perform such management and consulting duties as requested by
the Board of Directors of Western Dubuque Biodiesel.
	 
	 	2.	 	Ed Recker shall be paid $1,000 per week for his services to Western Dubuque
Biodiesel.
	 
	 	3.	 	The parties agree that an independent contractor relationship shall exist
between Ed Recker and Western Dubuque Biodiesel.

     Signed
and agreed this 15th day of January, 2006.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	WESTERN DUBUQUE BIODIESEL	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Ed Recker
 

Ed Recker

	 	 	 	By:
	 	/s/ William Schueller
 

William Schueller, Presidentexv10w4

 

Exhibit 10.4

THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA

STANDARD FORM OF DESIGN-BUILD AGREEMENT AND GENERAL CONDITIONS

BETWEEN OWNER AND CONTRACTOR

(Where the Basis of Payment is a Lump Suns)

TABLE OF ARTICLES

	1.	 	AGREEMENT
	 
	2.	 	GENERAL PROVISIONS
	 
	3.	 	CONTRACTOR’S RESPONSIBILITIES
	 
	4.	 	OWNER’S RESPONSIBILITIES
	 
	5.	 	SUBCONTRACTS
	 
	6.	 	CONTRACT TIME
	 
	7.	 	CONTRACT PRICE
	 
	8.	 	CHANGES IN THE WORK
	 
	9.	 	PAYMENT
	 
	10.	 	INDEMNITY. INSURANCE AND WAIVER OF SUBROGATION
	 
	11.	 	TERMINATION OF THE AGREEMENT AND OWNER’S RIGHT TO PERFORM

CONTRACTOR’S RESPONSIBILITIES
	 
	12.	 	DISPUTE RESOLUTION
	 
	13.	 	MISCELLANEOUS PROVISIONS
	 
	14.	 	LIST OF CONTRACT DOCUMENTS

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

 

 

This Agreement has important legal and insurance consequences. Consultation with an attorney
and insurance consultant is encouraged with respect to its completion or modification,

STANDARD FORM OF DESIGN-BUILD AGREEMENT AND

GENERAL CONDITIONS BETWEEN OWNER AND CONTRACTOR

(Where the Basis of Payment is a Lump Sum)

ARTICLE I

AGREEMENT

This Agreement is made this 30 day of June

In the year 2006, by and between the

OWNER

	 	 	 
	(Name and Address)

	 	Western Dubuque Biodiesel, LLC
	 

	 	 
	 

	 	10749 Jamesmeier Road
	 

	 	 
	 

	 	Farley, Iowa 52046
	 

	 	 
	and the
	 	 
	CONTRACTOR
	 	 
	(Name and Address)

	 	Renewable Energy Group, (REG)
	 

	 	 
	 

	 	406 First Street, P O Box 68
	 

	 	 
	 

	 	Ralston, IA 51459
	 

	 	 
	for services in connection with the following
	PROJECT

	 	New 30 Million Gallon Per Year Biodiesel Facility in Farley, Iowa including Soy Oil Pretreatment.
	 

	 	 

Notice to the parties shall be given at the above addresses.

ARTICLE 2

GENERAL PROVISIONS

2.1 TEAM RELATIONSHIP The Owner and the Contractor agree to proceed with the project on the
basis of trust, good faith and fair dealing. The Contractor aggress to procure the architectural
and engineering services set forth below, and to furnish construction and administration of the
Work.

2.2 ARCHITECT/ENGINEER Architectural and engineering services shall be procured from licensed,
independent design professionals retained by the Contractor or furnished by licensed employees of
the Contractor, or as permitted by the law of the state where the Project is located. The person
or entity providing architectural and engineering services shall be referred to as the
Architect/Engineer. If the Architect/Engineer is an independent design professional, the
architectural and engineering services shall be procured and payments shall be made pursuant to a
separate agreement between the Contractor and the Architect/Engineer. The architectural and
engineering services are independent of the work or services provided directly by the Contractor.
The Architect/Engineer for the Project is Todd & Sargent, Inc.

2.3 EXTENT OF AGREEMENT This Agreement is solely for the benefit of the parties, represents the
entire and integrated agreement between the parties, and supersedes all prior negotiations,
representations or agreements, either written or oral.

2.4 DEFINITIONS

.1 The Contract Documents consist of:

	 	a.	 	Change Orders and written amendments to this Agreement signed by both the Owner and
Contractor;
	 
	 	b.	 	This Agreement, except for the existing Contract Documents set forth in item e below;
c. The most current Documents approved by the Owner pursuant to Subparagraph 3.1.1;
d. The information provided by the Owner pursuant to Clause 4.1.2.1;
	 
	 	e.	 	The Contract Documents in existence at the time of this Agreement which are set forth
in Article 14;
	 
	 	f.	 	The Owner’s Programs provided pursuant to Subparagraph 4.1.1.

In case of any inconsistency, conflict of ambiguity among the Contract Documents, the
Documents shall govern in the order in which they are listed above.

.2 The Work is the Design Services procured in accordance with Paragraph 3.1, the
Construction Services provided in accordance with Paragraph 3.2, Additional Services in
accordance with Paragraph 3.7, and other services which are necessary to complete the Project
in

 

 

accordance with and reasonably inferable from the Contract Documents.

.3 The term Day shall mean calendar day.

.4 A Subcontractor is a person or entity who has an agreement with the Contractor to perform
any portion of the Work. The term Subcontractor does not include the Architect/Engineer or
any separate contractor employed by the Owner or any separate contractor’s subcontractors.

.5 A subsubcontractor is a person or entity who has an assignment with a Subcontractor to
perform any portion of the Subcontractor’s work.

.6 Substantial Completion of the Work,
or of a designated portion, occurs on the date when
construction is sufficiently complete in accordance with the Contract Documents so that the
Owner can occupy or utilize the Project, or a designated portion, for the use for which it is
intended. This date shall be confirmed by a certificate of Substantial Completion signed by
the Owner and Contractor. The certificate shall state the respective responsibilities of the
Owner and Contractor for security, maintenance, heat, utilities, damage to the Work, and
insurance. The certificate shall also list the items to be completed or corrected, and
establish the time for their completion and correction.

.7 The Owner’s Program is an initial description of the Owner’s objectives, including
budgetary and time criteria, space requirements and relationships, flexibility and
expendability requirements, special equipment and systems, and site requirements.

ARTICLE 3

CONTRACTOR’S RESPONSIBILITES

The Contractor shall be responsible for procuring the design and for the construction of the
Work consistent with the Owner’s Program, as such Program may be modified by the Owner during the
course of the Work. The Contractor shall exercise reasonable skill and judgment in the performance
of the Work.

3.1 DESIGN SERVICES

3.1.1 DRAWINGS AND SPECIFICATIONS The Contractor shall submit for the Owner’s written approval
Drawings and Specifications based on the Contract Documents or any further development of Contract
Documents that have been approved in writing by the Owner. The Drawings and Specifications shall
set forth in detail the requirements for construction of the Work, and shall be based upon codes,
law or regulations enacted at the time of their preparation. Construction shall be in accordance
with these approved Drawings and Specifications. One set of these documents shall be furnished to
the Owner prior to commencement of construction. REG will provide “as-built” drawings to Owner
at Substantial Completion.

3.1.2 OWNERSHIP OF DOCUMENTS All documents shall remain the property of the Contractor and are not
to be used by the Owner without the written consent of the Contractor. Contractor vests in
Owner a limited irrevocable license to use the documents and work product in connection with
Owner’s occupancy, operation and repair of the Work/Project and Contractor shall provide with a
copy of the “as-built” plans related to the Work/Project.

3.2 CONSTRUCTION SERVICES

3.2.1 Construction will commence upon the issuance by the Owner of a written notice to proceed.

3.2.2 In order to complete the Work, the Contractor shall provide all necessary construction
supervision, inspection, construction equipment, construction labor, materials, tools and
subcontracted items.

3.2.3 The Contractor shall give all notices and comply with all laws and ordinances legally enacted
at the date of execution of the Agreement which govern the proper performance of the Work.

3.2.4 The Contractor shall maintain the Schedule of Work. This schedule shall indicate the dates
for the state and completion of the various stages of the construction including the dates when
information and approvals are required from the Owner. It shall be revised as required by the
conditions of the Work.

3.2.5 The Contractor shall assist the Owner in securing the building permits necessary for the
construction of the Project.

3.2.6 The Contractor shall take necessary precautions for the safety of its employees on the
Project, and shall comply will all applicable provisions of federal, state and municipal safety
laws to prevent accidents or injury to persons on, about or adjacent to the Project site. The
Contractor, directly or through its Subcontractors, shall erect and properly maintain at all times,
as required by the conditions and progress of the Work, necessary safeguards for the protection of
works and the public. The Contractor, however, shall not be responsible for the elimination or
abatement of safety hazards created or otherwise resulting from work at the Project site carried on
by the Owner or its employees, agents, separate contractors or tenants. The Owner agrees to cause
its employees, agents, separate contractors and tenants to abide by and fully adhere to all
applicable provisions of federal, state and municipal safety laws and regulations. The above
provision shall not relieve Subcontractors of their responsibility for the safety of persons or
property in the performance of their work, nor for compliance with all applicable provisions of
relevant laws.

3.2.7 The Contractor shall keep such full and detailed accounts as may be necessary for proper
financial management under this Agreement. The Owner shall be afforded access to all the
Contractor’s records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda
and similar data relating to Change Order work performed on the basis of actual cost. The
Contractor shall preserve all such records for a period of three years after the final payment or
longer requested by law.

3.2.8 The Contractor shall provide periodic written reports to the Owner on the progress of the
Work as agreed to by the Owner and Contractor.

3.2.9 At all times the Contractor shall maintain the site of the Work free from debris and waste
materials resulting from the Work. At the completion of the Work, the Contractor shall remove from
the premises all construction equipment, tools, surplus materials, waste materials and debris.

3.3 HAZARDOUS MATERIAL

3.3.1 A Hazardous Material is any substance or material identified now or in the future as
hazardous under any federal, state or local law or regulation, or any other substance or material
which may be considered hazardous or otherwise subject to statutory or regulatory requirements
governing handling, disposal and/or clean-up. The Contractor shall not be obligated to commence or
continue Work until any known or suspected Hazardous Material discovered at the Project site has
been removed, rendered or determined to be harmless by the Owner as certified by an independent
testing laboratory and approved by the appropriate government agency.

3.3.2 If after the commencement of the Work, known or suspected Hazardous Material is discovered at
the Project site, the Contractor shall be entitled to immediately stop Work in the affected area,
and the Contractor shall report the condition to the Owner and, if required, the government

 

 

agency with jurisdiction.

3.3.3 The Contractor shall not be required to perform any Work relating to or in the area of known
or suspected Hazardous Material without written mutual agreement.

3.3.4 The Owner shall be responsible for retaining an independent testing laboratory to determine
the nature of the material encountered and whether it is a Hazardous Material requiring corrective
measures and/or remedial action. Such measures shall be the sole responsibility of the Owner, and
shall be performed in a manner minimizing any adverse effect upon the Work of the Contractor. The
Contractor shall resume Work in the area affected by any Hazardous Material only upon written
agreement between the parties after the Hazardous Material has been removed or rendered harmless.

3.3.5 If the Contractor incurs additional costs and/or is delayed due to the presence of known or
suspected Hazardous Material, the Contractor shall be entitled to an equitable adjustment in the
Contract Price and/or the date of Substantial Completion.

3.3.6 To the fullest extent permitted by law, the Owner shall indemnify and hold harmless the
Contractor, Architect/Engineer, Subcontractors and Subsubcontractors, and the agents, officers,
directors and employees of each of them, from and against any and all claims, damages, losses,
costs and expenses, whether direct or indirect or consequential, including but not limited to
attorney’s fees, costs and expenses incurred in connection with litigation or arbitration, arising
out of or relating to the performance of the Work in any area affected by Hazardous Material. To
the fullest extent permitted by law, such indemnification shall apply regardless of the fault,
negligence, breach of warranty or contract or strict liability of the indemniee.

3.3.7 Notwithstanding the proceeding provisions of this Section 3.3, owner is not responsible
for hazardous conditions and/or Hazardous Materials introduced to the Project site by Contractor,
or by its subcontractors or sub-subcontractors, or anyone from whose acts they may be liable.
Contractor shall indemnify, defend and hold harmless Owner and Owner’s officers, directors,
employees and agents from and against all claims, losses, damages, liabilities and expenses,
including attorneys fees and expenses, arising out of or resulting from those hazardous conditions
and/or Hazardous Materials introduced to the project site by Contractor or by its subcontractors,
sub-subcontractors or anyone from whose acts they may be liable.

3.3.7.8 The terms of this Paragraph 3.3 shall survive the completion of the Work under this
Agreement and/or any termination of this Agreement.

3.3 ROYALTIES, PATENTS AND COPYRIGHTS The Contractor shall pay all royalties and license fees which
may be due on the inclusion of any patented or copyrighted materials, methods or systems selected
by the Contractor and incorporated in the Work. The Contractor shall defend indemnify and hold the
Owner harmless from all suits or claims for infringement of any patent rights or copyrights arising
out of such selection. The Owner agrees to defend, indemnify and hold the Contractor harmless from
any suits or claims of infringement of any patent rights arising out of any patented materials,
methods or systems specified by the Owner. Contractor grants to the Owner a perpetual and
irrevocable license to use any and all of Contractor’s technology and proprietary property related
to and/or incorporated into the Work/Project in connection with the operation, maintenance and
repair of the Work. Contractor represents and warrants that it has all right and interest in and
to the technology and proprietary property (or has obtained all such rights and interests) related
to the design, construction, operation, maintenance and repair of the Work/Project and has the
power and authority to grant the license to Owner as contemplated by this Section. Owner shall pay
no license fee or royalty to Contractor or to any other person for Owner’s use of the technology
and proprietary property. The consideration for the license is included in the amounts payable by
Owner to Contractor for the construction of the Work under this Agreement. 

Patent Infringement: Contractor shall defend any action or proceeding brought against Owner
based on any claim that the Work, or any part thereof, or that the operation or use of the Work, or
any part thereof, constitutes infringement of any United States patent or copyright, now or
hereafter issued, including any claim relating to the failure of Contractor to pay royalties or
license fees. If Owner is enjoined from the operation or use of the Work, or any part thereof, as
a result of any patent or copyright suit, claim or proceeding, Contractor shall at its sole expense
take reasonable steps to procure the right to operate or use the Work. If Contractor cannot so
procure such right within a reasonable time, Contractor shall promptly, at Contractor’s expense,
(i) modify the Work so as to avoid infringement of any such patent or copyright or (ii) replace
such Work with work that does not infringe or violate any such patent or copyright; provided,
however, any modified or replacement Work to the project shall continue to enable the plant to meet
any and all performance guarantee criteria. Contractor shall indemnify and hold harmless Owner for
any and all damages and claims (including, without limitation, reasonable attorney fees) arising
out of or resulting from any claim of infringement with respect to the use of the technology and
proprietary property related to and/or incorporated into the Work/Project or for any breach of any
provision of this Section. All provisions of this Section shall survive and remain in full force
and effect notwithstanding any termination or expiration of this Agreement or the license granted
herein. 

3.5 TAX EXEMPTION If in accordance with the Owner’s direction an exemption is claimed for taxes,
the Owner agrees to defend, indemnify and hold the Contractor harmless from any liability, penalty,
interest, fine, tax assessment, attorneys fees or other expense or cost incurred by the Contractor
as a result of any action taken by the Contractor in accordance with the Owner’s direction.

3.6 WARRANTIES AND COMPLETION

3.6.1 The Contractor warrants that all materials and equipment furnished under this Agreement will
be new unless otherwise specified, of good quality in conformance with the Contract Documents, and
free from defective workmanship and materials. Warranties shall commence on the date of
Substantial Completion of the Work or of a designated portion. The Contractor agrees to correct
all construction performed under this Agreement which proves to be defective in workmanship and
materials within a period of one year from the date of Substantial Completion as set forth in
Paragraph 6.2 or for such longer periods of time as may be set forth with respect to specific
warranties required by the Contract Documents.

3.6.2 Those products, equipment, systems or materials incorporated in the Work at the direction of
or upon the specific request of the Owner shall be covered exclusively by the warranty of the
manufacturer. There are no warranties which extend beyond the description on the face thereof.
All other warranties expressed or implied including the warranty of merchantability and the
warranty of fitness for a particular purpose are expressly disclaimed.

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

3.6.4 The Contract shall collect all written warranties and equipment manuals and deliver them to
the Owner.

3.6.5 With the assistance of the Owner’s maintenance personnel, the Contractor shall direct the
checkout of utilities and operations of systems and equipment for readiness, and assist in their
initial state-up and testing.

 

 

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

3.6.6 Contractor guarantees and warrants that the Work/Project will achieve the performance
requirements with respect to the operation of the Work/Project set forth in that certain Process
Guarantee letter dated June 23, 2006, by and between the Contractor and Owner, which Process
Guarantee Letter is incorporated into this Agreement. In the event of Contractor’s breach of this
Agreement and warranty, Contractor shall take all action as necessary to remedy the deficiencies
that prevented the successful achievement of the performance requirements at Contractor’s sole cost
and expense. 

Performance tests will be conducted jointly by Contractor and Owner to verify achievement of
the performance requirements. If the performance tests fail to achieve the performance
requirements, Contractor shall promptly take such action as may be necessary to remedy, at its
expense, all deficiencies which prevented the successful completion of the performance test.
Contractor shall be required at its sole cost and expense, to conduct one or more additional
performance tests, until such time that the performance tests confirm that the corrective measures
have corrected the deficiencies and the Work/Project meets the performance requirements.

The Process Guarantee shall be deemed to have been met when the facility accumulates ***
periods, producing *** gallons or more of biodiesel per *** hour period. 

3.6.7 Contractor further warrants that the Work/Project shall demonstrate that is does not
exceed those air emissions levels cumulatively allocable to the Project contained in, and does not
violate the terms and conditions of, the air permits issues to the Owner for the Project. If the
Project fails to meet such air emission levels, then Contractor, at Contractor’s sole cost and
expense, shall correct any defects of deficiencies in the Work/Project as necessary so that the
Project does not violate or exceed such air emissions levels set forth in the air permits.
Contractor shall continue to take corrective measures until subsequent performance tests
demonstrate that the Project does not exceed the air emissions levels and otherwise complies with
the performance requirements. 

3.6.8 The standard of care for all design and construction services performed by Contractor
shall be the care and skill ordinarily used by members of the design and construction profession
practicing under similar conditions at the same time and locality of the project. Notwithstanding
this standard of care, the parties have agreed upon specific performance standards for certain
aspects of the Work, which standards should be set forth in any performance guarantee criteria.
The design and construction professional services shall be performed to achieve such standards.

3.7 ADDITIONAL SERVICES The Contractor shall provide or procure the following Additional Services
upon the request of the Owner. A written Agreement between the Owner and Contractor shall define
the extent of such Additional Services, such Additional Services shall be considered a Change in
the Work, unless they are specifically included in Article 14.

.1 Documentation of the Owner’s Program, establishing the Project budget, investigating
sources of financing, general business planning and other information and documentation as may
be required to establish the feasibility of the Project.

.2 Consultations, negotiations, and documentation supporting the procurement of Project financing.

.3 Surveys, site evaluations, legal descriptions and aerial photographs.

.4 Appraisals of existing equipment, existing properties, new equipment and developed properties.

.5 Soils, subsurface and environmental studies, reports and investigations required for
submission to governmental authorities or other having jurisdiction over the Project.

.6 Consultants and representations other than normal assistance in securing building permits,
before governmental authorities or others having jurisdiction over the Project.

.7 Investigation or making measured drawings of existing conditions or the verification of drawings or other Owner-provided information.

.8 Artistic renderings, models and mockups of the Project or any part of the Project or the Work.

.9 Inventories of existing furniture, fixtures, furnishings and equipment which might be under consideration for incorporation into the Work.

.10 Interior design and related services including procurement and placement of furniture,
furnishings, artwork and decorations.

.11 Making revisions to design documents after they have been approved by the Owner when
revisions are due to causes beyond the control of the Contractor.

.12 Design, coordination, management, expediting and other services supporting the procurement
of materials to be obtained, or work to be performed, by the Owner, including but not limited
to telephone systems, computer wiring networks, sound systems, alarms, security systems and
other specialty systems which are not part of this Agreement.

.13 Estimates, proposals, appraisals, consultations, negotiations and services in connection
with the repair and replacement of an insured loss.

.14 The premium portion of overtime work ordered by the Owner including productivity impact
costs.

.15 Document reproduction exceeding the limits provided for in this Agreement.

.16 Out-of-town travel by the Architect/Engineer in connection with the Work, except between
the Architect/Engineer’s office. Contractor’s office, Owner’s office and the Project site.

.17 Obtaining service contractor and training maintenance personnel, assisting and consulting
in the use of systems and equipment after the initial state-up and adjusting and balancing of
systems and equipment. Operator training requested by Owner that extends past Contractors
standard turn-key service will not be covered by this agreement. Standard service includes two
weeks of pre-startup off-site training along with one week of on-site training. This is
followed by two weeks of start-up support and off-site support as needed for a period of one
month. 

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

.19 Services requested by Owner or required by the Work which are not specified in the
Contract Documents and which are not normally part of the generally accepted design and
construction practice.

.20 Serving or preparing to serve as an expert witness in connection with any proceeding,
legal or otherwise, regarding the Project.

.21 Preparing reproducible record drawings from marked-up prints, drawings or other documents
that incorporate significant changes in the Work made during the construction.

 

 

ARTICLE 4

OWNER’S RESPONSIBILITIES

4.1 INFORMATION AND SERVICES PROVIDED BY OWNER

	4.1.1	 	The Owner shall provide full information in a timely manner regarding requirements for the
Project, including the Owner’s Program and other relevant information.
	 
	4.1.2	 	The Owner shall provide:

.1 all necessary information describing the physical characteristics of the site, including
surveys, site evaluations, legal descriptions, existing conditions, subsurface and
environmental studies, reports and investigations;

.2 inspection and testing services during construction as required by law or as mutually
agreed; and

.3 unless otherwise provided in the Contract Documents, necessary approvals, site plan
review, rezoning, easements and assessments, necessary permits, fees and charges required for
the construction, use, occupancy or renovation of permanent structures, including legal and
other required services.

4.1.3 The Owner shall provide reasonable evidence satisfactory to the Contractor, prior to
commencing the Work and during the progress of the Work, that sufficient funds are available and
committed for the entire cost of the Project, including an allowance for changes in the Work as may
be approved in the course of the Work. Unless such reasonable evidence is provided, the Contractor
shall not be required to commence or continue the Work. The Contractor may stop Work after seven
(7) days’ written notice to the Owner if such evidence is not presented within a reasonable time.
The failure of the Contractor to insist upon the providing of this evidence at any time shall not
be a waiver of the Owner’s obligation to make payments pursuant to this Agreement, not shall it be
a waiver of the Contractor’s right to request or insist that such evidence be provided at a later
date.

4.1.4 The Contractor shall be entitled to rely on the completeness and accuracy of the information
and services required by this Paragraph 4.1.

4.2 RESPONSIBILITIES DURING DESIGN

4.2.1 The Owner shall review and approve further development of the drawings and specifications as
set forth in Article 3.

4.3 RESPONSIBILITIES DURING CONSTRUCTION

4.3.1 The Owner shall review the Schedule of Work and timely respond to its obligations.

4.3.2 If the Owner becomes aware of any error, omission or failure to meet the requirements of the
Contract Documents or any fault or defect in the Work, the Owner shall give prompt written notice
to the Contractor.

4.3.3 The Owner shall communicate with the Contractor’s Subcontractors, suppliers and
Architect/Engineer only through the Contractor. The Owner shall have no contractual obligations to
Subcontractors, suppliers, or the Architect/Engineer.

4.3.4 The Owner shall provide insurance for the Project as provided in Article 10.

4.4 OWNER’S REPRESENTATIVE The Owner’s representative is Ed Recker, who is agreed to by
the Contractor. The representative:

.1 shall be fully acquainted with the Project:

.2 agrees to furnish the information and services required of the Owner pursuant to
Paragraph 4.1 so as not to delay the Contractor’s Work: and

.3 shall have authority to bind the Owner in all matters requiring the Owner’s approval,
authorization or written notice. If the Owner changes its representative or the
representative’s authority as listed above, the Owner shall notify the Contractor in advance
in writing. The Contractor shall have the right to approve any successor representative.

ARTICLE 5

SUBCONTRACTS

Work not performed by the Contractor with its own forces shall be performed by Subcontractors.

5.1 RETAINING SUBCONTRACTORS The Contractor shall not retain any Subcontractor to whom the Owner
has a reasonable and timely objection, provided that the Owner agrees to increase the Contract
Price for any additional costs incurred by the Contractor as a result of such objection. The
Contractor shall not be required to retain any Subcontractor to whom the Contractor has a
reasonable objection.

5.2 MANAGEMENT OF SUBCONTRACTORS The Contractor shall be responsible for the management of the
Subcontractors in the performance of their work.

5.3 MANAGEMENT OF SUBCONTRACT AGREEMENTS The Contractor shall provide for assignment of
subcontract agreements in the event that the Owner terminates this Agreement for cause as provided
in Paragraph 11.2. Following such termination, the Owner shall notify in writing those
subcontractors whose assignments will be accepted, subject to the rights of sureties, if any.

ARTICLE 6

CONTRACT TIME

6.1 COMMENCEMENT OF THE WORK The Work Field Construction shall commence on or about
July 17, 2006 and shall proceed in general accordance with the Schedule of Work as such
schedule may be amended from time to time, subject, however, to the provisions of Paragraph 3.3 and
Subparagraph 4.1.3.

6.2 SUBSTANTIAL COMPLETION The date of Substantial Completion of the Work shall be no later than
12 months after the “break escrow” date, subject to adjustment in accordance with the
provisions of Article 8. Time shall be of the essence of this Agreement. Owner and Contractor
agree that as liquidated damages for dely Contractor shall pay Owner $1,500 for each day that
expires after the time specified for substantial completion until the work is substantially
complete.

 

 

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

6.3 DELAYS IN THE WORK

6.3.1 If causes beyond the Contractor’s control delay the progress of the Work, then the Contract
Price and/or the date of Substantial Completion shall be modified by Change Order as appropriate.
Such causes shall include but not be limited to: changes ordered in the Work, acts or omissions of
the Owner or separate contractors employed by the Owner, the Owner preventing the Contractor from
performing the Work pending dispute resolution, Hazardous Materials, except those Hazardous
Materials arising under article 3.3.7, differing site conditions, adverse weather conditions
not reasonably anticipated, fire, unusual transportation delays, labor disputes, or unavoidable
accidents or circumstances.

6.3.2 In the event delays to the project are encountered for any reason, the parties agree to
undertake reasonable steps to mitigate the effect of such delays.

ARTICLE 7

CONTRACT PRICE

The Contract Price is $ ***, subject to adjustment in accordance with the provisions of
Article 8. Price is per REG Proposal Letter dated June 28, 2006.

ARTICLE 8

CHANGES IN THE WORK

Changes in the Work which are within the general scope of this Agreement may be accomplished by
Change Order without invalidating this Agreement.

8.1 CHANGE ORDERS A Change Order is a written instrument, issued after execution of this
Agreement, signed by the Owner and Contractor stating their agreement upon a change and any
adjustment in the Contract Price and/or the date of Substantial Completion. Each adjustment in the
Contract Price resulting from a Change Order shall clearly separate the amount attributable to
Design Services.

8.2 DETERMINATION OF COST An increase or decrease in the Contract Price resulting from a change
in the Work shall be determined by one or more of the following methods:

.1 unit prices set forth in this Agreement or as subsequently agreed;

.2 a mutually accepted, itemized lump sum; or

.3 if an increase or decrease cannot be agreed to as set forth in Subparagraphs 8.2.1 or
8.2.2 and the Owner issues a written order for the Contractor proceed with the change, the
adjustment in the Contract Price shall be determine by the reasonable expense and savings of
the performance of the Work resulting from the change. If there is a net increase in the
Contract Price, a reasonable adjustment shall be made in the Contractor’s overhead and
profit. In the case of a net decrease in cost, the amount of decrease in the Contract Price
will not include a reduction in overhead and profit. The Contractor shall maintain a
documented, itemized accounting evidencing the expenses and savings. The Contractor’s
overhead and profit for changes in Project resulting in an increase shall be 10%.

8.3 NO OBLIGATION TO PERFORM The Contractor shall not be obligated to perform changed Work until
a Change Order has been executed by the Owner and Contractor, except as provided in Subparagraph
8.2.3.

8.4 ADJUSTMENT OF UNIT PRICES If a proposed Change Order alters original quantities to a degree
that application of previously agreed to unit prices would be inequitable to either the Owner or
the Contractor, the unit prices and the Contract Price shall be equitably adjusted.

8.5 UNKNOWN CONDITIONS If in the performance of the Work the Contractor finds latent, concealed
or subsurface physical conditions which differ from the conditions the Contractor reasonably
anticipated, or if physical conditions are materially different than those normally encountered and
generally recognized as inherent in the kind of work provided for in this Agreement, then the
Contract Price and/or the date of Substantial Completion shall be equitably adjusted by Change
Order within a reasonable time after the conditions are first observed.

8.6 CLAIMS FOR ADDITIONAL COST OR TIME For any claim for an increase in the Contract Price and/or
an extension in the date of Substantial Completion, the Contractor shall give the Owner written
notice of the claim within twenty-one (21) days after the occurrence giving rise to the claim or
within twenty-one (21) days after the Contractor first recognizes the condition giving rise to the
claim, whichever is later. Except in an emergency, notice shall be given before proceeding with
the Work. Claims for design and estimating costs incurred in connection with possible changes
requested by the Owner, but which do not proceed, shall be made within twenty-one (21) days after
the decision is made not to proceed. Any changes in Contract Price and/or date of Substantial
Completion resulting from such claim shall be authorized by Change Order.

8.7 EMERGENCIES In any emergency affecting the safety of persons and/or property, the Contractor
shall act, at is discretion, to prevent threatened damage, injury or loss. Any change in the
Contract Price and/or extension of the date of Substantial Completion on account of emergency work
shall be determined as provided in this Article.

ARTICLE 9

PAYMENT

9.1 INITIAL PAYMENT Upon execution of this Agreement an initial payment of
                                        dollars shall be made to the Contractor. The amount of the initial payment shall
be credited against                      the Contract Price at final payment. Prior to signing of this
Agreement the Owner has made payment to the Contractor for Pre-construction Services. These
payments totaling $*** and the Work attributed to it become a part of this Agreement and are
included in the Contract Price of this Agreement. This Agreement supersedes any pre-existing
agreements between Owner and Contractor. Retainage on this Project
shall be in amount of ***% of
each invoice and shall become due in accordance with Article 9.2.7.

9.2 PROGRESS PAYMENTS Prior to submitting the first Application for Payment, the Contractor shall
provide a Schedule of Values satisfactory to

 

 

the Owner, consisting of a breakdown of the Contract Price, with a separate line for Design
Services.

9.2.1 On or before the 30th day of each month after the Work has commenced, the
Contractor shall submit to the Owner an Application for Payment in accordance with the Schedule of
Values based upon the Work completed and materials stored on the site or at other locations
approved by the Owner.

9.2.2
Within ten (10) fifteen (15) days after receipt of each monthly Application for
Payment, the Owner shall pay directly to the Contractor the appropriate amount for which
Application for Payment is made, less amounts previously paid by the Owner.

9.2.3 If the Owner fails to pay the Contractor at the time payment of any amount becomes due, then
the Contractor may, at any time thereafter, upon serving written notice that the Work will be
stopped within five (5) days after receipt of the notice by the Owner, and after such five (5) day
period, stop the Work until payment of the amount owing has been received.

9.2.4 Payments due but unpaid shall bear interest at the rate the Owner is paying on its
construction loan or at the current “prime rate” of bank, whichever is higher, plus two points.

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

9.2.6 The Owner’s progress payment, occupancy or use of the Project, whether in whole or in part,
shall not be deemed an acceptance of any Work not conforming to the requirements of the Contract
Documents.

9.2.7 Upon Substantial Completion of the Work, the Owner shall pay the Contractor the unpaid
balance of the Contract Price, less a sum equal to the Contractor’s and Owners mutually agreed
upon estimated cost of completing any unfinished items as agreed to between the Owner and
Contractor as to extent and time for completion. The Owner thereafter shall pay the Contractor
monthly the amount retained for unfinished items as each item is completed. Contractor shall
notify Owner when it believes the Work is substantially complete. Within five (5) days of Owner’s
receipt of Contractor’s notice, Owner and Contractor will jointly inspect such Work to verify that
it is substantially complete in accordance with the Contract Documents. If such Work is
substantially complete, Contractor and Owner shall jointly prepare and issue a Certificate of
Substantial Completion that will set forth (i) the date of Substantial Completion of the Work, (ii)
the remaining items of Work that have to be completed before final payment, (iii) provisions
establishing Owner’s and Contractor’s responsibility for the Project’s security, maintenance,
utilities and insurance pending final payment, and (iv) an acknowledgement that warranties commence
to run on the date of Substantial Completion, except as may otherwise be noted in the Certificate
of Substantial Completion.

9.3 FINAL PAYMENT

9.3.1 Final payment, consisting of the unpaid balance of the Contract Price less the initial
payment made under Paragraph 9.1, shall be due and payable when the Work is fully completed.
Before issuance of final payment, the Owner may request satisfactory evidence that all payrolls,
materials bills and other indebtedness connected with the Work have been paid or otherwise
satisfied.

9.3.2 In making final payment the Owner waives all claims except for:

.1 outstanding liens;

.2 improper workmanship or defective materials appearing within one year after the date of
Substantial Completion;

.3 Work not in conformance with the Contract Documents; and

.4 terms of any special warranties required by the Contract Documents.

9.3.3 In accepting final payment, the Contractor waives all claims except those previously made in
writing and which remain unsettled.

9.3.4 At the time of submission of its final payment, Contractor shall provide the following
information: (1) An affidavit that there are no claims, obligations or liens outstanding or
unsatisfied for labor, services, material, etc., (2) A general release executed by REG
waiving all claims except those claims previously made in writing to Owner, (3) The delivery of the
operating manuals, warranties and other deliverables required by the contract documents, (4)
Certificates of Insurance confirming that required coverage will remain in effect consistent with
the requirements of the contract documents; and (5) Such other reasonable and customary
documents as necessary for owner and its lender to obtain the required clean title to the plant
which may include all final lien waivers from Contractor and its subcontractors.

9.3.5 Contractor shall indemnify, defend and hold harmless Owner from any claims or mechanics
liens brought against Owner or against the Project as a result of the failure of Contractor, or
those for whose acts it is responsible, to pay for any services, materials, labor, equipment, taxes
or other items or obligations furnished or incurred for on in connection with the Work. Within
fifteen (15) days of receiving written notice from Owner that such a claim or mechanics lien has
been filed, Contractor shall commence to take the steps necessary to discharge said claim or lien,
including, if necessary, the furnishing of a mechanics lien bond. If Contractor fails to do so,
Owner will have the right to discharge the claim or lien and hold Contractor liable for costs and
expenses incurred including attorney’s fees. The foregoing obligation of Contractor shall be
subject to reasonable disputes that Contractor may have with respect to any claim or mechanics lien
provided Contractor provides written notice of such dispute to Owner and Owner agrees to delay the
enforcement of its rights under this Section.

ARTICLE 10

INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION

10.1 INDEMNITY

10.1.1 To the fullest extent permitted by law, the Contractor shall defend, indemnify and hold the
Owner harmless from all claims for bodily injury and property damage (other than to the Work itself
and other property insured under Paragraph 10.5), including resulting loss of use that may arise
from the performance of the Work, to the extent of the negligence attributed to such acts or
omissions by the Contractor, Subcontractors or anyone employed directly or indirectly by any of
them or by anyone for whose acts any of them may be liable. The Contractor shall not be required
to defend, indemnify or hold harmless the Owner for any acts, omissions or negligence of the Owner,
Owner’s employees, agents or separate contractors.

10.1.2 The Owner shall cause any other contractor who may have a contract with the Owner to
perform work in the areas where Work will be performed under this Agreement, to agree to indemnify
the Contractor, Subcontractors or anyone employed directly or indirectly by any of them or anyone
for whose acts any of them may be liable and hold them harmless from all claims for bodily injury
and property damage, other than property

 

 

insured under Paragraph 10.5, that may arise from the contractor’s operations. Such provisions
shall be in a form satisfactory to the Contractor.

10.2 CONTRACTOR’S LIABILITY INSURANCE

10.2.1 The Contractor shall obtain and maintain insurance coverage for the following claims which
may arise out of the performance of this Agreement, whether resulting from the Contractor’s
operations or by the operations of any Subcontractor, anyone in the employ of any of them, or by an
individual or entity for whose acts they may be liable:

.1 workers’ compensation, disability benefit and other employee benefit claims under acts
applicable to the Work;

.2 under applicable employers liability law, bodily injury, occupational, sickness, disease
or death claims of the Contractor’s employees;

.3 bodily injury, sickness, disease, or death claims for damages to persons not employed by
the Contractor;

.4 usual personal injury liability claims for damages directly or indirectly related to the
person’s employment by the Contractor or for damages to any other person;

.5 damage to or destruction of tangible property, including resulting loss of use, claims
for property other than the work itself and other property insured
under Paragraph 11.5 10.5
;

.6 bodily injury, death or property damage claims resulting from motor vehicle liability in
the use, maintenance or ownership of any motor vehicle; and

.7 contractual liability claims involving the Contractor’s obligations under Subparagraph
11.1.1.

	10.2.2	 	The Contractor’s Commercial General and Automobile Liability Insurance as required by
Subparagraph 11.2.1 shall be written for not less than the following limits of liability:

	 	.1	 	Commercial General Liability Insurance

	 	 	 	 	 	 	 
	a.
	 	Each Occurrence Limit	 	$	1,000,000	 
	 
	 	 	 	 	 
	b.
	 	General Aggregate	 	$	2,000,000	 
	 
	 	 	 	 	 
	c.
	 	Products/Completed	 	 	 	 
	 
	 	Operations Aggregate	 	$	2,000,000	 
	 
	 	 	 	 	 
	d.
	 	Personal and Advertising	 	 	 	 
	 
	 	Injury Limit	 	$	1,000,000	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	         .2
       Comprehensive Automobile Liability Insurance
	 	 	 	 
	a.
	 	Combined Single Limit Bodily	 	 	 	 
	 
	 	Injury and Property Damage	 	$	1,000,000	 
	 
	 	 	 	 	 
	 
	 	 	 	Each occurrence	 
	 
	 	Or	 	 	 	 
	b.
	 	Bodily Injury	 	$	N/A	 
	 
	 	 	 	 	 
	 
	 	 	 	Each Person	 
	 
	 	 	 	$	N/A	 
	 
	 	 	 	 	 
	 
	 	 	 	Each Occurrence	 
	c.
	 	Property Damage	 	$	N/A	 
	 
	 	 	 	Each Occurrence	 
	 
	 	 	 	 	 	 
	         .3
       Umbrella Liability
	 	$	10,000,000	 

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

10.2.4 The policies shall contain a provision that coverage will not be cancelled or not renewed
until at least thirty (30) days’ prior written notice has been given to the Owner. Certificates of
insurance showing required coverage to be in force shall be filed with the Owner prior to
commencement of the Work.

10.2.5 Products and Completed Operations insurance shall be maintained for a minimum period of at
least one (1) year(s) after either ninety (90) days following the date of Substantial
Completion or final payment, whichever is earlier.

10.3 PROFESSIONAL LIABILITY INSURANCE The Architect/Engineer’s professional liability insurance
for claims arising from the negligent performance of professional services under this Agreement
shall be written for not less than $1,000,000 per claim and in the aggregate with a
deductible not to exceed $100,000. These requirements shall be continued in effect for
one (1) year(s) after the date of Substantial Completion. If the Architect/Engineer
retains consultants for a portion of the design, their professional liability insurance coverage,
including deductible amounts, shall be set forth in Article 13 of this Agreement.

10.4 OWNER’S LIABILITY INSURANCE The Owner shall be responsible for obtaining and maintaining its
own liability insurance. Insurance for claims arising out of the performance of this Agreement may
be purchased and maintained at the Owner’s discretion.

10.5 INSURANCE TO PROTECT PROJECT

10.5.1 The Owner Contractor shall obtain and maintain property insurance in a form
acceptable to the Contractor Owner upon the entire Project for the full cost of replacement
at the time of any loss. This insurance shall include as named insureds the Owner, Contract,
Architect/Engineer, Subcontractors and Subsubcontractors. This insurance shall insure against loss
from the perils of fire and extended coverage, and shall include “all risk” insurance for physical
loss or damage including without duplication of coverage, at least: theft, vandalism, malicious
mischief, transit, collapse, falsework, temporary buildings, debris removal, flood, earthquake,
resting, and damage resulting from defective design, workmanship or
material. The Owner
Contractor shall increase limits of coverage, to reflect estimated replacement cost. The
Owner Contractor shall be responsible for any co-insurance penalties or deductibles.
This insurance shall include testing with a limit of $10,000,000. If the Owner wishes testing
limits higher than $10,000,000 or other special coverages Contractor will attempt to include them
in the Builders Risk policy. The cost of this insurance shall be billed to Owner outside of the
contract price at Contractor’s actual price. 

10.5.2 If the Owner occupies or uses a portion of the Project prior to its Substantial Completion,
such occupancy or use shall not commence prior to a

 

 

time mutually agreed to by the Owner and the Contractor and to which the insurance company or
companies providing the property insurance have consented by endorsing the policy or policies.
This insurance shall not be cancelled or lapsed on account of partial occupancy. Consent of the
Contractor to such early occupancy or use shall not be unreasonably withheld.

10.5.3 The Owner shall obtain and maintain boiler and machinery insurance as necessary. The
interest of the Owner, Contractor, Architect/Engineer, Subcontractors and Subsubcontractors shall
be protected under this coverage.

10.5.4 The Owner shall purchase and maintain insurance to protect the Owner, Contractor,
Architect/Engineer, Subcontractors and Subsubcontractors against loss of use of Owner’s property
due to those perils insured pursuant to Paragraph 10.5. Such policy will provide coverage for
expediting expenses of materials, continuing overhead of the Owner and the Contractor,
Architect/Engineer, Subcontractors and Subsubcontractors, necessary labor expense including
overtime, loss of income by the Owner and other determined exposures. Exposures of the Owner,
Contractor, Architect/Engineer, Subcontractors, Subsubcontractors, shall be determined by mutual
agreement with separate limits of coverage fixed for each item.

10.5.5 Upon the Contractor’s request, the Owner shall provide the Contractor with a copy of all
policies before an exposure to loss may occur. Copies of any subsequent endorsements shall be
furnished to the Contractor. The Contractor shall be given thirty (30) days’ notice of
cancellation, non-renewal, or any endorsements restricting or reducing coverage. The Owner shall
give written notice to the Contractor before commencement of the Work if the Owner will not be
obtaining property insurance. In that case, the Contractor may obtain insurance in order to
protect its interest in the Work as well as the interest of the Architect/Engineer, Subcontractors,
Subsubcontractors in the Work. The Contract Price shall be increased by the cost of the insurance
through Change Order. If the Contractor is damaged by failure of the Owner to purchase or maintain
property insurance or to so notify the Contractor, the Owner shall bear all reasonable costs
incurred by the Contractor arising from the damage.

10.6 PROPERTY INSURANCE LOSS ADJUSTMENT

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

10.6.2 Upon the occurrence of an insured loss, monies received will be deposited in a separate
account and the trustees shall make distribution in accordance with the agreement of the parties in
interest, or in the absence of such agreement, in accordance with an arbitration award pursuant to
Article 12. If the trustees are unable to agree between themselves on the settlement of the loss,
such dispute shall also be submitted for resolution pursuant to Article 12.

10.7 WAIVER OF SUBROGATION

10.7.1 The Owner and Contractor waive all rights against each other, the Architect/Engineer, and
any of their respective employees, agents, consultants, Subcontractors, Subsubcontractors, for
damages caused by risks covered by insurance provided in Paragraph 10.5 to the extent they are
covered by that insurance, except such rights as they may have to the proceeds of such insurance
held by the Owner and Contractor as trustees. The Contractor shall require similar waivers from
the Architect/Engineer and all Subcontractors, and shall require each of them to include similar
waivers in their subsubcontracts and consulting agreements.

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

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

ARTICLE 11

TERMINATION OF THE AGREEMENT AND OWNER’S RIGHT TO

PERFORM CONTRACTOR’S RESPONSIBILITIES

11.1 TERMINATION BY THE CONTRACTOR

11.1.1 Upon seven (7) days’ written notice to the Owner, the Contractor may terminate this
Agreement for any of the following reasons:

.1 if the Work has been stopped for thirty (30) day period;

	 	a.	 	under court order or order of other governmental authorities having
jurisdiction;
	 
	 	b.	 	as a result of the declaration of a national emergency or other
governmental act during which, through no act or fault of the Contractor,
materials are not available; or
	 
	 	c.	 	because of the Owner’s failure to pay the Contractor in accordance
with this Agreement;

.2 if the Work is suspended by the Owner for sixty (60) days;

.3 if the Owner materially delays the Contractor in the performance of the Work’

.4 if the Owner otherwise materially breaches this Agreement: and such material breach
has not been cured by Owner within ten (10) days of written notice from Contractor of such
material breach; or

.5 if the Owner fails to furnish reasonable evidence that sufficient funds are available and
committed for the entire cost of the Project in accordance with Subparagraph 4.1.3 of this
Agreement.

11.1.2 Upon termination by the Contractor in accordance with Subparagraph 11.1.1. the Contractor
shall be entitled to recover from the Owner payment for all Work executed and for any proven loss,
cost or expense in connection with the Work, plus all demobilization costs and reasonable damages.
In addition, the Contractor shall be paid an amount calculated as set forth either in Subparagraph
11.3.1 or 11.3.2 depending on when the termination occurs, and Subparagraphs 11.3.3 and 11.3.4.

11.2 OWNER’S RIGHT TO PERFORM CONTRACTOR’S OBLIGATIONS AND TERMINATION BY THE OWNER FOR CAUSE

11.2.1 If the Contractor persistently fails to perform any of its obligations under this
Agreement, the Owner may, after seven (7) days’ written notice, during which period the Contractor
fails to perform such obligation, undertake to perform such obligations. The Contract Price shall
be reduced by the cost to the Owner of performing such obligations.

11.2.2 Upon seven (7) days’ written notice to the Contractor and the Contractor’s surety, if any,
the Owner may terminate this Agreement for any of the following reasons:

 

 

.1 if the Contractor persistently utilizes improper materials and/or inadequately skilled
workers;

.2 if the Contractor does not make proper payment to laborers, material suppliers or
contractors;

.3 if the Contractor persistently fails to abide by the orders, regulations, rules,
ordinances or laws of governmental authorities having jurisdiction; or

.4 if the Contractor otherwise materially breaches this Agreement.

If the Contractor fails to cure within the seven (7) days, the Owner, without prejudice to any
other right or remedy, may take possession of the site and complete the Work utilizing any
reasonable means. In this event, the Contractor shall not have a right to further payment until
the Work is completed. This Agreement may be immediately terminated by Owner in the event
Contractor becomes financial insolvent. 

11.2.3 If the Contractor files a petition under the Bankruptcy Code, this Agreement shall
terminate if the Contractor or the Contractor’s trustee rejects the Agreement or, if there has been
a default, the Contractor is unable to give adequate assurance that the Contractor will perform as
required by this Agreement or otherwise is unable to comply with the requirements for assuming this
Agreement under the applicable provisions of the Bankruptcy Code.

11.2.4 In the event the Owner exercises its rights under Subparagraphs 11.2.1 or 11.2.2, upon the
request of the Contractor the Owner shall provide a detailed accounting of the cost incurred by the
Owner.

11.3 TERMINATION BY OWNER WITHOUT CAUSE If the Owner terminates this Agreement other than as set
forth in Paragraph 11.2, the Owner shall pay the Contractor for all Work executed and for any
proven loss, cost or expense in connection with the Work, plus all demobilization costs. In
addition, the Contractor shall be paid an amount calculated as set forth below:

.1 If the Owner terminates this Agreement prior to commencement of the construction, the Contractor shall be paid the unpaid balance of
the Contractor’s design costs as set forth in the Schedule of
Values plus 5% of the remaining balance of the Contract Price.

.2 If the Owner terminates this Agreement after commencement of the construction, the Contractor shall be paid the unpaid balance of the
Contractor’s design costs as set forth in the Schedule of Values
plus 10% of the remaining balance of the Contract Price.

.3 In either event, the initial payment as provided in Paragraph 9.1 shall be credited to the Owner’s account at the time of termination.

.4 The Owner shall also pay to the Contractor fair compensation, either by purchase or rental at the election of the Owner, for any
equipment retained. The Owner shall assume and become liable for obligations, commitments and unsettled claims that the Contractor has
previously undertaken or incurred in good faith in connection with the Work or as a result of the termination of this Agreement. As a
condition of receiving the payments provided under this Article 11, the Contractor shall cooperate with the Owner by taking all steps
necessary to accomplish the legal assignment of the Contractor’s rights and benefits to the Owner, including the execution and delivery of
required papers.

11.4 SUSPENSION BY THE OWNER FOR CONVENIENCE

11.4.1 The Owner may order the Contractor in writing to suspend, delay or interrupt all or
any part of the Work without cause for such period of time as the Owner may determine to be
appropriate for its convenience.

11.4.2 Adjustments caused by suspension, delay or interruption shall be made for increases
in the Contract Price and/or the date of Substantial Completion. No adjustment shall be made if
the Contractor is or otherwise would have been responsible for the suspension, delay or
interruption of the Work, or if another provision of this Agreement is applied to render an
equitable adjustment.

ARTICLE 12

DISPUTE RESOLUTION

12.1 INITIAL DISPUTE RESOLUTION If a dispute arises out of or relates to this Agreement or
its breach, the parties shall endeavor to settle the dispute first through direct discussions. If
the dispute cannot be settled through direct discussions, the parties shall endeavor to settle the
dispute by mediation under the Construction Industry Mediation Rules of the American Arbitration
Association before recourse to arbitration. Issues to be mediated are subject to the exceptions in
Paragraph 12.2 for arbitration. The location of the mediation shall be the location of the
Project. Once one party files a request for mediation with the other contracting party and with
the American Arbitration Association, the parties agree to conclude such mediation within sixty
(60) days of filing of the request.

12.2 AGREEMENT TO ARBITRATE Any controversy or claim arising out of or relating to this Agreement
or its breach not resolved by mediation, except for claims which have been waived by the making or
acceptance of final payment, shall be decided by arbitration in accordance with the Construction
Industry Arbitration Rules of the American Arbitration Association then in effect unless the
parties mutually agree otherwise. Notwithstanding Paragraph 13.2, this agreement to arbitrate
shall be governed by the Federal Arbitration Act.

12.3 NOTICE OF DEMAND A written demand for arbitration shall be filed with the American
Arbitration Association and the other party to this Agreement within a reasonable time after the
dispute or claim has arisen, but in not event after the applicable statute of limitations for a
legal or equitable proceeding would have run.

12.4 AWARD The arbitration award shall be final. Judgment upon the award may be confirmed in any
court having jurisdiction.

12.5 WORK CONTINUANCE AND PAYMENT Unless otherwise agreed in writing, the Contractor shall
continue the Work and maintain the approved schedules during any arbitration proceedings. If the
Contractor continues to perform, the Owner shall continue to make payments in accordance with this
Agreement.

12.6 MULTIPARTY PROCEEDING The parties agree that all parties necessary to resolve a claim shall
be parties to the same arbitration proceeding. Appropriate provisions shall be included in all
other contracts relating to the Work to provide for the consolidation of arbitrations.

12.7 COST OF DISPUTE RESOLUTION The prevailing party in any dispute arising out of or relating to
this Agreement or its breach that is resolved by arbitration or litigation shall be entitled to
recover form the other party reasonable attorney’s fees, costs and expenses incurred by the
prevailing party in connection with such arbitration or litigation.

 

 

ARTICLE 13

MISCELLANEOUS PROVISIONS

13.1 ASSIGNMENT Neither the Owner nor the Contractor shall assign their interest in this
Agreement without the written consent of the other except as to the assignment of proceeds.
Owner can collaterally assign the Agreement to its lender without obtaining the prior written
consent of Contractor.

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

13.3 SEVERABILITY The partial or complete invalidity of any one or more provisions of this
Agreement shall not affect the validity or continuing force and effect of any other provision.

13.4 NO WAIVER OF PERFORMANCE The failure of either party to insist, in any one or more
instances, on the performance of any of the terms, covenants or conditions of this Agreement, or to
exercise any of its rights, shall not be construed as a waiver or relinquishment of such term,
covenant or condition or right with respect to further performance.

13.5 TITLES The title given to the Articles of this Agreement are for ease of reference only and
shall not be relied upon or cited for any other purpose.

13.6 OTHER PROVISIONS

13.6.1 Contractor warrants and guarantees that the Project will be capable of obtaining
BQ-9000 accreditation.

13.6.2 Our intent is to build this project on a Merit Shop basis. Should we be required to
enter into any wage agreements (prevailing wage, Union, etc, ) the extra cost and/or time
associated with this will be treated as a Change in the Work under Article 8 of this agreement.

13.6.3 Owner is responsible to provide all commodities require for the start-up and/or testing
of the facility.

13.6.4 Performance and Payment Bonds have not been included in this Agreement. At Owner’s
request bonds will be provided and the Owner agrees to pay Contractor at Contractor’s actual cost
outside of this Agreement.

13.6.5 Contractor shall be responsible for security at the site during the construction of the
facility. Owner shall assume responsibility for security at the site at substantial
completion.

ARTICLE 14

EXISTING CONTRACT DOCUMENTS

The Contract Documents in existence at the time of execution of this Agreement are as follows:

REG Proposal Letter, dated June 28, 2006

REG Process Guarantee Letter, dated June 23, 2006.

Technical Specifications, dated June 23, 2006.

Contract Drawings: Reference Drawing List in Section 01100 – Summary, Item 1.1.A.2 of the
Technical Specifications dated June 23, 2006

 

 

This Agreement is entered into as of the date entered in Article 1.

      

	 	 	 
	 
	 	 
	ATTEST:

	 	/s/ Ed Recker
	 

	 	 

      

      

      

      

	 	 	 
	ATTEST:

	 	/s/ Vickie Ayers
	 

	 	 

	 	 	 
	OWNER:

	 	WESTERN DUBUQUE BIODIESEL, LLC
	 

	 	 

	 	 	 
	BY:

	 	/s/ Bruce Klostermann
	 

	 	 

	 	 	 
	PRINT NAME:

	 	Bruce Klostermann
	 

	 	 

	 	 	 
	PRINT TITLE:

	 	Vice Chairman
	 

	 	 

	 	 	 
	CONTRACTOR:

	 	RENEWABLE ENERGY GROUP
	 

	 	 

	 	 	 
	BY:

	 	/s/ Philip Sargent
	 

	 	 

	 	 	 
	PRINT NAME:

	 	Philip Sargent
	 

	 	 

	 	 	 
	PRINT TITLE:

	 	Partner
	 

	 	 

 

 

REG

June 28, 2006

Mr. Ed Recker

Western Dubuque Biodiesel, LLC Board of Directors

301 1st ST. NE P.O. Box 82

Farley, Iowa 52046

RE: Design/Build Contract for Western Dubuque Biodiesel, LLC

Dear Mr. Recker and the Western Dubuque Biodiesel Board of Directors:

Renewable Energy Group (REG) is offering a design/build contract for a biodiesel production
facility to be built for Western Dubuque Biodiesel, LLC. (WDB) This plant will produce 30 million
gallons of B100 biodiesel per year derived from soybean oil and animal fat feedstock (if
applicable) meeting ASTM D6751 specifications. (“REG Process Guarantee” is attached to this
letter)

The enclosed technical specifications and drawings will further define our scope of work. The
project is bid as a turnkey project including, but not limited to, site development, buildings,
procurement, and installation of all equipment, mechanical and electrical/controls. The City of
Farley has indicated that they have sufficient water to meet process and fire protection
requirements. This will be confirmed once water is extended to the site and the flow rate
verified. In the event that a water tank is required, this cost is offered as an adder.

Pricing for this facility is based upon moving on-site on July 17, 2006 allowing full access to the
site on that date. Anticipated construction duration is twelve months of on-site construction time
and an updated schedule will be provided once the actual move-in date is established. The twelve
month construction window will not start until WDB is able to break escrow.

Pricing for this project will be held for 30 days from the date of this letter. If a contract is
not executed prior to that date, pricing is subject to review and possible escalation. With the
current volatility in the steel industry, REG reserves the right to update pricing for structural
steel and stainless steel products prior to final execution of purchase orders for these products.

Biodiesel Facility Pricing

Our cost plus price to design, engineer, construct, and commission a 30 million gallon per year
biodiesel facility is shown below. Performance and Payment Bonds and Builder’s Risk insurance are
not included in the total contract price.

 

 

June 28, 2006

Western Dubuque Biodiesel

Page 2 of 2

	 	 	 	 	 
	Total Contract Price

	 	$	* * *	 
	Alternative #1 FFA Equipment Tower

	 	$	* * *	 
	Alternative #2 Security Fence

	 	$	* * *	 
	Alternative #3 Concrete Floor-Storage Bldg.

	 	$	* * *	 
	Adder #1 Fire water tank (if needed)

	 	$	* * *	 

Notes:

Sales tax is included in our total contract price. The administration building is not included.
Site preparation, grading, roadways, and parking are included as well as all utilities within 5
feet of this building. We will coordinate utility locations and truck scale placement with the
building designer. We have not included any design work pertaining to this building but can
provide a quote for such services if desired.

Builder’s risk and hot work insurance are not included in our contract price above. We estimate
the cost of this policy will be around $* * *. A payment and performance bond is not included in
our contract price above. We estimate the cost of this bond will be around $* * *.

Alternative #1: All necessary utility infrastructures needed for the FFA system is included. This
alternative adds the column and extends the building tower. The FFA column was not included in
original equipment order and a delay may be encountered with this option.

Alternative #2: Adds an 8 foot high perimeter fence with 3 strands of barbed wire, man gates, rail
access gates, and power truck access gates. Perimeter is identified on Site Plan GAR111.

Alternative #3: Install a 5 inch reinforced concrete floor in storage building in lieu of gravel.

This proposal does not include a firewater tank, as we understand the city will have adequate
water. Confirmation will be determined once utilities are in place. Possible adder: $* * *.

On-site wastewater pretreatment is not included in our contract price above. Until we have had a
chance to collect data from the operation of the Western Iowa Energy plant, we will not know the
full cost impact of wastewater pretreatment, however it could be in the $1 — $2.5 million range. A
wastewater decanting system to separate fat, oil, and grease is included in this quote along with a
ph stabilizing system.

On behalf of REG, I am pleased to extend this design/build contract to the Western Dubuque
Biodiesel Board of Directors.

Bill Raney

Sales Production Manager

Renewable Energy Group

PO Box 68

Ralston, Iowa 51459

 

 

REG

June 23, 2006

	 	 	 
	To:

	 	Western Dubuque Biodiesel, LLC
	From :

	 	Renewable Energy Group, LLC

Subject: REG Process Guarantee for 30 MGPY Biodiesel Facility

The following is the process guarantee for your 30,000,000 gallon per year Biodiesel plant. The
output yield of the plant has to be based upon the in-bound raw product as noted in the performance
data.

Performance Data for Continuous Transesterification Process (Biodiesel Process)

Quality of the product (crude soy or canola oil or fats) going to the Biodiesel process is
dependent upon the quality of the feedstock to the pre-treatment process. The quality of the
feedstock to the pre-treatment process must be of a quality that insure all contaminates can be
removed before the biodiesel process.

Minimum Feedstock Quality to the Biodiesel process – Vegetable Oil or Animal Fats

	 	 	 
	Moisture and Volatiles:
	 	0.05% max
	Acidity:
	 	0.5% max
	Phosphorus Total:
	 	2 ppm max
	Soap:
	 	50 ppm max
	Unsaponifiables*:
	 	1.0% max
	 
	 	 
	Product Information:
	 	 
	Biodiesel yield **:
	 	greater than 95%
	Crude Glycerine:
	 	approximately 0.13 lb of 75-80% glycerine per
	 
	 	     Pound of product
	Fatty matter:
	 	less than 0.01 lb
	Methanol stream:
	 	99.9 methanol (recycled)
	Water stream (0.2% methanol):
	 	nil

 

* Amount and component makeup of phosphorus and unsaponifiables must be at a level to theoretically
allow Biodiesel 
     product to conform to ASTM D 6751 or equivalent standard.

** Yield based on available triglyceride content after subtraction of moisture, unsaponifiables and
FFA. Biodiesel product 
     will conform to ASTM D 6751 or equivalent standard.

 

 

Summary – Performance Standards – Inputs and Outputs

	 	 	 	 	 	 	 
	 	 	Peak Hour*	 	Peak Day**	 	Annual***
	Inputs
	 	 	 	 	 	 
	• Pre-treated triglyceride
	 	3,987 gal.	 	95,688 gal.	 	31,578,947 gal.
	• Methanol (99,9%)
	 	2,528 lb.	 	60,682 lb.	 	20,025,000 lb.
	• Sodium Methoxide
	 	710 lb.	 	17,045 lb.	 	5,625,000 lb.
	(25% NAOH)
	 	 	 	 	 	 
	• Steam (150 psi)
	 	9,091 lb.	 	218,182 lb.	 	72,000,000 lb.
	• Connected Power
	 	213 kwh	 	   5,113 kwh	 	1,687,500 kwh
	 
	 	 	 	 	 	 
	Outputs
	 	 	 	 	 	 
	• Biodiesel
	 	3,788 gal.	 	90,909 gal.	 	30,000,000 gal.
	• Glycerin
	 	3,693 lb.	 	88,629 lb.	 	29,247,624 lb.

 

			
	*	 	One uninterrupted hour of operation
	 
	**	 	24 uninterrupted hours of production
	 
	***	 	7,920 uninterrupted hours of production (330 – 24 hour days)

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